If You Can Keep Your Head When All About You Are Losing Theirs…

2016 is shaping up to be quite the annus horribilis. Quite apart from the passing of such legends as Bowie, Rickman, Cohen, Wogan and Corbet, there has been unprecedented political turmoil, with UK’s vote to leave the EU (“Brexit”) and the election of Donald Trump to the US Presidency.

It’s these last two events that have caused all businesses – but particularly start-ups – to face increased uncertainty, difficult markets and most of all, higher levels of risk. Though I think Brexit is likely to affect UK businesses more than Trump’s success (it’s going to be a key topic of discussion at the ‘TechCrunch Disrupt London’ event in December), even sectors such as renewable energies are facing disruption after the election, according to Elon Musk.

“An Entrepreneur is someone who jumps off a cliff and builds a plane on the way down” Reid Hoffman, founder of LinkedIn.

So what’s the problem? Entrepreneurs thrive on this risk and uncertainty – without the thrill of riding out the waves of uncertainty there would be little interest in venturing into the world of start-ups to begin with. When uncertainty hits, it’s natural for your brain tell you to panic, but those with entrepreneurial acumen automatically begin thinking rationally – how can they effectively assimilate and deal with this new information? How do you keep your head and continue building your plane?

When I started my last business I had absolutely no money, no staff, no business plan and a sizable amount of unsecured debt to my name – not to mention my wife, Viki, and Ofelia, our six-month-old baby, to support. And it was slap bang in the middle of a recession! Five years later, at the age of 31, I sold my company, E-Tale Marketing Solutions Ltd., in a multi-million-dollar deal; after selling to, and competing with, some of the biggest businesses in the world. Despite the challenges it was something i felt compelled to do. I simply had to do it, and i trusted myself that, whatever the challenge, I could overcome it. The journey was peppered with a huge amount of risk and uncertainty, but it’s how you deal with it that marks you out for success. These are some of the mental strategies that kept me going:

1. Think Positive

During the good times, entrepreneurs can find is easy to forget about focusing their mood, because the smiles come easy. But when the tough times present themselves – and they will – try to find a happy or positive thought to rebalance the panicked reaction. Whether it is a business breakthrough from recent weeks, or a promising event happening soon, remind yourself that good things can (and will) happen and that focusing on negativity will not help you to get through it.

 2. Let Go

As much as the entrepreneurial instinct is to micro-manage everything, there are some things that are simply out of your control – such as the outcome of an election. When these situations arise, you need to be able to accept that, yes, this will affect your business, but no, you cannot prevent it or ignore it. So your job is to ride it out and decide the best course of action to see the other side with minimal damage. Try not to exaggerate the situation to yourself or those around you – acknowledge it with a level head for exactly what it is and plan using the information you have available.

3. Prioritise

Understanding the difference between a make-or-break decision and an inconsequential one is vital for when tumultuous situations arise. The truth is that every decision made during the running of a start-up brings uncertainty, but by using the information available and focusing on the most important decisions first, whilst weighing up a range of possible outcomes will save a lot of your energy and relieve enough stress to allow you to wiz through the small choices later.

4. Trust Yourself

You started the business on your own and sometimes you must trust the same instincts, that used to scream at you that this was a good idea, to carry it forward. Start by listening to your instincts on small matters and learn whether your first impressions are to be relied upon or if you’re the kind of person who needs to research more thoroughly. Many top entrepreneurs know how to settle their brain and focus on the issues – Steve Jobs took walks to make decisions, whilst Einstein went sailing to clear his mental blocks.

5. Stay Agile

I’ve said it before, agility to is the best defence against uncertainty and by adopting an agile, or flexible approach to your business, you gain a competitive advantage. Now is the time to take a progressive view, remain dynamic and revert to Entrepreneur 101: remain agile and look for opportunities.

 

Knowledge is the key, and whilst it is vital to remember that there will be things you cannot possibly know – you can take the information you do have and build upon it to make plans. Whether it’s finding funding, or choosing the people you want to be by your side, plan ahead and never let negativity hold you back.

How do you see it? Is your business facing new challenges as a result of Brexit or Trump? How do you handle uncertainty? – let me know below.

The Importance Of Agility

Now, more than ever, it is important for start-ups to look at the way they operate, and plan ahead to ensure that they are able to handle whatever the economy, politics and the business world tries to throw at them. The residual fallout from the Brexit results has shown that the unpredictable is always possible, even if it seems unlikely and start-ups find themselves in a vulnerable position in uncertain times such as these. So, how can new businesses prepare themselves for the journey ahead of them?

The founding principle of a start-up plan needs to be agility – or the ability to pivot an idea in reaction to – or even preparation for – an uncontrollable external factor.

 

Competitive Advantage

Adopting an agile, or flexible approach to your business gives you a competitive advantage. Big companies and brands are used to working with the larger agencies, where almost every business process seems to take twice as long as it should to be completed! Big companies will weigh the risks of working with start-ups against the sheer hunger, ambition and desire to raise the bar which is often seen in independent start-ups. This leads to the larger brands often working with smaller businesses and start-ups, in order to access the best talents and innovation on the market – regardless of how big business has been carried out in the past. This sort of change is already happening at places like financial services firm Fidelity who are using small incubator teams to solve specific problems.

Big organisations are also fond of working with businesses who are able to work around them, evolving and developing their products and services to match the brand’s needs perfectly. Being agile means that start-ups can bring Clients into their team and build products around them. Also, when you are a start-up working with a top tier brand, there is no question over who is the big fish and who is the little fish. When companies deal with large suppliers, they often feel like there is a power struggle. So the little start-up where the founder is on the phone can sound very appealing.

 

Changing Your Outlook – Becoming Agile

It may not be easy to change your outlook on business practices – education, tutorials and journals seem to be set in a certain mind-set of ‘this is how it’s always been done, therefore this way is correct’. However, a different way of thinking about how you market your products and how your products and services will benefit clients during times of uncertainty will make a huge difference to your business operations.

 

Meera Kaul, writing in Forbes, advises that start-ups should plan for the future based on their own rules, without trying to imitate those followed by small companies. She poses:

Start-ups are not companies. And they never will be. The parameters and thesis that define corporate success may not apply to them. A start-up is an experiment. The entrepreneur or a group of people with the acumen to identify an opportunity and match their skills, create a solution to meet the opportunity or gap. They possess the necessary skills to execute the vision, or have the capability of executing the skills.”

I think she is right, start-ups cannot be defined by the same rules as companies, especially those who have a reliable business model, which is so ingrained in society that changing times seem to leave them unaffected. Start-ups must be more experimental, ready to change and adapt with the times and flexible – just to survive long enough to become established.

Planning for Every Possible Outcome

Alison Freer advises that start-ups and small businesses need to plan for every potential outcome – even those less savoury and unwanted outcomes. Planning ahead gives the start-up the opportunity to see each eventuality and have a solid plan in place to overcome, circumvent and weather whatever situation happens. There’s a lot to be said for positive thinking, but denial that other outcomes are possible is sheer naivety.

As the effect of Brexit become more and more volatile and apparent, you will see more big businesses beginning to question the necessity of expenses as margins are squeezed. This means that highly agile and cost-effective suppliers are far more appealing. Therefore, providing that the start-up is themselves cost effective – i.e. not having a Soho office and a company Mercedes – you have the opportunity to take away business from the big guys,  especially when the barrier to entry is now so low.

Brexit Food

The Brexit Fallout: Where Do We Go From Here?

In my last blog post, I discussed the possibilities facing small businesses in London if the EU referendum resulted in Britain leaving the EU. Unfortunately, that possibility became reality on the morning of 24th June and the resulting turmoil has left the business world in a state of disquiet, anxiety and for some, utter shock.

 

What’s The Damage So Far?

As soon as the news was reported that a 52% majority had voted to leave the EU, the reality and effects of that decision became noticeable. Within 12 hours:

  • The pound fell in value (to the lowest level against the US dollar in 32 years)
  • The FTSE 250 fell by 14% from the previous day’s closing figures
  • The 15 richest people in the UK lost a total of £4 billion collectively as markets plunged
  • Many businesses, such as Vodafone, have warned that they plan to move their business out of the UK if trade agreements fail
  • 25% of company directors plan to initiate hiring freezes during the uncertainty ahead

I know there’s an overwhelming demand for people to ‘stop going on about it’, but I really don’t think most people understand the damage that will be caused if we cut our ties with Europe. If we stop talking about it, we will never get anywhere. There’s no plan without communication.

The only certain thing about uncertainty is that it is uncertain. The uncertainty alone freezes decision making in business, and this causes the economy to stop growing and even shrink, leading to what media outlets are terming ‘Texit’ – the presumption that tech companies will leave Britain, as Britain leaves the EU.

This doesn’t just cause issues for ‘the rich’ and ‘business leaders’, it directly impacts every single person who contributes to society. Right at this moment it makes more sense to setup a business outside of the UK than it does inside it. People seem to have forgotten that our economy is primarily built on service based companies, the contribution of which has steadily grown from 46% in 1948 to 78% in 2012.

These companies can be based anywhere in the world, but choose to be here because of the EU, our relationship with EU countries, and the certainty/stability of the pound. I would love someone to explain to me how this Brexit thing helps us in any way that isn’t someway driven by a generic statement like ‘wanting change’. Wanting change to our political system is a good thing and in my opinion is needed. However, people have been hoodwinked into thinking that leaving the EU means that we will somehow see new economic opportunity and growth.

Already, just over a week later there is buyer’s remorse from many in the Leave camp as well as those who voted to remain, and there is confusion over what to do next.

 

So what now?

We need to snap out of the haze. Like Baroness Lane Fox I believe we need to accept what has happened and begin to take a progressive view on how to move forwards. In the words of her letter to the Evening Standard “The worst thing to do now would be dwell on the result and not look to the future”. I 100% agree.

Now is the time to take a progressive view, remain dynamic and revert to Entrepreneur 101: remain agile and look for opportunities. It’s easy to look at the current situation and become so overwhelmed with uncertainty and fear that you stop trying altogether. I know that things might seem a bit hopeless right now, but I invite you to look at this from a different perspective: now is the time to make your mark! Take the opportunity to overcome adversity, stare odds which are stacked against you square in the eyes, and say “My business and entrepreneurial spirit will overcome this, this is not going to hold us back.”

There will be challenging times, but also opportunities. As global tech investment firm Atomico stated, some of the largest companies around today were born in tough economic times; “Entrepreneurs are resilient. We’ve seen this over and over again. Microsoft and FedEx started out in the 1973–1975 oil crisis and US recession. Skype was founded in 2002, during what was still the dotcom nuclear winter. Airbnb, Spotify and Uber were born during the 2008–2009 financial crisis. This, if it turns out to be a crisis, will be no different.”

The future is ours, and it’s up to us to make it work in our favour.

Why Brexit Would Destroy UK Tech

 

Two major events are happening in the British tech industry this week – the EU referendum and London Tech Week. Of course, the possibility of Brexit becoming reality has been a hot topic within the opening speeches at London Tech Week, and the statements and statistics put forward have served to strengthen my belief that remaining in the EU is the best option for UK start-ups.

 

The UK is the home of the Unicorn

London Tech Week launched with a keynote speech from Gordon Innes, CEO of London & Partners, in which he stated that “London has become the best city in the world to create and scale tech companies”, and backed this up with figures showing that over $10bn has been invested in London’s tech sector.

London has built a reputation as a global tech hub through innovation and applying the productive benefits of technological advances to other areas of production – such as disability and medical aids, emission reduction and innovative building materials. My concern is that, in leaving the EU, London’s tech start-ups will lose access to many of the factors driving this success.

Currently, Europe is leading the way in producing sustainable start-ups, with European tech companies being valued at 18 times their revenue generation, in stark contrast to the US tech companies, which are valued at an average of 46 times their revenue generation. According to GP Bullhound’s Annual European Unicorns Report, Europe is currently home to 47 billion-dollar digital start-ups – a majority of which (18) are based in London – showing that London truly is the home of the Unicorn Start-up.

 

Brexit would likely destroy London’s ‘Tech Hub’ status.

I am not alone in this opinion, either. Many leading tech businesses have put their names to letters urging the UK to remain a member of the EU. The UK heads of IBM, Microsoft and SAP joined 32 other business leaders in signing an open letter, whilst are among 1,280 business leaders to have signed another and hundreds of tech start-ups and entrepreneurs have signed a separate letter. Former Google Chrome Marketing UK head and founder of the Sup App, Richard Pleeth also shares my sentiments, alongside 87% of Tech London Advocates, as does the highly respected entrepreneur Richard Branson:

 

This does not mean that voting to remain within the EU will mean that there will be no change to the British tech industry, however. Both potential results will trigger change within laws and regulations and tech companies – both start-ups and established businesses alike, will have to make rapid changes in order to keep up. But it is glaringly obvious that a ‘remain’ outcome is less likely to destroy Britain’s technology-driven capital and will mean less disruption for businesses overall.

If Britain was not in the EU, every stage of the process – from Business Development through to invoicing clients – would have been much harder for my business ‘E-tale’. Doing business in Europe and essentially exporting software was easy. We took this for granted until we began working in regions like Russia and Brazil where the level of paperwork and tax info required is out of hand! Brazil have various import taxes that make it really hard for an international supplier to be competitive, whilst Russia is less about the tax and more about the paperwork needed to ever get paid.

The admin costs of just finding out what the trading rules are outside Europe and the US is a cost that most start-ups are unable to bare. However, trading in the European Union was almost exactly like trading in the UK – sharing many of the same regulations and requirements and making understanding the whole process much simpler. In addition to this, having a strong European client base was a huge factor when E-tale was purchased by ChannelAdvisor in 2014.

I am not saying that I would have dismissed the thought of starting a business outside of the European Union, just that it would have been a lot harder, arduous and more expensive to do so. The opportunities for expansion and innovation would have been severely limited by not having access to EU markets and regulations.

For medium to large businesses, the impact of a Brexit result will be damaging, but will not be as devastating as the effects it will have on start-ups and entrepreneurs. New businesses and those still in the planning phase will be left stranded, lost and in need of severe guidance, should Thursday’s result see the UK leave the EU. A Brexit result would severely restrict, and in some cases destroy, those businesses currently starting up in London’s many tech hubs.