Hey guys – here are my notes from Jack Delosa from The Entourage’s presentation “The 7 Drivers of Entrepreneurial Success” at the Young Entrepreneurs’ Unconvention in Sydney in September 2012 #uncon. (Blog posts with notes from the other sessions are coming up)
Challenges of a startup business:
- Insight – about the market, we don’t have that at the start, success for a start up business isn’t about how much money you make but getting this insight
- Leverage – as an early stage you will thrive or die based on how many people you reach, convert. How do we do more with less
- Education – vast majority of early stage businesses do not actively seek mentors, advisers, education. You can leverage someone with 10 years of experience, so much leverage in education
In business there is a formula, that is why Branson can go into any industry and spit out successful businesses in just about any space in the world.
Most people learn through trial and error. The problem is the lesson always comes after the mistake.
7 Drivers of Entrepreneurial Success:
1) Lean startup – we need to become masters of learning quickly, discover quickly what works and what doesn’t
2) Branding – we need to master branding as a skill, develop a brand that compels people to do business with you
3) Business Development – create leveraged ways of generating business including strategic partnerships and PR strategies
4) Online strategy:
- How do we drive more traffic to our website?
- How do we convert more traffic once it gets to our website
- How do we automate that process as much as possible?
5) Systemisation – implement efficient management that enables growth
6) Capital Raising & Acquisition – how do we leverage off other peoples money to accelerate the growth of our business
7) Exit strategy – Build significant value and sell for the highest possible price
Siimon Reynolds says – No. 1 difference between good companies and great companies is that the leaders of great companies have a long term perspective
Startup business – temporary organism designed to find a viable business model
You will fail just about everything you try the first time. No.1 thing you need to do is fail and fail fast – as if you fail slow you will be gone before you can learn
Businesses fail because they didn’t get the insight fast enough and that killed them
Need to determine as quickly as possible what you can do to make the business work
Win/win relationship with a complimentary company designed to drive us business on a continual basis
E.g. McDonalds and Disney – with happy meals, not competing but same target market, McDonalds supplies the food and usually the toys are from Disney
1) Where do my clients go before they buy my product?
2) Where do my clients go after they buy my product?
3) Who targets the same market but offers a different product or service?
1) Complimentary Business
2) Compelling Reason for them to send out your offer
3) Compelling offer
The world has moved on from interruption marketing, stop and look at this, we are now in an era of permission / relationship marketing
So compelling offer needs to be a no-brainer of a deal, usually free
Entourage is working with ANZ – ANZ sends out an email to their 120,000 small business clients every time they run an unconvention
ANZ’s reputation rubs off, that business is marketing on their behalf continually
E.g. Greg Stark, Better Being Personal Training – Personal Trainer created relationships with Lorna Jane and all these brands and grew by 300% in a year
Next challenge in business – systems
As your business progresses in the growth curve, your day to day involvement should decrease
If everything that needs to happen needs to come through you then you are the bottleneck and you are preventing the business from growing
No 1. goal should be to build a business that works without you
Because we want to work when we want to rather than when we have to
- Who – use positions, not names which come and go
- When – when this trigger happens, do this task
- How – Use Jing screenshot recording software which enables you to film a portion of the screen while you film the computer. E.g. This is how you send an email to the database
People raise capital for 2 reasons usually:
1) Looking to accelerate growth and increase demand
2) To facilitate existing growth
Growth devours cash
$1 billion was invested into small businesses by Angel Investors in 2010, average transaction size $200,000 so 5000 businesses
22% of Australian Business owners now aged over 60, about to lose hundreds of thousands of businesses and no-one is there to take them up
3 questions on every investors mind:
Most people when pitching us as investors answer question 3 first which is a dealbreaker
1) Will I lose my money? First thing they are looking at as risk:
In combating risk, looking at:
- Experience of the entrepreneur, and if you are young the experience of your advisors that you have around you
- Proof of concept – does not have to be making profit, can be consumer insight, we have spoken with consumers and facts, stats, Google insights and stats help prove the concept
2) When will I get my money back?
Is there an exit strategy? How committed is the entrepreneur to the exit strategy?
3) Will I make money?
First thing you need to do is lower buyers resistance, then heighten buyers acceptance
- What are the growth opportunities for this business?
- Who might buy this business?
- Is there strategic value in this business, could this business be worth more to someone else than to us? E.g. Instagram $1 billion sale but no money made
Young Electrician – Bought another business with $110,000 profit a year selling for $110,000, negotiated for $90,000. This multiple is cheap, businesses in Australia sell for only 2x profit multiple.
- How does Janine Ellis go from starting Boost Juice as a mother and selling 65% for $65 million in 10 years
- How does Spreets sell for $40 million in only 10 months?
- Richard Branson invested $10 million only into Virgin Blue in Australia. Virgin followed a similar formula to Boost, floated on ASX 3 years after they started. Floated business for $2.3bn – Richard had 29.6%
Business is a team sport. No 1 thing Jack says he got right early on – “was surrounded myself with people that were smarter than I am”
More blog posts coming up with notes from the other sessions at the Young Entrepreneurs’ Unconvention Sydney and other conferences around the world including Affiliate Summit and Clickbank Exchange in New York – for all the notes, videos and guides join our newsletter here.