BRW Fast Starters Issue : "Knowing what you now know, would you start a business again ?"
In a week, I'll be in a new home. First (outright) for (i'd guess) 6 years. (post dotcrash gone fishing hehe) It's a rented one (bank manager doesnt let you swap stock in your startup for beach property); Located in Aspendale, nice and close to the beach; In the middle of Melbourne and the Mornington Peninsula.
The main driver being that running a "virtual" business, while cute, is not optimal. So I've decided I need to be close enough to Melbourne (and Tullamarine airport) 5 days a week. (i commuted hours each day for years so need sub-1hour each way drive/train) Even though our business has always had a central converted house/office in Elsternwick, this is also in the process of being replaced for something "more busy" so there are more people to work round each day, as well as having somewhere with gadgets and lattes to take clients.
While it doesn't matter how hard you work, if you work on the wrong opportunity, at the wrong time, with the wrong people and execute it wrong, success in the start-up game, is different to success in a "job" or consultancy. Getting a 'bonus' for exceeding (often intangible or non readily control'able) targets or a team building holiday may assist achieve better results in a corporate setting : In a startup, the results are everything. And the holidays dont bloody exist, but you can blog on a Friday afternoon if you have the window.
So reading the (orange cover) "Fast Starters" issue of BRW (i tend to buy their special issues : Rich 200, Young Rich 40, etc - which leads them to bring out more and more special issues i suspect) it was amazing the parallels I found in disparate industries. Every entrepreneur (well some anyway) probably can feel (in the early days) as if they are the only one experiencing the range of emotions that come up. So if I can find $7.95, and you are interested in the ingredients for being a Fast Starter, I'd recommend getting yourself an issue for the 18% of you that are Australian readers.
(go and visit your local newsagency now, dont worry about googling for the article, buy the mag now:)
OK, so for those of you that didn't purchase, there are some good takeouts :
- 89% of businesses lease offices ONLY 2% are located AT HOME. (yup... very scary findings for the home business, thats a hard stat to beat) Thats why im restructuring my geo-logistics.
- 23 of the 100 companies listed as Fast Starters are in the IT industry which was the largest followed by finance then property. (need to have more revenue than $500k - which I think is a nice cut-off point to use this as a mid-term objective.. because let's face it : the fundamental weakness of ANY business, and esp web 2.0 ones, is lack of revenue and ultimately profits. Esp revenue. Heck if you have 40m photobucket like users, lovely, but they also have $10M+ revenue growing at a huge amount... So any business should be aiming to make more than $500K in annualised revenue. (id say alot of web2Co's dont btw)
- NSW 49 companies vs VIC 27, then QLD (10), WA (7), ACT (5), SA (2) - Come on non Sydney Harbor Co's !!! Let's not let the Bronti dwellers own the innovation :) Melbourne MODM event coming up....
- Following Fred Wilson's summary that his typical founder of companies he invests in is GenX (with some 40's) the BRW quant research seems exactly the same. I have no excuses !!!; "They come from the ranks of generation X, and most are aged in their 30s and 40s, with previous experience in the corporate world." (tick, tick, scary)
- 42% have undergrad, 15% have masters (tick, tick)
- 36% work 50-60 hours a week, 35% more than 60 (tick, and um tick if u include watching video on the second mac screen and blogging on the first)
- Most common salary ($50K-$100K) no tick there... yet.. um almost there i hope.. the first 2 years all you see is negative cashflow, let alone a positive income of $50k-$100k..
- 36% have a (paper) personal net worth of $1m-$2m; 27% of $2m-$5m (this sounds consistent with typical paper investor valuations and the stakes founders have in 2.0 businesses.. having that as an exitable, in the bank value hehe that is different eh)
- Here are the name of the IT companies so you can Google them (which I tend to do when BRW have Top 500 Private Companies, Fastest Growing companies etc... so u can see what successful businesses do and make money.. dont see any widget companies here ppls;) :
#1 Bravura Solution, #10 Matrix CNI, #11 MVSS, #27 Downling Consulting, #36 HCS, #41 Revolution IT, #46 Maxaam Computer Systems, #54 Best International, #60 Distribute.IT, #61 defining the moment, #62 DocsCorp, #63 Genos, #64 CQR Consulting, #67 FuseFarm Interactive, #69 The Farm, #80 Viteknologies, #82 Gravity, #87 Riteq, #94 Biometric Innovations, #97 Pure Hacking, and finally #99 Aspirence Information Technology !!!!
So it will be interesting to see if any Australian Web 2.0 companies can crack the list next year as the "companies must have completed 2 fiscal years of revenue". And let's face it, the biggest insurance policy one can have against a potential bubble deflation as Don Dodge points the potential to, is to have a business which along with strong technology, unique market position, great management team, lots of growing end users and paying customers, is revenue, revenue growth, profit and profit growth.
Sustainable financials means being able to weather any storm about whether widgets are a revolution or social networks being the new black. You want to know all the work and years you put into the business have a reason ie an asset value, or else make sure the salary you are earning is near to what you would get commercially.
There are some kewl little graphs throughout the issue :
Q : "If the right amount of money were offered today, would you sell the business ?"
A : 67% Yes. 33% No. (although interestingly 62% want to "retain ownership of business." - I won't get into rights holders of convertible securities and different clauses that can null and void this "intention" - or maybe this is why 56% are NOT looking for capital to expand.)
- 51% have 5-20 staff (30% : 21-50)
- 82% havent had trouble with a business partner... well I guess they would say that.. all is fair in..
- 45% sell goods in overseas markets / 55% dont...
- Amazingly 58% of the businesses required less than $100,000 of start-up capital. Another good lesson.
- 24% say cashflow was their "main stumbling block". (esp payroll is mentioned....)
- 28% finding staff was hardest problem (even more than cashflow, which is a chicken and egg problem.. best people cost most and often you cant afford them without correct equity/options structure in place, which itself is hard to properly at start because it costs real money to put in place and VC/angel investors may totally redo it anyway and prefer a "clean structure".) Not surprising then that the first post on Fairfax's startup blog which Mr Farmer set up (for us to vent) has Marty from Tangler talking about the hiring process and a non-suitable client who seemed good.
- 11% said searching for funding was hardest part (even i understimated amount of time and length.... it goes on and takes forever, just when u dont have time because u want/should be focused on team/tech/sales :)
Outtake : My favourite definition of entrepreneurship is the one when an entrepreneur is asked after "completing" his or her business (typically a 5-8 year process for the startup/early stage) "Knowing what you now know, would you start a business again ?" : To which the entrepreneur laughs and says "No F'n Way !" Although their body language and continual talking about business opportunities would suggest otherwise ;) OK, i'm off for a Point Leo beach run, until I switch for the newer Aspy-Edith-Bonbeach Nirvana is just around the corner run next week....
The main driver being that running a "virtual" business, while cute, is not optimal. So I've decided I need to be close enough to Melbourne (and Tullamarine airport) 5 days a week. (i commuted hours each day for years so need sub-1hour each way drive/train) Even though our business has always had a central converted house/office in Elsternwick, this is also in the process of being replaced for something "more busy" so there are more people to work round each day, as well as having somewhere with gadgets and lattes to take clients.
While it doesn't matter how hard you work, if you work on the wrong opportunity, at the wrong time, with the wrong people and execute it wrong, success in the start-up game, is different to success in a "job" or consultancy. Getting a 'bonus' for exceeding (often intangible or non readily control'able) targets or a team building holiday may assist achieve better results in a corporate setting : In a startup, the results are everything. And the holidays dont bloody exist, but you can blog on a Friday afternoon if you have the window.
So reading the (orange cover) "Fast Starters" issue of BRW (i tend to buy their special issues : Rich 200, Young Rich 40, etc - which leads them to bring out more and more special issues i suspect) it was amazing the parallels I found in disparate industries. Every entrepreneur (well some anyway) probably can feel (in the early days) as if they are the only one experiencing the range of emotions that come up. So if I can find $7.95, and you are interested in the ingredients for being a Fast Starter, I'd recommend getting yourself an issue for the 18% of you that are Australian readers.
(go and visit your local newsagency now, dont worry about googling for the article, buy the mag now:)
OK, so for those of you that didn't purchase, there are some good takeouts :
- 89% of businesses lease offices ONLY 2% are located AT HOME. (yup... very scary findings for the home business, thats a hard stat to beat) Thats why im restructuring my geo-logistics.
- 23 of the 100 companies listed as Fast Starters are in the IT industry which was the largest followed by finance then property. (need to have more revenue than $500k - which I think is a nice cut-off point to use this as a mid-term objective.. because let's face it : the fundamental weakness of ANY business, and esp web 2.0 ones, is lack of revenue and ultimately profits. Esp revenue. Heck if you have 40m photobucket like users, lovely, but they also have $10M+ revenue growing at a huge amount... So any business should be aiming to make more than $500K in annualised revenue. (id say alot of web2Co's dont btw)
- NSW 49 companies vs VIC 27, then QLD (10), WA (7), ACT (5), SA (2) - Come on non Sydney Harbor Co's !!! Let's not let the Bronti dwellers own the innovation :) Melbourne MODM event coming up....
- Following Fred Wilson's summary that his typical founder of companies he invests in is GenX (with some 40's) the BRW quant research seems exactly the same. I have no excuses !!!; "They come from the ranks of generation X, and most are aged in their 30s and 40s, with previous experience in the corporate world." (tick, tick, scary)
- 42% have undergrad, 15% have masters (tick, tick)
- 36% work 50-60 hours a week, 35% more than 60 (tick, and um tick if u include watching video on the second mac screen and blogging on the first)
- Most common salary ($50K-$100K) no tick there... yet.. um almost there i hope.. the first 2 years all you see is negative cashflow, let alone a positive income of $50k-$100k..
- 36% have a (paper) personal net worth of $1m-$2m; 27% of $2m-$5m (this sounds consistent with typical paper investor valuations and the stakes founders have in 2.0 businesses.. having that as an exitable, in the bank value hehe that is different eh)
- Here are the name of the IT companies so you can Google them (which I tend to do when BRW have Top 500 Private Companies, Fastest Growing companies etc... so u can see what successful businesses do and make money.. dont see any widget companies here ppls;) :
#1 Bravura Solution, #10 Matrix CNI, #11 MVSS, #27 Downling Consulting, #36 HCS, #41 Revolution IT, #46 Maxaam Computer Systems, #54 Best International, #60 Distribute.IT, #61 defining the moment, #62 DocsCorp, #63 Genos, #64 CQR Consulting, #67 FuseFarm Interactive, #69 The Farm, #80 Viteknologies, #82 Gravity, #87 Riteq, #94 Biometric Innovations, #97 Pure Hacking, and finally #99 Aspirence Information Technology !!!!
So it will be interesting to see if any Australian Web 2.0 companies can crack the list next year as the "companies must have completed 2 fiscal years of revenue". And let's face it, the biggest insurance policy one can have against a potential bubble deflation as Don Dodge points the potential to, is to have a business which along with strong technology, unique market position, great management team, lots of growing end users and paying customers, is revenue, revenue growth, profit and profit growth.
Sustainable financials means being able to weather any storm about whether widgets are a revolution or social networks being the new black. You want to know all the work and years you put into the business have a reason ie an asset value, or else make sure the salary you are earning is near to what you would get commercially.
There are some kewl little graphs throughout the issue :
Q : "If the right amount of money were offered today, would you sell the business ?"
A : 67% Yes. 33% No. (although interestingly 62% want to "retain ownership of business." - I won't get into rights holders of convertible securities and different clauses that can null and void this "intention" - or maybe this is why 56% are NOT looking for capital to expand.)
- 51% have 5-20 staff (30% : 21-50)
- 82% havent had trouble with a business partner... well I guess they would say that.. all is fair in..
- 45% sell goods in overseas markets / 55% dont...
- Amazingly 58% of the businesses required less than $100,000 of start-up capital. Another good lesson.
- 24% say cashflow was their "main stumbling block". (esp payroll is mentioned....)
- 28% finding staff was hardest problem (even more than cashflow, which is a chicken and egg problem.. best people cost most and often you cant afford them without correct equity/options structure in place, which itself is hard to properly at start because it costs real money to put in place and VC/angel investors may totally redo it anyway and prefer a "clean structure".) Not surprising then that the first post on Fairfax's startup blog which Mr Farmer set up (for us to vent) has Marty from Tangler talking about the hiring process and a non-suitable client who seemed good.
- 11% said searching for funding was hardest part (even i understimated amount of time and length.... it goes on and takes forever, just when u dont have time because u want/should be focused on team/tech/sales :)
Outtake : My favourite definition of entrepreneurship is the one when an entrepreneur is asked after "completing" his or her business (typically a 5-8 year process for the startup/early stage) "Knowing what you now know, would you start a business again ?" : To which the entrepreneur laughs and says "No F'n Way !" Although their body language and continual talking about business opportunities would suggest otherwise ;) OK, i'm off for a Point Leo beach run, until I switch for the newer Aspy-Edith-Bonbeach Nirvana is just around the corner run next week....
posted by redbarren at 4:20 PM
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