STARTING OUT: A GUIDE
STARTING A BUSINESS, LAUNCHING A PRODUCT OR SERVICE, IS ONE OF THE GREATEST CHALLENGES A PERSON CAN FACE. WE’VE HEARD THE STATISTICS AROUND NEW BUSINESS FAILURE; DREAMS CAN BE SHATTERED ALMOST OVERNIGHT. HOWEVER, ALTHOUGH THERE ARE STRUGGLES, WITH HARD WO
Starting a business venture is one of the greatest challenges a person can face. Welcome to our short, sharp guide to getting started in business.
New Zealand has just under half a million businesses with less than 20 employees1. We are a nation obsessed by business ownership. People launch (or buy) businesses for a variety of reasons, but the wave of software start-ups over recent years, particularly in the mobile space, has made it all look deceptively easy.
Let’s get one fact absolutely clear – starting a business is not easy. I have that on good authority – the hundreds of business owners I’ve met over the past 14 years, and from my own experience. And then there are the failure stats – but we won’t go there.
There are, of course, countless articles about business start-ups and business growth, including those in this esteemed publication. If you’re looking for one of the best, check out Mark Loveys ten-part Garage to Global ‘how-to’ series on the NZBusiness website. (Part One is here: https:// nzbusiness.co.nz/article/garage-global-10-steps-take-your-idea-world.)
Mark talks about the one ‘Big Idea’ as the genesis for any new start-up. As he says, it doesn’t necessarily need to be world-changing. “But it does need to be something that you are capable of executing well; that has some kind of unique selling point (USP); that is useful to other people; that people will pay good money for; and that can sustain and grow a successful business.” Success is what we’re all aiming for, correct? In the limited space available here, I’m going to pick up on one of Mark’s points – the USP – and another factor – mentoring – through two interesting start-up case studies.
Because case studies are where we learn from the mistakes and successes of others.
HARDWARE IS HARD
While not implying for a second that software start-ups are easy-street, nevertheless there is a saying within the start-up community that “hardware is hard”.
It’s a term Dan Bowden, co-founder and CEO of start-up O2O2, is familiar with.
His company has developed the next generation of pollution protection – patented smart-enabled clean-air masks featuring advanced air filtration technology. In short, a USP like no other. “Our hardest challenge is simply the nature of our product,” says Dan. “I regularly look on in envy at the software startups who can change a few lines of code and rollout a new product globally overnight.”
O2O2’s product is unique and involves long lead times, higher costs and complex supply lines, says Dan. “We address a silent killer; we require and have achieved independent testing of the product; we work from the nanoscale in New Zealand upwards – through to a physical product someone in Asia will wear partially as a fashion choice.”
In conjunction with AUT, O2O2 has proven the performance of the product and is now facing an equally challenging prospect of getting the product fit for market and finding the right channel partners.
“We potentially have some amazing channel partners in the wings and believe we can take a large proportion of the $10 billion-plus masks and respiration market,” says Dan.
O2O2 was the brainchild of fellow co-founders Jerry Mauger and Ilya Vensky, who had experienced air pollutants living in China and worked in a polluted workplace.
“Jerry felt that current solutions on the market to protect users were flawed and caused a host of user issues,” explains Dan. “He suspected that both performance and user issues could be addressed by fully utilising the properties of nanofiltration, co-developed with Revolution Fibres. It took a lot of experimentation and failure, coupled with Kiwi ingenuity, but Jerry managed to completely flip the solution on its head and in doing so came up with the foundations of what is now O2O2.”
The founders have a big vision for O2O2’s masks. But due to the fact that air pollution is not acute in this country, and therefore Kiwis struggle to grasp the problems being solved, the start-up immediately began reaching out to international contacts. This led to receiving seed investment from BMW and US venture capital fund SOSV.
“That opened the doors to the US Navy and investment from a Korean manufacturing giant,” says Dan. “I’m not sure we would have been moving so quickly if we had limited our ambitions to New Zealand.”
Planning has been the big lesson for this start-up. “We all know where the product can go, but if we try to do it all at once, we will never get there,” Dan explains. “So we need to clearly communicate how we are going to get there and not push the technology too hard in the initial steps.”
Lessons come hard and fast for start-ups, and Dan believes it’s important not to dwell on the past and the negatives – but learn from mistakes.
“We have had hundreds of learnings [along the way] – every day there seems to be something new,” he explains. “But failure and learning is the nature of life and of a good start-up.”
He says the stand-out lesson from the hundreds of lessons over the years would be the need for increased communication.