BOLD ENOUGH TO LAUNCH YOUR START-UP? HERE ARE FIVE TIPS FOR ENTREPRENEURS
Take it from someone who knows, setting up a company is not for the faint-hearted, explains Bernard Lee
Entrepreneurship is a key driver of any successful economy and the globally trending interest in start-ups and freelancing continues to grow.
In the UAE, the interest in and importance of entrepreneurship as an economic growth engine has accelerated as the government’s balance sheet has shrunk with declining oil prices. This has encouraged many to start their own businesses or become freelancers. Based in Abu Dhabi, GlassQube Co-working, the UAE’s first co-working business centre focused on SMEs, start-ups and freelancers, has been involved in the growth of this trend first-hand.
As the chief executive of GlassQube Co-working, I have the pleasure of working with entrepreneurs, SMEs and start-ups across all sectors every day. GlassQube itself is a start-up and as its co-founder I have gone through the start-up gauntlet myself. My co-founder Fahad Al Ahbabi and I created the vision for GlassQube back in 2014 and launched our first location in September 2016. From ideation to execution to building and operating a commercially successful venture, we are well acquainted with the perilous start-up journey. Over the past few years we have made many mistakes, learnt many tough lessons and made some interesting observations. We have distilled this experience down to our top five list of tips for start-ups:
1. Do your homework
The old axiom that “there are no stupid questions” is totally false. There are lots of stupid questions and I have heard many of them at GlassQube. The number of wannabe-startups who come to GlassQube with big “unicorn” dreams and no due diligence is flabbergasting. Typically, this person comes into GlassQube before making any serious effort to understand the most basic principles or processes related to starting a business. They will always ask me the same series of the most fundamentally basic questions about trade licences, visas, and start-up costs and of course my “best price”.
The licensing and business set-up regime in the UAE is complex and having questions on the process is expected. However, the UAE Government has done an exceptional job over the past couple of years in publishing excellent information on these topics and there is no excuse for not having a full grasp of the fundamentals. Preliminary research presents an inexcusably low barrier to entry and yet is the most important investment you can make in your business. Educate yourself on the fundamentals of your market, your business and the competition. The more preparation and contingency planning you have done upfront, the more resilient your business will be as you navigate the inevitable pitfalls.
2. Beta test your thesis
If, after you complete your initial due diligence and you continue to believe that your idea has a market and can be competitive, then as quickly as possible you must test it. The road to ruin is littered with start-ups who have worked on their “innovative disruption” in a vacuum and discovered far too late that their idea is a failure. Test your ideas quickly with real market data and pivot as necessary. (For more on pivots please see tip 4.)
For example, before we launched our first GlassQube Co-working location we did a vigorous competitive analysis which included market size, competitive analysis and pricing strategy. The initial data told us that there was a market gap and an opportunity for GlassQube’s offering. However, GlassQube is a capital-intensive business and we had to find a way to increase our confidence in the investment thesis. As a final due diligence exercise we ran a beta test using a “fake” GlassQube Co-working website. We acquired the domain, built a basic website, set up a few social media accounts and “launched” GlassQube Co-working without actually having a business yet.
Within days we had hundreds of inquiries for co-working and private office space, and over the coming months we actually pre-sold several memberships. So before we even had a physical location for GlassQube Co-working and before we invested any capital, we beta-tested our thesis and proved that it was correct with actual market data: customers.
3. Have a high risk tolerance
If you are risk-averse or cannot manage extreme stress then keep your day job. Seriously.
Entrepreneurship is superconcentrated toxic risk-induced stress in a bottle. The unindoctrinated tend to focus on the sexy image of the startup world, perpetual “disruption” and unicorns ringing the Nasdaq bell.
This is a fairy tale.
In reality, starting a business is brutally difficult and filled with innumerable opportunities for catastrophic failure; an endless source of hyper-extreme stress. If you are not excited about the prospect of spending months or perhaps years lying in bed awake at 4am, sweating profusely with your stomach in knots because you don’t know if your business will survive another day, then starting a business probably isn’t for you.
Entrepreneurship is a terrifying journey of calculated risk that becomes incrementally less terrifying as you continue to manage the risk and survive to fight another day.
4. Be tenacious but know when to pivot
“Everyone has a plan until they are punched in the face” – former world boxing champion “Iron” Mike Tyson.
Successful entrepreneurs must have the humility to acknowledge when they’ve been punched in the face and their plan isn’t working, coupled with the presence of mind to shake it off and change course. In the contemporary lexicon this is often referred to as a pivot.
The landscape of Silicon Valley unicorns is rife with legends of Company X that started off as a doing “A” but pivoted a number of times to find unicorn success doing “B”. Airbnb once sold cereal, Facebook started as a Harvard pseudo-Tinder, Patagonia originally only sold carabiners. The list goes on.
Let’s also pay tribute to those who failed to pivot; the whale blubber industry, ice harvesters and who remembers Sega Genesis?
At GlassQube we had to pivot very early upon realising that the start-up community we were targeting was not responding in the way we anticipated. We had assumed a much deeper, more sophisticated start-up ecosystem which proved to be categorically false.
We quickly pivoted to more effectively serve the SME market while still cultivating the small but growing start-up community. This proved to be a highly successful pivot and today SMEs comprise 85 per cent of the GlassQube community.
5. Health
This is an important component of any lifestyle analysis, career or otherwise. Whenever I speak to my mom she almost always ends the conversation with, “Take care of your health. Without your health you have nothing”. Although it gets a little annoying hearing this from her for the 1 zillionth time, she is of course right.
I have a long history training and competing in combat sports such as kickboxing and jiu-jitsu. I was able to maintain this through college, grad school and continued to have amateur fights into my early days as a banker.
However, as my career progressed my office vs gym hours became inversely correlated on a logarithmic scale and my fitness took a back seat to the punishing grind of Wall Street. I have never been as fat and out of shape as in my last year of investment banking in 2012.
Thankfully, today I am in much better shape. I train jiu-jitsu and play tennis at least eight hours a week every single week. I block out my weekly training schedule in my work calendar and I don’t schedule meetings or calls during this time. This is non-negotiable.
Of course I realise that not everyone has the flexibility or necessarily the desire to train eight hours a week, but the point is to invest in your body as an integral part of investing in your career.
You will have more energy, be more productive, reduce your stress and live a much better quality of life.
Becoming a successful entrepreneur should not be mutually exclusive with being healthy – because you can’t be a boss if you’re dead.