An Expert’s Guide To Creating A Successful Startup
Illustration by Mr Giordano Poloni
A new book by entrepreneurs Messrs Courtney and Carter Reum explains how to get your business up and running.
According to the book Shortcut Your Startup by Messrs Courtney and Carter Reum, new technology means that the time it takes for an entrepreneur to become phenomenally rich has never been quicker. And they should know. Formerly employees of Goldman Sachs and now startup veterans, the brothers helped to take companies such as Under Armour and Vitamin Water public with M13, their brand development and investment company.
But before you get ahead of yourself and tell your boss where to stick it, Mr Courtney Reum would like to remind you that while technology has speeded up the rate at which startups can achieve phenomenal growth, it has also intensified the level of competition in the marketplace. “The internet allows entrepreneurs to start some businesses for as little as $5,000,” he says. “This has also created an environment in which it is more challenging to compete and grow.”
Success therefore requires new strategies and tactics in order to move quickly and stand out. Shortcut Your Startup draws directly from the experience of the Reum brothers and provides new insights that they call “startup switch-ups” – hacks that will help your new business become the next big thing.
GAIN FIRST-HAND EXPERIENCE
“The biggest initial mistake is not doing enough research,” says Mr Reum. “You might think you have a great idea that no one’s done before, but is that really the case? What else is out there? And even if it is genuinely new, perhaps the reason why no one has thought of doing it is because it isn’t really that good an idea. A friend of ours from Goldman Sachs had an idea to launch an Italian version of Chipotle [a chain of Mexican restaurants in the US], but instead of jumping straight in and launching the business, he got in the trenches and worked minimum wage on the line at a branch of Chipotle. Here he learned first hand the challenging demands of running a well-branded restaurant, and has since gone on to launch a successful financial technology business instead.”
Time really is money
“We’ve all heard the adage ‘time is money’, and in the startup world that is particularly true,” says Mr Reum. “Intense competition means time is your scarcest resource. If you plan to do something in six months, then you may find that somebody else is already doing it, and you’ll lose first-mover advantage. Investors know that even with the best product or service, if you move slowly, it’s much easier for others to copy you. Investors realise that your time is their money. The longer you take, the more capital your business will need and the bigger your exit [how much you sell for] will need to be for anyone to make real money.”
Make sure it’s for you
“Any business venture, no matter the industry or stage of the company, involves risk,” says Mr Reum. “As a founder you have to be comfortable with risk. Although we often joke that we were just young enough and stupid enough to leave Goldman to become entrepreneurs, we were also interested in taking a risk, provided it was thoughtful and strategic one. Everyone can be an entrepreneur, but that doesn’t mean everyone should. I would say that the number-one quality you need to have is resilience. When we launched Veev, an acai-infused spirit based on vodka, the product had the slightest yellow tint to it. We noticed the colour continuing to build. It was in the early days of the business and it felt like the end of the world. We decided to sell the existing product and track down the root of the problem. What it taught us was that there are very few problems you can’t bounce back from.”
Become an intrapreneur instead
“For those with an entrepreneurial mindset but who don’t want to assume all the risk of starting their own business, all is not lost,” says Mr Reum. “Become an ‘intrapreneur’ instead. Some companies encourage entrepreneurial activity from within. Adobe’s Kickbox initiative gives employees who have an idea $1,000 on a prepaid credit card, and enrols them on a two-day workshop to develop and test out their concept. If one Adobe executive approves the idea, it is passed on to the next round of funding and development. Such opportunities are increasingly common in big firms. Google famously allows employees to dedicate 20 per cent of their time to whatever they think will be beneficial to the company. Some of the products that have come out of this approach are Google News, AdSense and Gmail.”
Look the business
Illustrations by Mr Giordano Poloni