You asked and I, with a little help from friends, have answered. Questions from Akhtar, Jeremy and Ben (where are the women?) on hiring that first employee, finding angel investors and getting through the door to sell. #AskPiers #ScaleUp
Selling and getting through the door
There is no shortcut Akhtar. It involves wearing out several pairs of shoes, networking and having a clear strategy so that you don’t waste time and resource. It depends why you want to connect - to test a MVP and/or to sell to them. I am assuming that this is sales related - then you need to understand that selling is a process (and a profession) with many 'systems' that boil down to the same stages from marketing and identifying prospects to the close. It took me a while to realise back in 2000 that it doesn’t matter what you do, you need to always be selling - and be good at it. Marketing is a science. If you have no experience about how to build a sales pipeline, you need somebody who does, at least to support you. Customers are busy and you are not the only person trying to sell to them no matter how much value you honestly believe your product will add to their business and bottom line. You need to communicate the features and benefits succinctly and ideally use reference customer case studies to demonstrate that it does create value – and don't use a friend! The market is very honest; listen to it. This is how you market test your product and go to market strategy and if it isn’t working, change it. Use every online and real-world network available. Network. Start local and prove your product or iterate it until you can. You may find all of the answers in Silicon Batley before you look further afield.
Hiring your first employees
Business is about people – hiring those that fit your culture and perform while parting with those that don’t – quickly. You just don’t know whether somebody is going to work out until they start working with you no matter what their CV or referees say. Also, working for a small company is very different if they are used to corporate life with drawers full of spare staplers should they break one. You have to hire the best people you can and then find out very fast whether they are going to make it. This is how you manage the risk that seems to be keeping you awake at nights. Few small companies manage people properly as (a) some founders haven’t done it before, and (b) it can be time consuming and require more tedious admin when you have fires to light and markets to conquer. But, do so and from the very outset. Set very clear objectives for the probationary period, but make sure you deliver your side of the bargain in terms of support, providing the resources promised and be available. At the end of that period you will know the answer in your gut. But still many ignore that (I have in the past) and don’t make a change because it is more work and another recruitment process with expense – don’t fall into that trap as it will cost you more in the long-run. Also, be aware of the reality that you and/or your business may not be for them. Tony Hsieh, the founder of Amazon-owned shoe retailer Zappos, pays new joiners $1,000 to leave within the first few weeks to avoid people hanging on to a job they don’t really like. It works both ways.
Your business can’t grow without adding people, so manage your risk and bite the bullet.
Where are the angels?
Don’t pay such fees. I am sure there is a nice business ‘matching’ entrepreneurs with angel investors, but most serious angel investors would not approach their search for investments that way. Nor do you want to somebody investing and perhaps taking a board seat that you have not established a relationship with having met them on something akin to Tinder!
The best way to source angel investors is to start local and within your own networks. You don’t have to go out gunning for Peter Thiel. Then reach out further and look into who has invested into similar companies and talk to other founders. You will be surprised at how supportive other founders can be as they get it. Approach the established, proven and well-organised angel networks. I keep plugging this (I am a NED at British Business Bank) as its good, but try the Finance Hub and associations such as the UK Business Angels Association (UKBAA). The process will test you and your business model and pitch, which will require work – they always do. Your 20th pitch will far better than the 1st.
Keep going, but be systematic and relentless. The thing about funding is that often you just need to find ‘the one’ and then others will follow.