When it comes down to startups who better to dish out the right kind of advice than CEO Ray Reddy, Ray was able to take an idea and have it blossom into a $25 Million dollar sale to Google; but this success didn’t come overnight and it certainly didn’t come without headaches. Ray recaps that there were things that he realizes his startup both excelled at, and had shortcomings in:
Things We Did Right:
– Avoid Slideware: When it comes down to a startups, everyone has an idea, a product on the drawing board. What they don’t have is the actual product, or at least a prototype. Venture Capitalists (VC’s) love when you can approach them saying “This is what we’ve done and we’d like money to take it further” rather than saying “This is what we would like to do!”
– Culture is Value: Many people will tell you that company culture is a nice feature but doesn’t add value, but when you look at places like Google, or other tech startups you can certainly see there is a value. With a culture people are willing to work harder, commit themselves to the long hours, and work together building on each other’s successes and combating each other’s failures. Even as a company continues to grow new people enter the mix and can feel and thrive on the culture. Ray suggests that he say a 20-30% increase in productivity when his company developed a culture.
– PR Traction Locally: Gaining a local presence is a huge deal, when Pushlife first started out it was an unknown name in Toronto, when posting jobs for interns the response was 2-3 candidates each time and as Ray says “They were absolute crap!” but after getting in the local news, getting the name out there and doing talks at local tech Universities, Pushlife’s next job posting saw over 400 applicants (topping the applicants for RIM at that particular University Co-Op site)
– Cash Efficiency is Key: Keep your cash flow positive, it doesn’t matter how much profit you make, or how many assets you own, if at he end of the week you don’t have the cash to pay your employee’s then your sunk. Go after every government grant you can. Especially in the technology and research fields.
– Merger and Acquisition prep: It’s important to be prepared for possible Merger and Acquisition at all times, and keeping this M&A level of preparedness is also just good business practice. Make sure your patents are in order and you have proper intellectual property assignments. It is important that the company your building owns the IP/Patent rights of the product it’s building; this is one of the key assets in any acquisition and any solid growth business model.
– Early Focus on Business Model: No matter what your startup hopes to achieve it’s important to have an idea of a revenue model right from the get go. Even Google, from the moment it realized it was going to be a company rather than just a pet-project, had evolved to having a revenue model in which the user-experience focus would generate profits by using ads. If your business model can not support some source of revenue then you do not have a business you have a foundation. Free is not a business model.
Got a startup? Or a concept for one? Take a step back and look at your revenue model, your intellectual property and your culture, maybe you could stand to gain some valuable traction from Ray’s experiences.