Around 6 months ago, Lisa joined our team as our Community & Communications Manager. She’s recently went through her first full Ignite programme: the 2022 Accelerator. Here, she shares her learnings to date.
I never thought I knew it all, but I did think I knew a fair bit about how tech startups work. I was very wrong. Here’s my Ignite story.
I graduated with a First from an MSc in entrepreneurship in 2017 whilst leading an enterprise student society. I’d learned about the basics of business plans, customer research, startup “methodology”, and so forth, and regularly attended more generic startup workshops around the country.
But Ignite blew my mind.
I’ve only been part of Ignite for a few months, but in that time I’ve learned a LOT.
And whilst you might think I’m biased because I work at Ignite, I can honestly say that Ignite’s totally changed my mindset, and the way I look at tech startups.
It’s impossible to capture all my learnings here in one blog, so I’ve condensed it down to three key points that I think have really stood out for me to date:
Starting a business is not a linear journey. It’s not a matter of, ‘do X Y Z like this and off you go’.
Sure, I knew that, but what I didn’t realise is how much contradiction there is in what has determined failure and success for different businesses.
Since joining Ignite, I have heard so many conflicting views on how to start a business, or on how to raise investment — and all from very credible people. None of them are actually wrong. Just because one thing worked for one person, doesn’t mean it will work for someone else (but it might).
Hearing contradicting views is a good thing. Ignite deliberately invites different people in to open founders up to different opinions: to show them different pathways, and different ways of thinking, and let them make up their own mind.
One mistake we see founders make, and which I know I would probably have made too, is taking all advice as gospel. This can send founders on a wild goose chase of contradictions. For example, an investor might say “if you do X Y Z, I might invest” or an advisor might say “do X Y Z. This worked for me and my business was successful” and, before you know it, you realise your business is far removed from what you wanted it to be, because you’ve been too busy doing what others suggested instead of focusing on what was really important for your business at that moment in time.
I’m not saying, don’t take advice on board. Take it on board (yes, please, please, do). Hey, that’s a big part of the reason why Ignite exists. But know you don’t have to act upon everything, and that people speak from their own frames of reference. You’re in charge of your business. Stay focused on what matters.
Before Ignite, I’d thought market research was about going on Mintel and getting reports on market trends, popping it in a pitch deck to justify your market need and speaking to a few potential customers to see if they agreed with your findings and had more info to help you beef up your value proposition.
I was wrong.
Startups are living learning machines, and you learn best by actively talking to potential customers, both before and throughout your building process.
Understanding the problems potential customers are facing is crucial. Most people know that. But the way you come to understand these problems, and the way customers talk to you, depends entirely on how you ask your questions. It’s a skill, and there are whole books dedicated to it (like the brilliant The Mom Test). But my point is, don’t just rely on external research reports and online surveys to give you that information.
And remember that the problem comes first, before product/solution. If you make wrong assumptions about the problem, such as that people are willing to pay for it, and you don’t test these assumptions by talking to the right people, you’ll waste time (and possibly money) building something that might not be a solution to anything scalable.
Whilst you don’t need investment to succeed, I always perceived getting that first bit of capital into the business as a good milestone (it’s not, it’s a possible means to a milestone). What I never appreciated though, and what I think is really really important to get across, is how that first round can affect your future funding, and why you need to plan long-term from the beginning. I don’t think people talk about this enough when they talk about startup investment in general. There’s an over-focus on the first raise.
→ It’s entirely possible to make it nearly impossible to raise future funding for your business (or, at least, get a good deal), because the terms of your first round sucked — or because you gave away too much equity to advisers and other partners.
“Equity is your most important asset” is something I’ve heard multiple times from different people. Dare to be precious about it.
But why might you want to raise again in the future? Why prepare for those “future rounds”? Of course, you don’t always have to (remember, there is no one trajectory to starting a business), but for many founders who are looking at starting a scalable business, there will be multiple rounds involved. They’ll likely use the first raise to essentially ‘buy more time’ to talk to customers and build and test solutions.
Your first raise is not a matter of ‘I’ve raised funds to now build a product that will soon make money’. It’s a journey of testing, learning, building, testing, and doing it all over again to come to the proposal of a viable solution. What I mean is: if you’re early stage, you’re not going to build and scale something straight away. You’re going to burn through the cash.
Even if you don’t think you need multiple rounds, well, OK but what if you do? You want to be in a position where you’re able to consider it if needed (aka where you haven’t given too much away already). So just be aware that you might need more money in the future. That it might take you longer than you think to find a market-fit for your product, and that you might not get it right the first time (you might even have to go back to the drawing board!), and leave room in your equity allocations (aka cap table) to mitigate that risk.
As I’m writing this, we’re busy planning our next Pre-Accelerator. I’m super looking forward to the start of this programme next year, and to continue learning as part of Ignite!
I think it’s pretty obvious, but nonetheless I’d like to disclaim that much of what I’ve said here are my interpretations and paraphrases from genius brains I’ve had the luck to be able to listen to over the past few months. A huge thank you to Jo, and anyone who’s supported Ignite, for letting me join all the sessions and learn along :)