Starting a Start Up
I often get asked about how, and why, I started AiRE (my most recent exit). Every entrepreneur’s journey is different, so before I answer the question, just make sure that you take it with a grain of salt that this is by no means a one-size-fits-all process.
I have always wanted to run my own business. My first attempt was a print broking business when I was around 20 years old. Since then, I can count at least 5 other attempts that have had various levels of success, but nothing like AiRE. So what made AiRE different? Well here are the key things that I did differently to all the other false starts.
Have a 1 Year Personal Runway
Runway is the amount of time you have to operate your business until it runs out of cash. But for me, it wasn’t just my business that would I needed to worry about. I had 2 small kids, a wife and a mortgage to pay. While my wife earned a good income, we still needed a second income to make sure we could keep our house. The cost of founding a start up can vary depending on what your chosen product or market is. For me, doing the software development myself, the actual startup costs were small. But the biggest thing I needed to make sure of is that I could go at least 1 year without needing a pay cheque. And I personally wasn’t prepared to ask for money from other people to act as seed capital.
So, I saved up. I did the maths and new that I needed about $100k in the bank to ensure that I had enough time to get the business up and running, and earning enough to give me a small income. I also needed to be comfortable to lose that money if it didn’t work. I also assumed that I could get another job if it did fail. Which is always a big assumption. If you’ve ever been unemployed (and I have) you know how stressful that situation can be.
Start ups are gambling. They are high risk. If you find the proposition of losing $100k of your savings too much to bare, then I’d be thinking again about whether this is the right option for you. For me, I compared the risk of losing all of that money with the regret of never having given my dream a chance. I could live with failing. But not with never having truly tried.
Think Big, Start Small
Until I started AiRE, I’d always approached life in 3-5 year increments. Isn’t that the typical “vision” question you get asked? “Where do you see yourself in 5 years?” The problem with a 5 year timeline, is that there’s very few really big problems that fit within a 5 year timeframe. The genesis for AiRE came when someone asked me a bigger question. “What could I spend the next 25 years of my life doing?” 25 years? 25 years!? When you think about the year 2048, one can’t help but envisage futuristic concepts like flying cars and teleportation stations.
But that’s the point. The world changes quickly. If you focus on what’s 5 years away, chances are, by the time you get your business up to speed and positioned to take advantage of the market, you’re going to be too late. Not only that, but you’re going to limit your possibilities to those that are constrained by today’s technology.
In 2017, Artificial Intelligence was just starting to get in to the mainstream business arena. This amazing new technology that was going to be the key to unlocking human potential. Nearly every key note on the topic was about how AI was going to mean that within a decade, 40% of human jobs would be replaced by robots. Now that sounded interesting. I loved data. I loved technology. And here we were, at the beginning of a mass migration from human labour to digital labour.
Learn the Business First
You can’t underestimate the importance of experience. While some might say that it isn’t necessary, or that it stops you from thinking differently, I would encourage you to learn the business you want to be in while getting paid a salary.
While I always knew that I was likely to do a startup in the software space, I’d never really worked in a large technology business. So, when the opportunity came up to take a senior role at a publicly listed technology company, I jumped at the chance. And I committed at least 3 years to learning as much as I could in the process. Some people go do a university degree for 3 years. I chose to learn on the job. But I didn’t just seek to understand my role, but rather all the roles that existed in the business to be successful.
I built strong relationships with the CTO, CFO and CEO. I spent time with the head of support. I spent time with the engineers. I got to understand what a software business looked like at scale. I learnt what worked, and what didn’t.
My “degree” turned out to be 4 years long. And while you might think that’s a long time to lose before starting your business, I can’t emphasise how valuable these years of learning were. I’m almost certain that I wouldn’t have been as successful as I was. While it may not help you in the start up days, knowing what the business looks like at maturity makes it easier to understand where it needs to be in the end.
