Navigating the Jungle: A Survival Guide for Student Entrepreneurs

So you’ve got a business idea, you want to get your first company off the ground and you need to balance this with getting the degree you want. It’s a tough position to be in – particularly if you don’t have much business experience. The good news is that there are a wealth of easily accessible people, resources and organisations which can help you out!

I was in exactly this position a few years ago. I had a business idea during my second year at university and started with the student society for entrepreneurship (Oxford Entrepreneurs). I also found great value in the resources below and these helped me develop my company GroupSpaces to where it is today.

Entrepreneurship Societies

I strongly advocate these – the entrepreneurship society at your university is a fantastic resource. The speaker events it holds can inspire you, the other members of the society can be your co-founders and the more experienced entrepreneurs in the society can offer you guidance and direction. If you’re not already a member, you can find out how to join the entrepreneurship society at your university at www.groupspaces.com.

Online Resources and Books

There are a plethora of online resources that will help you with ‘starting a business’ ranging from the embarrassing to the enlightening. Here are my top three that will provide you with genuine value:

1. Paul Graham’s essays at www.paulgraham.com – over 100 thought-provoking essays with a focus on entrepreneurship and technology by one of the global thought leaders on entrepreneurship. If you haven’t come across these before I’d recommend starting with “A Student’s Guide to Startups” and “Why to Not Not Start a Startup”. Paul sold his own startup Viaweb to Yahoo! in 1999 for $49.6M.
2. Stanford University’s Entrepreneurship Corner at ecorner.stanford.edu – over 1,200 educational speaker videos about all aspects of entrepreneurship, featuring the world’s top venture capitalists and the entrepreneurs behind Facebook, Google and dozens of other extremely successful companies.
3. Business Link at www.businesslink.gov.uk – guides to the majority of paperwork-related issues you will face starting a business, ranging from incorporating your company to payroll, taxation and selling your business (hopefully you’ll get that far!).

There are also a huge number of books about starting a business. Here are my top three:

1. Founders at Work by Jessica Livingston – a collection of short, candid interviews with founders of over 30 of the most successful technology companies from the last few decades such as Apple, PayPal and Dell. This brings the notion of starting a great company down to earth – you’ll be surprised by how clueless some of these entrepreneurs were at the beginning!
2. The Art of the Start by Guy Kawasaki – a how-to guide to making ideas happen by the venture capitalist and former Chief Evangelist at Apple.
3. The Four Steps to the Epiphany by Steve Blank – a guide to launching a company using the “Customer Development” methodology, something which I believe will become the de facto approach to starting a business in years to come. Steve founded or worked in 8 startup companies in California’s Silicon Valley.

Support Organisations and Schemes

There are several national and international supporting services, campaigns and initiatives which offer mentoring, advice, guidance and funding to students wishing to start companies. Here are 5 which you might find useful:

NCGE (National Council of Graduate Entrepreneurship) works to reshape and improve the environment for enterprise and entrepreneurship in higher education. It also works directly with students and recent graduates to support those who want to start a business through its FlyingStart initiative which provides training, mentoring and expert advice. You can build an online support team, find out about FlyingStart events and read success stories of entrepreneurs who have benefited from working with NCGE at www.flyingstartonline.com.

Shell LiveWIRE combines an online support service and awards programme for young entrepreneurs in the UK. It is one of the longest running youth enterprise schemes in the UK, promoting enterprise as a real career option since 1982. You can ask questions and receive expert video answers, discuss business issues with other young entrepreneurs and access an online business library at www.shell-livewire.org.

NACUE (National Advisory Consortium of University Entrepreneurs) is new to the scene. It is a national organisation that supports and represents university enterprise societies across the UK. NACUE provides budding entrepreneurs with a national, diverse and dynamic network to support them in their start up process. From providing students with the latest news on training, business support services, enterprise conferences, competitions and funding and incubation opportunities to enabling them to connect locally, regionally and nationally with like-minded young entrepreneurs across the country, over the next few months NACUE will become a central reference point for student entrepreneurs across the UK. For more information on NACUE and to sign up for its weekly e-newsletter, visit www.nacue.com

Seedcamp is Europe’s leading micro-seed fund and each year it provides 20 select, very early-stage software companies with a week of workshops and networking in London with Europe’s top investors, product experts and marketing gurus. At the end of this week, all 20 teams will have developed a network that would otherwise have taken years to build and 5-7 teams receive a small investment of up to €50k. Recent student success stories include Kyko and Zoombu, both of whom received Seedcamp investment in September 2008 and were founded by Oxford University students. To find out more and apply for Seedcamp Week 2009, visit www.seedcamp.com.

Y Combinator is a Silicon Valley-based micro-seed fund (founded in part by Paul Graham and Jessica Livingston – both mentioned above) which runs a bi-annual 3-month scheme for 10-20 teams at a time and offers investments of $5k + $5k per founder. The 3-month period runs from January to March and July to September each year and leads up to an “Investor Day” where each team gets to pitch their idea to a room full of Silicon Valley’s top angel investors and venture capitalists. Y Combinator has made in excess of 100 investments to date, 10 of which have been in British teams. The most notable being Songkick which was founded by Cambridge graduates and has raised in excess of $5M venture capital investment to date; and Auctomatic which was founded by Oxford graduates and sold to publicly-traded Canadian company Live Current for $5M in March last year. To find out more and apply for the next batch, visit www.ycombinator.com.

The last resource I’ll leave you with is myself – if you have any questions, feel free to email me on david [@] davidlanger.co.uk or tweet me on @langer

You can read the print version of this article in Issue #19 of The Gateway newspaper

The Year That Made Me: Nick House

Nick House

Nick House is the fourth and final interviewee for The Year That Made Me series. He follows other successful entrepreneurs Michael Smith, Jamie Murray Wells and Kulveer Taggar.

After organising parties and events while studying at Leeds University, Nick started working at Citibank upon graduation. However, this new life was neither as much fun nor as satisfying as the old, and in 1999, shortly after starting at Citibank, he left to establish Nick House Entertainment (NHE group), which would offer consultancy on all areas within the bar, restaurant and nightclub industry.

Since then, the company has expanded from consulting and promotions to also owning and operating some of the top venues in London, such as Mahiki, Whisky Mist, Tini and The Punch Bowl.

Mahiki, arguably the most well-known of these is now frequented by celebrity clientele such as Paris Hilton, Girls Aloud and Princes William and Harry.

Which was the year that made you?

No year has actually made me but in terms of stepping stones 2001 was when I made my commitment to working in the bar and club business and that commitment meant a night and day, 7 days a week focus.

What were the main challenges you were facing at this time?

Opening two new premium venues in the darkest depths of the recession, raising finance from financial institutions during a credit freeze and attempting to maintain growth on our existing bars and clubs during turbulent trading times.

You ran events and parties while you were studying at Leeds. What did you learn that helped you when you started NHE?

I learnt that it was an incredibly fun way to make money and meet exciting people. I also learnt there was a direct correlation between what you got out and what you put in.

After graduating from Leeds University you moved to London to start working at Citibank. How did you find it and why did you decide to leave it behind soon after starting?

I joined Citibank because I suffered a momentary lapse of focus and followed rest of the pack into the City. Looking at my watch all day helped me make the decision to leave soon after starting.

What advice would you give to current students thinking about starting their own business after graduating?

The fortune always favours the bold and there is no such thing as a wrong decision simply a right decision next time.  Never be afraid to make mistakes as they are far cheaper at an early age.

Which people inspired you early on in your career?

I learnt from many entrepreneurs, in particular from Piers Adam and Eric Yu. They taught me a lot about the social dynamics of people and what communities gel with other communities.  Understanding how people work is the first step in driving them into a party.

More recently you moved from club promotion to club ownership with Mahiki and Whisky Mist. What new challenges came with this move?

New challenges included the operations side of the business, cost control, gross profit margin, licensing and ultimately the game of politics with local MPs and the police force – regrettably!  Other than that, running clubs is no different to running parties, except that the stakes are a little higher.

Last question, what’s next?

A few more clubs are opening this year but I have got my sights set on opening a 3000 plus capacity club in the heart of London.

You can read the print version of this article in issue #19 of The Gateway newspaper

The Year That Made Me: Michael Smith

Michael Smith

Michael Smith is the third interviewee in this 4-part series which explores the pivotal year in some successful entrepreneurs’ careers. In 1998, less than a year after graduating from the University of Birmingham, Michael launched Hotbox.co.uk (now Firebox.com), an Internet retailer which now turns over tens of millions of dollars each year and is responsible for inventing the Shot Glass Chess set and selling many other games and gadgets. Then in 2004 Michael launched Mind Candy, which after raising $10M+ venture capital is now one of the world’s leading developers of social multi-player games, helping kids around the world play and connect.

Which was the year that made you?

1998, the year I launched Hotbox.co.uk, invented the Shot Glass Chess set and subsequently realised that my first business was going to work.

What was your situation at the start of 1998?

After graduating in the June of 1997, I went travelling for a few months before taking a job with Goldman Sachs. However, it wasn’t what I really wanted to be doing and my good friend from university Tom Boardman was in a similar position. Then in February 1998, we read a book called “Business on the Internet”, made lots of notes and thought setting up an Internet business would be a cool thing to do.

What happened next?

We were both fans of men’s and gadget magazines and noticed that while they regularly reviewed gadgets, they never promoted an online retailer that sold them. After doing some research and finding out that there actually weren’t any, we wanted to capitalise on this opportunity. So we quit our respective jobs, and started Hotbox.co.uk.

We started off working from Tom’s attic and both did some clinical drugs trials in order to earn a few hundred pounds to cover our living expenses. After my Mum heard about the trials, she gave us £1,000 to help keep us going without having to risk our health doing more trials!

By the summer, we had some friends buying gadgets from the website, but turnover was tiny. Then one night in a pub in Cardiff we came up with the idea for the Shot Glass Chess set. It’s essentially a chess board but all the pieces are replaced with shot glasses. We described it as the Thinking Man’s Drinking Game. Our friends all liked the idea when we explained it to them but to our surprise, we couldn’t find anywhere that sold or manufactured it. So the next day we went into WHSmith, scribbled down the physical addresses of several magazine editors and journalists and sent them a press release we put together. Almost immediately we had a lot of interest in the concept – from BBC Wales to magazines such as Loaded and FHM.

So everyone liked your idea but you had no Shot Glass Chess sets to sell yet, no suppliers to buy some from and hardly any money. How did you overcome this situation?

We knew that we were going to receive a flurry of press in the lead up to Christmas so we spoke to some manufacturers, explained our predicament and ask if they would produce 100 sets on credit. To our delight, one agreed. Then in the lead up to Christmas we started receiving orders, the whole initial batch of sets were shipped and at this point we knew the business was going to work.

How did you proceed after gaining this early traction with the Shot Glass Chess sets?

By early 1999, we had already made tens of thousands of pounds and hired two more people into our team which allowed us to scale up our operation using this money

A few months later we were at a networking event called First Tuesday and we spoke to a Venture Capitalist (VC) about our ideas and early success. The VC was interested in finding out more and we needed to write a business plan. However, at 23 years old and with no knowledge of how to do this, it was far from straightforward. Anyway, we read as much as we could on the subject, made up some financial models that added up and put a plan down on paper. By the end of the year we had secured £500,000 from the venture capital firm New Media Spark.

What advice would you give to recent graduates raising money for their first business?

If you’re trying to raise money for your first business today, I’d say the most important thing is to get out in front of as many investors as possible. Go to networking events, have coffee with angels, present at ‘angel networks’ and take advantage of any other ways you can get time with potential investors.

Given the current global economic climate, do you think now is a good time for new graduates to start a company?

I think it’s always a good time to start a company – recession or not. We are in an economic downturn but bear in mind that Apple, Microsoft and many other hugely successful companies were founded in recessions. It’s also tougher to get into traditional work, so starting a company might be a more appealing option for some people upon graduation.

How much help was it having a co-founder when starting up?

It is really tough to set up a business. Working with Tom made a huge difference – startups invariably have high highs and low lows and having a co-founder helps to keep the morale up during the difficult periods.

University is a great environment in which to find a co-founder because you get to work with people, get to know them as friends and therefore get to know their strengths, weaknesses and potential fit with you.

You’ve now started angel investing yourself. What do you look for from potential investments?

I’ve made about 6-8 investments and I like to invest in companies started up by friends, or friends of friends. The character and attitude of the person you’re investing in is more important than the actual idea so it’s a huge advantage to know a little about that individual before you invest.

I like consumer facing businesses, particularly ideas that I would use myself. The industries I tend to go for are online gaming and social networks.

Which entrepreneurs still inspire you?

Steve Jobs is my favourite entrepreneur. He made computers sexy. He’s revolutionised four major industries in his career: personal computers, animation, music, and mobile.

One problem with the UK is that there are not as many role models as there are in the US. There are a few greats such as Richard Branson but we need more in the next generation.

Last question, what’s next?

I’m currently spending 99% of my time on Mind Candy. We’ve just started generating revenue from our second product, Moshi Monsters, a social multi-player game aimed at kids of all ages. Over the next year we’ll be looking to develop this aggressively – a similar game called Club Penguin was acquired by Disney for $700M in August 2007 which is evidence of the opportunity in this rapidly growing sector.

With Firebox.com, we’ve had a couple of conversations with potential acquirers but we haven’t come to any agreements yet. We’re a Venture Capital backed business so it’s important that we are planning for an exit at some point.

While most of my time is spent developing Moshi Monsters, I have a few other projects on the go such as organising entrepreneur meet-ups, a music festival, and a possible book.

The life of entrepreneur is hectic, but the decision to launch my own business a decade ago remains the best thing I’ve ever down. I’d encourage anyone reading this to shake off the fear and give it a go.  Life’s too short to stand on the sidelines watching.

You can read the print version of this article in issue #17 of The Gateway newspaper and follow Michael on Twitter at @acton

The Year That Made Me: Jamie Murray Wells

Jamie Murray Wells

Jamie Murray Wells is the second interviewee in this 4-part series exploring the pivotal year in some successful entrepreneurs’ careers. He follows on from Kulveer Taggar – an Oxford graduate who quit his Investment Banking job at Deutsche Bank in London and ended up moving to Silicon Valley and selling his company Auctomatic for $5M less than a year later.

While studying for his finals in English at the University of the West of England, Jamie discovered that he needed to start wearing spectacles. When he also discovered that the cost of a pair from his optician was £150 even though they would only cost £7 to make, he smelt a big opportunity. This inspired him to use the rest of his student loan to set up Glasses Direct, a business which would sell spectacles directly to the public, over the Internet. In the first year of business, Glasses Direct sold 22,000 pairs, and had an annual turnover of £1M, the company now sells a pair every few minutes over the web, with annual turnover of around £4m, and estimates that it has saved the British public over £40m on their prescription eyewear.

Which was the year that changed your life?

2007, the year Glasses Direct came of age. The company stopped feeling like a bootstrapped startup and this was the first year where our mission to become a global household brand became a real possibility.

What was your situation at the start of 2007?

We were a team of 16 students and recent graduates based in a barn in Wiltshire. Over the Christmas break I was running the numbers out to see how I expected the business to grow. However, despite our growth rate of 50-100% annually, we were going to take many years to reach the market share I wanted. Following this startling realisation, I knew that we needed a financial injection in order to hire a senior management team and grow the business even more aggressively.

How did you proceed?

I worked out that we needed £3M in order to achieve my objectives and I knew that Venture Capital was the only sensible route to taking on that level of financing. My first task was to persuade the existing board that this was the right move for the business.

One thing to realise when you set out to raise Venture Capital, is that it’s a long process and if you don’t end up securing a deal, you may find it very tough to continue running your business as you are likely to have taken a lot of time out of day-to-day operations and you might be running out of money.

Despite the obvious risks associated with this route, I did manage to convince my board that this was the correct choice.

What happened during your fundraising process?

For the first few months I spent a lot of time getting the train to and from London, building up my network and learning more about the VC community. I knew that I only wanted to work with the best VCs and this meant I needed to get good at pitching. Fast. Entering my first VC meetings, I felt like I had just entered a boxing ring with someone several weight categories above me. They had spent years negotiating with entrepreneurs like me and I was little more than a student.

Nevertheless, I did get the hang of it and after 7 months we were ready to close a deal with two top-tier VCs – Index Ventures and Highland Capital Partners. On July 18th 2007 – the day on which the deal was meant to close, we were close to running out of money and then a legal complication came up. I was worried that the deal was not going to close, pacing up and down the corridor of my lawyer’s office in London’s Gherkin building. Luckily, we found a solution and at 4pm that day, £3M arrived in the Glasses Direct bank account. Soon afterwards I was in the bar on the roof of the Gherkin where we drank some champagne to celebrate. It was incredible going from potentially nothing, to everything – a real make or break day.

What advice would you give to other young entrepreneurs looking to raise Venture Capital investment?

Give a great pitch. Illustrate what your product/service looks like now and in the future. Use all available technology (video etc.) to build an interactive and experiential presentation to get your investor to emotionally buy in.

Approach a wide range of investors in order to make your deal competitive. Too many entrepreneurs only approach the same 7-8 VCs who all talk to each other. Seek out family funds, angel investors and any other source you can access.

Build a great team. Even if you can’t hire top people at an executive level initially, try to get one or two on board as Non-Executive Directors or NEDs before your fundraise. For example, I saw David Magliano (Director of Marketing at Easyjet) speak at a Marketing Society event at Claridges a few years ago and went up to him straight after his speech explaining why he needed to get involved with Glasses Direct. It worked and soon afterwards he came on board as an NED – this turned out to be very useful when we came round to fundraising and developing the business.

If and when you do complete an investment round, hit the ground running straightaway. You only get one chance to spend the money and make the business work.

Make sure the people who you appoint to your board you a) like and b) trust. You’re ‘getting into bed’ with these people. Spend time with them. Speak to their other investee companies and take references on them. Take references on their references.

I would also advocate keeping the board as small as possible. If you want to have more people in closely involved in a non-executive capacity, create an informal “Advisory Board” for these people.

So, in July 2007 £3M had just landed in the Glasses Direct bank account. Did that change the way you ran the business subsequently?

After closing, everyone previously on our board left, except for myself and David Magliano. Saul Klein from Index Ventures and Fergal Mullen from Highland Capital Partners came on from the VCs, and I brought on Michael Ross (Founder, Figleaves.com) as an independent 5th Board Member for his experience in e-commerce. With such an elite board appointed, I needed to step up my game more than ever.

By the end of 2007, we had set up a fulfilment office in Wiltshire, an office in London, hired a COO from Betfair and we had grown the team to 40 people in total. As the business has grown, my role has become less hands-on and more managerial. I had hired in a senior management team and I needed to set targets, measure them carefully and take action where there was underperformance. As CEO, I needed to remain objective, keep my cool, think everything through, be flexible and be sure to take other people’s views into account.

I notice that you have advised several politicians about policy on entrepreneurship. How did you first get involved with Politics?

Entrepreneurs like to take on great challenges and I believe that the political system contains many great problems and challenges. I wanted to inject some entrepreneurial thinking into it. My first opportunity to get seriously involved came about after I won the 2006 Enterprising Young Brits award, which was presented by Gordon Brown (at that time, Chancellor of the Exchequer). He invited me to join a round table of entrepreneurs who would offer him and his team advice.

Following this, I was then asked to join George Osborne’s New Enterprise Council. My main motivation with it all is to ensure that young entrepreneurs have the best chance of succeeding with their businesses.

Which entrepreneurs do you still find inspiring?

Steve Jobs (Apple), Jeff Bezos (Amazon), Mark Zuckerberg (Facebook) and Warren Buffett (Berkshire Hathaway) all come to mind. Steve has had a phenomenal career – he has brought into existence many of the devices we rely upon today. He is also a great salesman, something which is important for entrepreneurs. Check out some of his presentations on YouTube, he’s like a magician. Jeff for his consumer-focused approach: every penny spent by the company is on something customer-facing. Initially employees at Amazon had to build their own desks as desks weren’t things that directly benefited their customers in any way. Mark, as despite being young, appears to have the longevity as CEO which is both impressive and interesting to watch. Finally, Warren for always taking a long-term approach – short-termist approaches don’t often work in business.

Last question, what’s next?

I’m still fully focused (excuse the pun) on Glasses Direct. We’re in the process of setting up our US office in Salt Lake City and we’re about to release some new virtual mirror technology which will allow people to try on their glasses online!

And like every other true entrepreneur, I never stop looking for the next big thing.

You can read the print version of this article in issue #16 of The Gateway newspaper

The Gateway. Careers info done right.

On a chilly evening the week before Christmas, I had the pleasure of dining at The Oxford Retreat with Mawuli Ladzekpo, Editor of The Gateway. Mawuli (currently a 3rd year PPEist from Exeter College) and I had bumped into each other at the Oxford freshers’ fair a couple of times in the past. However, the incredibly hectic environment hadn’t afforded us the opportunity to get to know one another properly. Now, months later, we were sitting in GroupSpaces’ local at a very exciting time for both of our young companies.

Onto The Gateway. Not only is it the UK’s first national student newspaper, but it’s also the first student paper in the UK to solely focus on business and finance. Together with Mawuli, it was set up by fellow Oxford students Max Lewis and Chris Wilkinson last summer. With an initial motivation to help students get jobs in investment banking, the concept has evolved and broadened to now cover consulting, law and (hopefully) a good level of information about other careers.

What I particularly like is the relevance of its content for students. Having done a few internships myself, and run the application-interview gauntlet more times than I care to remember, I understand the common pains well. For instance, here’s one situation encountered far too often: you’re starting to prepare the night before an interview. No, wait – probably 1am on the morning of a 9.30am interview. You’re weighing up the relative value of 2 hours cramming and 4 hours sleep against 4 hours of cramming and 2 hours sleep. You want a source that provides up-to-date information on the markets and current macroeconomic environment at a suitable level, and you also want a source that reminds you of the nitty gritty detail on key interview techniques. At the very least, you need to put together a few thoughtful arguments that you will fit into a good cross-section of interview scenarios.

Well The Gateway does much of the hard work for you. You pick up copies of the last couple of editions, check what the hot topics are, get the lowdown from the people who do the recruitment – so you know it’s not some off-the-wall analyst take on things, and there you have it – you’ve got your arguments right there and then. All that’s left is to check some company-specific information like the Thomson Financial rankings, recent deals and your done.

Having published the first edition on 8^th October with fortnightly 8-page copies being distributed across Oxford University for the rest of Michaelmas Term, the newspaper has just gone national, distributing tens of thousands of 24-page copies across many of the UK’s top universities.

Going back to dinner with Mawuli – during the evening he mentioned that he had come across my blog and he asked what subject I’d studied and where else I had written. When I owned up to this blog being the first time I’d written anything outside of an e-mail client or application form since my GCSE English exam, and that I was also a mathematics student, he became a little hesitant. Nevertheless, he proceeded to ask if I could write a new column on entrepreneurship for The Gateway this term.

It was an honour for me to accept, and on Wednesday, my first article was published. You can view it in its original context here (page 8).

It was my first ever experience of writing something that would be edited, and despite a significant cut in length, I’m pretty happy with the final result. Some readers have said my recent posts were too long anyway…

I’ll post the rest of the series here over the coming weeks.