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Simo Dragicevic (EMBA 2011)
Don't let the doubters grind you down, life as a start-up entrepreneur
The objective of this article is to explain the entrepreneurial journey with my start-up Bet Buddy, a data analytics provider in the gaming industry.
When I started Bet Buddy over 18 months ago my ideas and vision were often dismissed by people within the industry. I was told that that I was addressing problems that were too difficult to solve or highlighting issues that were taboo or too sensitive for gambling operators to tackle head-on.
Looking back, this was actually a positive sign as good ideas are often dismissed when they are initially mooted, especially if this involves change in organisations. This is probably the biggest challenge Bet Buddy faces, in that we are trying to change the way the industry works and perceives its customers. This cannot be done by one person or company (although there are exceptions to the rule). But the point is that I very soon realised that I needed a growing body of experts and industry advocates to start spreading stories and ideas that were aligned with Bet Buddy’s, and this doesn’t happen overnight. The concept of the ‘tipping point’ is important here, and it has been said that you need around 10% of people to believe in an idea or concept to in order to get a much wider adoption.
There are many fascinating anecdotes and stories from very successful entrepreneurs about what life is like starting and building a business, and whilst I am not in their league in terms of experience and success, I can personally vouch for many of these truisms. These include:
Dealing with rejection on a regular basis, from prospective clients, friends, colleagues, clients, prospective investors, people you hire, etc. It’s important not take these personally. Most people are risk averse, and asking people to buy into new ideas, take risks, etc, is not easy. Fighting tooth and nail for every single opportunity to meet a client, present at a conference, and get clients to actually pay you for the work you have delivered. From the outset nobody knows who you are and most don’t care until you ship or deliver something meaningful. Taking accountability for ensuring everything gets done. Unfortunately you will not have lawyers, a finance team, administration support, HR, marketing, sales, recruitment, and product development teams. Getting used to saying ‘yes’ to almost everything and getting comfortable with stretching the truth (this is sales). But never lie, because trust in business is priceless. Successful businesses are built around relationships and trust – with business partners, clients, staff, etc. Be super polite with everyone, especially in the social media sphere. Being a little embarrassed with the early software that you develop and ship. In the product and software business, shipping early and often is critical, so get used to never being 100% happy with your product. The concept of Minimal Viable Product, whilst also having a roadmap to deliver truly great products, is importantBuilding a product centric business as opposed to a service centric business is very difficult. I know people who have set-up and run consulting businesses, and whilst these have their own challenges, selling the same software product to multiple clients is a tough business. If you get it right though, it is far more scalable and generally products have much higher margins. The most important team is your family and friends. Without their support (emotional and financial), I would have struggled to keep Bet Buddy running. Entrepreneurship is certainly not for people who need certainty and stability in income and job security. This is an important point as there may be some very good reasons, not related to you or your business idea, as why you shouldn’t try it e.g. mortgage, young family, etc.
One of the hardest things to know as an entrepreneur is when to throw in the towel with the current business idea. You get very emotionally absorbed in your company and there is danger that after a while you will start believing your own b*******. The problem with a start-up is that nobody really knows for sure whether it will be a success, whether the business will flop, whether it will need to change significantly, etc.
A good friend with whom I studied with on the Cass EMBA, Marty Carroll, had a great social media business, some cool web-based technology, and was on the verge of securing funding, but he made a decision quite early to ditch the business. What’s important here is not why he did it (there were valid reasons), but the fact he was able to make that decision and move on despite the financial and emotional investment already committed. I really respected his decision, it took guts. As an entrepreneur you’ll go through this decision in your head many times, and you hope you never actually have to go through with it (although most start-ups are highly likely to fail). By the way, Tello.com recently received $2.7M in Series A funding to do exactly what Marty was doing in 2010.
Having said that, patience and a taking a long-term view is critical, and getting the decision right as to when to stick at it and went to ditch it is very hard. Yes, there are stories of start-ups being acquired by established companies less than a year after launching. But this is often larger companies acquiring talent (generally engineering talent) rather than acquiring established businesses. I was talking to a successful entrepreneur the other day (my definition of successful in this case is down to the fact he has previously sold a business for £60m). He told me it has taken him over eight years to get one of his current software product right, and that he would like to sell the product or business within the next five years. He believes that in his entire career he will probably build and sell two or three businesses. He is not a short-term thinker.
Securing funding is not always the panacea it sounds and I have heard many stories of entrepreneurs fighting with investors who don’t understand their business and who focus too much on early revenues rather than building the product. But funding does buy you time, which can be priceless when building a business and being able to take a long-term view. We have one competitor which was founded in 2005 and within the last six years secured £130K seed funding and £1m series A funding. One of their non-execs also happens to be one of the UK’s most successful entrepreneurs and is a NESTA trustee. In the seven years since the company was founded it is still trying to define and develop a product roadmap. I’m not trying to criticise the competitor. What I am pointing out is that without funding and an important connection I doubt they would still be in business today. Talent and a good idea alone is rarely enough and the entrepreneur who can build a business without funding is a very rare breed and possesses something very unique and special, such as proven reputation, important industry connections and supreme determination and talent.
The definition of success for an entrepreneur is very broad. For me it’s about building a business that can grow and provide me with interesting and meaningful work and that’s sustainable. Whilst I still think about and understand the exit opportunities for Bet Buddy, I know that they will not happen in the short-term. One of my passions over the past decade has been mountaineering. I climbed Mt. Everest in 2007 and I very nearly summitted (that’s another story...). The experience of climbing Everest is a mix of excitement, fun, trepidation, and physical and mental exhaustion and I think there are some good analogies with building a business. If you have talent, time, funding, luck, and a whole lot of self-belief and determination, you are in with a chance of reaching the top. Whatever the outcome (OK, let’s exclude serious injury or death on Everest), the experience is unique and very rewarding, most definitely a rollercoaster ride. Reid Hoffman (LinkedIn co-founder) summed it up nicely in the FT this week: “Entrepreneurship is throwing yourself off a cliff and assembling an aeroplane on the way down”.
Bet Buddy Overview
Bet Buddy was created in 2010 and is a software company building on technology mega trends such as online gaming, data analytics and machine learning. Bet Buddy’s products use peer-reviewed scientific research and statistical techniques to analyse player gambling data to predict problem gambling behaviours. Bet Buddy is focused on helping lotteries and gambling operators to effectively intervene or ‘nudge’ people to make better decisions about gambling before they cause harm to themselves. In this way, we help to build sustainable consumer relationships.
Contact: simo@bet-buddy.com
Further Information: http://bet-buddy.com/