I am a great fan of The Fog of War, a documentary where Robert McNamara (JFK’s Defence Secretary) gives 11 lessons from his long life. I thought I would like to try and emulate this documentary in my own small way with a series of posts where people give their lessons for life. My first subject is Will Wynne from Arena Flowers. Will is the only person I know who has a tribute twitter account as well as a real one. Take it away Will:
When Trevor asked me to write up a guest post I figured that I’d try to do something a little different. So I decided to write a list not of what we consider the most important parts of founding a business, but a list of the ten things that caught us by surprise or that we never really expected. You may think some of these are obvious, but for us they weren’t. This topic also means I avoid giving away all our trade secrets and competitive advantages.
NB we are not a hugely venture capital funded business, more of a bootstrapped start up with limited resources, so some of our issues may not be relevant for a mega VC funded start up…
So, without further ado, here we go:
1. Everything that can go wrong probably will at some point
Bad things happen. Bright eyed start ups never expect them as that stuff happens to “other people”. If you’re lucky that might be the case, but in reality, there’s a reason that big businesses have disaster recovery plans; because they’re needed. Some examples, none of them our fault (honest!):
- Exploding three phase electricity blowing all power at Flowers HQ for 3 days (despite us rewiring the whole building before moving in);
- A 6 day internet outage in Park Royal, the biggest business park in Europe (our DSL supplier invoked “Act of God” clauses to get out their responsibilities – it was actually a man with a digger cutting 6000 the cables);
- Death. It’s not a nice topic and no one likes to talk about it, but people do die. We never gave a moment’s thought to the possibility that if someone’s relative/partner/friend died, they would disappear at very short notice for weeks leaving our already very lean team totally overstretched;
There are many more examples of totally unpredictable disruptions I could give, but I’ll spare you. The point is the unthinkable does happen and you need to at least have thought about it, even if you don’t enjoy doing so. We find “manage the downside and the upside will take care of itself” a useful maxim to keep our minds focused on this point.
Everyone knows this stuff crops up and I nodded absentmindedly when told “take care of the legals” as I’d said this myself before in my days working in venture capital. Let’s be honest, legals are really boring. But get them wrong and you’ll pay the price. At some point most business will have a disagreement with one or all of a supplier, an investor, a competitor, an employee, the government, a plagiarist or just a random nutter (we picked up a weird stalker/troll just recently).
The “gentleman’s agreement” – ie a deal that isn’t properly written down and documented is a prime culprit here, as it leaves room for different interpretations through being too unspecific. At the very least, get things spelled out in a clear and detailed email that can be referred back to reliably. NB legals don’t necessarily require lawyers. Legals just need doing.
This is also an interesting article from the Harvard Business School on the top ten legal mistakes made by entrepreneurs.
3. The stress is massive, but not in the way you expect
When I talked about the stress to friends, they would typically look sort sympathetic but would clearly be thinking “good, it shouldn’t be too easy”. Our senior team members have all run teams before, but previously it wasn’t, ultimately, our fault if the overall business went wrong. Now, if it does, it is. Wasn’t easy in the early days when we had no money in the bank and I would meet one of our driver’s newborn sons and try to smile in a calm way and say “Ah, isn’t he cute!” when actually I was thinking “I hope we don’t screw this up and have to lay off your father”. Such thoughts don’t make for restful sleep!
My father runs businesses in the Congo and I remember when I explained this feeling of mild panic and terror to him he said “Finally. Someone else in the family knows how it feels.” He then added, “Don’t worry. Just be calm, logical and do what’s right”. Sound advice.
Nonetheless, I’m very glad that the mania and mild terror of the early days has at least receded if not disappeared entirely. I have lost half my hair as a result though. L
4. Buy this snake oil! NO!
There are a flabbergasting number of people out there selling absolutely nothing for stupid amounts of money. Such businesses feel very parasitical and probably have a lot of success tapping into the budgets of large businesses that don’t measure the ROI on their spend. “Only £2k for a ¼ page advert!” in some zero circulation magazine that will never be read. One lady started shouting at me when I’d politely declined “HOW ARE YOU GOING TO GET ANY CUSTOMERS IF YOU DON’T BUY ADSPACE IN [celebrity home makeover man's] MAGAZINE?! YOUR BUSINESS IS DOOMED!”. Erm. Okay. Thanks for that.
I no longer answer any calls to my mobile from numbers not already in my phone book for fear of a sales call or other random caller. All calls to the office are screened and our CS team revels in winkling out sly salesmen (salesmen have ways of evading the “So, is this a sales call?” question that would make politicians blush). Standard answer from CS: “Send [team member] an email”.
Spinvox is also handy, as it turns all voicemails into texts so you don’t waste time calling up to listen to them and you can read them during a meeting without seeming too rude. Though I didn’t take Spinvox with me when I got an iPhone as the iPhone visual voicemail system is pretty good, though slightly different.
5. Never ever be dependent on one supplier – they WILL try and abuse that relationship
12th February 2008. Two days before Valentine’s Day. Phone call from one of our courier partners (a market leading name). “Hi. There’s a problem with your packaging; it’s leaking. I’m afraid we’ll have to manually process all your orders. That will mean a £5.00 surcharge [on top of a similar normal charge per unit].” Given we were set to send about 4000 orders through that partner that week, this would effectively have cost us £20k. Nothing had changed in our process for 6 months. We had asked them to confirm everything was fine weeks before. They didn’t. Then their last minute bombshell.
They were simply taking the mickey thinking they could get away with it and help themselves to an extra £20k from our pocket. Charming. Sadly for them, we’d recognised this as a risk in December and had just completed an integration with another courier, unbeknownst to the original partner. We discussed the call, agreed that the original partner was behaving appallingly, and switched ALL our orders to the new partner. The old partner suddenly began groveling and toad eating for Britain but to no avail; they are now our reserve partner but lost several hundred thousand pounds a year of business by trying to abuse their position.
We could give a number of similar examples. Simply, if you depend on one partner, you’re over a barrel and they can do what they want. And they’ll probably try it. We now ensure we have a back up supplier for every key part of our operation, to spare greedy suppliers such temptations. PS obviously, this is also important for disaster recovery planning too.
6. Suppliers can be bigger “investors” than, erm, investors
Pre credit crunch at least, even a new business didn’t find it that hard to get credit from suppliers. There is a lot of focus put on raising equity from angels, friends, family and so on. But a lot of the funding requirement can in fact come through credit from suppliers. One of our suppliers pointed out this out to us once: “How come you owe me more than your investors put together and I own none of the business?”. Cue awkward silence, shuffling of papers and then saying briskly “Anyway, moving on…!”
It’s not the lowest risk approach ever and not the way to finance a business long term, but it can give extra liquidity that was never expected.
7. Product Product Product
Business advice talks a lot about SEO, market size, scalability, teamwork, web design, business development, networking, fund raising, financial controls. All important things. But all totally useless if you don’t have a decent product. If you are in a business that gets £1 off people once, then this point is less important. But if you want repeat business then unless your product is actually any good, it doesn’t matter how good you are at all the other stuff. It’s only a matter of time til your demise.
We make as sure as we can that, within the constraints of making money, that we provide an outstanding product. That’s not to say we don’t make mistakes, and, as with all businesses, we can’t please all the people all the time, but, 99% of the time, our product will delight the customer (and recipient) and be better than that of our competitors. That’s a good foundation on which to build a business. If you don’t try to deliver the best possible product for your customers then you don’t really deserve to succeed.
8. Nothing ventured, nothing gained + BONUS: you can rewrite history after the event (if your idea works)
Our conservative instincts tend to make us want to be careful and risk averse. Mine certainly did. But a number of times we’ve just said “Ah, let’s just go for it!” and seen where it’s taken us. For instance, our European expansion could be reframed as a stroke of tactical genius; hindsight is a marvelous thing. Actually, there was some inspiration, some detailed analysis and strategising but, mostly, there was a large chunk of “Yeah, sounds good. Let’s do it.” luck. We can now talk wisely about rolling out our operation abroad to cover Europe and develop the brand’s international reach. At the time it wasn’t nearly so clear cut. Realising that not everything can be worked out in PowerPoint or in a spreadsheet is a great freedom and lot of fun. Just don’t expect it to work every time.
9. Turns out that stuff about team work is actually true
If you’re like me, you’ll probably have always thought that all the “teamwork is great” and “I’m a team player” chat on CVs was interesting but a bit “yeah yeah, whatever, no one cares about that really”. And in larger companies, in my experience, it was less necessary and sometimes felt somewhat forced. A fun thing about working at Arena is that there are lots of different types of people: techies, award-winning florists, linguists, operations gurus, flower buying experts, finance bods and so on. The key is to getting all the different parts to work together and understand the overall business’s priorities because everyone has to muck in to different areas. If you don’t get on, the business won’t succeed.
One other thing is that you can set the attitudinal weather in a small business around the leadership team’s values. In our case, we absolutely don’t allow is any petty politicking, childish bickering or any “it’s not my problem, guvnor” rubbish, nor do we blame people for making mistakes – at least not the first time . The aim is to deliver the best service for our customers as efficiently as possible. Childish spoilt brat behaviour has no place in that process.
10. It feels good!
“What’s it like to be your own boss? Do you enjoy it? Is it all it’s cracked up to be?” I get asked that a lot. The answer is “Absolutely!”. At least once you’ve got through the pain and the horror of the start. Once you’ve broken the back and moved from “start up” to “established [but still young] business” the scales lift from your eyes and you remember what it’s like to be human plus begin to enjoy the freedoms of being your own boss without having a Board sending down instructions and messing you about on HR reviews or telling you what to do and what to think daily. It’s an incredibly uplifting feeling and I hope never to have to go back.
Seeing teams build and relationships develop and reading emails from elated customers is a great thing when you were part of the team that built it from absolutely nowhere. One of my favourite things is when people write emails saying “Thanks, Arena!”. I can still remember the day we sat down and worked out what to call the business; it’s great to hear it taking on a life of its own.
have you got some lessons from life you want to share? If so please contact me.If you found this post useful, why not buy me a coffee!