If you’re looking for quick and simple solutions to the many challenges entrepreneurs face, you won’t find those here. Those don’t exists. Entrepreneurs encounter numerous and difficult problems on a daily basis, and in the UK, they face problems very specific to that ecosystem. So while quick and simple solutions don’t exist, hard work, perseverance and a little luck can make these problems navigable.
Fundraising is always going to be an issue for startups, no matter where they are in the world. The UK has some special issues when it comes to fundraising, though, assuming you don’t have family or friends who can help. Thanks to some misguided media coverage, the general consensus is that there’s a lot of investor money floating around the UK, just waiting for the right project to come along. This has led to an investors’ market, with entrepreneurs from all over Europe–and the World–coming into the UK to raise money.
While there is capital in the UK, it’s not easy for startups to get their hands on it. Historically, investors in the UK are tremendously risk averse, and most look for tax benefits, so funding momentum in the UK has never really taken off.
How to get around it
Unfortunately. there isn’t really a way around this one other than 1) hustling or 2) getting your customers to fund the business. Number two may involve getting a bit creative with your business model: having customers prepay for a product, having a matchmaker business, or even crowdfunding. If none of those are an option for you, it comes down to exploiting the connections you have, and trying to make new connections as fast as possible. Fundraising at any stage will be difficult, but it’s just a matter of putting in the time and preparing for opportunities when they come–however infrequently that might be.
The startup ecosystem is young
Right now, even though it exists in big cities like London, the startup ecosystem in the UK is still relatively young and small. This isn’t a always a problem; you get acquainted with everyone you need to know pretty quickly. But often, the smallest circles are the tightest and hardest to break into. Without a preexisting connection, access to mentorship and other assistance can be difficult to come by, especially for new entrepreneurs. There are some good incubators and accelerators in the UK, but many of these aren’t up to standard of excellence the UK deserves.
This isn’t to say there aren’t people who are trying to help, but because the ecosystem is so new, many who want to help don’t have the ability to quite yet. From investors, to mentors, all the way to people in the government, many haven’t run their own businesses, so they may not know what it takes to build, scale, and ultimately create a successful business.
How to get around it
London has hundreds of events every year designed to bring together and grow the startup scene. But again, this is the kind of long-term solution that won’t help your business today. Another option can be to grow your own system rather than waiting for the ecosystem you’re in to catch up. For every event, there is also a contest or a competition for startups in the UK or somewhere else in the world that can help get your company’s name out there and grow. Even if you don’t win any of these competitions, you’ll be put in touch with people you wouldn’t have met otherwise who might end up being valuable contacts later on.
An additional plus to these conferences, events and contests is they usually not only bring startups together, but also entrepreneurs who have already found success. For the time being, it’s still difficult to find the kind of mentorship and feedback startups have access to in other innovation hubs, but if you’re looking for guidance in the UK, it’s a good place to start. We’ve been lucky to have been guided by Microsoft’s London Accelerators, which not only helped us to scale our product, but also helped us pitch our product to Microsoft’s clients.
There are so many opportunities to waste time
To be clear, not every event designed to bring startups together will be useful for you. Sometimes, these events are more of an excuse for like-minded people to get together and make small talk, which is not usually the best way for an entrepreneur to spend their time.
Entrepreneurs in the UK are also likely to face the “Hesitant Investor.” This is another time waster that isn’t entirely unique to the UK, but it’s something that seems to happen here more than anywhere else. You need people to invest, and these people want to be sure they understand your startup as much as possible. But some people are going to ask for information, and then ask for some more, and then ask for the first set again. All the while, they’ve likely already decided not to invest.
How to get around it
To not waste time at events that have no use for you, it comes down to research and recommendations. Be choosy when you’re thinking of attending an event, and make sure to talk to other people you know with similar enterprises about what events they’ve enjoyed and found valuable.
Dealing with the Hesitant Investor can be a bit more difficult, especially for entrepreneurs who really need that shot of capital in the arm. There can’t be a steadfast rule for how to court investors (if there were, getting investment and funding wouldn’t be a problem). If you’re dealing with a potential investor, you need to be prepared to pack up and leave. When to do that will be up to you. Unfortunately, this will always be a trust your gut scenario.
Talent is expensive
In the nerve centres of the startup world, like New York City and Silicon Valley, life can be exceptionally expensive. This is true for the UK as well, especially in the tech and innovation hub: London. This poses a slew of obvious problems; for one, startups are usually cash-strapped, but also require good people to get the work done. This problem is compounded by the fact that startups need people with multiple skill sets. If you’re a fintech company and need a developer, ideally you’ll find someone with knowledge in both fields. But because those skills are in such high demand, a bigger, more established company will likely scoop eligible candidates up at rates you can’t afford.
How to get around it
The immediate solution is simple: hire people in other countries and work remotely until you can afford to hire in London/UK. This will work in the short-term, as there are so many talented people all over the world with fewer expenses than a person living in London. But this solution is only a band-aid. Eventually, you’ll want and need people in the trenches with you every day. The long-term solution here is to hire well and have a willingness to train. Take the time to hire good people. This is important for any business, but startups especially need people who can be trained, and ideally already have malleable skill sets. Training people who you know have the raw ability to learn is difficult, and time-consuming, but having good people be a part of your team will prove to be invaluable.
There is a fear of failure
Failure is crucial to startup culture. Most successful companies–and people–have had dozens of failures for every success. Maybe it’s the traditionally conservative investors, or the lack of a strong startup culture, but in the UK, failure is seen as a demon constantly clinging to entrepreneurs’ backs. Fear is crippling in all cases, but especially so when the fear is of something so vital. In the U.S., for example, getting out of a business when failure is imminent is a badge of honour. In the UK, people are afraid of failure in a way that hasn’t allowed startup culture to properly bloom.
How to get around it
Fail! Fail often, but fail fast. There’s this notion that failure is the opposite of success, but it’s not. Failure is part of success. Learning to fail is arguably one of the most important skills an entrepreneur can develop, and unfortunately, this one only comes with practice. Of course, only try this when you absolutely must, and conquer it without fear!
Leave a Reply