Starting Up in a Time of Turmoil (Campus Party Europe 2012)

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It can be scary starting a new business at a time when each day brings more bad news about he economy, unemployment and business confidence. Uncertainty and change certainly bring opportunities. But do the conventional ideas about growing a startup make sense in a climate like this?

In this session entrepreneur Charles Armstrong will draw on his experience growing Trampoline Systems and The Trampery to answer this question. He will go on to suggest strategies for finance, growth, business culture and workspace that can help entrepreneurs succeed in the current climate.

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Starting Up in a Time of Turmoil (Campus Party Europe 2012)

  1. Starting upin a time of turmoilCharles ArmstrongCampus Party Europe 2012
  2. This is not the advertised talk!(but I will be discussing workspaces)
  3. Charles Armstrong @car0lusSociology at St John’s College CambridgeTrampoline SystemsThe TramperyOne Click OrgsUK Government Tech City initiative
  4. Usual recipe for a startupRaise investment from a big name VCGrow as fast as you canAct like a grown-up corporationSet up your own officeRecruit a team covering all functions
  5. My advice:Tear it up
  6. We are living in anextraordinary period
  7. We needdifferentapproaches
  8. Where can we lookfor a precedent?
  9. 65.5 million years ago
  10. Permian-Triassic mass extinctionSuccession of global cataclysms70% of species wiped outFood chains & ecosystems collapsed
  11. Dominant species died out
  12. Small niche playerssurvived
  13. Why did mammals make it?Small size, fewer resources to surviveMain predators disappearedEvolved rapidly (hearing, smell, warmth)
  14. LessonsThe rules can change completely from onegeneration to the nextBeing small & agile is the best bet in a crisisSurvivors evolve to become top species
  15. 1 Finance
  16. “Total capital managed byVC funds* will contract by50% from $24 billion to$12 billion.”*Figures relate to USA onlySource: “Right-Sizing the Venture CapitalIndustry”, Kauffman Foundation, June 2009
  17. VC investment$46.5 billion in 2008$11.8 billion in 201175% reductionSource: Dow Jones VentureSource
  18. Changing patternsSupport existing portfolioFewer, larger dealsLower risk, closer to profitability
  19. The way it was£50 million £2 million £1 million £500,000 £100,000 Friends Angels VC Private IPO & family equity
  20. And now…£50 million ? ? £2 million £1 million £500,000 £100,000 Friends Angels VC Private IPO & family equity
  21. Innovative financing routesDonation crowdfunding (eg Kickstarter)Club crowdfunding (eg Bandstocks)Equity crowdfunding (eg Crowdcube)Investment bonds secured on equity/assets
  22. But do you need investment?Earn consulting revenue whilst building productWhite-label versions of your productCreate projects to raise sponsorship
  23. My experience2007 raised £3 million from VC2008 VC disappeared after crash2009 raised £500,000 equity crowdfunding2012 currently raising £500,000 bond2013 planning £1.5m crowdfunded bond
  24. LessonsBootstrap if you possibly canEquity crowdfunding or bonds if you need cashDon’t be scared to innovateA talented VC can still be a great ally
  25. 2 Growth
  26. A startup shouldscale as rapidlyas possibly
  27. Right?
  28. Not necessarily. There’sa trade-off between rapidgrowth & resilience.
  29. My experienceTrampoline broke even with 5 peopleGrew to 20 people before 2008 crisisHad to restructure to 5 peopleNow growing organically & profitable
  30. LessonGrow more slowly to survive shocksBe ready to turn away some opportunitiesReach profitability at each growth stage
  31. 3 Business culture
  32. A lot of people encourageus to play a conventional“business” role
  33. But if you play a role, ratherthan being yourself, you cutyourself off from passion &authenticity
  34. In an age when the worldis in flux it can also be anadvantage to be differentfrom the crowd
  35. My experienceTried to be more conventional for investorsRealised it was making me miserableClients & senior execs like that I’m differentEncourage team members to be themselves
  36. LessonsBe yourselfRespect conventions but don’t follow themBuild genuine relationships
  37. 4 Workspace
  38. Conventional wisdom says asuccessful business needs ashiny office of its own
  39. Now this logic is beingturned on its head
  40. Co-working isn’t justabout cost &flexibility, it opens upcompletely new growthstrategies
  41. Co-working growth strategiesCreate communities of trust & friendshipTreat other tenants almost like team membersShare freelancers, contractors & servicesOutsource functions to other tenantsIf one business succeeds, many succeed
  42. My experienceOpened Trampoline’s office as The Trampery30% of tenants are partnering with 5+ othersGrowing pool of shared contributorsOpening another 4 buildings in LondonRe-structured Trampoline to maximise benefit
  43. The Trampery Bevenden Street 60 people 2 meeting rooms
  44. The Trampery Old Street 50 people Members club Conference centre
  45. The Trampery St John’s Street 50 people Seminar room
  46. The Trampery Mare Street 60 people Café Performance space
  47. The Trampery Tabernacle Street 200 people 4 self-contained studios Winter garden Event venue
  48. LessonsTreat workspace as a strategic choiceChoose a community that “fits” youDiversity is good, not just people in one fieldMake time for informal discussionBe open to serendipity & random chances
  49. Conclusion
  50. Starting up in a time of turmoilAvoid raising finance if you canIf you need investment try crowdfunding or bondsGrow at a sustainable rate even if it’s slowerBe yourself & encourage others to do the sameFind a co-working space the suits youOutsource, share & partner with other firms
  51. Above all… be a smallmammal, there’s no pointcopying the dinosaurs
  52. This is themost excitingtime to do astartup EVAH
  53. Good luck!I’m @car0lus@tramp0 @thetrampery

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