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.

1. Starting up
in a time of turmoil
Charles Armstrong
Campus Party Europe 2012

2. This is not the advertised talk!
(but I will be discussing workspaces)

3. Charles Armstrong @car0lus
Sociology at St John’s College Cambridge
Trampoline Systems
The Trampery
One Click Orgs
UK Government Tech City initiative

4. Usual recipe for a startup
Raise investment from a big name VC
Grow as fast as you can
Act like a grown-up corporation
Set up your own office
Recruit a team covering all functions

5. My advice:
Tear it up

6. We are living in an
extraordinary period

7. We need
different
approaches

8. Where can we look
for a precedent?

9. 65.5 million years ago

10. Permian-Triassic mass extinction
Succession of global cataclysms
70% of species wiped out
Food chains & ecosystems collapsed

11. Dominant species died out

12. Small niche players
survived

13. Why did mammals make it?
Small size, fewer resources to survive
Main predators disappeared
Evolved rapidly (hearing, smell, warmth)

14. Lessons
The rules can change completely from one
generation to the next
Being small & agile is the best bet in a crisis
Survivors evolve to become top species

15. 1 Finance

16. “Total capital managed by
VC funds* will contract by
50% from $24 billion to
$12 billion.”
*Figures relate to USA only
Source: “Right-Sizing the Venture Capital
Industry”, Kauffman Foundation, June 2009

17. VC investment
$46.5 billion in 2008
$11.8 billion in 2011
75% reduction
Source: Dow Jones VentureSource

18. Changing patterns
Support existing portfolio
Fewer, larger deals
Lower 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 routes
Donation 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 product
White-label versions of your product
Create projects to raise sponsorship

23. My experience
2007 raised £3 million from VC
2008 VC disappeared after crash
2009 raised £500,000 equity crowdfunding
2012 currently raising £500,000 bond
2013 planning £1.5m crowdfunded bond

24. Lessons
Bootstrap if you possibly can
Equity crowdfunding or bonds if you need cash
Don’t be scared to innovate
A talented VC can still be a great ally

25. 2 Growth

26. A startup should
scale as rapidly
as possibly

27. Right?

28. Not necessarily. There’s
a trade-off between rapid
growth & resilience.

29. My experience
Trampoline broke even with 5 people
Grew to 20 people before 2008 crisis
Had to restructure to 5 people
Now growing organically & profitable

30. Lesson
Grow more slowly to survive shocks
Be ready to turn away some opportunities
Reach profitability at each growth stage

31. 3 Business culture

32. A lot of people encourage
us to play a conventional
“business” role

33. But if you play a role, rather
than being yourself, you cut
yourself off from passion &
authenticity

34. In an age when the world
is in flux it can also be an
advantage to be different
from the crowd

35. My experience
Tried to be more conventional for investors
Realised it was making me miserable
Clients & senior execs like that I’m different
Encourage team members to be themselves

36. Lessons
Be yourself
Respect conventions but don’t follow them
Build genuine relationships

37. 4 Workspace

38. Conventional wisdom says a
successful business needs a
shiny office of its own

39. Now this logic is being
turned on its head

40. Co-working isn’t just
about cost &
flexibility, it opens up
completely new growth
strategies

41. Co-working growth strategies
Create communities of trust & friendship
Treat other tenants almost like team members
Share freelancers, contractors & services
Outsource functions to other tenants
If one business succeeds, many succeed

42. My experience
Opened Trampoline’s office as The Trampery
30% of tenants are partnering with 5+ others
Growing pool of shared contributors
Opening another 4 buildings in London
Re-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

54. Lessons
Treat workspace as a strategic choice
Choose a community that “fits” you
Diversity is good, not just people in one field
Make time for informal discussion
Be open to serendipity & random chances

55. Conclusion

56. Starting up in a time of turmoil
Avoid raising finance if you can
If you need investment try crowdfunding or bonds
Grow at a sustainable rate even if it’s slower
Be yourself & encourage others to do the same
Find a co-working space the suits you
Outsource, share & partner with other firms

57. Above all… be a small
mammal, there’s no point
copying the dinosaurs

58. This is the
most exciting
time to do a
startup EVAH

59. Good luck!
I’m @car0lus
@tramp0 @thetrampery