The document provides an overview of strategies for making the first year of a new startup a success. It discusses establishing the right strategy by conducting tests rather than growing too quickly, focusing on people and culture by establishing core values and standards, maintaining prudent finances by self-funding initial experiments, and developing an effective marketing approach through rigorous testing of low-cost customer acquisition channels. The document emphasizes establishing a strong brand identity, maintaining high standards, and being transparent if the business begins to fail.

1. Making
Year One
A Success
George Bevis

2. Agenda 1. About me
2. Strategy
3. People & Culture
4. Finance
5. Marketing
6. Brand
7. Standards
8. Realism

3. WTF are you?
•2002 – 08: Banker ☹
•2008 – 11: Retail ecommerce startup
(angel funded failure)
•2011 – 14: Freelancing (more banking ☹ )
•2014 – 2018: Created Tide (pretty good...)
•2019+: Incubating more startups

6. How it usually is: SpeedSell

7. Don't go by reports, by legends, by traditions, by scripture, by
logical conjecture, by inference, by analogies, by agreement through
pondering views, by probability, or by the thought, “This
contemplative is our teacher.” When you know for yourselves that,
“These qualities are skillful; these qualities are blameless; these
qualities are praised by the wise; these qualities, when adopted &
carried out, lead to welfare & to happiness” — then you should
enter & remain in them.

9. Strategy: Conduct tests, don’t grow a business
• If you invest your/others’ money now you’re probably wasting it
• Try to prove every hypothesis cheaply first
• What proposition do customers like?
• What will it cost to get customers?
• How much margin will I make over the lifetime of each customer?
• Etc… (although those are the main things)
• Only build a business after you’ve established there’s a business to build
• [Customer lifetime value] > [3 x cost of customer acquisition]
• Outsource non-core activities (accounting/payroll/etc)

10. People & Culture
• All DNA set in 1st year
• Work out your “mission” and
bang on about it
• Write down desired
behaviours/values and recruit
against them
• Last round interviews with all
staff
• Keep standards high (but
compromise is inevitable)
• Be frugal with options

11. Finance
You shouldn’t seek other people’s money (yet)
• Won’t work unless can be a £50m+ business in 5-10 years
• Time-consuming: half your time for 1-3 months (angels), 4-8 months (VCs)
• Long term loss of ownership: rare to end up with over 20%
• Reduced authority with team & other stakeholders
• Investors always add stress, may destroy your business
• Requires a board, who usually won’t add value
• You’ll probably fail and lose their money
• Better to fund experiments using contracting or (maybe) grants

12. Investors: know your stage
Stage Round size You need (usually...) PITA?
Friends & Family & SEIS Up to £150k Presentation
EIS £200k - £1m+ + Product & “team”
Seed (VC) £500k - £3m + Customers
Series A (VC) £4m+
+ Proven economics, ~$1m
run-rate, +$300k/quarter
Timewasters (all stages) £0 (to avoid)
● £Amount to raise: as much as you can (usually)
● Fallback: Quite normal to run out of cash: deep-pocketed investors useful
● Corporate investors: slow, unpredictable, may cripple future fundraising/sale

13. EIS/SEIS: minimise guilt if you lose your investors’ money
Remember:
● Angels make 20x (or more) on a win
● With SEIS/EIS they don’t even lose 1x on a failure
● So: no guilt! (NB taxpayer does brilliantly too)
(source: Crowdcube) EIS SEIS
Individual can invest (per year) £1m £100k
Company can receive (ever) £12-20m £150k
Immediate income tax reduction -30% -50%
Tax relief if company fails (@45%) -31.5% -22.5%
Remaining investor exposure 38.5% 27.5%

14. Networking
• Intros from successful people you know (in any field)
• Check quality of connection first
• Cold email: why not?
• Operators more helpful than investors
• Events (NB inefficient)
• Investors: accelerators (Entrepreneur First, TechStars, 177 others)
• Don’t use advisors, don’t grant equity

15. Marketing
• Objective: prove low cost of customer acquisition in 1+ scalable channels
• Don’t make a major investment in anything without testing it first
• Be ruthless with time: optimise [marketing proofs per day]
• 7% growth per week is excellent
• Many channels may work (no “power law”)
• …. BUT you need to work hard to establish just one
• PR is probably not your channel (and doesn’t scale)
• Disadvantage: little data / unrefined marketing
• Advantage: low hanging fruit

16. Brand = DNA
• Most important thing you’ll do
• Creates organisational focus, assists hiring and enables ultimate
handover
YOU CAN’T DO:
• Takes 6-9 months + an expert
• Cost €100k-€200k
YOU CAN DO:
• Words (more important than pictures)

19. Standards: “Don’t worry be crappy”
• Product & processes
• Brand
• Legal compliance
• Data
• HR policies

20. Why failure happens (mistakes you won’t make twice)
• Unit economics
• Customer lifetime value > 3x marketing cost
• Willingness to do something hard
• Management inertia
• “Board already agreed X”
• Insufficient paranoia
• Why won’t customers like this?
• Why will partnerships go wrong?
• Why might this hire be wrong?
• How can this stakeholder screw things up?

21. What to do when you’re failing
• Be honest
• With yourself (10% chance? 30% chance?)
• (Consider insolvency obligations)
• With investors: make it their problem too
• Be honourable
• Try to find jobs for all staff
• Insist on paying all staff salaries
• Pay creditors if you can (even out of own pocket)
• Look for a sale

23. Questions?