New York ideal for Scots entrepreneurs to emulate
NEW York City was hit with the crash of 2008 just as badly as every other big payer. Property prices raced to the bottom and the corporate jobs that were “always” there disappeared overnight for graduates and those looking for their second and third step up roles.
Michael Bloomberg was in office, and he embraced the change that was needed. Six years later NYC is a hothouse of business accelerators, incubators and co-working spaces. A big focus on fashion, health and technology has positioned the city as a global player in start-up.
Three days visiting organisations such as GRIND, Fuelled, Techstars, General Assembly and ERNYC confirmed to me that thousands of start-up and growth folks are hard at it daily building new technologies and companies that are investable and have a global vision. Underpinning it all is a belief that they can be and want to be successful.
Having worked with so many new entrepreneurs in Scotland, there can be a fundamental difference in the approach to building a new venture. Firstly, we have far too many solo entrepreneurs and not enough teams. The old adage that investors want to see a good strong team holds true for a reason. This was again confirmed in NYC.
A brilliant team with a good idea is more investable than an average team with a brilliant idea. Building a team is hard and takes a lot of emotional energy. Then there is the issue of equity and share options, co-founders etc, but in essence this is vital to medium-term traction. The second key blocker to creating success in Scotland is customer validation, or the fear of engaging with potential customers who may be straight-talking on pricing, usability, features and why would they open their wallets to pay for this new product.
NYC is full to the brim with straight-talking folks who will help validate. Many Scottish entrepreneurs are afraid to get out from behind their laptops and really gain customer insight into what they are developing. These things take time, but people buy people and people buy making emotional decisions. A business cannot operate in a vacuum.
At the heart of entrepreneuring is a willingness to get to the heart of the pain of others so that the entrepreneur can solve it and get paid at the same time. Scotland needs to be more willing to get out there and ask meaningful questions, with a willingness to accept the answers may be tough.
Finally, we hear that Scotland’s entrepreneurs are afraid of failure. Many would proffer that this is a specific Scottish psyche; the steamie mentality. No-one wants to fail, but failure is part of learning in business. Just ask some of the big names. Trump has filed for corporate bankruptcy four times.
I would suggest that the real reason we do not have enough Skyscanners is not a fear of failure, but a fear of success. I have seen so many brilliant new start-ups in Entrepreneurial Spark whom the team believe will be awesome. However, success looks so scary! The success part is not becoming a multi-millionaire overnight, it is closing a £150,000 investment while giving away 10 per cent of your baby, validating and acquiring customers, bringing in bank debt to grow, and building a team. This growth takes a certain mindset and I have witnessed many who will not execute on great ideas solely because they may actually be successful.
Scotland needs more successful entrepreneurs… and yes, success can be scary.
Welcome to the world of the entrepreneur.
• Jim Duffy is chief executive optimist at Entrepreneurial Spark