But what is also clear is that too many great businesses with original ideas end up failing. This is partly because of the poor use of digital technology that results in them taking on too many people and not generating enough profit. With estimates suggesting that more than half of all UK start-ups fail within the first five years, this is a real issue for the whole Scottish economy.
The question that needs to be answered – as a matter of urgency – is around what can be done to improve survival rates and see start-ups successfully scale-up.
I was fortunate enough to be on the panel of judges at the StartUp Summit, a festival of entrepreneurship that took place in Edinburgh and virtually towards the end of October. This experience left me feeling genuinely excited about the truly innovative businesses originating here in Scotland. One example is Pawprint which has a carbon footprint platform that combines great technology with the purpose of helping reduce global emissions.
As well as judging companies at the Startup Summit, I delivered a workshop on the opportunities and pitfalls that new businesses should look out for. I was speaking from personal experience as co-founder and chief executive officer of ClearSky Logic, an Edinburgh-based digital transformation specialist, and My Booking Hub, an artificial intelligence-driven booking platform. It’s targeting such sectors as electric vehicle charge point installation companies and can help businesses reduce congestion, cut transport carbon emissions and improve customer experiences by allowing bookings to be efficiently managed online.
While I’m optimistic about the future of the country’s start-ups and the resilience they have shown during the pandemic, I’m also concerned about the number of businesses that either fail or don’t scale-up as much as they should.
A large part of this issue lies with the fact that many start-ups spend a lot on people at an early stage, which eats into their ability to make money and causes problems when it comes to customer service.
At ClearSky Logic we help build businesses of the future. This involves helping companies spin-out new products, services, automation and features to unlock growth. Over the course of our careers, we’ve frequently run into the same issues around companies not getting their tech right and this ultimately halts their growth.
More support should therefore be available to help start-ups access tools and services that let them use digital technologies to improve their offerings and win and retain business. Such digital transformation efficiencies will make businesses in any sector more profitable in the long-term.
We believe that businesses shouldn’t be held back by technology. The pandemic has placed a huge emphasis on the importance of having effective online systems and platforms in place. As we emerge from Covid-19, it’s vital that start-ups and scale-ups take a good look at how they are using digital technologies. Failure to do so could unfortunately see their entire business fail.
Darren Auld is an entrepreneur and co-founder of ClearSky Logic and My Booking Hub