Jim Duffy: Business is the nation’s beating heart

Business is essential and it is everywhere, from train franchises and farmers to airlines and grocers, writes Jim Duffy
Business is essential and it is everywhere, from train franchises and farmers to airlines and grocers, writes Jim Duffy
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If we don’t change our mindset and take action, we will kill off the next generation of business builders says Jim Duffy

Business is the beating heart of a country, whether it’s selling mangos at the roadside, building an Internet of Things start-up or operating in a large corporate. Business, as all politicians from all persuasions will tell you, is vital to the success of economies. You’ve heard it all before - right? Business creates jobs for people. It gives people purpose and gets them out of bed. It pays HMRC taxes and in some cases contributed towards pensions. Business is essential and it is everywhere. Train franchises to farmers to airlines to grocers to ecommerce to newspapers. Every country has programmes in place to support business and encourage people to enter - startupland. Scotland has many such programmes. But, something is missing. And if we don’t take action, it will kill off the next generation of business builders.

I’m being pedantic here in my language and proactively referring to people starting businesses as business builders. It’s time to re-frame the lexicon that has creeped in over the past decade where firstly start-up and then scale-up became the sexy words that encompassed business and indeed entrepreneurship. Start-ups are everywhere and we have shed loads in Scotland. Travel to Manchester or London and the numbers quadruple. But, much of what we have out there supporting these start-ups in startupland is not hitting the spot. Too many of them are still failing and still not making it. There are multiple reasons for this.

First off the bat is the short termism that permeates startupland. I see it all over the UK. Start-ups who are jumping on to the investment travelator and whose stole purpose in life is to get investment. It’s all about the funding and that’s why they then dive bomb once they have brought it in. Ostensibly, they are building a model that is attractive to investors, whether they be family and friends or high net worths or angel syndicates. But all the questions are wrong, it could be argued. Instead of asking these newbie start-ups who have just come into startupland, what their exit strategy is, it may be more prudent to ask them, how they are going to run the bloody business. It’s everywhere, start-ups creating three-minute pitches, business plans and investment decks showing potential investors the big pay days they may get. But these newbies in startupland don’t have a scooby how to actually run a business. Therein lies the first problem.

Secondly, our start-ups don’t understand what timing means. Timing is crucial when starting a new venture, seeking investment and building a business. Let me give you an example here. Internet of Things [IOT] businesses are trendy just now. I spoke to a young start-up business recently who are developing an umbrella that uses photovoltaic energy to power your iPhone when it’s up. It can also Bluetooth stuff from your smartphone while interacting with beacons etc as you walk. Pretty impressive stuff. But if this idea had been put out five years ago, it would have been too early. The flip side of this is coming to market too late, and trying to create the next Facebook. Timing is key to understanding when investors invest and where they will be and where your service or product fits.

Thirdly, despite all the signs and signalling from the USA, VC’s and all the support out there, we just do not have enough teams. We have too many solopreneurs, who cannot or do not have the capacity or nous to co-create a business with others. Trust me when I tell you this is really tough and it requires you to think and act differently. Team formation at the leadership level is crucial to potential success.

Having a co-founder is also a big plus point. Whether it’s serendipity and you stumble across each other and hit it off with the same vision for the idea or whether you have to actively go looking, a great co-founder speaks volumes to investors. It is the team that will execute. It is the team that will think things through and overcome. It is the team that will pull through when times are really tough. It is the team that co-creates and has that emotional buy into progress and success. But alas, we do not have enough start-ups in startupland who can pull this off. And it is having an affect right now on how startupland is functioning.

Finally, and I could go on a bit on this rant, we do not have the mindset of business-building. As I said earlier in this piece, start-ups are looking too much like short term bets. Forget labelling yourself as a start-up or scale-up and think about you, your co-founder and team as business builders. It’s a mindset change and one that is overdue in Scotland and beyond. So, I would encourage all those involved in supporting businesses to re-purpose support and thinking into a longer term approach that puts Business Building at the forefront of a start-up’s mind.

It’s perhaps time to take a step back and re-examine how we as a nation are helping to create our new business builders. After all ... business is the beating heart of a country.