Maybe there is an even better place to start than the beginning. Budding technology entrepreneurs may want to do something before they start, before they enter the world of technology entrepreneurship and that is: read the stories of those who have already done it.
And if there is a lesson, it is: be willing to pivot, listen to experts, but above all listen to customers.
Sam Huber founder of virtual reality and augmented reality platform Admix, has some more words of wisdom for technology entrepreneurs in the making: and the big tip is this: sell a vision. Investors want to back the next billion dollar company.
For Sam Huber, the route to do this lies with creating a platform. Admix has created a platform that VR and AR developers can use: They raised $2.4 million in 2017 and 2018. “We launched our programmatic market place in September last year (2018),” he says. “We now have 300 million requests, about a 200 brand inventory and around 150 apps using our platform. Growth is 35% a month. And our aim is for all creators that are building AR or VR will use part of our platform.”
It’s a succinct story, but coming up with that story took time, lots of pivots, and lots of heart searching.
For Joe Root, founder of Permutive, an edge based platform designed to support publishers, the big lesson was listening to the customer.
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It might seem obvious, but as Joe Root told us: “It is very easy to lie to yourself and convince yourself what you are doing is valuable when it isn’t.” Maybe that is how technology entrepreneurs fall down. Working in isolation, focused on their idea, not talking to people outside, lying to themselves, not talking to the customer.
Both Joe Root and Sam Huber went down the incubator accelerator route at some stage.
For Root, there were two: Entrepreneur First in the UK and then finally onto the Y Combinator Accelerator in the US.
In fact, it was reading articles by the founder of Y Combinator, Paul Graham, that inspired him as his co-founder Tim Spratt in the first place: “We were interested in writing code, we didn’t realise you could build a company,” he said.
Joe Root Better to make a few users love you than a lot ambivalent
Getting on the Y Combinator was the aim from early on, but the accelerator has a very low acceptance rate. So the initial stage was getting on the Entrepreneur First scheme. He says this taught him and his partner how to pitch their ideas and gave them contacts. It was an important step towards the move to Silicon Valley and Y Combinator.
But once on the accelerator? it must have been a shock. “I remember Paul Graham saying: ‘I don’t think what you are doing is creating any value in the world, you need to go back and focus on what you are good at.” And most importantly he said, ‘speak to your customers.’
“Y Combinator was like a pressure cooker; there was a very short feedback loop; meeting a partner every two or three days; constantly brainstorming how to improve. We very quickly discovered it wasn’t a good product.”
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So what did he learn from the experience? “Y Combinator’s motto is ‘make something people want.’” He cites another Y Combinator saying: “Better to make a few users love you than a lot ambivalent.”
So is getting on an incubator or accelerator scheme a must for success in the world of technology entrepreneurship? Of course it isn’t! Plenty made it without doing that.
But clearly both Joe Root and Sam Huber found it incredibly useful.
But Huber’s experience was a little different. For him, it was a learning experience and he certainly gave it the full go. He even worked for a while at an accelerator called Collider.
Sam Huber: A venture capital firm will say the key to a business is market and people, but timing is essential too.
He set up a kind of fantasy stock trading system called Rock Trader, which garnered sufficient attention, which, after an appearance at the Las Vegas CES show, meant he was able to exit via a trade sale.
He reinvested into forming a company called Kout, a company which employed gamification to creating games within ads. He with partners such as Unilever, Amazon, Heineken, Curry’s and Virgin, but he felt the company wasn’t scalable.
And it was from there that he set up Admix. There was no accelerator this time, Huber had learned, he had made the contacts.
He says a “lot of accelerators don’t offer much value, and are run by people not necessarily qualified to do so.”
You can see how his journey led him to the realisation you need a big vision. Up to Admix, the companies he setup were not so scalable.
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Admix works with developers in the VR and AR community. He draws an analogy with mobile games — Rovio produced 52 failed games before Angry Birds. “You can’t predict who will be successful,” so he wants to work with all of them.
As part of this, Admix acquired VR focus, “a publication read by every VR developer.”
So beyond having a big vision? what advice does he have for tech entrepreneurs?
The first is watch the timing. “A venture capital firm will say the key to a business is market and people, but timing is essential too. In 2016/17, the VR market was suffering from a hype/investment low; it had fallen down the hype cycle.
The second thing, technology entrepreneurs need to look for benchmarks. In trying to build the case for Admix, Huber needed to draw comparisons with companies who had offered similar products/concepts. But there were none in VR, rightly so, because Huber was trying to be a pioneer. Instead he drew benchmarks from companies that had operated in different fields but with similar concepts — and that meant mobile and desktop advertisers, platforms such as Double Click.
For Joe Root and Permutive, the company was founded in 2014, and had a series A Funding announced in January 2018. The company has grown from three to 50 people, they launched in the US in Q1 this year and already have BuzzFeed and Business Insider as clients there. UK clients include CondeNast, Immediate Media, Dennis, The Economist, Stylist and Burda.
Root says: “He learned a harsh lesson. His final product that was developed solved a problem for publishers,”
And that maybe the key lesson for technology entrepreneurs, find a problem to solve, test it among customers, then developer it further. Be willing to pivot. The key to success in technology entrepreneurship is listen to customers. To attract funding you need to tell a story, you need benchmarks or key performance indicators, you need a vision and a product that is scalable.
But technology entrepreneurs, just like comedians, just like investors, also need good timing.