Lessons learnt on a start-up journey
I grew up in Darwin, northern Australia and dreamt of playing hockey for my country. Today I live in Glasgow, thousands of miles away from the sunny climes of home and head up the UK operations and marketing for regtech firm Encompass.
Being part of a fast-growing international start-up has taken me on a challenging yet exhilarating journey from Sydney to Glasgow.
We’ve achieved some amazing things over the last five years, but of course mistakes have also been made: here I outline some of the lesson learnt, what I believe has contributed to our successes and why the fun and furor of being part of a start-up can match, if not exceed, that of being on the hockey pitch.
Identify a problem, and then solve it
Too often people get excited about their technology, widget or initial service idea and become wedded to this starting point. But I believe that success comes from looking at things from the opposite perspective: what is the problem people (a market) need solved?
Ideally, start with the problem and let your business idea come from that. At the very least, ensure your idea solves a problem affecting a big enough market so that you can ensure your business model stacks up. While passion and belief will get you a long way, as will a great product, you will always struggle to get it off the ground if the market for your idea simply doesn’t exist.
For my company, Encompass, the problem was always front and centre: Encompass was borne out of a business decision that left our co-founders Roger Carson and Wayne Johnson badly burnt after being defrauded in a property investment. So the problem we wanted to solve was not only abundantly clear, but personal too. To this day, the driving force behind Encompass’ vision is to ensure that what happened to Wayne and Roger couldn’t happen to others. We believe the best decisions are made when people understand the full picture.
Don’t be afraid to change course
It’s important to maintain the overarching vision for your company, but you must not be afraid to change your strategy along the way.
I like the term “pivot”, coined by Eric Ries in his book “The Lean Startup” (and I’m not alone – it’s a staple of the start-up vernacular and yet an often misused term). To surmise, using the analogy of a map, Ries argues that you must keep your destination in mind, though you may have to alter your route significantly along the way.
Some famous examples include Flickr, which started out as an online role-playing game with a photo sharing feature. The company “zoomed in” on this functionality which became the basis of its value proposition and success. Another is Twitter, which started as a side project at Odeo, a podcasting company.
Our experience wasn’t dissimilar, we started as a predictive analytics business, yet it was one feature – of visualisation – that people loved, and that’s where we initially focused in Australia. Today we have zoomed in again, and our focus is on automating KYC processes. The ability to adapt and react to what the market it telling you is crucial.
Catch a wave
As one commentator noted, “too big to fail has translated to too complex to manage”. The wave of ever-increasing regulation that’s followed on from the banking crisis has forced business to rely on new technologies to re-instate and demonstrate control.
Our research suggests most major international banks are spending between £700m and £1 billion annually on financial crime compliance. That’s immense, and so it’s no surprise regulation technology – regtech – is now one of the “hot” areas of tech.
Being in the UK, renowned for the strength and robustness of its financial regulatory system and in a “hot” area has helped us secure significant investment. In turn, this has enabled us to grow, and establish a solid platform from which to launch into the North American market – the holy grail for any tech entrepreneur.
Securing funding is key to growing your business. We are grateful for the support and belief of our early investors and partners who saw the Encompass vision, and to this day securing investment remains a significant focus for us.
A good idea and business plan should be able to generate investment – if investment isn’t forthcoming that could be a sign you need to alter your business model.
Location also plays a role as different areas of the UK have differing investment opportunities. It’s always advisable to launch in an area where you can both benefit from a highly qualified workforce, as well as create opportunities for that workforce.
Showing how you will contribute to the local area by creating high value jobs helps secure funding. We’ve received significant support from Scottish Enterprise and Scottish Investment Bank, plus being part of Scotland’s growing regtech/fintech hub is an added bonus.
Company culture and recruiting the right staff
Being part of a start-up is an intense experience – the “next” six months are always the most important. Evolving as you grow is important; sometimes that means letting go of assumptions and beliefs that are no longer helping you in the next phase of your company, whilst making sure you retain the good parts about your company culture.
If you grow quickly – and across continents – this can be a challenge. You want to attract and retain the best and most suitable talent for your business. You also want these people to feel connected to and motivated by your vision. Most are, and having an employee share plan helps with that.
But as you grow up, each stage of your business attracts a different type of employee and melding all the mindsets while utilising new talent and experiences people bring to the table is not easy.
As with so many other companies we enable flexible working, there’s beer, a pool table, table tennis and the odd yoga class, but “building a company” is about so much more than these symbols. Communication is key and ensuring everyone feels connected to the vision and the founders and understands their valuable place in achieving our goals is an ongoing challenge we continue to work on every day.
Lean into the headwind
If, on a personal level, you have and need a well-defined three or five year plan, then a start-up probably isn’t for you: one of the biggest lessons I’ve learnt is to keep an open mind and avoid the mistake of accidentally reverse engineering yourself out of an opportunity. In practice, this means don’t be afraid to take risks: the pace of change is fast so don’t be afraid to take advantage of what’s in front of you.
For us (my husband and I), it was moving halfway around the world: that may seem extreme to some – but the opportunities that may seem extreme at the time could pay dividends down the line – and for us, just coming out of our #secondscottishwinter it already has, with personal and professional experiences we’ve gained living in this beautiful part of the world.
Most importantly, whatever challenges you face on your start-up journey, make sure to enjoy the ride.
By Alex Ford, VP marketing and operations, Encompass Corporation
This article is also featured in the April 2017 edition of the Banking Technology Magazine.