There are more than 60,000 digital businesses in the UK, generating over £161bn a year in total. New enterprises can learn a few things by thinking like a tech start-up, according to Jacyn Heavens, founder and CEO of Epos Now
New businesses are notoriously fragile. According to a survey by the insurer RSA, as many as 50 per cent don’t survive beyond five years.
At one stage, I was a frustrated business owner unable to keep up with larger businesses and chains moving into the area. My bar and restaurant didn’t have the scale, processes or technology to do this.
And yet, in the UK many tech start-ups appear immune to these odds. For example, Tech City UK has identified 60,000 digital businesses in the UK, generating more than £161 billion a year.
So how can every start up act like a tech start up? That is, use technology and data to take risks, but informed risks. I can only talk about my own experience, which I recognise is not typical. However, it’s worked for me and the company I founded in 2011.
How to think like a tech start-up
Use feedback with care
We’ve recognised that there’s a big difference between qualitative responses and data analysis. Only around 6 per cent of our customer base volunteers to take part in our beta testing and only a quarter give regular feedback; a large number of comments but only a small percentage of users.
Now we use feedback with systematically generated data, analysing trends on how our systems are used, identifying friction points and so on. This has helped us to cut down on the average time it takes for a customer to process a transaction on our system by 19 per cent .
Be flexible about product
When we first started, we had lots of requests from customers for a booking app. But when we built it, we found it wasn’t increasing sales – even though we had lots of potential customers that had said they were going with a competitor.
We analysed 130,000 customer touchpoints and realised that every single one of our customers was using it in a different way. We decided that rather than build 20 different booking apps to accommodate all users, we should build an app store and integrate with specialist booking apps.
We had to be prepared to be agile and sacrifice our initial ideas.
Customer service and partner support are critical
Build up your online reviews on sites such as Trustpilot. Referrals are extremely important as if you treat your sales team well, they will become your most effective sales team.
Due to our reputation we receive in excess of 6,000 inbound leads a month, eliminating the need for outbound sales.
Be tight on operation costs to begin with to invest in product
Our first computers cost £15 from Gumtree and our desks came from skips. Five years on we are refurbishing our latest office to include a hot tub, bar and arcade. This is only possible because of our prudent beginnings which meant we could invest in getting the product just right.
When you do invest, make sure it’s scalable
Don’t invite re-work but invest in automating scalable processes. While it costs more initially, it will save you a fortune as you grow and ensure you don’t have catastrophic failures when you reach a certain point.
Become a member of the IoD
The IoD has a range of memberships for directors, founders and co-founders, providing all the resources and facilities needed to enhance your business. To find out more about membership offerings and to join today, visit iod.com/membership