The first hundred days of a new venture should be the fun, exciting part, but there are some important decisions to be made, and mistakes to avoid.
When launching a startup, the first hundred days are some of the most important in the entire business lifecycle. If you don’t get the idea or the team right early on, you could be left making some very difficult decisions and facing all kinds of legal and financial trouble. However, fear not. The UK tech startup landscape is booming and if you’re sensible in your decision making, there’s no reason you can’t set yourself on the fast track to long-term success.
To help you navigate those tricky first hundred days, here is some advice from legal and financial experts, as well as founders, investors and mentors that have seen it and done it before.
Day 0-30: The idea
Before you decide to take the plunge by quitting your job and pouring all your savings into founding a startup, you first need to ask yourself, do you have a viable idea? Over the past couple of years, the press has been full of stories of startup failures like Juicero; a startup that was selling $400 juicing machines before it was revealed you could empty the contents of its juice packets by squeezing it with your hands.
Alice Bentinck is the cofounder of Entrepreneur First (EF) – a pre-seed investment programme focused on building startups from the ground up. Writing for Techworld, she notes that customers are less concerned about your company existing, they just want your product to solve a problem for them.
“Sometimes first-time founders can want to build a startup so badly; they forget the right outcome is not to have something that looks like a startup,” she says. In those first 100 days, the outcome you are aiming for is a strong hunch, backed up with evidence, that potential customers want what you are building.”
For EF, it’s much better to have a finished product that people want, but no logo or business cards than it is to have a fully functioning startup trying to shift a product no one wants to buy.Promoted
“You can build the ‘startup’ infrastructure later,” Bentinick explains.
Martin Alderson, cofounder of mobile cybersecurity startup Codified Security, also spoke about the importance of doing your homework before you launch your startup.
“Get a grip on SEO, paid search, content marketing and PR – testing the most effective ways of driving customers to you,” Alderson says. “We didn’t test enough price points or collect enough data, a significant oversight. We needed to ask how much people would pay, not just if they would pay.”
Day 31-60: Lay the groundwork
So, you’ve got your idea, you’ve done your research and you’re confident that your idea is viable. Now what? There’s a number of basic things you need to do in those initial days to ensure you don’t find yourself in trouble further down the line.
Firstly, before you get attached to a name, make sure it is available. Andrew Griffin, CEO of consultancy Oakhall Advisors, has some handy advice for securing your name for the future: “Check that your preferred domain and company name, and trademark name are available using a domain name registrar, Companies House, and the UK’s Intellectual Property Office trademark register respectively.”
Registering a domain will cost around £30 and setting up the company with Companies House another £15. When doing this, you will need to give the address of a registered office.
“If you don’t have one, use your home address, or you can spend £40-50 with an agency to give you a virtual registered office,” Griffin says.
Second, make sure you register your intellectual property. Launching a startup can be financially straining however there are some areas where you shouldn’t be cutting costs. Getting legal advice is one of those.
The legalities involved with registering intellectual property can be complex and taking a DIY approach could mean you find yourself in court at a later date trying to prove your idea is unique. It’s also important to tell as few people as possible about your idea until you’ve got all the necessary legal requirements out of the way.
Andy Moseby, corporate partner at the technology and digital media law firm Kemp Little advises: “Before discussing opportunities with suppliers/customers, consider a confidentiality agreement.
“It obliges parties to keep discussions confidential. When you’ve lined up some prospects, use terms and conditions to govern the sale of your product/service. It sets clear rights and obligations, allocates liability and covers for when things go wrong.”
Day 61-80: Focus on growth
Most startups are launched with a skeleton staff that often consists of little more than the founder and several family or friends that are able to volunteer some time or expertise. However, there gets to a point where you need to focus on growing your startup and this is when, if your financials allow it, you should think about making your first hire.Promoted
In the UK, the digital skills gap is continuing to grow, meaning it’s getting increasingly difficult to find well-qualified technical employees. As a result, TickX’s cofounder Steve Pearce advises you hire your technical staff first: “Fundamentally, there are just not enough developers to fill the ever-growing number positions at the ever-growing number of tech companies.
“With the market this competitive, salaries are rocketing and finding great talent is hugely challenging.”
Pearce also says a strategy TickX finds successful is being honest with candidates at the interview stage: “Something we always say in first stage of interviews is that they could earn more money working for a big well-established company. This might seem counter intuitive when trying to convince someone to join your startup but it’s the truth so why shy away from it. This honesty will gain you trust.”
The growth stage is also the point where you need to make sure you’ve got a handle on your finances.
Griffin’s first piece of financial advice is a simple one, and will make your life a lot easier: get an accountant. “They will perhaps save you money but certainly save you from making mistakes with your corporation tax or VAT. You should be able to get one for around £1,000 a year as a startup,” he says.
Having an accountant will also help your startup stay on the right side of the law when it comes to things like registering for corporation tax and PAYE.
“If you are making money from the start, you will want to register for fixed rate VAT, which means you pay a lower VAT rate on your sales, but cannot claim VAT back on input costs,” Griffin explains. “If you are losing money to start with, and especially if you are outsourcing, say, website development, then register for full VAT, and monthly VAT returns, and then you can claim back VAT paid to suppliers each month.”
It’s also vital that you have some form of liability and employee insurance in place, just in case.
Day 81-100: Funding
In the life of any startup, the first 100 plus days are always going to be challenging, especially if you’re trying to get things up and running on a shoestring budget. The ultimate aim for any startup is to receive enough funding to get it off the ground however, you should be cautious about accepting large amounts of money too early in the process.
Venture capitalist at Partech, Boris Golden, tells Techworld: “Only a very small percentage of companies are suitable for VC funding. They need to match two main things: they need to have huge potential – say, to become a unicorn. The second is they need to have the ambition to do that.”
David Hickson, head of corporate development at startup accelerator Founders Factory, agrees. He says that while funding is important, there’s other things you need to pay attention to if you want to be taken seriously by investors. For Hickson, a well put together slide deck remains the most important piece of kit in your locker.
Hickson explains: “Tell the story as a narrative arc through problem, solution, product, size of opportunity, go-to-market and demographic, how it differentiates from the competition, how it create a sustainable competitive advantage against the competition and new entrants, and which informs (and is informed by) the financial plan, the use of raise funds and the unit economics.”
This will help you show investors you’re serious about the long-term growth of your business and not just another flash in the pan.