Rachel Elnaugh of Red Letter Days and Dragon’s Den fame spoke last week of her Den and startup experiences. Rachel now mentors startup founders. Rachel said ‘99% of all Dragon’s Den footage ended up on the cutting room floor’ and only the “bitchy” comments make it to the final cut. Dragon’s Den is great entertainment but it does have its darker side.
Rachel confirmed my long held view that Dragons’ Den is not how real business funding is done. The show producers deliberately put many unsuitable candidates in front of the investors to provoke and maximize emotional responses on both sides. This makes for exciting entertainment but is frequently at the expense of the entrepreneur. The entrepreneur’s often become the laughing stock. Some of the entrepreneurs are naive. Some are foolish. Many of them are unprepared but they’ve all taken a significant risk to start their own business. We now live in a time when our economy needs young fresh businesses the most. So lets celebrate entrepreneurship and give them a helping hand.
In the past I’ve heard negative comments questioning Rachel’s success. I even heard some of these after Rachel’s talk. From my experience of interviewing and working for entrepreneurs there is often more to learn from failure than success. Yes, Rachel did fail after having a big success, however she has not quit. More importantly she has continued to learn from her experiences. This has enabled her to change her focus. I think there is much to learn from Rachel’s 16 points on starting and running a startup:
- You need the ability to overcome constant knock backs – It can be an emotional roller coaster of a ride. You have to pick yourself up and keep running. Good things can come from bad situations. My startup was badly let down by a freelancer last week but in the end we found someone even better.
- Think BIG – Jim Connolly posted ‘6 words to transform your results!’ - “Start with the end in mind.”. This is not a new idea – Laurence J. Peter said: “If you don’t know where you are going, you will probably end up somewhere else.”
- Have a killer idea – Hummm.. difficult one. Innovation is not easy. A great way to look at the Innovation challenge: Tyler Durden’s 8 rules of Innovation. We’ve taken a long route to come up with our product idea and that’s only the start.
- Your first/fast decision if often the best one – I agree but also some thought and analysis is always useful.
- You will go through a ‘Dark period’ (the ‘pit‘) - When the knock backs get too hard or they come too often you may loose all hope. Keep the faith and keep believing as this entrepreneur did.
- Yours sales will be half your forecast and costs will be double – I’ve heard variation on this from 2.5 to 4 times cost multipliers. Oh dear!
- Pay for marketing help – Good idea if you can afford it or you don’t have the skills.
- A good sales model should be effortless – Sounds like a dream. ‘Pinch me quick!‘
- PR & Word of mouth marketing is vital – Absolutely number one in the new open web world
- It’s dangerous when you win business awards. The ego rules. – I’ve also heard this before. Good advice.
- Keep the company lean – A lean mean fighting machine :)
- Get proper funding if your going to grow your company – Not aways the case. Atlassian is a good home grown example
- Believe in yourself – But don’t forget the people around you
- Know the numbers – A very important point which the Dragons’ always expect entrepreneurs to have
- Have absolute persistence and determination – For me its back to Jim’s point “Start with the end in mind“, then you have something to aim for
- Take responsibility (don’t blame others) – A true leaders quality
I enjoyed Rachel’s talk. She showed openness, commitment to business ethics and reflective learning. Many of Rachel’s points are obvious but as I’ve said many times over the last three years the ‘obvious is all around us, but it’s hard to follow’. ‘There is a difference between knowing the path and walking the path’.