This week we did an interview with Murray Newlands, an entrepreneur, business advisor and speaker about creating a working startup business model. He is a co-founder of Due an online invoicing company helping 75k+ business based in San Francisco.
We talked about many things. Newlands shares his insight into venture capital and getting investments, about entrepreneur’s role in the workplace and on the future of business
Newlands is also an adviser to the Draper Nexus Network of Things Fund that invests in IOT companies. He gives practice advice from the 1000’s of pitches he has heard for entrepreneurs and startups to grow their companies, get investment and succeed. Newlands received a Bachelor of Laws and he is qualified as a Lawyer. He gained his Green Card by being recognized by the US government as an “alien of extraordinary ability.” Newlands is the author of “Online Marketing: A User’s Manual” published by John Wiley & Sons.
How to become a good leader? What sort of skill set should you develop?
You become a good leader by committing yourself to a continual learning process where you are open to what others have to say. You also need to believe that even a leader needs to undertake constant performance improvement steps and assessments as well as can learn from those that he/she leads. It’s important to have a comprehensive skill set that covers all aspects of the business so that the leader better understands how each department and role fits into the overall strategy. This also allows the leader to more effectively communicate with all members of the team. As new technologies emerge that may impact upon a business, a leader needs to further their knowledge and expertise related to those technologies and how they fit into the startup business model.
In your experience, what sort of mistakes are common among entrepreneurs? How to avoid them?
The most common mistake an entrepreneur can make is to go out and ask for funding from any investor they find and show that investor an undeveloped business model for a product or service that may not be that investor’s expertise. This rush to market and funding, along with taking any investor that will offer money, are critical mistakes that can ruin the business before it even starts. These mistakes can be avoided if an entrepreneur spends more time on developing their business from an idea into a working model that shows revenue and quantitative potential to disrupt the market or address a previously unaddressed problem. That entrepreneur can also do their research, spend time studying the investors in their specific space, and identify those investors that align with the entrepreneur’s need for funding, stage of development, and expertise to understand and grow the business.
What is the main role for an entrepreneur in a workplace and developing a start up business model and how has it changed in the last 10 years?
Today’s entrepreneur and their role in a workplace are extremely different than a decade ago. Ten years ago, an entrepreneur did as much as they could by themselves rather than creating a team at the early stages. Now, that entrepreneur focuses more on building out their business model, strategy, and operations while leaving more of the daily tasks to a core team of talent that they use on a freelance or outsource basis. This more strategic approach for the entrepreneur allows them to focus on creating as viable a business model in advance of funding requests to illustrate its sustainability and to even show revenue. In the past, the entrepreneur was doing everything in the workplace but did not necessarily have the business model or revenue to show for all the effort.
Based on your experience, have most companies managed to adapt to the 21st century business climate that is dominated by technology, the Internet and Millennials?
My opinion is that most businesses are still struggling to adapt to the new business climate. There is still a lot of confusion around using online platforms and what it really means to engage with the target audience and existing customer base.
I see many examples of social media done wrong and the misunderstanding that the more traffic that goes to a website the better. Understanding what to do with the increased amount of data and what all the technology can offer in terms efficiency still have a significant learning curve for companies. As for working with Millennials, more companies have begun to change their operating environments to address how this generation of workers views their careers, but there is more that can be done to create the most effective working environment.
You have done a lot of interviews with venture capitalists (VCs). What are they looking for at the moment? What are their expectations to startups and young businesses?
VCs are looking for those start-ups and young businesses that are primarily in segments that offer the most market opportunity because they are poorly served and have the most potential for disruption. Areas of high growth include Internet-of-Things, healthcare, Big Data, “green” solutions, enterprise mobile apps and FinTech. VC expectations are that they the founder has become more important than ever along with the availability of a team that can execute on an idea.
VCs are looking more closely at a founder’s core skills, knowledge, and previous experience, including any other success they have achieved with a young business before they invest. They want to develop more of a working relationship with these start-ups, including with the founder and the team. I have learned a lot working with Salil Pradhan at http://nothingsfund.com/ . One of the key things I learned is that you have to have an idea that can meet a big market. There are some great start-up ideas that will never be truly big businesses and are therefore hard to fund. VC’s want the possibility of BIG exits.
What do you think the main challenges will be for running a company in 2020?
The main challenges for running a company in 2020 will be to continue to keep with the rapid pace of change, including technological, economic, environmental and consumer-oriented changes. The challenge is to predict or sense when the change is coming and be ready to respond or even be the company that creates the change for the competition.
Resources may be in shorter supply so doing more with less will be an ongoing challenge while more global economic issues like we are seeing with Greece as well as other regional stock markets, such as China, will continue to test investor and consumer confidence.
The other challenge will be that consumers will have greater power through social media, replacing traditional media as the primary credible sources on companies, products, and services, which will mean that companies will have to keep a closer watch on what is being said about them and do more to engage with this more powerful audience.