Competition is fierce and not everyone succeeds. Here’s one pro’s take on the current status of the game.
Take control, pursue your passion, create your destiny.
And if you want to know what it’s really like to start a business, ask someone who’s been there, given it their all, and kept trying no matter the circumstances.
That’s why it’s so critical to talk to Warwick Hill.
Hill’s CV is practically novella length. He’s worked in business development, was the CEO of an Indian and Middle Eastern wholesale carrier services company, spent nearly three years in Hong Kong as CEO of 3rd Space, worked as an advisor to NHS England, was a board advisor to Fineqia in Canada, led startups at Microsoft, and has recently served as a non-executive board member, non-executive director, chairman of the board, and ambassador for a long list of dynamic, state-of-the-art London-based businesses.
And that’s just the highlights.
“My journey was 30 years in the making,” he told me during an interview for my podcast.
Born in New Zealand, Hill came to London but just couldn’t seem to find any work that interested him. He reminisced about a hotel job he’d seen in New Zealand and wondered if the same existed in London.
That job was private transport that delivered hotel and event staff home after late shifts — after public transport had finished. Previously, companies had dropped huge sums on taxis for their workers. In Auckland, Hill had seen what amounted to a cross between an Uber and a bus. He copied the idea, moved it to London, and pitched the idea to hotels there, with four of them signing on the spot.
Ooops. Out of nowhere, he had a company to run.
Here’s a great business lesson: If you pitch an idea, be prepared to put it in motion immediately.
services licensing process. He took out a £5,000 loan, leased some busses, and was suddenly making £18,000 a month.
While I like to say that great businesses start by someone saying “Wouldn’t it be cool if…” or “Wouldn’t it be better if…”, Hill has his own idea:
“I can do better.”
Great business ideas come from finding better ways to do things.
Great entrepreneurs meld outside influences with what is in the market and find ways to combine ideas that offer new solutions to old problems. Which is odd, because much of the time in the United Kingdom, the investment community is searching for reinvention — something already successful which can be made 1% or 10% better.
That means funding opportunities and entrepreneurial ideas don’t always match. Investors want something with a track record — usually, a really, really good track record. There’s another fundamental common problem entrepreneurs run up against, Hill said: They may not be able to fully navigate the market they are preparing to disrupt.
“The sad fact that I have seen is a lot of people start companies thinking that they have understood what the problem set is and that they understand how to integrate the problem set into the market, and then they get there and they don’t,” he said.
And as all entrepreneurs are coming to know, there are huge problems with securing funding.
Right now, venture capital firms have portfolios brimming with investments that are not making money or are making very little money. And the mistakes that venture capitalists make, then, is counting too heavily on their next investment to bail them out of their poor prior decision making. That’s problematic for decent companies that are starting up.
“There’s such a high earnings expectation that hardly any company will get funded,” he said.
Meanwhile, many companies that do get funded are often great companies and can earn money from investors but are not great in the market.
Investing in startups is a tricky business.
About 80% pivot, die, or fail to live up to expectations. That’s difficult for those chasing that magical 20%.
“What I think is an interesting way of looking at it, which I haven’t seen yet but a couple of us are working on currently, is you take the VC model and you flip it on its head,” he said. “You turn it into an M&A model.”
In other words, you fund companies that you know will be acquired by the major players — companies with a service that can be bolted into a cloud that the cloud provider can take global. In this case, it’s the tech that matters, not the customer base, because the tech can be spread across the cloud and sold to all cloud users, not just those who are already using it.
But while the investing landscape is tricky, the playing field has been democratized for entrepreneurs because it only takes two things to get going. At Microsoft, Hill vetted thousands of companies — good ones, ones that had already made it in the front door at Microsoft — from all over the world. The success rate was startlingly low. Why?
Technology and cash have enabled anyone to start a business.
“Technology is so out there,” Hill said, “that everyone is struggling with what to do with it.”
Meanwhile, legacy companies, which are stuck in the mud and unable to move, are looking at the startups and thinking they want in on the action. The limiting factor is they are not playing on the same levels, though one can drive the other.
Finally sell your idea to a customer? Don’t underestimate how long it will take to onboard them.
Selling your technology to a mobile provider? It takes 18 months to embed it in their network — and that’s once you’ve sold them the solution. Breaking into a business like banking, where the adoption of new technologies can be dreadfully slow? You may be looking at even longer.
Finally, I asked Hill what his one piece of advice is.
“The mistakes I have made came when I was trying to do everything myself,” he said. “You have to be incredibly mentally strong to do that. Being a CEO of an emerging company is like being kicked in the teeth daily.”
Go and find someone like yourself, someone that you trust and who can give you solid advice and mentor you. Make sure you are ready for the journey, that you have the intelligence, and that you have the skill set to achieve your goals.
Entrepreneurs need to be smart about how they sell their products and how they approach VC. The landscape is extremely complicated and fraught with failures. But for those who know, the opportunities are vast and lucrative.