Entrepreneurialism is an illogical activity

Ernie Richardson reveals what he wished he'd known when starting up his business.

So, you've decided to go for it. Despite all my scepticism you're going to start up your technology company and give up (or at least put on hold) your academic career. I have to say that I take this news with a mixture of enormous admiration and deep foreboding, but since you're intent on going down this route, can I share with you a few thoughts that might help out when the going gets tough; as it will do!

"There needs to be something inside you that burns to do this, because when the going gets tough, it's that sense of illogical ambition which will sustain you."

Entrepreneurialism is a profoundly illogical activity

I would expect you as an academic to appreciate that. In your case it involves suspending a promising academic career in favour of tremendous hard work, nervous tension, strain on your finances and your personal life with (statistically speaking) a relatively poor chance of success. However, if there isn't an element of illogicality in what you're doing then you're probably on the wrong path. There needs to be something inside you that "burns" to do this, because when the going gets tough, it's that sense of illogical ambition which will sustain you.

Success has many fathers and failure is an orphan

After the initial euphoria, your project will meet deep and ingrained scepticism, particularly in the UK. The people in large corporates (who will ultimately buy your product /business) will go through a number of phases:

• Firstly ignore your idea, or dismiss it as trivial ("we could do that any time we wished")
• Then attack it ("it won't work; too expensive; threatens our installed customer base") etc.
• Then grudgingly adopt it, but only where they have no alternative
• Finally, when your route is self-evidently the way to go, absorb it ("we always knew that...")

However in the event that first time round it does fail, then there will be a torrent of "we told you so..." Nobody will thank you for proving them wrong. Rather the acknowledgement that you were right appears in the size of the business you build.

It's better to be rich than right

One of the attitudes that afflict the academic life is the need to be proved right. In contrast in the business world, decisions are made on a much less rigorous basis. For example, the world of technology is populated by second class products that dominate markets - Windows OS vs Open Source; PC vs Mac, etc. etc. The point here is that in any market there is a point where the quality of the technology (being right) is no longer the determining factor in its adoption - at this point all the black arts of sales and marketing come into play. Technology has to be good enough, but fairly soon issues like price, ease of use, market access to the product become much more important than the underlying technology. Two important matters follow from this:

• Firstly, the market decides on what is important and what isn't, not you or your development team. The thing that Microsoft have always excelled at is getting product into the hands of users quickly, listen to what they have to say and then incorporate it; even if it cuts across the view of the "beauty" of your product. This is why virtually all Microsoft products have to go through several versions before they are any good.

• Secondly, always go for growth. Again, the market will decide the value (price) attributable to your product, not you. So the challenge is to capture users, listen to them and then drive cost out of your product (and your business) such that it becomes widely adopted.

"The voyage that you've embarked on with your project is new; nobody has ever been there before."

Experience is valuable, but not invaluable

The voyage that you've embarked on with your project is new; nobody has ever been there before. Sure some people have undertaken similar journeys and some people have been to places (markets) that are like yours. But, nobody has ever taken your journey to your destination. This is why the advice they can offer and experience they can bring (including mine!) has value but nobody can tell you exactly what to do. If they can then you're on the wrong journey and you should stop and find your own journey, because most (if not all) of the value has already been extracted.

One of the stereotypical (and flawed) assumptions amongst people who operate in the area of technology entrepreneurs is that founders are OK up to a point but then the "grown ups" should take over. In some circumstances this may be right, but generally when the going gets tough, it's the founders who will hang on in there. Hired hands come and go. However, the key is that the decision to hand over any degree of control to an incoming manager should be yours and should be done on the basis of demonstrable added value. If you end up failing, it might as well be for your mistakes rather than for the mistakes of someone you brought into the business.

Learn how to sell

Probably the most frequent mistake made in technology start-ups is to over estimate the value of the underlying technology. In general terms the contribution made to any successful business by its core technology is probably no more than 10-15%. What really does add value is the application of that technology in the hands of users facing real business issues. Thereafter it's all about sales and marketing, and this is probably the most important contributory element.

Another stereotypical (and flawed) assumption amongst academic entrepreneurs is that sales and marketing is somehow a second rate activity and that academic entrepreneurs make poor sales people. This is driven by the "foot in the door", slick salesman picture that many academic entrepreneurs still carry. In fact, most businesses started up by academics are business to business, high added value operations where the person doing the selling has to know as much about the technology as his customer; who is probably a highly qualified technologist. In this situation the sales process lends itself to similarly qualified sales and marketing personnel. Finally good sales and marketing people are very well organised and are following a systematic sales process which any academic can recognise and quickly adopt.

So enough of the sage words. At the end of the day you've embarked on this journey because somewhere deep down you have to! I applaud that and even if it doesn't work out, during this process you will discover more about yourself and about business than any number of MBA programmes. Good luck and make sure to send me an invite to the IPO party.