“Work hard, play hard” was a slogan popularised by stockbrokers and Del Boy yuppies in the 1980s. It has had relevance in various industries since, including our own technology sector.
Tales of 90s Silicon Valley parties are the stuff of folklore, and east London has played host to its own excesses in recent months and years – not least the already almost legendary Silicon Drinkabout night.
And why not? What better way to unwind after that 100 hour week, or to celebrate after realising that next round of investment?
Well, here’s the thing. Unfortunately, many in the east London tech hub these days unwind before ever winding up in the first place. Indeed, some new-breed “entrepreneurs” appear to have had something approaching a work bypass.
It’s not everyone, let’s be clear. But it’s enough to give me pause for thought.
Part of what I do is mentor technology start-ups. Over the last year or two, I’ve noticed a disturbingly common characteristic among Silicon Roundabout entrepreneurs: they have absolutely no idea how much hard work is involved in running a start-up business.
The large marketing pitch that is Tech City has undoubtedly increased awareness of the area, and of the sector as a whole. (If only marketing was everything!) But getting a desk at one of the tech hubs near Old Street is not the end of the story. It’s not even the beginning.
Here’s the brutal reality that no amount of marketing flattery changes: having an idea, a TechHub membership or a laptop with a freshly-installed copy of Adobe Creative Suite 6 does not make you an entrepreneur.
What does is being able to realise your idea, ensuring there is a market and demand for it; having self-belief, drive and commitment to follow ambition through to the end; being able to adapt to market conditions; and, most importantly, being able to attract customers and make a profitable product.
Entrepreneurs also have ability to surround themselves with talented people who compensate for their own deficiencies. They are forward-thinking. Visionary in their aspirations. And, oh yes, and they work really, really hard.
What I encounter so often from those claiming the entrepreneurial mantle these days is an automatic assumption that angel, private equity or venture capital backing will be gifted to them, sprinkled like stardust over their brilliant infant.
“Trifling” considerations such as how developers might be paid to progress an idea to a beta stage are brushed aside in this grand delusion.
What is even more concerning is that many business plans are based on the expectation of venture capital investment in the very short term, before profits (and sometimes sales) are even achieved – as if a fairy godmother will save the day when cashflow becomes tight.
This irresponsible short-termism utterly misses the point that venture capitalists like to invest in successful businesses. They are not charities for failing or unproven business models – even if increasing numbers of them are now funded via the public purse.
A viable business should be able to survive and prosper in its own right. Many successful ones have – shock, horror – prospered without needing external investment.
There is also an assumption that ideas are born perfect and evolve fluently into the final product that goes to market. In fact, most successful businesses nowadays, and not just in the tech world, have taken their products or services through many different iterations and versions before hitting the sweet spot of what the customer really wants.
So why are so many of today’s start-up wannabes under-prepared for the reality of what creating a new business involves? My own suspicion is that the much reported-on success stories of the east London tech world have given prospective entrepreneurs a rose-tinted view of what can realistically be achieved.
The truth is that these businesses were operating well before the “Tech City” moniker was coined – and that no world-beating businesses have emerged since it was. For every success story there are hundreds of start-ups who never get as far as actually making a sale or profit, let alone a headline.
Blindly positive marketing that enables substandard business models to circulate does no one any favours.
The current surfeit of positive stories, and the absence of realism, feeds a sense of expectation, whereby people without adequate skills or resources believe they can become the next dot com millionaire. Tech City has become The X Factor for business, scarcely more credible than the celebrity investors of Dragons’ Den.
A few rise to the top – just as they do on Simon Cowell’s TV show. But most are attracted by the promise of fame, fortune and a booze-fuelled, trendy lifestyle, not the sort of hard graft necessary to build a European LinkedIn or Facebook.
Elements are just often missing. For instance, experience is crucial in being able to run a successful business. The making and learning from previous mistakes is fundamental to the growth of entrepreneurs.
Most have worked for other enterprises before launching their own and have an understanding of the business world. They know how much pressure and hard work is involved and have a clear understanding of the basic operational and financial principles in running a company, sometimes identifying an unmet customer need.
My key mentoring message to tech entrepreneurs is just a sentence long: be realistic in your expectations. Give me a few minutes longer and I may point out some facts about the need to work exceptionally hard, the difficulty in getting venture capital funding and even then success is not guaranteed.
Very few people out there have come straight from college or university and created their own successful business. Yet East London appears to be full of these “graduate start-ups”.
Accept that you will probably make mistakes. Glory in them. Be prepared to change the idea you started with – it is unlikely to be perfect from day one.
You may need to work for someone else and then spend the rest of your waking hours developing your own start-up. That’s no bad thing: use it to gain experience to take into your own business.
Do not be afraid to ask others for help. None of us knows it all.
Don’t expect to be able to leave the office at 6pm.
The next east London tech success story will need to involve all of the above. Otherwise, Tech City is doomed to achieve little more than its accomplishments heretofore, which consist of little besides talking big and knocking back shots on a school night.
Want to change the world? It might be time to grow up and get back to the office.
Mike O’Brien is a partner and specialist in technology start-ups at accountancy firm Reeves