By Paul Fifield, Chief Revenue Officer, UNiDAYS
1. Without wanting to sound cliché, write down what didn’t go to plan to learn as much as you can from it - despite all the content out there you learn the best when the world puts you on your ass!
2. Think deeply about the business model you used - think hard about taking risk out the business model you choose next time
I’ve been up-close and personal with 3 business models in my time, Marketing / Digital agency, SaaS and Consumer internet (monetizing audience).
Marketing/Digital Agency: I doff my cap to anyone that can grow a large agency from scratch. It’s the hardest model by far. Your business is your talent, headcount (read cost) and revenue are linear and it’s crazy hard to differentiate your business against others in the space. And boy is it a crowded space as the barrier to start is so low. It was way too hard for me!
Small watch out – you won't get much better than 1x your revenue in value.
SaaS: SaaS is great once you get to around $5m ARR but is VERY expensive to scale. To build an enterprise product takes millions of dollars and you have to build expensive sales and marketing operations well ahead of revenue. Then there’s the small matter of product market fit.
You will enjoy much better multiples here. 5-10X revenue depending on revenue growth and market potential.
Consumer Internet: Scaling an audience as part of this business model has seemed to been the easiest so far, especially when you have inherent revenue model like we do at UNiDAYS which is a share of the revenue we generate. But in saying that, my perspective is distorted because the business was so crazy successful before I joined. We were 15 people two years ago, and now we have grown to 200. It’s not always that easy. For example, internet audience businesses can be vastly expensive if your business model is advertising and you need to scale audience before the ad dollars roll in like Facebook, Twitter or Snapchat who raised $3.5bn, $1.1bn and $2.7bn respectively of cumulative investment before their IPOs.
Again multiples will be strong – the faster you’re growing the better they will be. Even Facebook today is 14x revenue.
3. Dont give up and read some Churchill quotes! My favourite is: “The definition of success is going from failure to failure without losing your enthusiasm’. Which is a cooler way of saying don’t give up. If you do then this entrepreneurial game wasn’t meant for you anyway, but at least you tried. Something else that works in the psychological war you face as an entrepreneur is think of all doubters and muster the energy to prove them all wrong!