Too much focus on start-ups is not something you’d expect to hear coming from Jim Duffy, the founder of Entrepreneurial spark, author of Create Special: Think Like An Entrepreneur To Change Your Life.
The man who, arguably, has done more than anyone to advance the idea of starting your own business in Scotland has come to the conclusion that all of the focus on starting-up, pitching, getting your company investment ready and the whole entrepreneurial lifestyle may be missing a significant piece of the puzzle.
Similarly, the more recent obsession with ‘scale’ suffers from the same problem. “It’s sexy, it’s outward looking, but again, it can push companies into certain mind set, focused solely on ‘scaling-up’ and forgetting about everything else,” says Jim.
Both activities, argues Jim, can leave companies thinking in the short-term and ignoring the hugely important activities of making money and building business.
Chasing Funding
“Don’t get me wrong,” says Jim. “Encouraging entrepreneurialism is hugely important. Creating an entrepreneurial mindset is vital and E-Spark and the incubators across the country are doing a good job. But the danger is that founders then start to think that ‘starting-up’ and chasing funding is their goal, rather than focusing on actually running their business day-to-day.”
Jim readily admits that the day-to-day aspects of running and growing a company are not as sexy as starting-up or scaling-up a business, but they tend to be the difference between a company which appears, raises money, raises more money and vanishes, compared to a company which actually makes money.
“Look at the industrial estates across the UK in the 70s, 80s and 90s,” says Jim. “You had people starting up ‘traditional’ businesses like motor engineers, tile warehouses, the least sexy companies you can think of.” The key difference according to Jim, was the focus on getting cash coming in. “For most of these people, the focus was on operations. Generating business, making money – and making money in the long term.”
Building Your Business
Jim contrasts the operational focus of these businesses with the current start-up culture – especially in the digital technology sector. “The attrition rate in the tech sector is very high,” says Jim. The number of companies which go pop, even after a couple of rounds of funding is worrying.”
The focus on day-to-day operations is key, says Jim. “I’ve spoken to a lot of companies which are raising money and chasing finance. In a number of cases if you were to say to them, ‘I’ve got £350,000 here which I’m interested in investing, but tell me, right now, what you’re going to do with it in the next 90 days, that’s going to have an impact on your business’, you find a lot of blank stares.”
The unglamorous, yet crucial, area between start-up and scale-up is where Jim’s latest venture, Moonshot Academy, is aiming to make a difference.
“Rather than welcoming every company and helping them all reach a basic level, Moonshot is about selecting companies which we can see are putting the effort into that operational day-to-day ‘building your business’ and have proven they can generate cash,” says Jim. “We plan to work with companies in the long-term. This isn’t a fixed period programme. We want to partner with companies all the way to their eventual exit.”
Destination Moon
Early indications are that Moonshot is already making progress. “We should be announcing the first companies in the next weeks,” says Jim, (the first company signed up at the start of August) “and we’re already looking at expanding the management team from three to five people.”
As for his literary ambitions, Jim is a little more circumspect. “I’m focusing on the business right now,” he tells DIGIT. “The operational stuff. Business development. Making money.” There may however, be something in the pipeline. “There might be something,” he muses. “Something on the Moonshot mindset. That could be useful.”
DIGIT suggested Jim take a leaf out of his previous book and #GoDo…
