The current culture for most businesses keen to scale up is to focus on funding, which many entrepreneurs believe is an integral component of a successful growth strategy. This is a belief which may well have been imported from the Silicon Valley model of product & funding focus, which is trending in the UK tech scene.
But Britain and Silicon Valley are not identical. I’ve recently spoken to several CEOs of ambitious UK tech firms who have confirmed the level of funding available in the UK is generally a lot less than in the US (a few million v tens or hundreds of millions). In fact, UK augmented reality start up Blippar moved to California last year to be closer to investors.
Another question you should think about is - if you do decide to go for funding, do you believe that the money invested will necessarily drive growth? It’s important to consider that it might well drive growth if it is invested in pulling the right levers, but equally it might not and let’s not forget that it needs to be paid back at some stage.
Everyone needs some seed/start-up capital, but funding is not necessarily the silver bullet to scale up your enterprise. Serial entrepreneur Luke Johnson warned of an over reliance on funding in The Sunday Times recently: ‘Sometimes it seems that an entrepreneur has arrived if his start-up has received bountiful funding from venture capitalists, even if it has modest revenues and makes large losses. Too much cash leads to waste and permits poor economic models to persist for much longer than they should.’
Focus on selling
Instead of spending all your efforts on pitching to investors, spend it on attracting customers. My experience is that a clear focus on selling can allow you to take control of your own growth, close sales and grow your top and bottom lines.
This sales focus essentially creates a ‘self-funding’ model which can enable you to: