Plusnet has brought together inspiring UK start-ups to help you get to grips with all things marketing and funding.
Launching and growing a business can feel like a huge achievement, but entrepreneurs can still face an uphill struggle on the road to success.
Even the most successful founders have a hard time tackling challenges including two key areas, marketing and funding.
To help you tackle these challenges, we partnered with Startups.co.uk to bring together some of the UK’s most exciting start-up founders at a round table discussion, where they offered their tips to help make marketing and funding a doddle.
The roundtable was held as part of our new Plusnet Pioneers campaign enlisting some of the UK’s top entrepreneurial talent to create helpful content that will help ensure customers and investors will fall in love with your brand.
Featuring the founder of a multi-million-pound laundry app, the creator of an innovative solution to wine delivery, and an entrepreneur making waves with a new PR agency, the business owners we spoke to have a tonne of advice to help you win over customers and investors.
Read on for their dos and don’ts for marketing and funding, as well as advice on how to keep momentum up when the going gets tough.
Get to know our marketing and funding start-up insiders
Jonathan Lister, CTO of PensionBee
PensionBee consolidates all of your old pensions into one pension plan. Launched in January 2016, the start-up has secured more than £2.3m investment and has had more than 55,000 customer sign-ups.
Ed Relf, co-founder of Laundrapp
Laundrapp is an on-demand dry cleaning and laundry app. Established in January 2015, the business has secured more than £10m investment and now has customers worldwide, including Australia and New Zealand.
Cathy White, founder of CEW Communications
CEW Communications is a PR and communications firm which works with growing tech and digital start-ups such as Blooming Founders and Gift Wink. Launched earlier this year, the start-up has grown without investment to date.
Riya Grover, co-founder of Feedr
Feedr is an online marketplace that enables Londoners to order artisan food for delivery to their home or office. Launched in January 2016, the company now works with over 100 vendors and has raised significant funding from high-profile investors such as Wonga founder Errol Damelin.
Santiago Navarro, co-founder of Garçcon Wines
Garcon Wines has created the world’s first full-sized postable wine bottle. Established in 2016 after winning £20,000 prize money, the company has secured its intellectual property in 35 countries and has raised investment from high net worth investors.
Oliver Bridge, founder of Cornerstone
Cornerstone is an online shaving subscription service with over 150,000 customers. Started in 2014, the business has raised £8m investment to date through crowdfunding and venture capital.
Michael Connolly, general manager of Mr Lee’s Noodles
Mr Lee’s Noodles specialises in instant gluten-free, low-sugar rice noodles. The Bournemouth start-up launched in September 2016 and recently closed an oversubscribed crowdfunding round, securing more than £780,000.
PART 1: Dos and don’ts for marketing success
• DON’T expect your marketing efforts to bear fruit straight away
• DO have a focused marketing strategy from the start
• DO prioritise social media and make it a priority to your business
• DO put the customer first in your marketing strategy
• DON’T rush to get your product or service to market
DON’T expect your marketing efforts to bear fruit straight away
Ed Relf:
“Entrepreneurs are often looking for that big golden lever that they can just pull, and it will answer all of their questions, and the reality is it just doesn’t really exist.
“Marketing is an entrepreneurial pursuit and 90% of what we do is marketing and failing. It’s about finding the lever that really works. You’ve got to throw a lot of mud at the wall before you find something that works.
“We do have instances where it doesn’t work. We wrapped five taxis with ads in Liverpool and saw no impact at all and therefore wrote the channel off. The reality is you probably need to do that for six months and at 10-times the scale for it to have an impact.
“The same applies with outdoor advertising as well. I know a lot of people who’ve tried billboards, and you know they’d have probably spent 20 times their budget and have done it for 10 times longer to see an impact.”
Jonathan Lister:
“We did have to advertise from day one and try lots of different channels to eventually find something that worked.
“We had a marketing strategy behind it, but that requires cash, and it requires a lot more cash per person than revenue would permit to try and test lots of different channels.”
DO have a focused marketing strategy from the start
Relf:
“From a marketing standpoint, very often there are two or three channels that just work and are scalable for your business.
“Often you’ll find the most success by just stripping it all away and really distilling your marketing down to what are the two or three things that you genuinely believe in.
“Because, in most businesses, people are dabbling in lots of different areas and don’t see the results that they hope, and it’s often because they’ve just not given it the time or attention that it needs to scale”.
DO prioritise social media and make it a priority to your business
Cathy White:
“A number of companies come to me and talk about a need for PR and needing the press to get their name out, but actually when you ask them what they’re doing with social, no one necessarily has an idea about what their strategy should be.
“Social media is generally considered low hanging fruit and low-priority, but it should be one of the higher priority marketing channels.
“Whoever takes care of your social media should have a really good idea of what they’re doing across each social media channel and have an idea of why they’re doing it. If you just fawn social media responsibilities off to an intern you’re never really going to see what that social channel can do.”
Riya Grover:
“We’re a marketplace, so we’re placing other people’s products. And a big consideration for us is how we get out own brand presence on the site. We can wrap things physically, we can get labels, but actually what’s very effective is trying to use social media for people who are engaging with products on both sites to engage with us.
“Another realisation I’ve had is just how much content you have to do as a business for social media. There’s just so much to put out, whether it’s marketing campaigns or blog posts or website copy that needs working on – it’s something that we hired for much earlier than I would have anticipated.”
Relf:
“For paid social media activity, I’ve always given the responsibility to someone who’s super experienced or an agency.”
DO put the customer first in your marketing strategy
Lister:
“Our plan is all about making things simple, very consumer-friendly and approachable. Probably every major product decision we made in the first few years was about removing barriers. I think marketing has played an important part in conveying that to customers.
“We’re regulated by the industry body – the Financial Conduct Authority (FCA) - which is a good sign for consumers. That was a decision that set our launch date back by a year, but we had to do it because there was no way we felt comfortable going out to the public without it.
“It could have been a nightmare without it from the point of view of getting pensions right. We also collect TrustPilot reviews as we’re very keen to get that social proof.
“For our outdoor advertising, we had five of our best customer advocates come in and we did a big shoot involving them. And one of our customers was on a gigantic banner in Brighton train station! We use our customers to sell our products as they are the best ambassadors for our brand.
“We’re always just trying to be approachable and transparent.”
DON’T rush to get your product or service to market
Relf:
“I find it interesting when I meet very early-stage businesses and they’re spending extraordinary amounts on marketing, whether it’s Facebook or PR etc., and the business isn’t ready.
“For instance, when you soft launch your app and you scramble to get your first version of your product to the App Store, all you need to do is focus on the first metric so things like onboarding, registration, ‘Are we hitting the 90% we need?’
“Then when you’ve hit the 90% you can focus on the next part of the funnel. When you’ve gone through the whole funnel and you hit the metric, then it’s time to start spending on advertising.”
PART 2: Dos and don’ts for getting funding
• DO be persistent with investors
• DO use fake deadlines with investors
• DON’T just take money from anybody
• DON’T overvalue your business
• DON’T forget that there are a range of funding options available to you
• DO remember that success in funding and marketing your business comes down to you
DO be persistent with investors
Riya Grover:
“I was surprised at how many doors you have to knock on before you find an investor that’s interested”.
Michael Connolly:
“You’ve got to keep going if you want an investor to commit.”
Lister:
“The amount of waste there is in making meetings with investors who never return the calls, or they never sign on the dotted line despite all the parlour tricks of getting them to motivate themselves.
“I think fundraising is such an inefficient process and that’s a real shame because it’s such a waste for entrepreneurs that are building businesses”.
Relf:
“It’s about getting to a yes or no with investors as quickly as possible. How many of us have had those conference calls and right at the end – after I’ve spoken for an hour and a half - and the investors says, ‘you’re a little bit early-stage for us?’”
DO use fake deadlines with investors
Lister:
“We set a deadline with investors. It does take a lot of courage to tell somebody who’s trying to give you money that they’ve only got two weeks left or you’re closing your funding round. But it works.
“It’s hard knowing the only thing that’s going to happen is that you’re going to shut the door on some money. But, every single time, as soon as you tell investors they’re out of the game, they’re a lot more interested to get on board.”
Relf:
“Everybody wants things they can’t have. Scarcity is a powerful emotional trigger and if you go to a fundraising round, and you don’t have deadlines, then you don’t create that sense of urgency with investors and you can expect to be fundraising for the next nine months.”
DON’T just take money from anybody
Oliver Bridge:
“We turned down people who weren’t right. We had these guys that would approach us when we started and offered $1m but we turned them down and I’m glad we did”.
Santiago Navarro:
“For an early stage start-up, it’s very hard, at times near impossible, to get funding from people who invest money on behalf of others.
“If there’s risk in the equation, get someone who’s investing their own money and is an ultra-high net-worth investor and they mind a whole lot less.”
DON’T overvalue your business
Relf:
“The problem with a company valuation is, if you’re overvaluing the business it is going to catch up with you. In subsequent funding rounds, you never want to be in a position where you’re going down rounds because that’s not good for anyone.”
“The other thing I’d say, particularly with very early stage start-ups that are raising their first rounds, is to forget the crazy valuations and the crazy sense of ‘I don’t want to give up too much of my business.’
“That is counter-productive because you want investors that are invested and want to give you their time because they have something to gain from it.
“In a previous life, I’ve turned down investment opportunities purely because the founder only wanted to sell 5% at a £2m valuation.”
Navarro:
“Your accountant is probably the second most important person in your business, and your financial adviser and your chief financial officer should obviously tell you what is the sweet spot for your company valuation.”
DON’T forget that there are a range of funding options available to you
Lister:
“I’d put in a vote for SEIS and EIS schemes; these are tax schemes for individual investors. So, as an investor you get 30% back immediately when you invest in a start-up and it’s incredibly good for anyone who’s a high net worth individual.”
Navarro:
“There’s more than just equity finance, there’s also debt finance. I very seldom speak to start-up founders who talk about debt.
“Debt financing – where a company borrows money from a bank or third party and pays this finance back with interest – doesn’t often get considered by start-ups.
“At the moment, for us, I’m looking at debt finance across many different private and public organisations and we will continue to fund the business in the UK through debt.”
DO remember that success in funding and marketing your business comes down to you
Relf:
“As a CEO of a business, nobody is going to be more passionate than you.”
“I email our customers almost on a daily basis. I still do driver days and I do shifts in customer care. I do all this stuff because I believe not only should you be engaging with social, you should be experiencing every customer touch point of your business.
“Why wouldn’t the CEO of a company want to get in the van and do a shift and meet the customers and ask them how did they find the service, and then use the technology and feedback to the team? I don’t understand any CEO of a company that wouldn’t want to do that.”
Navarro:
“I know CEOs of companies who run an e-commerce business and won’t even visit their own website, let alone their warehouse.
“There are some accidentally successful people who don’t care. But eventually that’s going to change because business owners are empowered with so much data and intelligence that we can access.”
“I believe that, as you grow, you should recruit corporate executives to run your business, but remain involved in the business as a director, a shareholder, and as an active participant.
“Always keep that entrepreneurial spirit. Be the one with big ideas. Be left-field and stimulate.”
All views were expressed at a roundtable held as part of Plusnet Pioneers, an exciting content series to help small businesses grow and reach their potential.
For more information on Pioneers please visit our Plusnet Pioneers section.