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Five Companies Share Tips on How to Run a Startup in London

Launching a company is no small feat. Running it, though, and hopefully steering it on a successful course, is even harder.

While London is close to be the ideal place to be a startup founders, even the best have to come to grips with challenges and work hard to reach important milestones. What are the best ways to do it? We asked five companies — residents and former residents of SHACK 15 —for advice.

 

Expend

Expend’s team

What does it take to scale a startup?

Focus and relentless iteration. You need to understand what it is you want to create with your product. There is a need to regularly revisit your assumptions and to check that they are still valid when you receive new feedback. When we started Expend, we observed that there is an expenses problem in general. There were very few competitors and it was hard to validate this assumption. But with each iteration, we refined the product, we got more feedback and that got us closer and closer to solving the problem.

What is the hardest challenge when it comes to running a FinTech company?

Starting a new business involves making numerous decisions on a continuous basis. I think the hardest part for me is to know which outcomes will move you forward the fastest, while also wasting the least resource. Here is an example from our actual experience. As a FinTech company, we have strict rules we have to comply with, specifically concerning the checks on new customers. At some point we had to make a decision on how we were going to handle the checks on individuals when we on-board them at the time of registration. There were a few options. First, we could have a simple form and ask the users to enter all their data and then we could do the checks manually after submission. Second, we could build an automated, self-help system where we rely on third parties and their technologies to check customers’ identity. Nowadays the second option is the norm for financial services in the UK. So that’s what we set out to do. We spent months refining the process in our app and we tested approaches with customers. But ultimately, we changed our minds, because our customer base consist of companies, not individuals. So a few months ago we ripped all of that out, and settled for a process where there is a big application form, with mostly manual system for doing the checks. We made the wrong decision and wasted a lot of time and resources. So my advice for others would be to always start with the manual process – forget about automating things until you fully understand your business domain and the needs of your business.

What opportunities does London provide ?

London is a strange place. There is a lot of competition in the startup space, but in my view it is a good thing. A major benefit of being in London is that we’re surrounded by companies and government departments that understand what it means to be a startup.  It was easier to recruit employees before the referendum, people wanted to work in London. That isn’t necessarily the same anymore.

How important is the workplace for a startup’s success?

The workplace can have a negative effect on the startup. Factors such as noise, overcrowding and lack of organisation definitely affect the productivity of the team. Before joining Shack15 we were working in a large co-working space with many people around us. Shack15 is much smaller than our previous space and far better organised. Investors and customers love visiting us here because it is a pleasant, beautiful space. And that is a huge benefit for us. At the previous location, we were often embarrassed when we couldn’t book a meeting or when there were problems with the plumbing.

If you could give one business recommendation to yourself five years ago, what would that be?

It is important to get to MVP stage as soon as you can. Get people to pay you money for your product. Only once you reach this milestone does the real learning begin. Don’t waste time and build elaborate technical solutions, write perfect code or try to implement current best practice. Chances are very high that you will have to throw it all out once the real learning starts. So don’t waste energy. Instead, make it work with the processes or frameworks you know.

 

Headlight AI

Headlight’s cofounders Jameel Marafie and Puneet Chhabra

What does it take to scale a startup?

At the moment, we’re at the start of that very journey. Currently, I think it takes a team of people that are all aligned on a vision and mission to achieve something that they all believe to be important in the world. The startup could produce one major product or a whole suite of products, but of course, it needs to be solving a valuable problem. For a business, this is most typically evidenced by revenue, but in some cases, when they are building a technology that will be valuable in the future, their growth can be shown by substantial investments in the business.

As the business increases its revenue, or obtains more funding, it needs to maintain and hire the best talent, maintain the vision and mission of the company, but also be flexible to ensure it can transform into a larger organisation, and adopt the necessary processes for effective operation. In my view, whether a startup manages to do this is essentially down to its leaders. But perhaps ask me in 5 years and see if I still agree!

What is the hardest challenge when it comes to running a data science company?

There are several challenges for a data science company, which is highly driven by data and analytics. For a start, data privacy and security is extremely important to get right, and the right processes are required from a technical point of view and from an ethical and moral perspective. If not done properly it could even break a company apart, as we have seen recently with Cambridge Analytica. Although technology can help with analytics there is still major scope for innovation on techniques that maintain the highest magnitude of privacy and security.

Another major challenge, which is especially relevant for our business, is handling huge amounts of data, some key hurdles to overcome include fault tolerance, data quality, multi-modal data, and visualisation and compression. At Headlight AI, our focus is to improve the quality of the data and visualisation through new forms of signal processing and deep learning techniques. As our software is providing 3D maps for vehicles and other machines in poor visibility, we need to use even larger data sets than normal 3D mapping (which already produces large amount of data). Dealing with these large data sets and extracting analytics from this data in real time is one of our hardest challenges.

What opportunities does London provide ?

There are many opportunities. For a start, there’s plenty of people around that have formed startups, worked at startups, or generally have experience in other areas (finance, marketing, design etc.) that will be extremely useful for you when growing your own startup. These people can normally be found in co-working spaces, accelerators, or events. In fact, my co-founder and I met at a (kind of) accelerator in London last year (Entrepreneur First (EF)), which led to us to starting Headlight AI. Now we are at a great co-working space (Shack15) that is the ideal place for us to grow our startup, with many other experienced entrepreneurs around, relevant events, and it is conveniently located right in the middle of Shoreditch, so plenty of things going on locally.

As London attracts many different types of people, from various industries and backgrounds, there are plenty of highly talented people that congregate here, and some that are full of crazy ideas and new ways to do things. You can learn a lot from the way other people see the world, and having different viewpoints is essential. This means there are loads of opportunities to find people to cofound with, or to hire as you grow your business. There are of course loads of other businesses to contact and work with in London, who can be suppliers, customers, or advisors; and being in close proximity to them is a major benefit.  

When you do need to travel outside London, to other parts of the country, or even internationally, you also have great transport links, with loads of trains, buses, and nearby airports. And last but not least, it is generally easier to access capital in London, with many VCs and other investors being located here. This can be a major boost for a startup that is looking to scale fast.

How important is the workplace for a startup’s success?

I think this depends on the individuals that make up the startup and what type of business it is. Personally, I’m happy to work independently from home some days, and it can be more productive for certain tasks. However, I also value the importance of having an office outside my home, where I can interact with other people and bounce ideas around with immediate feedback. As the company grows I think the importance of a workplace increases. People need to have a base that is outside their home to give them another place to think differently, and be social with other people, who are working in different fields, and interested in different things. Having access to the relevant tools and technology is of course also a bonus, but I think the most important component of the workplace is the internal social network that allows the startups culture to emerge. This culture will strongly influence whether a startup will succeed.

If you could give one business recommendation to yourself five years ago, what would that be?

Do not try and do everything yourself. Whilst it is good to get exposure to different sides of your business (accounting, marketing etc.), don’t try to become an expert in each of these areas. If you want to start a business, you should already be strong in a few areas, so focus on identifying other people that possess skills and knowledge you don’t have, and then either partner with, or hire them. I would highly recommend finding a cofounder that compliments your skillset and looks at problems differently. It is always challenging and time consuming to start a business, if you can share the numerous tasks that build up, you will make your life much easier, and your company will run much smooth

 

Plum

What does it take to scale a startup?

Determination and a great team— it really all boils down to that.

What is the hardest challenge when it comes to running a data science company?

The hardest challenge is always data aggregation.

What opportunities does London provide?

London is absolutely fantastic for tech companies— there are a lot of meet-ups, events, and networking opportunities. The startup scene here is a very friendly one which is great for coming together, sharing ideas, and finding new talent.

How important is the workplace for a startup’s success?

Being able to rely on a good workplace is crucial. It’s important to be surrounded by companies that are a cultural fit with yours. These companies become an extended family of sorts. Being surrounded by data led companies and founders allows for a great sounding board. The chats, the feedback, are very very helpful. That was what we got at Shack15, where everyone could benefit from other people’s energy.

If you could give one business recommendation to yourself five years ago, what would that be?

Just start- even if you don’t have perfect data. (You’ll never have perfect data.)

 

Sparrho

Sparrho’s team

What does it take to scale a startup?

Process is essential – successfully scaling a startup requires lots of process, alongside well-structured operations. It’s also vital to ensure you hire the right people – finding the optimum team size comes with its own difficulties, and it’s been a learning curve since our inception. Overall, it’s key to understand that the most important – and often the trickiest – part of building a business is building relationships. It’s not easy to build an A team, but it’s worth it!

What is the hardest challenge when it comes to running a data science company?

The more data you collect, the more crucial it is to ensure it’s clean, usable, and in the right format – so that when you need to ask the important questions, there’s no doubt about what the data’s telling you. It’s always easy to go down qualitative routes when making decisions, but the challenge is forcing yourself to look at the data in the cold light of day in order to make logical, data-driven decisions.

What opportunities does London provide?

London is chock-full of great talent. Other cities around the world tend to have one specific industry that dominates the scene, but London historically has incorporated a wealth of knowledge from multiple industries – fashion, art, banking, finance, to name just a few – which means that the calibre of talent can be deeply multidisciplinary, making for a fascinating work landscape. On top of that, London attracts a huge amount of international expertise thanks to this diversity of industry, meaning that global opportunities are essentially endless.

How important is the workplace for a startup’s success? 

Where we work has always been very important to us, because it really sets the mood and the culture of our company. I really appreciated how Shack15 had multiple different areas, fit cleverly together in a small one-floor space, which encouraged and optimised our many different styles of work. For example, the coffee breakout area worked well for ad hoc meetings and creative brainstorming, whilst the bar area was perfect for hosting events – the alcohol speaks for itself! – and then the phone booths were great for privacy during one-on-one meetings and calls, especially because we have a lot of video conferences overseas. And finally, a workplace needs light and fresh air – nobody wants to be getting ill!

If you could give one business recommendation to yourself five years ago, what would that be?

There are so many! In a way, you have to live out the problems in order to become the best entrepreneur you can be – no matter what people tell you, there’s still an element of mistake-making that you have to do yourself. But I’d remind myself to be open to talking to a lot of different people to gain as many different perspectives as possible early on. Practise sieving – recognising what advice is irrelevant and what advice will help you and your business grow. Always be mindful of scaling, and never lose focus on what you ultimately want to achieve.

 

Streamhub 

Streamhub Founder Aki Tsuchiya

What does it take to scale a startup?

Speaking from an enterprise SaaS product point of view, it’s confidence in the product and having a clear picture of how it is helping improve the customer’s lives.  This can only come from customers using and buying your product.  As such, keeping focused on revenue-generating development is the first rule.

Then a second rule is strategically prioritising the client opportunities to the best of your capability.  You’re continuously burning money by just breathing air. It sounds retardedly simple, but you just need to make sure that for every £ spent, there’s going to be an equal or bigger return in revenue, market value, or historical significance. No time to waste.

What is the hardest challenge when it comes to running a data science company?

Getting to the bottom of which data sets and insights has the most direct ROI for each of our customers. Also, learning and edducating from customers is always a challenge with B2B.

What opportunities does London provide?

It provides an English-speaking market which makes it relatively easier to setup sales with a larger number of companies and initial pool of good quality talent.

How important is the workplace for a startup’s success?

Having the right homebase is always important. Our startup is inherently distributed with many remote workers. However the product decisions are made here in London, so being in an environment with other startups also working with big data is crucial in the exchange and nurturing of ideas.

If you could give one business recommendation to yourself five years ago, what would that be?

Fail faster and improve even faster. It’s difficult with B2B since sales cycles are long but some of the lessons learned could of been improved upon much quicker such as bad hires and bad features.

 

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Co-working space and blog dedicated to all things data science.

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