TEN years ago in late May 2000, boo.com, one of the earliest fashion retailers, which went through an obscene amount of money, was shut down. Between March 2000 when lastminute.com went public, through the summer, when some IPOs still got away was hit and miss. I sold my business First Tuesday in July 2000 to an Israeli private equity firm where the downturn hadn’t hit yet.
What have we learned over the last decade? Simplicity must be a golden rule. There’s an extraordinary alignment of interests when start-ups go on to become successful firms. Anyone who’s been in the hot kitchen of a start-up will tell you that there are 50 ways to fail. When you make it through, it’s miraculous. If shareholders are all pulling in a different direction due to a complicated corporate structure, the chances of creating value are slim. Think “over-simplify” to win.
Trust is efficient. I said this as I expanded First Tuesday across 17 geographies without a 65-page license agreement, and I still see the power of trust at work today in great firms.
As Colin Powell, the former US Secretary of State said at Davos one year, “leaders are those people who create the conditions of trust so that great things can happen.” If you’re building a team anywhere, focus on how you can infuse trust into the organisation to get lift-off.
Technology is not the point. It never was. Technology has become standardised and componentised such that you can launch an online business for 10 per cent today of what it would have cost you in 1999. Technology doesn’t differentiate; marketing trumps technology. What technology does to an industry is to provide exponential growth. This acceleration means that the adoption of new products is central to high-growth industries. Driving customer acquisition faster than it would happen naturally is marketing.
An economy thrives when it has a deep bench of talent. The most encouraging factor in the investment opportunities we see at Ariadne Capital is how many of the entrepreneurs we could back have two or three start-ups behind them. Learning through doing can’t be beaten.
Those of us who are hard at work in the third wave of web development – social media, smartphone, data monetisation – have new challenges, but we build on a core set of values of simplicity and trust in shareholder and management structures, and focus on marketing with an extremely talented pool of people to pull from.
Julie Meyer is chief executive of Ariadne Capital and a dragon on the BBC’s Online Dragon’s Den.