CLIENT WATCH: Weve

photoIn a bid to drive footfall to their new concept store, Tesco partnered with Weve who were able to identify 40,000 shoppers who frequently passed the store. Weve converted these passers-by into Tesco consumers by using clever smartphone targeting to offer discounted coupons for shoppers in a hurry. It has been Weve’s most successful partnership with a supermarket to date. Check it out..  

CLIENT WATCH: 65twenty

2462566The Lad Bible publisher 65twenty has made two senior commercial appointments with Adriaan Zimmerman as its Business Development Director, while also promoting James Wigley to the newly created role of Commercial Director. With their extensive experience between them they will continue to redefine the way content is created for, delivered to and shared by the Millennial generation. Exciting times ahead.

OPINION: Should I join a start-up?

Those of us in the digital media world are all too familiar with the dream; join a start-up, get your hands on some stock and when it floats or gets acquired you can pay off your mortgage. Easy………or is it?

Having seen many people make the move into start-up opportunities over the years and witnessed some of the good stories compared to the bad we thought it would be useful to share some of our insight.

The first thing to say is that there are start-ups and then there are blindingly obvious superstar start-ups. We are pretty sure that the early UK employees of Twitter and Facebook will be the first to admit that they didn’t need to have an incredible grasp of the digital landscape to know that they were backing a winner (although we did have a candidate once turn down the opportunity to interview at Twitter, describing social media as a ‘flash in the pan’!). Frankly it would have been a surprise if those companies hadn’t floated or been acquired, the real challenge is trying to spot the company that doesn’t necessarily have a high profile, consumer facing, brand. This is infinitely more challenging and actually almost impossible to predict.

To confuse matters further your ability to hit the jackpot and cash in your stock isn’t even dependant upon whether the company you join proves to be a success rather than a failure. There are incredibly successful digital businesses that still show no signs of an IPO so actually the rules to follow in order to spot a winning ticket are very hard to define.

What is much easier is to highlight some good signs to look for as well as some ‘red flags’, if you see one of the red flags that is your cue to run a mile.

Some good signs:

  • Has the founder or founders successfully sold a business before? There is no doubt that those who have done it once have a much better chance of doing it twice!
  • An obvious one; make sure the business has solid funding in place.
  • In a market that changes incredibly quickly be certain that the proposition of the start-up is unique and is powered by a proprietary technology.
  • The growth to date (probably in the US) has been fast, don’t forget companies come along with great ideas all the time and are very quickly copied. In digital if you have a great idea it’s a race to grab territory quickly before the copycats eat your lunch. If the business has been going 18 months in the UK and still only has a handful of people the chances are that it isn’t going to fly.

Some bad signs:

  •  You are asked to work from home. This is a massive red flag. If the company isn’t willing to invest in even a desk at a serviced office then you need to be pretty concerned about their level of funding and commitment.
  • The basic salary is some way off of your market value. This in itself isn’t necessarily a red flag, it’s logical that start-ups would like to keep costs down, what you need to weigh up though is what that decreased salary will add up to after four years of service, the usual time for stock awards to fully vest. Let’s imagine a scenario where your salary is £15,000 less than you are used to earning. Over four years that is at least £60,000 less than you would have earned in a ‘normal’ business. It’s a pretty expensive lottery ticket.
  • Beware the company owner who throws stock at you but may never have any intention of selling. A commitment from an owner to share equity is a useful way of retaining staff, and costs nothing in the short-term, especially if the owners are happy to ride the wave of high revenues (and their own high dividends) whilst their product is in demand until moving on to their next project when demand drops. Remember, there is no rule that says they have to float or sell so your stock may be completely worthless.

 

Finally some thoughts for those who have already made the move into a start-up and are starting to question their decision. Maybe the business hasn’t grown in the last year, other players have come to market with similar or better versions of your product or your own role hasn’t evolved as you’d have hoped. Our advice at this point is don’t flog a dead horse. Whilst it is completely understandable that you don’t want to walk away from all that stock there comes a time when you have to let go. The ‘what if’ can be crippling, the likelihood though of you walking away and then seeing the business suddenly thrive is highly unlikely.

We interview a huge number of people who tell us that they’d like their next move to be into a start-up, when we probe the rationale behind that desire it’s pretty evident that stock is one of, if not, the key motivator. This is a big mistake, it certainly shouldn’t be your key driver. Firstly ask yourself how many people do you know who have actually benefited in a big way from stock? It’s actually a very small number. Then consider the fact that stock is not the same as shares, in fact there are different types of stock awards, understanding what type you have been offered and the length of the vesting period is often overlooked.

The most pragmatic way to view it is that stock is the icing on the cake, but don’t forget the cake! The components of a successful move are incredibly varied and include crucial factors such as environment/people, learning and development.

And herein lies the real value in joining a start-up, the autonomy and ability to directly influence a business are hugely attractive factors to ambitious, hungry people. Win or lose you are likely to emerge from the experience as a much more rounded and employable individual with a skill set that is current and in high demand.

So our short answer? Yes, go join a start-up but do it for the right reasons.

TODAY: How do you stay motivated?

The answer: it all goes back to passion. There’s no reason in 2015 to do something that you hate, there are a number of companies out there that you can get passionate about; whether that be 1st party data or a creative partnership. When you figure out what makes you tick, it’s a lot easier to get up at 6.00am in the morning to get to another breakfast meeting. Remembering who you are and what makes you tick allows you to be much more committed to your job.