In the first year of being an entrepreneur and deciding to go and do your own startup, you are going to uncover multiple challenges along the way. To help you with this journey, I recently interviewed David Henderson (CEO) and Dana Blouin (Chief Data Scientist) of the first year startup Drvr.
Drvr is a combination of a device and a sleek piece of software that allows companies to capture data on their fleet of vehicles and then use their platform to analyse the data to assist in optimising driver behaviour, vehicle safety, and resource management.
Thailand is rated the second worst country in the world for road accidents with almost 30,000 people dying on the roads last year. This alarming statistic is partly what makes Drvr’s business concept so compelling outside of the obvious data insights.
Throughout the interview, it was clear that David and Dana were creating something much bigger than fleet management, but more a change in society and a vision of something bigger. David was a wealth of knowledge and took me back to what it’s like to be in year one of a brand new startup.
Dana, on the other hand, is clearly a thought leader in the tech space and has a very impressive career background. His expertise in “The Internet Of Things,” came across loud and clear, and is obviously a key motivation for him joining Drvr. He regularly speaks at technology conferences, is studying a Ph.D. and has an audience of 53K worth of Twitter followers.
What makes Drvr unique, as a startup is that it started in Australia and then moved to Bangkok in the first year to be closer to the most under-utilised customer-base. While the challenges exist, many of the lessons David & Dana taught me had some unique insight because of the change of locations.
Below are the nine strategies they gave me that you can use in year one of your own startup.
1. Frustration in the corporate world is useful in the startup world
If you are just beginning your first startup, then there is a high chance that you have probably left a corporate job of some form to follow your passion. Now in the first year it’s going to be very hard so you will need some pretty strong motivation.
David told me his own corporate story, which was the seed for starting Drvr. While working a corporate job in Australia, he was always getting enquiries from Asian companies trying to solve traffic and fuel stealing issues.
On a number of occasions he took a proposal to the board of his company and recommended that they expand into the region. On many occasions, he was consistently rejected (a key ingredient in successful startups).
He puts the rejection down to the fact that corporates can often be too conservative and even worried about things in a new market such as political risk, lack of understanding of the market, underdevelopment of the country and even corruption.
“Unless we take a few risks as entrepreneurs we won’t be able to succeed in business” – David Henderson
Dana puts the issue down to the suggestion that size can hamper mobility of a company and the bigger they are, the harder it is to pivot and make adjustments. He says, “it’s not that large business is not interested in innovation it’s just that they can’t move quick enough to take advantage of it.”
So David used his frustration in the corporate world as his strategy to join forces and form a startup with his colleagues Damien Williams and Eugene Peresada. So if you were previously working a day job and being told you couldn’t do something, then that’s your motivation for the first year of your startup.
Do you want to go back to being told you can’t do something every day? If not, continue with your startup and keep pivoting your idea until you find a revenue generating market.
2. Validate your idea with pilots
The first step to validation is to get feedback from industry professionals about your product or service. Assuming the feedback is good, you can then get your sales people (or you if you don’t have any) to offer pilots to prospective customers
If the customer feedback is positive, then your sales people should then get the clients to sign a contract for your product or service. Once you have customers with recurring revenue each month, then you have essentially proven your concept.
This is the exact strategy Drvr used to prove their startup concept and direction.
3. Make tough money decisions
As a startup founder, every day you have to make decisions about things you would like to do but can’t afford to do. In Drvr’s case, they were forced to make decisions like whether to spend money on going to conference, or whether to rent a new office.
Get used to making these tough decisions because the first year will require you only to fund the essential strategies of your startup.
4. Sales people are more powerful than marketing
If there was one strategy that came out loud and clear from Dana & David, it was that in the first year of a startup, unless you are focused on the consumer market, marketing should be a low priority. The best strategy that both of them continually recommended was to get sales people that have existing networks to customers you want to do business with.
Drvr has been successful because they have hired great sales people, focused on one clearly defined region to begin with and sold their service – simple. In places like Asia, more so than anywhere else, email is looked at as spam, cold calling doesn’t work and businesses don’t tend to look at Facebook or Newspapers to find services.
Leverage your business development efforts with existing networks before spending any money on marketing to make sales.
5. Time your first capital raise
Don’t raise funds immediately. You need to validate your idea first because most startups tend to pivot at least once. For Drvr, they pivoted within the first few months of their launch. If they hadn’t done the pivot, then they would have burnt through their cash.
The initial idea for Drvr was a user behaviour insurance that monitored driver behaviour and sent the data back to the insurance company and the driver. While this feature is still part of the product, it’s not their core offering.
Through their experience of attempting a seed round capital raise, David strongly believes you need to have some traction; otherwise it can become an impossibility to raise money. Now that Drvr has that traction, they are very likely to raise their seed round in the coming months.
6. Social enterprise elements drive culture and engagement
A trend that I see more and more, which I also saw with Drvr, is startups having almost a side business in some form of social enterprise. To drive great team culture, Drvr has a major goal of working on projects that have a benefit to the overall society that they serve.
Recently Drvr partnered with another Thai startup to help an off grid school with some much-needed school supplies and help to assess future needs for the school. This gets the Drvr team really excited and gives them a social enterprise element to their business.
How can your startup make an impact and change socially with your community?
If a startup team member’s primary motivation is to make money, then they are in the wrong place at a startup. David says they are better off working in a large organisation where over a five-year period they will probably earn more money.
Using the social enterprise aspect to Drvr, David gets his team to stay engaged by getting them to think of the opportunities they are going to have in advancing their career, being able to make a difference, having a large amount of responsibility and getting to work on some cool projects.
7. Develop a new kind of customer service strategy
By being a Thai startup, Drvr learnt that the expectation of customer service in Asia is much higher than other parts of the world. Asian business expects a startup to not only provide a service but to participate actively in their business. This creates an opportunity for a startup to win a client for the long term.
Asian business taught Drvr that you have to provide them with training and be the one that answers their questions when they need it. These businesses don’t expect to ring a call centre and talk to someone reading off a script.
“This strategy for customer service that Drvr learnt in Asia not only applies to the Asian market,” Dana told me, “it will be the differentiator between successful startups and the ones that fall by the wayside by using call centres and scripts.”
8. Attract talent and engage them
Drvr hired one of the first iOS developers in Myanmar Arkar Min Aung who has become a bit of a tech celebrity in the region for his work. What attracted him the most was the opportunity to work with a quality software development team and the chance to learn from Drvr’s co-founder Eugene, who is a very talented back end programmer.
So the lesson we can get from Drvr here is that money is not the only motivation to attract talent. When people get the chance to work with someone they can learn from and whom they respect, this will often outweigh the bias that money can have on attracting talent.
The same advice should be said for you as the startup founder. Using your own capital to bootstrap a startup means that the only way you will stay motivated in the first year and not second-guess yourself is to have no backup plan. You must lead the team by example.
David & Dana told me that once you attract good talent, there are a number of ways to keep them engaged but that most of all you need to make your startup a place where people want to work.
In the first year, you really need to focus on measuring results and not the hours people work. Your motto should be “there are projects and we need them done, not how many hours did someone work.”
An easy way that Drvr found to attract talent and keep them engaged is to give each team member equity in the business (even if it’s only small), which helps give team members skin in the game. Combine this element with a social enterprise model, and you have a recipe for startup success.
9. Outsource basic functions
In year one for Drvr, they have remained very lean and outsourced most of the non-core roles. It’s no secret that being lean in year of your startup will set you up for success. Have all your information stored in the cloud using something easy like Google Apps For Business so you can add new users easily to your startup and allows users to work from anywhere.
For graphic design, try marketplaces like Design Crowd or Fiverr to find freelancers to outsource quickly too – Drvr found someone on Fiverr that ended up becoming their main graphics person. Outsource all your bookkeeping and ideally have someone local review the outsourced work regularly.
Regarding office space, start in a co-working space and scale out until it becomes more cost effective to get your own startup office space. These few little tips will help you stay lean in your first year and ensure you’re in business for year two.
***Entrepreneur Quick Tips***
Dana – Entrepreneurship is a beautiful thing and drives a lot of the innovation and creativity that we see in society. It’s not for everyone because it can be stressful and demanding. If you want to take the journey of entrepreneurship, the benefits far outweigh the challenges if you are ready for it.
Flush out your idea first, and validate it. Check if it’s feasible, something the market wants and something that’s economical. If you can answer yes to these things, then there is nothing stopping you from moving forward and making your own success.
David – Entrepreneurship is not an individual endeavour. You can’t do this as a one-man band. Every successful startup is built around a great team of people. Work with people you can trust and rely on and don’t put everything on your own shoulders.
Dana’s Favourite Book’s – “The Hundred Dollar Startup” and “Where Good Ideas Come From”
David’s Favourite Book – The Lean Startup