Craig Cotton of OneHQ shares his insights on why Kiwis’ famously independent streak is the formula for business failure.
Is the financial stress, worry, anxiety, depression, divorce and sacrifice of being in small business worth it? Because that’s the reality that Kiwi business owners face when they give up their job and start a business – but it doesn’t have to be that way if they can learn to give some of it away early on or simply fail their idea before they leave their job.
I believe that almost half of small business start-ups in New Zealand fail – while a large chunk of those that survive are holding on by their fingernails – because they want to keep the business all to themselves; to be their own boss, and in the process never achieve their ‘why’ and passion.
Business is hard work. There is no fast buck or quick success in the way that it is romanticised in social media. Fact is, your way is the hard way. As Kiwis, we have an active streak of independence, but it’s counterproductive.
If you want to succeed in business and achieve all the things you dream of, why go it alone? Very few people succeed on their own; they are simply buying a job. My advice is to find other like-minded people, share early, team up and build a better business together. It’s better to have a smaller piece of something big than a big piece of nothing. Building a team of like-minded people around you means more time for your family, greater financial independence, a sense of self-accomplishment and more fun in the long run especially for you and your team. It’s about sharing the work and the rewards, as I honestly believe better is together.
Building a business with like-minded people means re-discovering your ‘why’ with others. In my experience as an advisor, mentor and investor, at least 80 per cent of small businesses owners never realise their ‘why’ because working every day in your own business is just bloody hard and lonely.
I left a corporate life to follow my ‘why’ and build my own balance sheet, but the reality is it’s harder, it takes longer, and it will cost you more money and personal sacrifice than you ever imagined. I sold my house. I lived out of my truck, dossed on spare beds and at times couches, lost a relationship and only came back to Auckland every other weekend to see my children – it was hard and I suffered to the point of being depressed.
But I constantly reflected on my ‘why’. I was honest with my children (lots of hugs, kisses and tears), and with my friends and my networks, and I listened. One of my favourite quotes from Winston Churchill: “If you’re going through hell, keep going” comes to mind, and, after an honest chat with my daughter (more tears), I failed my first venture and pivoted to the next.
Given the year of failure and learnings, I shared my next idea early, connected and attracted like-minded people, failed and learnt some more and across nine months built Affero Ventures. Then we started another 12 months of failing, fixing, learning and scaling ideas which ended with us parking a project called Fluent and incorporating OneHQ, which is about creating better together. Doing it together with other people is better. Bigger is also better because success needs scale, first to market doesn’t win, first to scale does. As Kiwis, we have this thing that failure is not an option. We dread failure, and we’d rather be miserable than fail, but it is better to fail fast, learn fast and fix fast than hang on to a hopeless venture.
Business success requires three essential ingredients wrapped up with better connections. Capability, Capital and Customers.
1. CAPABILITY Each year, roughly the same number of businesses close that open. Everybody thinks they can do it better, but it just creates excessive competition. Maybe chat to an existing business owner, share your idea and who knows, give it a go together. Don’t do it alone. Partnering with others gives you scale automatically – more connections mean more access to capability, capital and customers. That human connection makes all the difference.
2. CAPITAL Most small to medium businesses in New Zealand are financed through mortgages on the family home, which only adds to the dread of business failure.
A good business concept, one that is pressure tested, researched and shared with others – preferably while you are still in your job – will find it easier to get proper business finance, even backers and investors. But giving up your income and launching out on your own on the back of a mortgage on your home is not smart.
You’ll build a successful business – we see it every day with the companies that we work with – by collaborating, testing, scaling and failing before you fully abandon your income.
3. CUSTOMERS Sales and customers will come if you have a business idea that meets the needs of them. Park your romantic beliefs about life in business and connect quickly with your customers and then ensure what they want is going to make you happy and that it delivers your ‘why’.
Ignite your partners, your team and your suppliers with your passion and belief linked to your customers need – build those connections – and customers will be tripping over themselves to get in the door. People buy culture, they buy passion, and they buy your ‘why’.
While many business owners started because they thought they had a unique idea, the truth is that it’s not the idea that delivers success. Business is simply planning to mitigate risk, and execution is everything. Share your idea early. Ask for help. Get advisors. Find partners. Connect, Collaborate and Create better together.