Jack Underwood, CEO & Co-Founder of Circuit
Contrary to popular belief, you can create an effective business in your 20’s. Whilst experience comes with age, a youthful take on things and access to the right information can present fantastic opportunity.
Despite the cynics, I was able to scale Circuit – a global business – to 10M in ARR without raising traditional VC at age 23, after just four years. So how did I do it? Well, it was a little bit of luck and a lot of hard work, planning and strategic thinking.
Here are my top tips for building a business as a young entrepreneur:
Charge customers from the start
As tempting as it may be to offer a service for free at the beginning to get feedback, charging customers instantly will put your business at an advantage.
Customers who pay for a product will always give distinctively different feedback to those who use it for free. Ultimately, brutal honesty is favoured in order to ensure your product is working at its optimum level and is as user-friendly as possible.
In addition to this, by paying customers you indicate your business is for the long term. There isn’t much that can tell you if a customer is willing or going to pay for a product like asking them to do so immediately. If customers are unwilling you can then address this before you expand.
Your network is not always your net worth
Of course, industry contacts are great but don’t be discouraged if you don’t have 100’s or even 10’s of these in your phonebook. Entrepreneurs often focus too heavily on who they know, and fail to take the first step as a result of this.
An established network or impressive array of industry connections is not a requirement to start a successful business. A great product will do the heavy lifting. In reality, approaching a new sector with less connections can work in your favor! A new outlook can be the best way to discover what works and what doesn’t.
Use paid ads
Circuit would not be what it is today without paid advertising. This is because the feedback cycle is rapid – you could purchase a 100 clicks and know in less than a day if your product is working as it should. There’s no other form of marketing that works as fast for such a low price.
We have only ever spent money on ads where there’s been a clear ROI and at the beginning we focus on low volume, low costs ads between £10 – £20 for just 20 to 40 installments. Whilst this may not appear to be much, it’s enough to gather the most relevant data to better your product. As your product improves, your business will be able to afford it will then be profitable enough to create a positive feedback loop where increasing ad spend will result in a better product and thus, more ad spend. This is the speediest method to improve your service and build momentum.
Focus on unit economics first
Thinking of the big picture is great, however a business strategy must be built around profit from a single customer – not the masses. You should be able to acquire a customer, sell them a product / service and still have money remaining. If that’s what you have, then that is positive, if not, then you must fix this issue before you attempt to expand.
Find your unique selling point
Cliche as it may sound, starting a business where there are many already working to solve the same issue will not set you apart from others. However, if you want your business to succeed, you must find an opportunity that has been missed by others.
Are you looking for areas that have poor service? Are people still buying it anyway? Then you’ve hit the jackpot. This means your sector is probably in dire need of an upgraded product, and what’s better is that you will not need to create a customer base from scratch.
This is the formula I used when I created Circuit. I had seen delivery drivers were using technology, but the products they were using were not functioning at a high quality. It was this that made me realise that something needed to be made to meet their distinctive needs. Here, I found the opportunity to build a valuable market leading product.
Creating your own business is not easy and can even be harder at a young age – but it definitely is worth it.
Learn more about Circuit at www.getcircuit.com