People between the ages of 25 and 40 were responsible for creating fifty percent of new businesses in the UK since July 2020. For those who were born in the internet era, more than half are interested in how the internet can help create businesses.
As with the creation of any company, the process is complex and requires vast investment in time and capital. To better understand the challenges, benefits, and process of start-ups, we spoke to Barny Dillarstone, who earlier this year launched twio, a start-up that helps businesses personalise their customers’ charitable giving.
Barny’s background does not suggest an obvious pathway to entrepreneurship. He grew up in Oundle, and after degrees in chemistry and environmental technology, he worked for a conservation non-profit in Indonesia. He admits that the start to his career was unconventional. He has not sought employment with a company, because he did not want to be confined by a nine-to-five job.
“I think it’s certainly challenging as a younger person, when you have university friends going on to get high-profile jobs with big companies, and you’re thinking that’s not really for me, I want to do something else,” he said.
This does not mean that the alternatives are easy. The challenges and effort required for a start-up are immense, and failure claims a high percentage of new ventures.
Barny’s first start-up venture was an online tutoring company and he said he learned a lot from this. He thought he had a niche angle working with overseas students, but he shut down the business after a few years when he came to terms with how competitive the market was. “The space was already very busy. I think the space is even busier now in terms of every single person seems to be a tutor or have set up a tutoring company. I think the problem was just not having a proper understanding of the market, which is an OK mistake to make with your first business.”
Other problems that set back the venture included starting the business as a bootstrap company without cash, so it was difficult to scale and grow. “I had this great product, I had this great service, but how do I actually tell people about it and how do I grow this from being a company that has a few clients to one that has thousands of clients? That was something I never really cracked with that company.”
His new venture, twio, provides donation solutions for online stores. Instead of ticking a box at checkout to donate £1 to a random charity, the interface allows the customer to choose a preferred charity to make a donation to.
When he started to develop plans for twio, he utilised all that he learnt from his first venture. Foremost among them was to not be a sole founder. He said that working with two or more co-founders is essential for motivational support and also essential for building confidence and raising capital from investors.
Twio was co-founded with Cesar Faucher and has been built up with a team of full and part-time staff who are focusing on the technical development.
“Who you hire as a young company makes or breaks your company. It’s incredibly important when you’re adding the first members of your team that they are the right people. One of the questions that every fund asked us was about the team and team dynamics. They understand that bad dynamics result in failing companies,” Barny said.
In the beginning, most of their investment came from angel investors, individuals who have cash to invest and can take advantage of tax incentives. Since then, they have accepted investment from venture capital funds.
The UK is Europe’s leading start-up nation, attracting €17.2bn in venture capital funding in the first half of 2021, more than the €14bn in all of 2020.
He said there’s a balance to strike between raising investment and maintaining independence. “One thing you have to be careful of as a young company is not selling too much of your company too quickly. VC money comes with strings attached so you end up feeling like you’re kind of working for someone else.”
However, raising of capital is essential and always will be a significant challenge for any start-up. “The chicken and egg problem is that you always feel you need more cash to get to the next step, but you need to get to the next step to raise more cash,” he said.
As any business owner knows, the work never stops if the ambition is to grow the business, so the work never get easier.
Barney is not someone who brags or complains about how busy he is, but he admits he is busy. “Everyone is busy, but as a founder of a smallish company you wear a lot of different hats and you have to get good at jumping between different tasks on different parts of the business, like every five minutes,” he said.
The ambition to innovate and thrive tends to put the marker for success on a distant horizon. Every entrepreneur must have a long-term plan, but Barney said it is important to remember the need to celebrate what has been achieved along the way.
“The goalposts are always a year ahead of you and you’re always chasing them. One thing I fall short of is congratulating myself and the rest of the team for hitting milestones.”