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news Lessons from young digital entrepreneurs
Chartered accountants Haines Watts point to some recent lessons for start-ups and young entrepreneurs in how to ensure customers love them enough to not just use their products and services but tell others to sign up too
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Gary Heywood, partner at Haines Watts, with Jez Rose, a finalist in last year’s Young Entrepreneur of the Year competition
Gary Heywood of Haines Watts, said: “We’ve seen some massive business success stories over the past year – companies founded by young entrepreneurs, which have millions of devoted customers. Two such companies – Tumblr and Instagram – were so popular they became extremely attractive to big buyers.”
Yahoo acquired the Tumblr blogging platform, founded by a 26-year-old, for $1.1 billion, when it had 300 million monthly users. Facebook bought the mobile photo-sharing service Instagram for $1b in 2012, with around 30 million users. Instagram founders Kevin Systrom and Mike Krieger are both only around 30 years old.
Tumblr itself was only five years old, whilst Instagram was an 18-month-old start-up – but their reach and success has been phenomenal and, of course, the digital marketplace is extremely lucrative. So how did they do it?
Instagram astounded the commercial world because at the time of sale it only had 13 employees. By keeping the business lean and efficient and not falling into a common trap of scaling up too quickly, it didn’t over extend and lose focus. That’s not to say it didn’t have massive ambition but it concentrated on building up its loyal customer base and did it by offering a free app rather than charging for it. That way, Instagram was able to grow fast.
Instagram and Tumblr both managed to create a fresh and emotional connection with customers to differentiate their business from
Business THE M A GA ZINE
www.businessmag.co.uk THE BUSINESS MAGAZINE – THAMES VALLEY – JULY/AUGUST 2013 TM
others. Both sites unnerved many of the ‘big players’ in their sector with their innovation.
Gary Heywood added: “So when planning your vision for your business, you may – or may not - see yourselves on quite such a big stage, but the principle still applies; if you want your customers to love you, focus on what they want and keep fresh – that way you’ll remain attractive … and ensure your Intellectual Property rights are in order”
Haines Watts is running a competition for young entrepreneurs currently but hurry, as the deadline approaches. It is free to enter and is open to candidates who live/work in the Thames Valley area, defined as Berkshire, Hampshire, Surrey, Buckinghamshire, Hertfordshire and Oxfordshire. Finalists not only get a cash prize and free publicity for their business but also year-long mentoring sessions from a partner at Haines Watts.
Details:
www.hwye.co.uk
For further information about the Haines Watts Group visit
www.hwca.com
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