EXPERT VIEW
the company’s initial focus was just on convention- goers in San Francisco. This was of course an incredibly narrow target market at the outset, and while it may not have “moved the needle” for the larger company who today are Airbnb’s competitors, it has certainly served them very well.
5
Turning every “No” into a “Yes” When entrepreneur Thomas Knobel
got stiffed by a bankrupt supplier, he began a campaign. Every day, he left a voicemail on every phone at his supplier’s offices. “I would call and leave a message on extension 101, and then I’d call back and dial extension 102, until there were no more extensions to dial. It was a fight for survival,” he recalled. “I’m a student. You’ve taken away my business. I hope your sons and daughters aren’t ever treated in this way.” After just one week, the lawyer called back and said Knobel would receive his
money if he stopped the voicemails. For today’s best entrepreneurs, breaking
the rules of ‘how things are normally done’ is part of the
landscape and “No” is not an acceptable answer.
6
“Ask for the cash and ride the float”
Vancouver-based entrepreneur, Rud Browne, financed his refurbished mobile computing device business by asking for 90 day terms when he bought used no- longer-needed equipment, and by getting his customers to pay him on delivery, even sometimes in advance. Riding the float between when he received his customers’ payment and when he paid his suppliers enabled Ryzex, with no outside investment, to reach $75 million in revenue, with five offices around the world and 360 employees. Does riding the float by getting paid on
delivery (or even in advance) and paying suppliers on generous terms make more sense than giving up a stake in your business to access investment capital? Surely, it does. And it’s vastly cheaper capital, too!
Have you got what it takes? The good news is that great entrepreneurs are almost always made, not born. Can you do new things and
www.smeweb.com
❝
RIDING THE FLOAT ENABLED RYZEX, WITH NO OUTSIDE INVESTMENT, TO REACH $75 MILLION IN REVENUE, WITH FIVE OFFICES AROUND THE WORLD AND 360 EMPLOYEES
assemble – but not bother to own – the resources you’ll need, and not take “No” for an answer? Are you targeting a narrow target market having a compelling problem that you can solve? Can you ‘ride the float’ and use your customers’ funding to bootstrap the start of your business? Yes, you can!
JOHN MULLINS is an associate professor of management practice at London Business
School and author of “The New Business Road Test: What Entrepreneurs and Investors Should Do Before Launching a Lean Start-up,” fifth edition 2017.
SME 25
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