kendra is asking how much test-driving
do you need to do before you ask for an
investment oh I think I I think with all
these things actually let’s let’s look
at it the other way what are investors
look for they look for a really good
kind of management team and an idea so
back to the product idea and I you know
I know that you can raise money on the
back of a mentoring team and idea I
think for your your confidence because i
hate kind of seeing you guys give away
too much here companies i think you want
a test drive again run it on fumes don’t
spend loads of money to evans point
because you can do things really cheaply
especially through social media and
digital and you can test drive loads of
stuff really cool e but really cheaply
as well and that’s what you should do so
iterate it and test driver and i’d say
i’ll be honest businesses should never
stop test driving you know when they get
super scale they should always be test
driving stuff new ideas new products
prototype them incubate them kill kill
them if they’re not going to work if
they are going to work cause correct to
make sure they learn from it and then
when you go to investors i think i would
we’ve talked about this a lot i would
always kind of try and run your business
almost on fumes you want to plan your
cash so you’ve got plenty of cash runway
but i’m the best way to do that is
either through friends and family
certainly wouldn’t be going to get loads
of money because I’ve seen the parallel
the extreme and when I was a CEO of a
nasdaq company and we were startup back
in well this a long time ago 1997 we we
had this phrase where we you know
basically treat treat the company’s
money as if it’s your own number one
revenue always should follow expenses in
a business kind of number to rule and
number three rule we saw loads of
companies at that time go and raise a
hundred million dollars or two hundred
million dollars and they would just
waste money just you know you couldn’t
believe the waste that be booking
private jets and stupid stuff like that
rather than worry about what really
mattered was about the customers on the
product so I think it’s a really good
ethos even when you
on the scale up your company to keep
that kind of hungry sort of street
fighter kind of mentality that we’re
really going to preserve cash we’re
going to preserve every dollar and we’re
going to ask ourselves on that dollar we
invest what fraternity we get but within
that context I think there’s tremendous
scope to test drives and when you feel
confident in terms of your business your
test driving to get investment then I
think that’s a whole different
conversation around where you get there
but probably the last place i go for
businesses like ours that we talk about
is to the sort of traditional places i
think there’s much better sources of
investment and people who will be great
partners to you and your business who
can give you advice we potentially can
join your board or your management team
and all those sort of things and the
final thing back to our recruitment
actually back in the day Evan when I
started a business I got people to join
our company take a massive haircut on
their salary and trade that for equity
so they had a share of the business but
wow did that change their attitude they
had so much skin in the game and you
know they worked harder and we build a
great business and they got rewarded
over long term much more than they would
if they’re just taking a salary so
that’s a question I get asked a lot from
my audience and I’m cue to hear your
perspective giving up ownership in a
startup business who to give it to how
much to give up because then your
ceiling to raise capitals you grow and
you can’t give the same percentage to
everybody if you’re certain the business
and you’ve identified some key employees
that you want to keep long-term do you
have advice on how to go about
determining how much to give them and
how much you want to lose in the
business yeah i would say um Evan on
this I think yeah this is this is an
extreme philosophy but I would counsel
you that everybody you hire should have
equity in the business I think there’s
no more powerful way to get commitment
and to get alignment around
the purpose and you know the dream that
you have then people having real skin in
the game so even if you have to sort of
pay them hopefully you could pay them
what seventy eighty percent of the
market salary or even fifty percent and
then give them the trade on equity then
that’s a great thing to do and I’d say
that pays for itself a hundred times are
the other thing back to your message
about partners if you’ve got a great
product and you do our dependent
potential on a distribution partner I
don’t think there’s anything bad to if
you’re if you structure something with a
partner so they actually make an
investment that’s a pretty cool thing to
do in return for a bit of equity but
then have some really big milestones in
terms of distribution you for it the
more with partners you know the real
thing is how are you going to get them
committed how you know if they’re
carrying 50,000 products why do they
care about your product so anything that
you can do back to Evans but what can
you do to differentiate yourself when
they look in a catalog on a screen of a
thousand products if yours pop out and
they’ve got an investment in it that’s
not a crazy thing to do and so on it
comes back to sort of the design of your
business what what’s your big idea how
are you going to be successful and who
are the people that you need and where
the audience is to really deliver that
dream do you have and then i would use
equity as a good way i’d suggest as you
grow and scale your business typically
you’re going to dilute your company and
you just have to accept that ah but
again to have it’s always the old adage
of North percent of a billion dollars is
not as good as ten percent of a hundred
million so you know I think you just
have to be in some ways generous as you
share the opportunity for world creation
in your business and you connect people
you the dream but I’d certainly look at
some key stakeholder groups and then
obviously if you’re raising money Evan
I’d always go to things like friends and
family are get network it i’ll
definitely if you’ve identified a rock
star potential sort of board member who
really knows the industry that would be
a great person to be invest in your
business as well so as those sort of
people people
really going to have skin in the game
who can bring something to move the dial
for your business and normally that’s
great experience or contacts or networks
or access to markets and distribution
very cool or Kenya is writing back to
say thank you sir that is awesome advice
and then a big happy face so I thanks
tender this is like in the answer
do you need to do before you ask for an
investment oh I think I I think with all
these things actually let’s let’s look
at it the other way what are investors
look for they look for a really good
kind of management team and an idea so
back to the product idea and I you know
I know that you can raise money on the
back of a mentoring team and idea I
think for your your confidence because i
hate kind of seeing you guys give away
too much here companies i think you want
a test drive again run it on fumes don’t
spend loads of money to evans point
because you can do things really cheaply
especially through social media and
digital and you can test drive loads of
stuff really cool e but really cheaply
as well and that’s what you should do so
iterate it and test driver and i’d say
i’ll be honest businesses should never
stop test driving you know when they get
super scale they should always be test
driving stuff new ideas new products
prototype them incubate them kill kill
them if they’re not going to work if
they are going to work cause correct to
make sure they learn from it and then
when you go to investors i think i would
we’ve talked about this a lot i would
always kind of try and run your business
almost on fumes you want to plan your
cash so you’ve got plenty of cash runway
but i’m the best way to do that is
either through friends and family
certainly wouldn’t be going to get loads
of money because I’ve seen the parallel
the extreme and when I was a CEO of a
nasdaq company and we were startup back
in well this a long time ago 1997 we we
had this phrase where we you know
basically treat treat the company’s
money as if it’s your own number one
revenue always should follow expenses in
a business kind of number to rule and
number three rule we saw loads of
companies at that time go and raise a
hundred million dollars or two hundred
million dollars and they would just
waste money just you know you couldn’t
believe the waste that be booking
private jets and stupid stuff like that
rather than worry about what really
mattered was about the customers on the
product so I think it’s a really good
ethos even when you
on the scale up your company to keep
that kind of hungry sort of street
fighter kind of mentality that we’re
really going to preserve cash we’re
going to preserve every dollar and we’re
going to ask ourselves on that dollar we
invest what fraternity we get but within
that context I think there’s tremendous
scope to test drives and when you feel
confident in terms of your business your
test driving to get investment then I
think that’s a whole different
conversation around where you get there
but probably the last place i go for
businesses like ours that we talk about
is to the sort of traditional places i
think there’s much better sources of
investment and people who will be great
partners to you and your business who
can give you advice we potentially can
join your board or your management team
and all those sort of things and the
final thing back to our recruitment
actually back in the day Evan when I
started a business I got people to join
our company take a massive haircut on
their salary and trade that for equity
so they had a share of the business but
wow did that change their attitude they
had so much skin in the game and you
know they worked harder and we build a
great business and they got rewarded
over long term much more than they would
if they’re just taking a salary so
that’s a question I get asked a lot from
my audience and I’m cue to hear your
perspective giving up ownership in a
startup business who to give it to how
much to give up because then your
ceiling to raise capitals you grow and
you can’t give the same percentage to
everybody if you’re certain the business
and you’ve identified some key employees
that you want to keep long-term do you
have advice on how to go about
determining how much to give them and
how much you want to lose in the
business yeah i would say um Evan on
this I think yeah this is this is an
extreme philosophy but I would counsel
you that everybody you hire should have
equity in the business I think there’s
no more powerful way to get commitment
and to get alignment around
the purpose and you know the dream that
you have then people having real skin in
the game so even if you have to sort of
pay them hopefully you could pay them
what seventy eighty percent of the
market salary or even fifty percent and
then give them the trade on equity then
that’s a great thing to do and I’d say
that pays for itself a hundred times are
the other thing back to your message
about partners if you’ve got a great
product and you do our dependent
potential on a distribution partner I
don’t think there’s anything bad to if
you’re if you structure something with a
partner so they actually make an
investment that’s a pretty cool thing to
do in return for a bit of equity but
then have some really big milestones in
terms of distribution you for it the
more with partners you know the real
thing is how are you going to get them
committed how you know if they’re
carrying 50,000 products why do they
care about your product so anything that
you can do back to Evans but what can
you do to differentiate yourself when
they look in a catalog on a screen of a
thousand products if yours pop out and
they’ve got an investment in it that’s
not a crazy thing to do and so on it
comes back to sort of the design of your
business what what’s your big idea how
are you going to be successful and who
are the people that you need and where
the audience is to really deliver that
dream do you have and then i would use
equity as a good way i’d suggest as you
grow and scale your business typically
you’re going to dilute your company and
you just have to accept that ah but
again to have it’s always the old adage
of North percent of a billion dollars is
not as good as ten percent of a hundred
million so you know I think you just
have to be in some ways generous as you
share the opportunity for world creation
in your business and you connect people
you the dream but I’d certainly look at
some key stakeholder groups and then
obviously if you’re raising money Evan
I’d always go to things like friends and
family are get network it i’ll
definitely if you’ve identified a rock
star potential sort of board member who
really knows the industry that would be
a great person to be invest in your
business as well so as those sort of
people people
really going to have skin in the game
who can bring something to move the dial
for your business and normally that’s
great experience or contacts or networks
or access to markets and distribution
very cool or Kenya is writing back to
say thank you sir that is awesome advice
and then a big happy face so I thanks
tender this is like in the answer
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