How do you start a successful business, and what problem areas would one need to focus their attention on to establish a strong business in the future? These are questions which every founder ponders.

With stats showing that around 20% of all businesses fail within the first year, and 60% go bankrupt within the first three years, a business owner must work incredibly hard.

Thomas Gillan, CFO at BR-DGE, NXD at Brewgooder, and Impact Investor, has recently returned from Silicon Valley as part of Startup Grind, a community group designed to boost Scottish startups to a global market.

Gillan headed the development of SIS Ventures in 2016, the mission-led investment arm of SIS which invests in high impact, high growth businesses. He joined his current organisation, BR-DGE, 12 months ago to help the company commercialise its offering, scaling the team from 20 to 50 during that time.

DIGIT spoke with Gillan about building a Scottish startup, what support is available in Scotland to help a budding owner, and how organisations like Startup Grind are helping Scottish entrepreneurs.

Getting a business off the ground

Speaking about the challenges he has faced launching companies in the past, Gillan believes that there is one key obstacle that arises.

“There’s always one major challenge that comes up time and time and time again, and that’s around product market fit,” he says.

“It’s an obvious point to make, but I think when you sit there on day one, you’ve got your ‘back of the napkin’ idea, and you say, ‘this is going to rock and we’re going to smash this out of the park’”.

Gillan says that, during this critical early stage, a budding founder should have the discipline to not get ahead of themselves: “It’s to have the discipline to make sure that the product is really what the customer wants to buy.”

He adds: “As each month passes, keep challenging that assumption to ensure you are on point with the market needs and don’t get pushed into the commercialisation phase too early, avoiding commercialising something that you know yourself is going to need to pivot very quickly.”

This is something that Gillan admits he has had to battle with during his career, not just at the start, but as his businesses began to scale as well.

As you move into new markets, Gillan says, you must evolve your product continuously. It may be something that customers are happy with right now, but whether you are innovating enough to keep ahead of the market is what is important.

“I think you need to be bold and brave when it’s not right and you need to accept that quickly,” Gillan says.

“The early-stage idea always becomes your baby, and your judgement can become clouded. Make sure you’ve got people around you that challenge you and say, ‘I hear what you say, but fundamentally, I believe that we need to go in this direction’. Good leadership is being able to listen to those people.”

Gillan continues: “Whether they’re part of your team, mentors or members of your network who are doing similar work, you need to listen to it quickly and accept that not everything you do is right.”

He adds that, ultimately, it’s fantastic to be first, but you need to do it right. “You can only do that with open layers of communication and honest conversations if you want to scale up.”

Once you have got to that stage, Gillan says, you can look back on what you have achieved and see both the positives and negatives.

“I think it is one of the most rewarding things you can ever do. And it depends on your mindset as an individual, so it’s not right for everybody,” he says.

Positives and Negatives

When discussing the good and bad of being in a high-growth startup, Gillan says to focus on the things that “get you out of bed in the morning”.

He says “I think [for me] it’s the early customers; I would try to never lose that first person that comes in and buys your product or service.

“Bottle that and remember that feeling when times are tough. It is so powerful because it just reminds you what your early successes looked like.”

In terms of the challenges, Gillan says there is plenty to think about. Time is finite and you need to use it wisely. “You always want more time,” Gillan comments.

“You will feel the pressures to go faster; to get into that commercialisation stage; and to sell more when you’ve got other challenges to address in a scaling business.”

Another common issue can be struggling to build strong relationships with potential investors. You may believe that you have a good product, but that doesn’t mean it is right for them, and that can knock your confidence, Gillan admits.

“I think in Scotland we can be overly hard on ourselves, and we can take constructive feedback the wrong way in those early stages.

“Being told that it’s not the right product, or it’s not the right time – I think we can react badly at that as an ecosystem.”

Business support in Scotland

To run a successful business, Gillan believes founders must have a passion for their products, and the drive to succeed.

“There’s quite clearly no ‘one size fits all’ in terms of being a successful founder,” Gillan says. “I think there is one thing in common, if I’m honest, and its belief: believing in the idea.

“You’ve got to have that unrelenting desire to get something to a stage where it’s either a household item, or it’s known locally in the ecosystem, and you have achieved your vision.”

And there are support systems in place in Scotland. According to Gillan, there are plenty of positive avenues of investment here.

“The benefit of Scotland, I believe, is it is such a close network, specifically from a tech perspective, but also other industries.

“You are no more than two calls away from getting hold of anyone within the network, and I think that’s reflected in the investor community also.”

However, something that Gillan noted during his time in Silicon Valley is the difference in funding opportunities in the US compared to a smaller country, like Scotland.

Recommended

• DIGIT Movers and Shakers | April 2022
• Entrepreneur claims Glasgow could become the next Silicon Valley
• Archangels announces Ian Macleod as its new board chair

Funding within the Silicon Valley ecosystem is “on another level,” says Gillan, and the ambition and risk appetite there is much larger, simply due to its size.

“I think the challenge in the UK and in a Scottish context is, whether it’s ambition or it’s just programmed into us, we don’t like asking for too much money and are aware of coming across overly ambitious,” he says.

Talking more about the impact that an event like Startup Grind can have on a startup, Gillan references the networking element of being able to gather with other leaders and the chance to build relationships with mentors.

He comments: “If an entrepreneur and owner can go from A to B faster because they’re learning from someone who has already walked that path, then that’s great.

“If someone’s been there and done it, learn from it. I think there’s more to be said about the value of informal networking. The impact of that is unquantifiable, but it’s significant.”

Get the latest news from DIGIT direct to your inbox

Our newsletter covers the latest technology and IT news from Scotland and beyond, as well as in-depth features and exclusive interviews with leading figures and rising stars.

To subscribe, click here.