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ZDNET’s key takeaways

• Many new ventures don’t survive to become established firms.
• Successful startups take a cautious and determined approach.
• They explore, partner, and develop new features iteratively.

Fed up with the daily grind? Wish you could start your own successful venture? Evidence from the experts suggests you’re far from alone. However, launching a successful business is far from easy.

This year’s Global Entrepreneurship Monitor suggests that early-stage activity is robust. However, many new ventures do not survive long enough to become established firms, never mind reaching an exit via an acquisition by another organization.

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The good news is that some entrepreneurs see their great ideas flourish into successful businesses — and these individuals have valuable advice for other professionals who want to launch a successful organization.

Take Jem Walters, who, having spent 23 years with finance firm Virgin Money, latterly as CIO, wanted to try his hand at entrepreneurship. He co-founded the successful money-saving app startup Snoop in 2019, which was acquired by banking group Vanquis in July 2023.

Today, Walters is CTO at Vanquis and continues to seek innovative ways to deliver better services to the bank’s customers. Here, he reflects on the lessons learned from starting a business and offers five best-practice tips to other would-be entrepreneurs.

1. Cool your jets

First, said Walters, don’t rush in: “Don’t feel like it’s necessary to start cutting code on day one. Just give yourself a bit of time to think things through.”

He looks back at the start of Snoop and says the team behind the venture spent the first six weeks considering how it could create a next-generation money management app.

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Walters says the team recognized that open banking mechanisms meant it could explore how to present customers’ financial information around key concerns, such as spending and budgeting. But he said the team behind Snoop wanted to do more and offer actionable insights.

“We thought about whether we could come up with a ‘so what’ and give people personalized hints and nudges that say, ‘Okay, well, we’ve seen this. You may want to try that step to see if you can save some money.'”

Walters said the team spent six weeks on a proper feasibility assessment that considered what it would take to build the business and whether it really had a good idea.

“And once we looked at what it would take to build the business, the risks involved, the type of technology we needed to use, the sorts of partners we required, and how we would acquire customers, we concluded, actually, this is a good idea, and it’s got legs.”

2. Partner with agencies

Walters said the team didn’t rush to market and start hiring people once a decision was made to launch the business.

Instead, Snoop partnered with two tech agencies: one on the data and analytics side, called Inawisdom, and one on the product and mobile side, called Hi Mum! Said Dad.

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The entrepreneurs had clear guidelines on what these agencies would provide and how their own business would scale.

“We said to them from the outset that, ‘When we’re done, this service is going to be run by a Snoop team employed by us. It’s our code base. We own the IP,'” he said.

Walters said the team at Snoop was clear on the direction of travel and told the agencies that, over time, it would look to swap agency talent for internal hires as the business grew.

“We took that approach over the course of about two years, and we ended up with a fantastic partnership with those two businesses, but also a brilliant in-house team. So, that approach worked well.”

3. Build in stages

Walters said he looks back on the development process now and wonders how the team built its platform so quickly and effectively.

“We created some amazing technology,” he said. “It’s high quality, with enterprise-grade security, performance, and capacity. And we did everything well.”

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So, how did the team successfully develop Snoop’s platform? The answer, said Walters, was having short-term, two-week goals.

Walters advised other professionals with entrepreneurial dreams not to plan too far ahead.

“Have a North Star, have a direction of travel, have a good understanding of where you want to get to, but don’t worry too much about planning in detail on how to get there, because life doesn’t work in straight lines. You’ll take wiggly lines to get there.”

4. Deliver enterprise-grade features

As entrepreneurs look to develop their business in stages, it’s important to get working software out the door as quickly as possible.

“Everything works brilliantly on PowerPoint,” said Walters. “But just get working software out there, because that’s when you really learn whether what you’re building is working, because you get a customer feedback loop.”

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However, once again, proceed with caution and don’t compromise on quality as services are put into production.

“If your exit strategy is, ‘We want to be bought by a bigger business,’ then think like a bigger business in the sense of the quality of the platform that you need to build, and in terms of your adherence to best practice and standards,” he said.

“Particularly with anything you’re doing online these days, you’ve got to have really, really good security in place.”

Walters said the standards his team achieved prove it’s possible to create an enterprise-grade startup without compromising quality.

“We weren’t a bank, but we were a regulated business,” he said. “One of our potential exits was, and that’s what happened eventually, that we might get bought by a bank. So, our security needed to be bank-grade, and you want to take that approach for your customers as well, if you’re dealing with their transactional data.”

5. Don’t be greedy

Walters said entrepreneurs can’t assume the business will be bought out eventually, even when things are going well and the startup is scaling quickly.

“All you can ever hope for with a startup is to achieve an outcome where the product persists, your customers continue to get the services you provide, and the jobs you created live on,” he said.

“You can’t predict the outcome. Many startups never make it. So, any outcome, any exit, is a good exit.”

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Walters said he and his fellow co-founders had to contend with issues beyond their control, including the coronavirus pandemic, macroeconomic instability, and geopolitical challenges.

“In the end, our exit was a good outcome for Snoop, and it’s proven to be a very smart acquisition for Vanquis. Because not only did the company get a great business, but it also got a great team of people who really know how to make digital business work,” he said.

“When you pair that capability with the strategy of Vanquis, then those two things coming together were really pivotal in terms of where we are now as a business.”