James Mulvany is the founder and CEO of Radio.co an online broadcasting platform, and MCR.Live, the music, culture and radio network for the city of Manchester.
A common view today is that anyone can set up, grow, and hopefully sell, their own online business. While it’s true that the internet has massively reduced the costs and overheads associated with running your own business, it’s never as easy as it seems.
Ultimately to succeed you either need time (sweat equity) or money (lots of it, preferably).
I started my own business while still at school, and have never worked for anyone except myself, so I understand the what drives entrepreneurs. Entrepreneurship is often dressed up as a glamorous occupation. But anyone who has done it themselves will tell you it’s a lot of hard work and requires you to make a huge emotional investment.
Having recently had my previous business, CDNify, acquired by SSL.com, I can also tell you that even the process of selling a business comes with its own hurdles and stresses. So, here are my top five tips for any entrepreneur who grow and sell their business.
1. Build what you know
CDNify originally started off as a side project that came about because of scalability issues with another company I was running. We launched an embeddable player for the radio industry and within minutes we knew our infrastructure wouldn’t be able to handle the amounts of traffic we were receiving.
It seems crazy nowadays not to use a CDN (content delivery network) as standard, but five years ago it was a lot less common. I had initially looked around, but there was really not much out there that would allow me to easily sign up with a credit card. I received PDF after PDF, and had to commit to a one year contract.
Having always worked in SaaS, I was quite shocked to realise how out of step with most internet companies the CDN industry was. So, not being someone who is scared of a challenge, I built CDNify to cater to this clear gap in the market.
Now don’t get me wrong, building your own CDN is not easy. But having worked in audio streaming for 10 years and having built up a team who are experts in this area, I felt confident that we would be able to build an awesome product that removed all the headaches that I had felt when trying to sign up to use a CDN myself. Plus, as I mentioned our team had a lot of experience building audio products that need high capacity and scalability, so building CDNify complemented our in-house resource and meant there was no need to outsource any of our development.
2. Pick the right people
If I’m completely honest, building CDNify would have been a lot more difficult if it hadn’t been for the team I already had in place. I’ve always been a strong believer in picking people who are experts in their field and empowering them as much as possible. Or to put that in less startup-y language, letting people get on with the job you hired them for and not micro-managing them.
It’s quite common for owners of privately held businesses to heavily involve themselves in the day-to-day running of the business. If you’re intending on selling your business, this can be problematic. Anyone who is considering buying your business will want to know that it can operate in your absence.
To start a business you probably do need to be a bit of a control freak, but to grow a business to the point where other parties are interested in purchasing it you need to be able to stand back and let people get on with things.
You’re a founder, you need to find people who can build on the foundations you have built.
3. Stand out from the crowd
If you were to look at CDNify’s competitors, like Fastly, then you’d think it would be impossible to cut through – especially when other companies offer a similar product to your own and have millions in funding in the bank. We stood out by understanding who our audience was and what hurdles they faced, because initially, I was one of them.
The other way we managed to grab people’s attention was to implement a strong, user focused marketing strategy that talked directly to our various demographics. This allowed us to reach a huge number of people for very little cost, other than the time needed to produce the content itself and had the added benefit of providing us with evergreen content that would consistently bring us new leads. For example, CDNify still ranks very highly on Google for the term ‘web performance guide.’
The other strategy we used to build an audience and reach potential customers was to innovate where other weren’t. One thing I am incredibly proud of with CDNify is that we were the first CDN in the marketplace to offer SSL for free. This really allowed us to set ourselves apart from other providers. In hindsight, it was the right thing to do. The rest of the industry soon followed suit, but by then the CDNify brand was well and truly lodged in people’s minds.
Now I’m not suggesting you compete with other brands on price. As I mentioned, we were up against companies who had millions in funding, so it was important to try and think of other ways to stand out from the crowd. In our case is was our content strategy and our willingness to innovate that allowed us to do this.
People often say work smarter not harder. In a startup, you need to do both.
4. Ask yourself whether you really need funding
In this day and age, it seems that everyone and their dog is raising money. Whilst I am not advocating against this, in my experience, it’s not always necessary.
I started my entrepreneurial journey at a young age and this has put me in the incredibly fortunate position where I haven’t had to go and raise funds. This has allowed me to take risks and do things that perhaps might not be as easy to do if I were answerable to a board.
When it came to selling CDNify, being a sole shareholder helped the process run smoothly. There were no other owners to run things by.
5. Build your product with your goal in mind
My final tip to anyone who is looking to grow and sell a business is to always work with an end goal in mind. Do you have a clear understanding of where your product is heading? If not then how can any potential buyer have faith in what you are doing?
Ultimately, anyone who is interested in buying your business wants to see that you have a clear vision that they can build on. In our case, SSL.com wanted to offer CDN services as an add-on to their existing customer base, so it was paramount that they knew they were purchasing a robust product that they would be able to scale. The fact that we had built CDNify from the ground up ourselves gave SSL.com the confidence to move ahead.
In my experience, selling a business is not a simple thing to do. It comes with a set of hurdles and stresses, but if you have faith in what you’re doing, follow your gut and listen to your users then you will be on the right track to finding a potential suitor.
Image credit: Paula Vengeance / Flickr