I’ve still no idea which issue this come from. But here’s the PDF if you want it.
I’m sat in the kitchen of a fellow entrepreneur discussing the difficulty of growth. We both have profitable businesses that each have turned over 6 figures in the few short years we’ve been going, but still need to grow to survive. It’s arguable we could both be earning lots more, for a fraction of the time, effort and stress, by just going off to get “normal jobs”. It’s something we talked about at length, but the reality is that it seems hard to accept. Our businesses have good models, they’re scalable, profitable, and have been proven to work. But our businesses are predicated on scale and therefore need to be significantly bigger. Take Facebook, for example. Their average revenue per user is about $5 (depending on who you listen to). As a business this clearly doesn’t stack up if they only have 20,000 users. Even for Google, who reportedly generate closer to a $50 average revenue per user (ARPU), their business is only really viable when their user base hits the millions.
Not that I’m suggesting our businesses will inevitably go on to be as big as Facebook or Google, of course. But the issue of scale is relevant in both cases. Our businesses are sound and profitable, but need a large injection of users/clients to generate significant revenue. And as long as the market is there, there’s no reason this can’t happen. As ex-Dragon Doug Richard once said to me, “the number one killer of small businesses is invisibility”. In other words, if only everyone knew you were there, they’d use you. In fairness, neither my startup, or that of my fellow entrepreneur would necessarily be of use to the general public, but the point still stands. By significantly increasing our visibility there would almost certainly be a clear and demonstrable increase in our revenue.
And this is why it’s so difficult to walk away and start on the next thing, like any good serial entrepreneur. If our businesses had clearly failed to prove a minimum viable product, and weren’t so obviously founded on good business models we’d already have started something else. But we know we’re just one good client, one great piece of press, one partnership, or one generous investor away from hitting that brilliant exponential growth curve that every scalable startup dreams of. It’s like a drug that keeps you coming back for more, despite the pain it puts you through.
And because the light is always there, shining away tantalisingly at the end of the tunnel, it WILL keep most entrepreneurs coming back for more. Because if you’re the type of person who’s built a business to this stage, there’s no way you’re going to give up when success is so, so close.
Hello! Introduce yourself.
Jonathan Morgan. Founder and Managing Director of Object Matrix Ltd.
So, what does your startup do?
Object Matrix creates software to handle the storage and access of data in media workflows. Primarily we work with broadcasters, film makers and post-production.
What makes your startup special?
At 9 years old we consider ourselves an “old startup”, but we consider ourselves one of the few European storage product companies, in an industry which is dominated by the USA. We’ve constantly had to fight against the stream. However, our product is special, allowing our storage to be used in media workflows.
What was the genesis? The eureka moment that made you realise you had to build this company?
I always knew I was going to run my own companies. Everything I’ve done in my career and education has led up to Object Matrix. For this company: I had a concept of how data storage should be done. I was travelling around the world at the time with a laptop in my backpack. Much of the product design was written by a beach in Rarotonga.
And where are you at right now?
Over the past three years says have tripled yearly. Even Strictly Come Dancing is kept on our systems this season, and our system is now beginning to sell well in France.
What’s the key to your growth? In other words, if someone could wave a magic wand, what would you want them to do for your business?
We are constantly cash constrained against growing more quickly. I’ve had orders from blue chip companies in the past and have been unable to borrow money from the banks to even fund the equipment needed for large orders. If I could wave a magic wand it would take away my cash flow issues!
Where would you like your company to be in 5 years time?
For the company or for myself, my philosophy is life is what you make of it. Make the right decisions at each juncture and the future will take care of itself. Julie Meyer said something along similar lines at the recent Welsh Entrepreneurs conference: don’t look for money, if you are doing the right things, money will find you. Similarly for me, it is all about focus on doing the right things rather than chasing a distant dream. Yes, this is a growth company with a large potential marketplace, but the present comes first.
Where can we find out more?