By Jack Underwood, CEO and co-founder of Circuit
Being an entrepreneur doesn’t come with a minimum age requirement. Whilst more birthdays and life experience under your belt can lend a certain advantage, and there may be a need to navigate generational generalisations, there’s no reason you can’t start a pioneering business in your 20s
When I set up Circuit at the age of 23, I wasn’t short of sceptics. But cut to four years later and Circuit has hit $10 million in ARR, all without raising traditional VC.
Here’s my advice to any young entrepreneur who also wants to start their own business.
- Know how to identify unrealised opportunity
The strength of your business relies on the strength of your idea. But it can be difficult to identify a problem that affects enough people, yet isn’t already well-served by a crowd of competitors. If you want a successful business then you need to find an unrealised opportunity that others have missed.
The trick is to look for areas where the current product or service offering is poor, but people are still buying the product or using it anyway. This shows there’s a deep need for a solution and proves that a market already exists. You’re not then having to work to create a customer base and can focus on building the best product or service possible.
That’s the strategy that led me to launch Circuit. I saw that delivery drivers were heavily dependent on technology, but were having to rely on products that either weren’t properly built for them or that did a poor job. I knew that if I created something that specifically catered to their unique needs, I’d have a market-leading product that could truly add value.
- Base your economics on a single customer
The simplest way to make sure your company turns a profit? Ensure the unit economics themselves make sense.
Put the bigger picture aside for one moment and think about how you will make a profit on a single customer. Can you acquire a customer, sell them a product or service and still have money left over? If yes, then you know you’re on the right track. But if you can’t make enough money from a single transaction then you need to fix that before you scale.
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Don’t stress about industry connections
Jack Underwood
Whilst industry contacts are useful, they’re not the be all and end all. Many young entrepreneurs get caught up with the ‘it’s who you know’ ideology and let this distract them or scare them off from taking their first step.
However, in reality, you don’t need an established network or impressive array of industry connections to start a successful business. A great product will open doors for you.
In fact, coming to an industry with fewer ties can even be an advantage. A fresh perspective is often the best way to figure out what no longer makes sense about the accepted way of doing things. After all, common practice is simply an average of everyone’s best practice – it’s never the best solution for any given scenario.
- Lean on paid ads
Paid ads have been critical to my company’s growth. The great thing about paid ads is the feedback cycle is incredibly quick. You can buy 100 clicks and know in less than 24 hours if your product solves a problem or not. There’s no other channel that can give you such quick feedback, for so little cost.
Our tactic has been to only ever spend on ads where we had positive ROI and in the early data, to focus on very low volume, low cost ads; in the beginning we’d spend between £10 and £20 a day on just 20 to 40 installs. This may not seem like a lot but it’s more than enough to validate, iterate, and improve on your product offering and monetisation.
Then, as your product improves, you can afford to tap into more and more volume profitability. From here, you can create a positive feedback loop where increasing ad spend allows you to create a better product, which in turn fuels ad spend. This flywheel effect is the fastest way to improve your product or service and build momentum.
- Listen to your customers problems, not their feature request
At the heart of every feature request from your user is a real problem – however, generally, your customer will not be able to tell you the best way to solve a problem, only a solution that will somewhat work for them. Your job is to get to the root of the problem “Why do you want this?”https://www.globalbankingandfinance.com/”What problem does it solve?” and then come up with the best possible solution to that problem.
Customers can point you in the right direction, but if you’re building something that hasn’t been done before, the real solution is unlikely to be what the customer initially says that they want.
Starting a business in your 20s can feel daunting but don’t let the assumptions of others put you off. If you’ve identified an unrealised opportunity and found a way to make more revenue per customer then you’re spending, then you’ve got the solid foundation needed for a great business. The rest is careful decision-making, determination and sheer hard work.
To find out more about Circuit, visit www.getcircuit.com
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