Entrepreneurs, especially in the tech sector, seem to be younger than ever. But it takes more than just a bright idea to stand out in a busy marketplace and to make any business a success, even in the age of crowd-funding and disruptive media.
Working out of his Silicon Valley office, 23 year old London-born entrepreneur James Proud is seeking $40m funding for his three-year old company, Hello. Less than a year ago, he raised $2.4m from a Kickstarter campaign for his Sense sleep monitor and his company is estimated to be worth $250m.
The latest round of funding is being led by Singapore’s Temasek investment company, indicating the truly global potential for digital media and new tech. The health and fitness sector is also booming, despite the potential for only a few big players to dominate the developing health-tech sector. Apple and Google are investing heavily in health features, not least on their Android and Apple Watch platforms, but this has not shaken Fitbit which floated this week with shares starting at $30.40 on its first day.
But Proud has disconnected Sense from established products, using a ‘Sleep Pill’ pillow clip to assess sleep quality through movement and a separate ‘Sense’ bedside device to measure outside conditions such as light, temperature and noise. The first round of products has just been shipped to those who backed the start-up on Kickstarter.
Despite being in his early twenties, Proud has been coding since the age of nine and sold his first business, Giglocator for almost $1m in 2012, with the support and mentoring of Peter Thiel’s Silicon Valley influential fellowship network. It is this network of senior tech figures and potential investors that has made Hello the success it already is and is set to become. The company has already raised $10.5m from well-known industry figures including former Paypal president David Marcus, former Google Android executive Hugo Barra, and Shakil Khan, another entrepreneur and adviser to Spotify. Facebook’s vice-president of partnerships, Dan Rose, sits on Hello’s board.
It is important for any entrepreneur to use their network of skilled, experienced and specialist friends, family members and professional advisers to fill in the gaps they may have (but not necessarily acknowledge). Opportunity and enthusiasm in launching a new product is not enough, even if it is has general appeal and is aimed at a mass market. Sector specific knowledge, honed with experience over time will prove to be invaluable.
Investors in particular will want to see credibility and stability, especially when significant funds are being invested. Some philanthropic investors may be prepared to ‘take a punt’ on impressive individuals motivated by good ideas, but such investments can often be thinly spread and in a variety of areas with little or no theme to the portfolio. This can impact on the additional support investors may be able to provide to promote and shape the business.
When it comes to selling a business, good management, contracts, policies and procedures –all of which are suitable and fit for purpose – and a carefully selected board of advisers is essential if any entrepreneur wants to realise a company’s true value, wherever they may be in the world and whatever sector they may be working in.
I joined the Arise News team on 16 June to discuss the age of the entrepreneur and the anticipated launch of the new Apple News service.