Julie Meyer cemented her position within the European start-up community when she launched networking club First Tuesday in the late nineties. After selling it in 2000 she started investment and advisory firm Ariadne Capital, whose portfolio of companies includes Monitise, BeatThatQuote.com and Zopa. Alongside running Ariadne, Julie is now an investor in the online version of Dragons’ Den. Her latest start-up project is leading a panel of judges for the Take One Small Step Campaign – a Barclays competition which will see 10 of Britain’s best business ideas share a prize fund of £500,000. She spoke to Startups.co.uk about the competition, what she looks for in an entrepreneur, and the secret to a great business plan.
Tell us about the Take One Small Step campaign and why you’re involved:
The opportunity for 10 lucky business to access £500,000 of financing seemed like a great thing to be involved in so I wanted to help raise the visibility of the competition. Barclays and I share a frustration that more businesses don’t properly understand business planning, yet can’t understand why they struggle to access finance. We want to get across to entrepreneurs that planning is not optional. It’s critical to unlocking funding, whether that’s from a private investor, venture capital firm or a bank.
What are you and the judges looking for when it comes to the winning businesses?
Any idea is welcome as long as it’s good and that’s one of things that attracted me to the campaign. I’m known more for digital businesses but that’s only one of the channels we’ll be looking at. Occasionally I get it wrong, but I think I’ve become very good at identifying entrepreneurs with the right level of confidence and drive. It’s about more than passion. I look for exceptional people with a blend of steel and optimistic energy.
You mentioned the importance of good business planning. What’s the most common business planning mistake you come across?
One very common one is not knowing the plan intimately enough. Sometimes people hand it to their accountant to do, but when it comes to sitting across from a bank manager, they can’t answer basic questions about what drives the business. If the business plan has been done by someone else, you never really own it yourself. The second mistake I see often is to be too optimistic on sales and costs. I don’t believe in thinking small, but you do need to present reasonable and achievable figures.
What’s the secret of a great business plan?
A good business plan should allow you to point to fixed costs, variable costs and forecasts for the next 12 months, which you should monitor on a month-by-month basis to see if you’re on track with them. If you’re wildly off base with your forecasts then you’ll know something’s wrong with the thought process.
There are really three different business plans you should have prepared. The best case scenario, the worst case scenario and the one in the middle which you roll with. If a bank manager asks you what the biggest thing that could go wrong with your business is and you stare back blankly, that’s an instant giveaway you haven’t stress tested your plan. It doesn’t need to be bulletproof. You just need to think about what could go wrong and how you’ll mitigate against that risk.
What advice do you have for entrepreneurs at the concept-testing stage of their idea?
Some ideas are so revolutionary they need patents and confidentiality clauses around them, but there are very few businesses like that. One of the best ways to test an idea is to socialise it. Run it by people you respect in the market. You need to risk sharing your idea in order to get feedback on it. Some entrepreneurs work in isolation either through fear, competitiveness or because they don’t have a network to discuss it with, but you need input to build a better concept.
What’s more effective, online or face-to-face networking?
There are so many different networks now – online and offline, and they’re both essential. Networks are an important way of building relationships with potential investors, partners and even future employees – it’s one of the reasons First Tuesday was so valuable in its heyday. Serendipity drives so much of life – it’s the dinner party you almost didn’t go to where you met the person who became your business partner. What the business networks are very effective at is increasing the occurrences of serendipity.
What advice do you have for people currently pitching for finance?
I’m a big believer in practising. People often roll their eyes when I tell them this, but one of the best things you can do is stand up and practise your pitch in front of the mirror. There’s no better way to get through the false starts and omissions, and the more you do it, the better you’ll get.
What’s your definition of a successful business?
Financial performance is a big part of it. On some level you have to look at the profit and revenue levels to see if the business is sustainable. Monitise (one of the businesses in Ariadne’s portfolio) is not as big as Visa, but I would still call it a success because you claim victory along the way. In my mind, a successful business is one that attracts both users and backers, and creates a dent in its marketplace.
For more information on the Barclays Take One Small Step campaign visit