Start-ups determined to go it alone may have to consider selling up to scale up, according to a leading North West tech entrepreneur.
Tech start-ups get a lot of airtime but scale-ups are arguably more important to the UK’s future prosperity. And even those entrepreneurs who have battled to reach the ‘M’ of their SME status can hit a brick wall without further resources.
Damian Hanson co-founded retail tech firm One iota in 2010 but three years in found clients questioning its future ability to deliver.
“We were running shopping baskets filled with mobile apps and commerce solutions for big brands like JD Sports and Superdry,” he told BusinessCloud.
“We were getting a lot of pain from them about our size and our ability to scale. These emerging channels were suddenly handling tens of millions of pounds’ worth of transactions, 12 to 18 months after we started.
“By that point we were losing business because we were a little too small and our existing clients were questioning who we were.
“So I think it was the right time to go and look for a deal. Sanderson, the group PLC who acquired us, ticked all the boxes.”
That £5.4m deal went through in October 2013. After seven years as CEO, Hanson stepped down in January 2017 but continues to support the business as commercial director while working on new tech venture Mission Labs, which is seeking to “build the future of communication”.
“A couple of years ago I was at an event where Zeus Capital partner Richard Hughes said many entrepreneurs simply do deals and continue to do deals to accumulate wealth,” he continued.
“We did a great deal for One iota at the time – from a personal perspective but also for our team and for our clients. We sold when we were turning over £700k and we’ve never looked back.”
Perhaps the biggest barrier in the modern-day tech sector is finding a ready supply of talent.
One iota was based in Haslingden in the Lancashire countryside while Hanson and co-founder David Hague have based Mission Labs in Bury to cut down on wasted commuting time.
However they will again turn to a key Manchester co-working space for the skills needed to grow the business.
“We opened a second smaller office at the Sharp Project to attract talent and will do the same with Mission Labs,” he said.