Written by Jack Underwood, CEO and co-founder of Circuit
There’s no best age to start a business. Whilst years do bring experience, if you’ve hit on an exciting new idea, there’s no need to wait for a certain birthday.
I was 23 when I launched Circuit, but being in my 20s didn’t shut me out of success. Four years later – and without raising traditional VC – my business has scaled to $10 million in ARR and operates around the globe.
These figures aren’t an accident. They represent careful planning and strategic thinking – other young entrepreneurs can do exactly the same. Here’s how:
1. Take time to find your niche
A successful business needs a killer idea. But it can be difficult to hit on something that affects enough people yet isn’t simultaneously well-served by a crowd of competitors. If you want a business that can scale, then you need to find an unrealised opportunity that others have missed.
The key 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 demonstrates that a solution is desperately needed whilst also showing that the market already exists. You don’t have to create a customer base from scratch, so you can turn your full attention to creating the best product or service.
This is the foundation on which I built Circuit. I saw that delivery drivers were heavily dependent on technology, but were having to rely on products that 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 an opportunity to build a market-leading product that could truly add value.
2. Focus on unit economics
The simplest way to ensure you turn a profit is to focus on the unit economics and make sure they make sense.
Big picture thinking is great, but you should build your business strategy around making 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.
3. Charge from Day 1
You need to charge your customers from day one. It’s tempting to initially offer your service for free to draw in new customers and get feedback, but charging from the start gives you a crucial advantage.
Paying customers will give you very different feedback to those using the product for free. You need their brutal honesty to refine your offering and make it as user-friendly as possible.
Making your customers pay also indicates the long-term prospects of your business. Nothing tells you if a customer would be willing to pay for something like actually asking them to pay right now. If they’re not, you can immediately work out why and address it before it’s too late.
4. Identify the problem behind the feature request
Customers will come to you with feature requests but you need to focus on the root problem, not their solution. A customer will generally be unable to tell you the best way to solve a problem but their feature request gives you key insight into how your service can be improved.
You need to understand why this particular feature is requested and what problem it is attempting to solve – then come up with the best possible solution to that problem.
5. Paids ads are your friend
Paid ads have been critical to Circuit’s journey. 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 and 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.
Starting a business young can be challenging but it’s a great deal more possible than you might think. You don’t need a thick book of industry connections or an MBA to do it, just a great idea, resourcefulness and focus.