Interview with Graduate Entrepreneur 'James Harwood' founder of 'Student Tenant'
1) What’s your background and what has driven you towards starting your own business?
I studied English at Manchester Metropolitan Uni, graduating in 2006. I worked in sales for a while after graduating and then went into teaching. Whilst I was teaching, I had the idea of what is now StudentTenant and started working on this in my spare time. I got a basic version of the site set up and started to get some interest from universities in Canterbury. Teaching was a great experience and taught me a lot of valuable skills which are definitely transferable to business, however I always knew that I wanted to do my own thing. I like being in control of my work life in a way that only working for yourself can allow, as well as the notion that, the more I work and the harder I work will have a direct impact on how successful my business is. I spent two years qualifying as a teacher and then decided to make the jump. My business hadn't generated any revenue at this point, so leaving a secure permanent position and to risk everything on the hope that my business took off was a nerve racking decision, but I knew I had to do it.
2) Tell us a little bit about student tenant and what it sets out to achieve?
StudentTenant is a website which has been set up to help make the rental process easier and more transparent for students and landlords. It's a site which is based around tenant feedback in the form of ratings and reviews, which highlights good properties and landlords. We've worked hard to make it as landlord friendly as possible and landlords benefit from advertising and being able to demonstrate positive feedback. The ultimate aim of StudentTenant is to allow landlords high visibility advertising and students the ability to make a more informed decision when renting a property.
3) How did the idea come to you and what steps did you take to turn the idea from vision to venture?
I had the idea through my own rental experiences - not just as a student, but after leaving university and living in the private rental sector. After having the initial idea and not being technical myself, I paid a freelance developer who was a friend of a friend to create an initial version of the site. At this time, I knew very little about web development, code or internet start ups, so it took me a while to really understand the ins and outs of the development process. Once the site was up and running, I got in touch with the universities in Canterbury and outlined what the site did. They expressed an interest in seeing how it developed, which gave me a certain amount of confidence. After a while, the site had acquired several hundred reviews from students living in Canterbury and started to get the attention of landlords and agents. A university then expressed an interest in paying for some of the services that StudentTenant had to offer. At this point, I started to truly believe that I had a business on my hands and decided to take the jump and leave teaching. A month after I'd left, I pitched the business to a business angel with a student property background. After several nervous days waiting for his decision, he agreed to come on board and finance the company with an initial £25k. From that point on, StudentTenant has been a full time venture. We have recently just secured further funding and got another business angel on board, as well as taken on our first employees who are all recent graduates.
4) Did you seek any advice/guidance when you got started, if so, who was this individual and how did they help?
I went through the Business Link website and attended a couple of their local free seminars, which was helpful. The issue was that the business I was creating was something pretty new, so there weren't any case studies of other businesses in the same area or business plan templates etc. I met with a few people before I secured investment to talk about raising finance, all of which gave some good advice, however I had a one on one meeting with a guy called Liam Harris from Business Link who suggested the idea of pitching to someone with an interest in student property. I gave his idea a try and landed the investment, so have a lot to thank him for!
5) What frustrates you about the startup experience?
In terms of internet start ups, definitely finding good developers. We've just recruited our first in house developers and it's been a difficult process. I heard a statistic that for every 4 web developer jobs going, there is only one suitable applicant. When you're starting out and not in a position to offer the same salary that established and corporate companies can pay, you have a battle on your hands to recruit talented individuals. In terms of a more general start up sense, I think the difficulty in raising finance is the most frustrating aspect, especially when you're creating something which hasn't been done before. I know that the government has recently launched an initiative to provide loans to young people, which is a step in the right direction, however an average of £2,500 per loan is not nearly enough. It's quite hard to forecast how many users, how much revenue and ultimately how much profit you're going to generate when you have nothing to base it on. It's all about finding someone else who believes in your idea and is willing to take a financial risk, especially in the early stages. Banks won't even look at you nowadays unless you have a clear trading history, the grant system differs from region to region and in my opinion is quite lengthy and over complex, so discounting friends and family, the only route that aspiring entrepreneurs have is to raise initial finance through individual private investors and it's a really competitive market. Business angels are bombarded with business plans and ideas for The Next Big Thing, which makes it essential for anyone trying to raise finance to stand out. There needs to be more focus on the creation of micro seed funding syndicates which give aspiring entrepreneurs a start up budget of around £10k, along with the assistance of experienced business mentors to really see a lot of ideas get off the ground and turn into fully fledged profitable companies.
6) What support do you think should be given to young people?
As mentioned above, more access to finance, but also more knowledge about setting up a business and finance in general. School children need to be given more information about personal finance, business and money in general. Having worked at 2 schools I was amazed at how little this factored into compulsory education. If students are leaving school without a sound understanding of how raising capital works, even on a personal basis, then it becomes increasingly difficult for them to get a business up and running.
7) What advice would you have for budding entrepreneurs?
Do something. Everyone has a great idea of some product or service that will be unbelievably successful, but in my experience, the idea itself equates to about 10% of the actual process of getting a business up and running. If you're serious about starting a business, you need to make something happen. If it's a website or a mobile app, scrape a few hundred quid together and pay a freelancer over the internet to build you a prototype. Don't worry if it's still a million miles away from the finalised version you have in your head, what's important in the initial stages is to prove a basic concept. One business angel I met with told me that too many start ups suffer from 'perfection paralysis' and fail because of this, which I thought was good advice. Get a prototype built, try and get as many users on there as possible and listen to their feedback. You're in a much stronger position to raise finance if you can demonstrate you've already done something and people are already using your product or service. Similarly, if it's a physical product you want to create, manufacture and sell, again try to get a prototype built for whatever you can afford and then a few purchase orders from potential customers who can see the potential and want to purchase the finalised product. When you can demonstrate the potential of your service or product, even on a small scale, it becomes significantly more viable.
8) What’s next?
For Jakuta, we are launching a new service next month which we're really excited about. It's been in development since the beginning of the year, so we're very eager to launch it! We're also looking to expand our team again in the near future, which again is an exciting prospect. Obviously, setting up a business is hard work and there can be a lot of bumps in the road, but we're all really looking forward to how things develop over the next few months.