How to build a successful tech startup
Here’s my take on Swiftkey co-founder’s comments at Startup Grind, January 29th
I will start by saying that for a technology entrepreneur I found Ben Medlock, co-founder and Chief Technology Officer, Swiftkey, refreshingly honest, humble and grounded. Given the criticism the technology scene has come in for, particularly Silicon Valley, it is good to know you can build a successful company, attract over $20m in investment and have an application on 50m Android devices, but still retain a good sense of humour and humility.
In listening to Ben at the Startup Grind event I picked up several key themes for any entrepreneurs, which have probably been heard before, but there is no harm in repeating them. He may not have articulated his thoughts in exactly these terms, but below is how I have interpreted his comments….
Have a key insight and know you are solving a real problem
When Ben was asked what motivated him to start Swiftkey with co-founder Jon Reynoldshe said he wanted a tangible problem to solve. Perhaps that is an understandable answer from someone with a technical background, but it underlines the difference between addressing a real need and simply producing a clever technology. The Swiftkey team was able to identify a real need, thanks to a key insight, namely that many smartphone users struggled to type using standard keypads. However, Ben didn’t just describe the practical frustrations he also talked about enabling users to get their thoughts down more easily. So Swiftkey is not just solving a practical technical issue, it is appealing to a deeper, instinctively human desire to communicate…something we can all understand.
Be focused and own your space
Ben referenced a variety of different areas that Swiftkey could have explored – for example voice. However, Swiftkey has stuck to its Artificial Intelligence heritage and Ben believes this has been essential to stay ahead of the competition, especially the bigger players…that and a “healthy” dose of paranoia! Consequently, Swiftkey has set out to own the keyboard, which it sees as the portal to the smartphone. For any start-up this is sound advice. Being confident of your core proposition and unshaken despite the presence of much larger competitors is all part of staying true to the course you have laid out.
Have a big hairy goal
Everyone knows this, but does every start-up own up to such an ambition? If you are going to set out to create a company that will become a world-beater then surely (even if you don’t choose to admit it publicly) internally you need to think in these terms. For Swiftkey their big hairy goal is becoming the most used keyboard in the world. In 2012 it signed its first OEM deals. By 2014 the company had licensed its technology to between 250 and 300m devices underlining what can be achieved with the right focus and ambition.
Create a consumer story to drive growth – don’t worry about revenue
One of the most interesting insights concerned Swiftkey’s approach driving engagement with the handset manufacturers and weighing up the best approach to encourage downloads. As an app vendor the obvious path would have been to concentrate on the ‘free’ version of the product. Although the beta version was released to a small audience for free within a matter of months Swiftkey took the brave decision to encourage adopters to buy the paid version, because they wanted to motivate the handset manufacturers to engage with them. By creating a consumer story – namely that even in its infancy – consumers were prepared to buy the product, Swiftkey was able to turn a corner with the vendors.
Hanging in there is important
For me resilience takes many forms. For instance recognising mistakes but not allowing them to consume or derail you. When asked “what would you do differently?” Ben was extremely open about the mistakes made along the way. For example he wished they had created fewer dependencies between different teams, so that they could have operated more autonomously. He also recognised the importance of referrals to maintain the calibre of new recruits – something he is trying to rectify now. Whatever the mistakes you didn’t get the feeling the team had become overwhelmed by them, rather it acknowledged the issues and learned from them.
“Hanging in there” was also vital to ensuring the company secured funding at important moments. Having already been awarded a first grant by the (then) Technology Strategy Board (now InnovateUK), the company applied for a second grant through the TSB’s competition scheme. They were rejected twice and could potentially have halted activity if they had not received the funding at the third attempt, but they persevered. Similarly, they spent 12 months trying to convince the handset manufacturers to engage with them, who were dismissive of the need for another keyboard technology.
Be flexible, be nimble, be quick
Having initially given the app to beta testers for free, the team decided to deliberately ask the same group if they’d purchase the paid for version of the app. This was a strategic move, as outlined earlier, which paid off when it convinced the OEMs that Swiftkey did have potential. Going down the paid route was a risky move, but it was the right one at that stage. Then the company decided to return focus to the free model in order to drive downloads. As Ben highlighted the top paid apps downloads get 3,000 a day, whereas the best free ones might get 300,000. There was an understandable logic to this change of tack and again it was successful given the downloads they’ve seen to date.
In all it was a thoroughly enjoyable and insightful discussion. Thank you Startup Grind! It was great to hear the role that the (then) Technology Strategy Board played in supporting a UK start-up during its conceptual stages and hopefully we’ll see many more companies like Swiftkey in the UK as a result.