Early in my career, I was fortunate enough to get the opportunity to work at a corporate ‘start-up’. I was the second person on board with the mission of launching a direct life insurance offering for a well known direct vehicle insurance brand. There was a huge amount of work that went into getting things off the ground, but in little to no time, there were thousands of policies on the books. As head of sales at this business, I took a fair share of credit for sales growth. I did, however, underestimate the massive contribution of capital, human resource, IT infrastructure, brand and experience brought to the table by the business owner (the largest insurer in Africa).
It was not until I launched my own business (CompariSure), that I fully appreciated how challenging it is to create something from scratch. It felt very much like being trapped in the middle of a desert. Every day was a fight for survival and the prospect of escape never seemed any closer, regardless of the kilometres covered.
Three and a half years on and CompariSure is finding its feet. We’re rapidly approaching the million user mark, having sold close to 20 000 insurance policies in the process. During the darkest days, I promised I would share the tough realities of founding a business, once light started to emerge at the end of the tunnel. Here are the five biggest challenges I faced and how I overcame them.
Letting go of an idea in the persuit of your 'WHY'
When CompariSure was just an idea, I was completely convinced of the path to success. I was going to build an aggregation website helping people find the best deal on insurance – people would flock in by the thousands. What I failed to realize was how complex the market for high-end products was (it was almost impossible to compare) and how tough it would be to integrate with insurer legacy systems and processes. As a ‘side bet’ to the broker aggregation tool, I built a chatbot framework. As it turned out, my original idea targeted the wrong market (high end) with the wrong technology platform (a website).
As an entrepreneur, you have to have a lot of confidence in what you are doing, but you also have to be comfortable with lack of clarity and making huge mistakes. Having a clear mission statement provided a guiding light through the pivots of early startup. Our mission – improving access to quality financial products – didn’t change, despite us changing our core products, target market and technology.
Knowing your limits
It took more than six months before the first employees joined the business. Before they joined, I was the developer, IT support, the marketer, the content writer, the salesman, the administrator, the compliance officer, the accountant and the guy at the promotion stand. The learning load was exhausting – five new coding languages, Google and Facebook ads, Photoshop, IT infrastructure setup, FSP registration and much, much more.
After six months of relentless work, the business generated its first revenue – less than half my prior salary. At the time, it felt like all my efforts were being absorbed into a black hole. Furious effort without corresponding results is the perfect recipe for burnout. The way I avoided emotional exhaustion was to take a step back and reflect on broader progress, not getting too absorbed with the never-ending job at hand. Taking pride in building out a solid foundation helped keep my motivation levels high and stave off burnout.
You cannot do this alone
It’s easy to take the support of a colleague for granted. Asking someone for their input on a decision, delegating a task to someone better skilled or your junior, sharing laughs and venting your frustrations are not at your disposal when you’re on your own. Additionally, people that used to vie for my attention whilst I was a corporate decision maker disappeared. I very quickly learnt who my real friends were. Close friends and family were essential to keeping my sanity.
Another big help was asking a few respected friends to act as a ‘provisional board’. I reported to them on progress on a monthly basis. This allowed a springboard for ideas and decisions as well as helping to formulate the businesses direction. As an added bonus, one of the provisional board members, Matt Kloos, joined as a co-founder just over a year after launch. The provisional board structure gave us an opportunity to formulate a vision for the business and develop a working relationship before he took the leap and left his job at an investment bank in London.
Prepare for financial strain
I had saved a substantial amount prior to starting CompariSure. I had enough in my bond to cover personal expenses for almost 60 months. But carrying the expenses of a new business over and above personal expenses, shortened this runway to less than 2 years – decreasing with every major expense and employee onboarded.
Our family cut back to a student lifestyle. Going out for supper and traveling were a thing of the past. It was hard not letting the financial stress derail the family and the business. As the maxim goes, it costs double as much and takes twice as long as you think it will to start a business. To overcome financial strain, you need to properly prepare before you leap, be extra careful with early expenditure and bring on investor support if you can.
Work when you are productive and stop when you're not
With all of the above challenges, it was especially difficult to maintain a healthy life balance. I spent traditional office hours (9-5) making sales calls and doing admin, whilst coding and creating marketing campaigns late at night and over weekends. Socializing took a big knock due to the time and financial cost that often accompanies social activity.
I found it hard to find time for leisure activities without compromising on progress. The way I overcame this challenge was to balance work tasks so that any one task didn’t wear me out completely. When I got sick of the sales hustle – I’d “take a break” and spend a day coding. When I got sick of coding, I’d get creative and develop a new marketing campaign. Tactical task changes allowed me to replenish energy whilst still being productive.
Exercise was another life saver. Long runs got the endorphins flowing and released pent up frustration. Kite surfing was a way to reconnect with nature, get the adrenaline pumping and put life into perspective. Exercise is one of the best investments of time when you’re trying to get a business off the ground.
Starting a business from scratch is not for the faint at heart. Whilst the early days built character, I would certainly not describe them as enjoyable. Everything changed when we started to gain traction, secured investment and brought new talent on board. As things stand, the sacrifices made were definitely worthwhile, but I do have a new found appreciation for how wrong things could have gone had the dice not rolled in my favour.
If I had things over, I would have tried harder to find a co-founder to join on day 1, although the time spent working on my own was important for my personal development. For all those planning to embark on the entrepreneurial journey good luck! And to those who have taken the leap and seen their vision through – double high five 🙌