If you’re a digital entrepreneur looking to start a new venture, money is everything. Many business look to cloud computing for the low cost flexibility and scalability the technology offers.
Databax provides cloud hosting services to UK businesses of all sizes. As an SME catering to the needs of other SMEs, they understand the hardships faced by small businesses.
In order to find out how cloud computing has impacted UK tech startups, Databax has gone straight to the source to ask CEOs to share their experiences and insights.
First up we have Hamish Lawson, founder and CEO of DaDa, a sustainable bamboo underwear company based in London that relies on cloud computing to compile and share data.
What made you decide to start the business?
I set up DaDa with some help from the Prince’s Trust after spotting a gap in the market for good quality stylish underwear that was made responsibly, I didn’t want to wear a garish pair with a writing all over them. It was always important to me that any product I sold was sustainably made which is why our materials are ethically sourced and we provide our workers with a living wage, meals and education.
Did you face any difficulties when setting up the business?
One of the biggest difficulties was having to order certain quantities of fabric without having made any sales. For an SME this a big cost, but because we only use sustainably sourced material it was an even bigger financial outlay. We are still a small set up, so will always be problems matching up the front-end and back-end of the business.
What role does cloud computing play in your business?
Cloud Computing allows our members of staff to remote work (currently our PR manager is out working from Bali!). Without it, it would take twice as long to share information and as an SME we don’t have time or money to waste. We also use it for the more traditional reasons such as having better (if not unlimited capacity) and a superior document recovery system.
Has cloud computing aided the growth of your business?
Certainly, by reducing costs, it has allowed us to focus budget on growing the business through improving the website and marketing.
What advice do you have for others looking to set up a digital business?
- Think outside the box to increase cashflow. We are an online underwear brand, so we have to pay upfront for our fabrics and manufacturing before we sell. This creates a cashflow negative. To try and counteract this I created the Quarterly Underwear Club – here customers pay a sum every year and get underwear delivered to them every three months. This way we get paid upfront and have a better idea of the number of products we need to manufacture and ship months in advance, increasing efficiency and accounting.
- Care about your workers. DaDa prides itself on being a responsible brand. Our underwear is manufactured in Sri Lanka, and all the workers are not only paid the living wage, but also are given free meals, transport and education. Not only does this mean we can feel proud of our product and how it was made, it also makes us stand out from other underwear brands who work in a much less ethical way.
- Ensure you can measure you social media activity. I think we can all agree that social media is a fantastic tool for creating a brand voice and raising the profile of a business. However, it can also be incredibly easy to spend hours lost in it. It is therefore important for an SME to focus on those with the highest ROI. I use Google Analytics to assess where the traffic to our site is coming from – and focus marketing time and money accordingly.
Finally we have insights from Az Jassal, the CEO of Book Abacus. Book Abacus is a UK-based technology startup that could not exist without cloud services. The site went live in January 2015.
What made you decide to start the business?
I decided to start Book Abacus because I had worked upon data projects involving books before and knew how much potential there was (I use to work for the Book Depository, acquired by Amazon and the publisher Macmillan). I was aware that while people were touting ‘data science’, not much had been done to apply it to books, so I wanted to do ‘book science’ and knew it could be enabled by embracing big data technologies and the cloud. In my past I also worked in banking (JPMorgan). I chose to do something with books over other spaces (e.g. finance) because book data returns good value, for example financial or social data goes out of date very quickly, whereas the book space does not change rapidly. This makes it more feasible to tackle when you have limited resources.
Did you face any difficulties when setting up the business?
I decided to build the business upon my core skill set, I’m a programmer, I’ve worked on small and large data projects (in e-commerce, publishing, banking and government) and starting Book Abacus was an opportunity to apply those skills on a problem that I was interested in and had the potential to ‘own’. Because I had the skill set and an understanding of the business, gained by working for others- I did not face the difficulties some startups go through, e.g. not being able to build anything before raising funding to hire people. Building a business on your skill set as opposed to the skill sets of others means you can get on with things from day one.
What role does cloud computing play in your business?
Cloud computing is vital to Book Abacus. It would not of been possible to build Book Abacus without external financing if cloud computing was not available. We use cloud services to gather book data, pricing and availability of millions of books around the world. While determining the feasibility of Book Abacus, I ran experiments to see how much it would cost to gather book data. I found that with a cloud services spend of £100, I was able to gather and analyse data about millions of books from all over the world. The value-for-money was incredible and determining how to appropriately leverage cloud services played a vital role in determining to go ahead with the venture.
Has cloud computing aided the growth of your business?
Our business is based on cloud computing and will leverage the key feature it provides: elasticity. This allows us to grow our cloud infrastructure as our needs increase, this can be either increasing the amount of data we collect or the amount of data we serve to users. It is up to us to work out how to orchestrate the utilisation of the cloud appropriately for our needs, and once we have done that we have an infrastructure that will grow with us. This is very different to the pre-cloud era, where rounds of funding would be required just to acquire capacity to keep up with growth.
What advice do you have for others looking to set up a digital business?
Embrace the cloud and leverage data to understand the world around you. Startups can either wait for data to be given to them, e.g. by users- which takes time, or can acquire data- which will eat into resources or can gather data about the world that will give them understanding of spaces and the ability to capitalise upon opportunities many never knew existed. The cloud is the enabler, be small, agile and fast. Get going doing interesting things!
We hope that the insights and experiences of these two entrepreneurs have provided you with actionable advice if you are embarking on your own digital venture.
Photograph by Damien Pollet