The Millennial generation (aged 18 – 34) is the most entrepreneurial yet. Millennials are increasingly turning to entrepreneurship as a career choice, with as many as 70% wanting to start their own business, according to Deloitte’s Millennial Survey 2015. Technology has removed many of the barriers to setting up a business. On the flip side however, research from Harvard University shows that 75% of all start-ups fail. So, what is the reality for Millennial entrepreneurs? What are the qualities needed for success? And is the business ecosystem doing enough to support today’s company founders?
Bailey Fisher Executive Search talked to three Millennial Founder/CEOs, Benedikt von Thüngen of Speechmatics; Rosemary Francis of Ellexus and Ed Rex of Jukedeck, about what motivated them to take the entrepreneurial path, the challenges of maintaining and growing their business, and what the future holds.
Benedikt von Thüngen is CEO of Cambridge start-up Speechmatics, the world’s most accurate and low cost, cloud-based speech recognition service, which converts audio to text, making the information searchable and interpretable. A serial entrepreneur with a Master’s degree from the University of Cambridge, Benedikt started his first company in 2006 at the age of 20. Speechmatics officially launched in 2014, and is cash-flow positive, having not taken any external investment. The cloud-based service currently supports US and British English, with more than 25 additional languages in the pipeline and the aim of expanding into every language across the globe, under the tagline transcribing the world.
Rosemary Francis is Co-founder and Managing Director of Ellexus, an established Cambridge-based company providing software to the chip design and bioinformatics sectors. With a PhD in Computer Architecture from Cambridge and a background at CSR and Intel, Rosemary founded Ellexus in 2010 to make it easier to install and manage Linux applications in the high-performance computing industry. Under Rosemary’s leadership the company has grown to serve customers such as ARM Holdings and Cancer Research – Cambridge Institute as well as a range of large international customers based around the world. In 2011, Rosemary was a finalist in the Shell LiveWIRE Young Entrepreneur of the Year and last year won the inaugural Techpreneur of the Year Award.
Ed Rex is the founder of Jukedeck, a London-based start-up spearheading the next generation of music creation. Having studied music at Cambridge, Ed developed software that writes original music on its own, creating unique soundtracks for videos, online games and other applications. Jukedeck has a team of eight, with a background in music, academia and at Google. The company raised seed funding in 2014 from Cambridge Enterprise & Cambridge Innovation Capital, and earlier this year won the LeWeb start-up competition in Paris.
What or who motivated you to set up your own business?
Rosemary “I have always wanted to start my own business, but I also really enjoy working with technology so I did a PhD in microchip architecture at Cambridge University before working for some large and small tech companies in the area. This gave me a good range of experiences in academia and industry from which to launch my business.”
Benedikt “It has always been clear to me that I wanted to set-up and grow businesses. One motivation is also to prove many people wrong that have doubted me in the past!”
Ed “In my case, the idea for the business sprang from the idea for the technology. My background is in music, and an interest in maths and technology got me thinking about how you could get software involved in the creative process, and what would be possible if you managed it. I started working on a prototype for a system that could compose original music, and once it looked like it was going to work we refined the business model and decided to concentrate on providing music for video.”
What problem does your technology solve?
Ed “The amount of video being created all the time by amateurs and professionals is shooting up, but finding music to accompany your videos is tricky – royalties are a minefield, scouring audio libraries takes ages, and everyone ends up using the same tracks. Our technology lets users take control of the music in their videos – you can create and download original, royalty-free music, whose style and features you control, at the touch of a button.”
Benedikt “We address many of the problems associated with speech recognition – poor accuracy, high cost, and difficult implementation. At the same time we are constantly finding new applications for speech recognition, either directly or through partners. Please contact us if you have a good idea!”
Rosemary “Our first product was aimed at the chip design industry and was designed to solve problems with deploying and tuning the CAD tools, but we now work across various high-performance (HPC) and scientific computing sectors. Our tools solve a range of issues from installation problems to IO bottlenecks and performance problems.”
“We have a new product coming out this year which is designed to solve storage load balancing problems on big compute clusters by monitoring application IO, and it is already proving popular across the different HPC sectors we work in. We are solving a major problem for IT managers who have to support many users sharing storage resources.”
Has the socio-economic climate been a factor in your decision to become an entrepreneur?
Neither Benedikt, Rosemary nor Ed saw this as a direct influence.
Entrepreneurship is a widely accepted career choice today, and technology has removed many of the barriers to starting a business. Maintaining and growing a business is where the challenges occur. Do you agree?
Ed “Yes, it seems to me that it’s definitely easier now than in previous generations, because of two things: the free flow of information and the rise of online networks, marketplaces and tools. If I want to set up a business, I just have to open my browser to find info on market demand, potential competitors, legal requirements and a heap of other things that would have taken serious research fifty years ago. And, once I know what my business is going to be, I can use online networks and marketplaces to find co-founders and investors, and then use tools and APIs such as site builders and user database APIs to build the foundations of my product incredibly easily, letting me focus on the things that set what I’m doing apart. In short, there’s much less reinventing the wheel than there was in previous generations.”
Benedikt “Yes, this is my fourth start-up over the last 9 years and it has become easier to set up a business. In fact it is too easy. The ready availability of start-up loans, accelerators and the “hip” culture of having a start-up means that today you can set up a company with little pressure. Often it is many months before you find out if the company is going to be successful or fail. Back in 2006/2007 there was a lot less support and you had to develop and validate your idea much, much faster as there was much less money and more competition for it. With a start-up that I was involved in before Speechmatics, I was forced to make a first sale and thus the concept (we did not even have the product ready) was tested and “designed” by the market. If the idea is any good then you refine it. If it is not, drop it. Early stage businesses need to be challenged and have to fail fast!”
Rosemary “I think the information and support available to those starting a business have certainly improved. Technology has changed the way people run their business and it has opened the door to a lot of new types of business, but I don’t think it has made it easier to grow and run a business. Social media is difficult and time consuming to use effectively and there is no replacement for speaking to someone face-to-face. I spend a lot of my time managing staff in Cambridge and visiting our customers around the world and that will always be important.”
What qualities do you need to make a success of running a business?
Benedikt “Vision, ability to sell, execute, speak to the market (and listen).”
Rosemary “Perseverance is key to being a good entrepreneur. Everyone makes mistakes and everyone has projects that don’t work out, but unless you are prepared to have another go and to keep trying then you won’t get anywhere.”
Ed “There are no absolutes here, but I’d say a combination of vision, persuasiveness and resilience would serve you well.”
A recent Deloitte Millennials Survey found that Generation Y respondents want businesses to focus more on people and purpose, rather than just profit and products. What are your thoughts on this in relation to how you run your business?
Rosemary “I think the link between happy staff and happy customers is now firmly established. Taking care of the people who work for you is the best way to grow a talented team and make the best products, particularly in the tech industry. At Ellexus working late is the exception, not the rule. I’m much happier when I hear that my team members are doing something fun in their spare time. A good work/life balance is critical in getting the most out of people and maintaining a really great place to work for everyone, including me!”
Benedikt “We have a strong focus on open communication within the team, many team events and perks, and we try to include and update all employees on what is going on in the business.”
Ed “In my experience, users want great products, and employees want great products and great culture. Get those things right and everyone’s happy. Having a great culture, of course, will include maximising social impact, getting work/life balance right and focusing on employee satisfaction.
On the product and social impact front, we’re focused on building a product that will help a large number of people and democratise the process of creating music, taking a process that’s currently hard and making it easy.
On the work/life balance front, we work sensible hours and have decent holiday allowance. It makes no sense to be working all hours of the day all the time – we do this when the product demands it, but the rest of the time it’s pretty clear that people work better when they’re happier.
And on employee satisfaction, we have weekly drinks, go on the occasional away day and, probably most importantly, we’re all musicians, so we’re all driven to build a great music product and spend most of our down time talking music!”
Is the business ecosystem doing enough to help start-ups and young entrepreneurs?
Benedikt “Yes, in fact too much, as highlighted earlier. The only pain points are banks, in particular with setting up accounts and simple account management. Start-ups need access to a dedicated business banking team where you can talk to the same person every time, who will give you advice.”
Ed “Yes, probably. Lots of big businesses actively try to work with start-ups, which can lead to great partnership opportunities. And, ultimately, start-ups are, you hope, big businesses in waiting – so it’s the business environment in general that makes any start-up’s existence possible.”
Rosemary “There are a lot of brilliant programmes available to help start-ups and entrepreneurs of all ages, but I don’t think it is ever possible to do too much – there is always room to do more. There is a lot of support out there, but it is very focused in some areas and very hard to access in others. The path into business is very well lit from the STEM subjects, but outside of those areas, in many senses of the word, the information can be harder to find. Diversity is something that the nation needs in the start-up scene just as much as in other areas of the economy and society.”
What does the future hold?
Ed “For the industry in general, lots more people working in start-ups. When we graduated, start-ups were a fringe career choice – now most people we know are getting involved in the sector. The start-up world is one of fascinating ideas, endless potential and ever-increasing numbers of jobs, and it’s going to attract more and more talent in the years to come.
For Jukedeck, we want to create tools and products that revolutionise the way people interact with music, and we’re focused on that mission.”
Rosemary “We are currently focusing on the release of our new product, Mistral, that will change the way people manage shared storage in scientific computing.”
Benedikt “In the short term the company is growing rapidly – we are a team of 16 today, but will be 20 by August. Longer term, we are hoping to build the next billion dollar Cambridge-based company!”
Bailey Fisher Executive Search is an independent executive search firm specialising in building the boards and senior management teams for ambitious companies in technology, life sciences and healthcare. The company operates internationally from offices in Cambridge and London. www.baileyfisher.com
This article first appeared in the September 2015 issue of Cambridge Business Magazine.