The Entrepreneur: Andy Cockburn, Mention Me
The referral marketing guru reflects on the importance of doing less, the value offered by SaaS tools and the benefits of trying to "kill" your business ideas...
Founder: Andy Cockburn
Company: Mention Me
Description in one line: Mention Me provides online businesses with a referral marketing platform and enables them to turn word-of-mouth into a meaningful marketing channel.
Previous companies: Andy was UK managing director of Homeaway, the world’s largest marketplace for holiday rentals; and founder and CEO of Wigadoo, a technology start up in the social payment space. He started his career at Bain & Company.
12 month turnover target: £4.5m
Describe your business model and what makes your business unique:
- Our refer-a-friend solution allows online businesses to run a referral programme just by adding a few lines of code.
- Our unique features result in referral driving 10-30% of customer acquisition; including the ability to AB test everything and for customers to be able to share using their name.
- We work on a cost per acquisition basis so we only make money when we successfully deliver new customers to our clients.
What is your greatest business achievement to date?
Growing a team from three to 30 people in the last three years… and funding it out of cash flow.
What numbers do you look at every day in your business?
- The number of referrals we’ve delivered for our clients: I want to know how well we’re performing for our customers.
- Net Promoter Scores that have come in in the last 24 hours: I want to know how happy our clients are, and if they’re not delighted I want to jump on it immediately.
- Our team motivation score: we use Motivii to track this on a weekly basis because we believe that keeping the team happy and motivated is the key to our success.
To what extent does your business trade internationally and what are your plans?
We currently operate referral programmes in 14 languages around the world and operate in 100 countries. At the moment all of that is served out of the UK but we have plans for a number of international offices in the next couple of years.
Describe your growth funding path:
We’ve made a very deliberate choice not to raise money until the time is right. We built the core product and started working with our first 20 clients without raising any money.
After 18 months, we raised an angel round and started growing the team. The angel round has provided us with a buffer but we continue to operate the business on a profitable basis, growing out of cash flow. From July to December this year we’ll have grown from 25 to 35 people.
We may raise in the next year or so in order to accelerate growth, but it’s been the right decision not to have raised a larger round up to this point.
What technology has made the biggest difference to your business?
We use so many different SaaS (software as a service) technology products across the business. The number and quality of tools now makes the start-up journey markedly different compared the way it was even ten years ago.
Xero and Futrli have meant that we haven’t had to hire a full-time accountant yet; Motivii and CharlieHR have meant we haven’t had to hire a full-time HR manager yet; Trello and Slack have made it easy for us to work with external contractors seamlessly; Pivotal Tracker keeps the engineering team on course; Amity helps us with portfolio management – the list goes on…
All in all we work with more than 20 different providers of SaaS technology, but we feel that picking the best in breed far outweighs the cost of having so many different technology partners.
Where would you like your business to be in three years?
I’d expect us to be operating sizable teams in multiple markets with multiple products, and with revenue north of £20m.
We’ll be focused on maximising the opportunity in trust marketing. There’s been fascinating research by Nielsen showing that trust is declining across most marketing channels. The one channel that bucks the trend is referral from a friend.
When a customer refers a friend, the trust that the customer has in the brand is transferred to their friend immediately, so that they are ready to buy. We’re developing new channels and products that will help brands to maximise trust and the benefits of having customers who trust them.
What is the hardest thing you have ever done in business?
Closing down a start-up. I took the decision to turn down funding and close a start-up where we couldn’t see a path to success without raising considerably more money than was available.
Closing down a start-up is painful, but it was absolutely the right decision in the long run both for the investors and the team.
What was your biggest business mistake?
I briefly joined a start-up without enough due diligence on the company or the founders.
Anyone joining a start-up of less than 50 people should be able to have an honest conversation with the founder in which the founder is willing to openly share data about how the business is doing. If they’re not willing to do this, it probably means they’ve got a culture of not sharing with the team or the business isn’t doing well. Both should set the alarm bells ringing.
Piece of Red Tape that hampers growth most:
Not having a universally accepted set of data security and data protection requirements across large enterprises.
Ensuring that we meet the necessary standards is very important but every large business has a slightly different and very lengthy set of requirements. We’re ISO27001 certified and have never failed to meet a client’s requirements but it takes a lot of time to go through the process each time. (If there are any budding entrepreneurs out there, there is a great business opportunity in solving this!)
What is the most common serious mistake you see entrepreneurs make?
Raising too much money too early. If you raise too early, you’ll spend the money (which is effectively your equity) potentially before you’ve got genuine product market fit. It isn’t very fashionable to say it, but going slower in the first couple of years to ensure you genuinely have product market fit is likely to result in a better outcome for the entrepreneur.
Pivoting a business is a great way to keep a business alive, but every pivot is very expensive for the entrepreneur and so if you’re going to pivot, ideally you’d do it before you raise money.
How will your market look in three years?
We’re playing in the marketing technology space which is a bit like the wild west of the online world at the moment. We’d expect lots of consolidation of businesses in the coming years.
We also expect marketers to be talking a lot more about trust marketing and thinking about how to maximise trust in their customer base.
What is the single most important piece of advice you would offer to a less experienced entrepreneur?
Spend the first 12-18 months trying to kill your business idea. You need to make sure that your idea has the legs to make it all the way. You should spend your time trying to disprove your hypotheses as to why it’s such a good idea. If you can’t kill it, you know you’re onto a good thing. If you do kill it, you’ve saved yourself a lot of pain further down the line.
A cold water swim on a frosty winter morning as the sun rises. Nothing is more life affirming (even if you do get some odd looks).
Executive education or learn it on the job?
I’ve done both and they’re good for different things.
I launched my first start-up out of business school (INSEAD). Business school helped me to think big, taught me how to evaluate ideas and provided access to a great network of people.
But no matter how much you study entrepreneurship, you can only learn to be an entrepreneur by doing. You never learn more rapidly than when running a start-up.
What would make you a better leader?
It’s amazing how the founder/CEO role seems to change every few months. You start off as a team of one or two doing everything, and then gradually bring in people around you to do different bits of what you were doing better than how you were doing them.
Ultimately I see it as my job to try to make myself redundant and to have everyone else in the team doing an awesome job. As CEO it’s often hard to let go and I constantly need to be telling myself to figure out how to be doing less.
What one thing do you wish you’d known when you started?
As the business grows, it doesn’t get any easier!
One business app and one personal app you can’t do without:
Personal: Castro, for podcasts
Even though it’s a few years old the book I find myself consistently recommending to would-be entrepreneurs is The Lean Startup by Eric Ries. I love the test and learn approach.