LocalLiberty.com: Philip Barthelemy
Startup profile: Philip Barthelemy's DVD and video game exchange has just launched
Philip Barthelemy thought up the idea for his business on a rainy New Year’s Day. He tells Startups.co.uk how he’s put that idea into practise to launch Localliberty.com
Startup profiles go straight to the hub of the action by speaking to entrepreneurs who have literally just started up. We find out what made them decide to start their own business, how they got it off the ground, the obstacles they’ve overcome and the barriers they still face. We’ll look at their hopes and aspirations for the future, and then, in six months time, we’ll go back and find out how they’re getting on.
Name: Philip Barthelemy Age: 30 Business: www.LocalLiberty.com Type of business: Web-based urban marketplace for DVDs and video games Start date: July 2003
When did you first decide you wanting start your own business? Starting a business was seen as a natural step in my personal professional development. I had beforehand looked at different business ideas but most of them either involved high initial capital or an extensive contact base of established players.
Tell us about your business www.LocalLiberty.com is a web based exchange facilitator to enable members to exchange on a “face-to-face” legal level their DVDs and video games. It is present in 74 cities worldwide and makes use of information technology such as email and database structuring for members to also directly meet other members.
Was it your first business idea and where did it come from?No, it was not my first business idea but is the one I felt comfortable and motivated to go further with. The idea came on the 1st January 2003 where on a rainy London day, a friend wanted to rent a DVD. The coincidence was that this friend had over 50 DVDs already sitting in his living room not being used and hardly seen them more than twice.
I thought, ‘what a waste of capital’. They belong to him and he can’t make use of their value! So came the idea to set up the website to facilitate a legal secondary market with choice and convenience. The way to structure the website with a database along the tube/metro stations came the next day.
Was your decision to start a business inspired by any other companies or individuals?In general, I would say, it is inspired by any individuals that set up a successful company. Two companies coming straight to my mind are eBay and Napster.
What makes you think there’s a market for your business?People are accumulating DVD and video games at a very fast pace. Their value is totally static where potentially it could enable people to spend more on other items while getting more choice, and meeting their neighbours and new friends.
Once you’d decided to start a business, what did you do first? Write a business plan – it is the first step before any financial investment. It enables you to research the market and refine your business model.
What research did you do? Within the business plan, industry and competitor analysis was seen as the most important. Also, basic market research about the concept was undertaken.
What advice did you seek? I approached Centa, which is linked to the DTI for providing help to small businesses. I also registered for an eCommerce course to get more aware of the general business issues. Centa provided a realistic view on crucial aspects, such as the economic model and the marketing positioning.
What other help did you get? Not necessarily help but more personal views from friends that are working in similar fields.
Does the government need to provide more help to people trying to start a business? I would say the government could be more transparent in terms of funding and grants. It is very difficult to get any financial support without giving away control of the development of the idea or having a special background that fits governmental views on the subject.
Talk us through the process of writing your business plan. I did not get much help in writing my business plan. I was already familiar with the process as I had written or worked on some before. Also, most of the structures needed are pretty much available on the net with a bit of research.
How useful has your business plan been and do you think you’ll stick to it as your business begins to grow?
The business plan is very useful in setting a core reference and seeing the critical issues or flaws of a business idea. I believe it will have to be adaptable in future, especially in such a changing and dynamic field as Internet and information technology.
How much did it cost to start the business? Sorry this is confidential. I would estimate the overall value of the work done until now to be over £10,000. The business required an initial investment to fund the development and costs associated with the research. It also requires maintenance funding until any cash is generated from the business. More importantly, the intangibles such as your own work is where the value is, not necessarily in the cost.
How did you fund this? Part of the business has been financed with my own funds and external funding. Also, much of the work you put in at the beginning can not be expected to be remunerated. So this also accounts as capital invested.
Similarly, how are you funding your running costs until the business takes off? Running costs have been budgeted accordingly for a certain period of time to see whether the business, as perceived in the market research, will take off. You also rely a lot on your own flexibility to squeeze as much as possible the costs at the beginning.
Have you made any provisions for business not being as prosperous as expected? Yes, this is included in the budget where the business can run for a predefined period including the running costs. The worst case is to stop the business at a loss that can be expected or sell it.
When did you stop working and how have you found the transition? I stop working by the end of November 2002. You have to organise your day differently and start getting out of a certain comfort zone and bring things together by yourself.
Are you working from home or from premises? I try to do as much work as possible from home. The main reasons can be associated to cost issues, especially in a conservative venture. Premises are expected given the financial condition of the business.
How many hours are you working at the moment?At the moment, I tend to work on average 60 hours a week. This tended to be closer to 80 hours around the peak research and development period.
How are you managing your day and what steps have you taking to ensure you’re able to get everything done without working around the clock? You have to prioritise and set yourself limits by managing your own expectations and not being overtaken by stress and fear of the unexpected.
What about staff, is it just you? It is not just me, but lets say that I work more on a partnership level by outsourcing critical tasks I can not do myself. Given the development of the structure, I expect to take on staff.
Is the amount of red tape that comes with taking on an employee something that concerns you? To some extent yes. You need to make sure the new employee is aware of the many different daily issues of your business. Usually friends of friends are a good source.
What marketing and advertising have you done so far? The site has just been registered on the main search engines and flyers are starting to be distributed around London. Press releases are also expected in the near future, while word of mouth is a good way to get initial feedback to start with. The site is still in its development phase and more budgeting should be allocated in the future.
Where do you hope to be in 12 months’ time? In 12 months time, the concept will have proved to be successful or not. So, either operating at a slow pace with a very specific proposition or being the local ‘one-to-one’ marketplace of reference for urban citizens and services.
What are the main obstacles to growth? Maintaining a healthy and disciplined budget. Also, I need to reach a certain critical mass to provide sufficient extra funding to reinvest in the time.
How do you plan to overcome these? By planning ahead to set up an environment that will help us ride the difficult times and be fully reactive for the growth times ahead. Projected income and cash flow statements are also based on different scenarios. Also, basic common sense and a prudent attitude are needed.
Tell us about your website My actual business is the website – www.localliberty.com . The important aspect is to make sure you get the most professional job done within your budget constraints. That means also being aware of your own strengths and weaknesses and acting accordingly.
What are your main ambitions, to make a lot of money or enjoy what you do?First, you enjoy what you are doing. For sure, you can expect money for the hard work and the business development.
What have you found difficult about starting up and what do you wish you’d done differently? I believe it is about trade off. Starting without a big amount of capital and the risk associated to the success of your venture is one. Being able to handle your personal and financial life requirements is another, especially in London. I would not necessarily change anything at this stage. I would have nevertheless been looking at people around me that could have been a bit more supportive and understanding.
What skills and personal characteristics do you need to start your own business? Courage, originality, resistance and money.
So what advice would you give to anyone thinking of starting a business? To just do it, as it is worth the personal experience. Don’t do it just because you fancy a change of environment or think it looks good, but if you’ve done your research, and made up your mind, then go do it.
Thanks a lot and the very best of luck. Will you come back and tell us how you’re getting on in six months’ time?
Yes, I would be more than happy to tell you what has been happening in six months’ time.
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