Steve Orenstein knows all too well the startup challenges of setting up a small business as he went head first into setting up his own IT support company at the tender age of 19.
“Having very little money to fund the business made things very difficult at 19, I would often have to use credit cards to get by and to help manage cash flow,” he said.
“Having had no experience in building a business, it took time to build up credibility where people didn’t care about my age and they focused on how I was able to deliver a service to them.”
Whilst running SMO Technology, Steve noticed that there was a need in the market for a cloud-based job management and scheduling tool that simplified the process of managing workers in the field. This became the philosophy behind Steve’s next startup, Connect2Field.
After just two years, Steve managed to secure first round funding by private equity investors in Australia and New Zealand, which allowed him to grow the business further. Steve says that developing a strong network is a crucial factor in securing investor backing.
“Develop relationships with people who trust you and you get along well with.
“When I raised my first round of funding I had already been in business for many years, so I had a good network of people and was also able to reach out to family and friends,” he added.
“Today, there are also many startup funds like Sydney Seed Fund which you can approach. This is a very good option in getting access to very experienced people who have been in startups before and can provide mentoring, along with funding.”
Investor funding allowed Steve to hire more staff but he wanted to avoid the expense of using recruitment agencies. Steve instead looked to social media, which he says proved to be a valuable tool for hiring talent and growing the business.
“I’ve got my own personal Twitter profile and anytime I’ve been looking for staff I’ve always tweeted about it, and someone who’s followed me has responded back, and said they’d be interested and would like to talk to me. I’ve made contact with them and gone from there and hired people through that.”
Having investors onboard meant that the company now had a board of directors consisting of specialists from various fields, effectively giving Steve access to a well rounded knowledge base.
“I had a board of directors at Connect2Field and would go to a monthly meeting and share my direction for the company. I would speak to each one of those board members on a regular basis to get advice. And I chose each of those members based on their experience in different areas of business. One was in legal, one was in marketing, one in sales, and one in technology.”
However, Steve says that learning what advice to filter was a skill he had to learn pretty quickly.
“It’s good to be open to ideas, suggestions, and advice from mentors and advisors. However, I’d also say that it’s very important to trust your own instincts and make decisions based on the information you have at hand.
A mere 12 months after securing investor funding, Connect2Field was acquired by Ireland-based global software-as-a-service vendor Fleetmatics, in a deal worth AU$6 million.
Acquisitions are a lengthy process and Steve says that maintaining the focus on growing the business during that period proved to be very challenging.
“There’s a huge amount of legal work, documentation, and due diligence that you have to go through. Your entire day is being sucked up by speaking with lawyers and the acquisition,” he said.
“Being as organised as possible in your business is vital to making that process go really quickly.”
Steve is now focused on his next startup, Zoom2u, a fast on-demand courier service that promises real-time tracking and delivery of parcels within hours. The business is expanding quickly, with plans to launch in Melbourne and Brisbane by the end of the month.
Steve says that his business journey over the years has taught him many valuable lessons along the way.
“I’ve always believed in making decisions based on what you think will deliver the best results rather than making a decision based on a mentor, who may only have a small view into what you are doing.
“The other thing to remember is that, being an entrepreneur, you will ride a huge wave with lots of ups and lots of downs, it’s good to remember this so that when you hit some hard times you keep pushing through and eventually you’ll be back up on top. Being able to ride the wave is vital to success, lots of people can’t handle riding the wave and may jump out too early.”