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Building a startup. Just how unfriendly is the world out there?

This is going to be a long article, so firstly I do apologise for that. But, this is something I have wanted to write for a long long time.

 Let’s start from the beginning shall we? In 2014 I had a small independent record label (Red Dragon Records) and it was a fun side project to have. In the same year it was announced that Youtube was to launch a new version of it’s platform called ‘Youtube Red’ This was going to completely destroy the independent music industry, (I won’t go into why, but if you have a search you will find plenty of information on it) Anyhow, I thought that if there was ever a time to compete with a market giant then now was it. We raised some capital, and built a platform called ‘Videscape’ and this is where the story gets interesting:

Accountants:

In the UK, for a limited company you really need an accountant to do your accounts, our tax code is one of the most complex in the world and following it is near on impossible. Unfortunately for you, Mr poor businessman, accountants have absolutely no liability whatsoever. If they screw up your accounts, you as a director are expected to know that they have screwed up and it is your responsibility to detect this and deal with it. We went through 6 accountants over 7 years:

  1. Accountant No.1 filed our accounts 9 months late resulting in significant fines and my company almost being struck off. Then had the cheek to bill us for it
  2. Accountant No. 2 Just plain ripped us off
  3. Accountant No. 3 Arrested and imprisoned for 2 years for blackmailing women to send him naked pictures on a popular dating app
  4. 4) Accountant No. 4, did our accounts, completely screwed them up and we didn’t realise until Accountant No. 5 reviewed them after Accountant No. 4 disappeared with all of our records
  5. Accountant No. 5 was just plain incompetent, claimed to specialise in the tech industry but had never heard of Amazon AWS
  6. Accountant No 6. The one we are currently with is actually very good. Unfortunately he is a Buy To Let landlord. As an actual entrepreneur and businessman, who creates, or enables the creation of new technology and new jobs, I despise landlords. Anyway, we will see how they do.

Tips to any government that would like to encourage actual business creation, rather than a rentier, extractive society (looking at you UK government)

  1. If a company has a turnover of less than 100k and Is not making a profit. Enable the simplest of accounts. We have spent tens of thousands on accountants over the 6 years it took us to become profitable, and that money would have been better spent actually driving the company forward rather than largely pointless reporting
  2. If a professional is required due to the complexity of the law, then make them responsible for their work. I am very good at what I do, but I cannot be expected to understand the full context of tax law to the same extent as a ‘qualified’ accountant and at the same time, be held responsible for their actions

Internet gate keepers. The giants

As any internet business will tell you, they almost all rely on one of the large internet companies to make their company succeed. Whether this be SEO for search, onsite advertising for website monetisation or Social media for promotion. Videscape, our video sharing platform relied on Google Adsense to monetise the platform. One day we received an email from Google telling us that our platform had been blocked for ‘Invalid click activity’. This means that we were blocked from Googles advertising systems for life. Just what is in ‘Invalid click activity’ though? Well, more often than not, it is a competitor going to your website and intentionally clicking on your ads. This then gets flagged by Google, and instead of them filtering out these clicks from the saboteur, they simply ban you from their network with no recourse to ever come back. This is how powerful Google is, they control some 90% of online advertising. IF you lose them as a growing website, it is almost certainly game over unless you can self-finance or find some alternative method of monetising your platform. Fortunately for us, we managed to pivot to a new concept and monetise it through subscription revenue. But, for many millions of small startups trying to battle their way up this is the death knell for them. A true Gatekeeper, if Google does not want you to succeed, then at a flick of a switch you’re gone.

PR companies

Unless you are extremely lucky, every startup needs a PR company to work with. We have been through our fair share that’s for sure. Whilst many are good, there are just as many that will rip you off under the guise that it’s not their fault they can’t get you any press. Now some may say, ‘well, yes they may not be able to get you press due to your product’ and this may well be true. But, my experience is that there are several types of PR

  1. The one that will take on anything, not do much and proceed under the guise that the press simply isn’t interested.
  2. The PR that will take on your work and just email it to a mailing list.
  3. The PR that will work hard, chasing and looking for opportunities.

From my experience, how can you spot the right one to work with? Any company that simply takes on your work no questions asked you need to absolutely avoid. Don’t go for the cheapest option either as they are most likely just going to do a mailshot and leave it at that. You want a PR that is going to ask you questions, and if they don’t think the opportunity is there for you then will turn you down.

Review sites

I am sure many of you, if not all have heard of review sites like Trustpilot. These sites really are the bane of the internet. A profile is created on the site by them, that if you don’t claim can be accessed and ‘reviews’ can be written on them with no evidence required. This of course, as a company then forces you to claim it to respond to the reviews that are made on it. Now, this would be fine if you could delete your company off of it if you decide that you simply don’t have the resources or man power to deal with this extra aspect, which many startups and small companies simply don’t have. We as a unique photo sharing platform that monetises content, has to be very strict on the criteria of imagery that we allow on the platform, and of course we have to be aware of fraud. This unfortunately does mean that we have to ban accounts for uploading stolen imagery, nudity or users who decide to divert bots to our platform to artificially inflate their views. Of course, what many of these account holders then do, is go straight to a review site and claim we are a scam, or a fraud with no evidence whatsoever (in fact given how many photographers get paid out daily there is a vast amount of evidence that shows we clearly are not a scam) Recently we have a review on Trustpilot literally stating ‘Don’t use this website it is a scam’ When we flagged it as false, Trustpilot verified it!

It is no wonder that so many businesses fail, and not through any fault of their own. Their business model can be sound, their market available and the product built. But whether it be getting stitched up be accountants, banned from vital systems on the internet for life, or ripped off by a failed PR company there are far too many hurdles there that actively stop businesses, and therefore new jobs, from being created. Some top tips to any government that reads this:

  1. Google controls the internet, whether you want to accept that or not. Their advertising systems need to be available to all. Or they need to be broken up
  2. Parts of your company that you need a professional for legally, they need to be held accountable for their actions
  3. Review sites need to be held legally accountable for reviews on their platforms. If someone is to state a platform is a scam for example, then evidence of this needs to be supplied by the claimant as would the case be in any lawsuit
  4. As mentioned previously, companies that are growing and not making a profit, should not have to go through onerous and expensive reporting processes that add no value to the company

If Governments truly want to get out of the mire, vast debt and soon to be significant unemployment caused by Covid as well as decades of poor decisions (again looking at you UK government pumping house prices and encouraging BTL at great cost to young entrepreneurs who have to waste money on rents instead of productively creating businesses!!) Then radical decisions need to be made that will allow people all over the world to create and grow their businesses, create employment and bring in sustainable and non-debt based growth to countries economies.

Tom Oswald

CEO and founder of Clickasnap.com

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