Case Study: Hubdub (by Nigel Eccles)

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Hubdub

Hubdub.com is a news aggregator founded by Tom Griffiths, Rob Jones, Chris Stafford and Nigel Eccles. This is the team’s third start-up with team members having previously worked for Betfair (online betting exchanges) and Groopit (social networking site). The Hubdub concept came out of an idea that you could use a market mechanism to rate and sort news articles.

Hubdub is a news aggregator wrapped around a set of prediction markets (made famous in James Surowiecki’s book, Wisdom of Crowds). On Hubdub people can track running news stories and find the most relevant news articles relating to that story. Users can also compete in predicting how each story will turn out, with the most successful predictors gaining credibility and greater editorial influence.

Currently on Launch.ed scheme
3 angel investors
US based launch in January 2008
Public beta lauch in March 2008
April 2008: 5000 registered user, 25000 visitors/month
Inspiration for Hubdub through knowing the technology (news and prediction websites) and identifying the customer pain (tedious to gather different news stories for one topic)

Interview

1) What motivated you to start you own business?

I've wanted to start my own business since I left the first start-up I worked for. The buzz of working in a start-up is incomparable with working in an established company. In most businesses if you have a good idea it can take months or years to get it to happen. This morning I was chatting with one of my co-founders about a certain aspect on how our product worked. It made sense so we decided lets just do it and see what happens.

2) What experiences in your life helped you to start a company?

Having previously worked in two start-ups as a product and project manager has probably provided me the most benefit in starting a new business. It was a real education in what to do (and what not to do!) in starting and growing a business. It also gave me a good network and built up my credibility with investors. Additionally, having about 6 years experience in consulting has been very useful in learning how to construct the business sides of the start-up and also the vital skills of presenting.

3) What are the specific challenges of being an entrepreneur as a student or just out of university?

The biggest challenges as I see it are lack of breadth of experience and business experience. Breadth of experience is important as successful businesses (outside of entertainment) generally solve real world problems. The most common mistakes I see student entrepreneurs making are building a solution for a problem that isn't that significant or building something that doesn't have a compelling business case.

4) What advice would you give students who want to start their own venture?

1. Seek advice. There are 1,000s of online sources of advice and you will be amazed how willing other entrepreneurs are to offer help. Be considerate of their time by focusing only on the things that you can only find out by asking them rather than researching on the web. Be precise in what you want to know. If possible use your network to get to them. If you can't do that go direct. If you are too the point you should get a response at least 75% of the time.

2. Filter good advice from bad. There is lots of advice out there but not all of it is good. Bad advice can be disastrous to your ambitions. I tend to weight advice based on the direct experience of the person giving the advice.

3. Start small and build. The costs of starting a company, particularly a tech company, have plummeted in the past couple of years. The best way to start is often to work out what is the smallest thing you can do that gets you towards your goal, and then do that. The smallest thing might be starting a blog about your idea or industry. That way you will learn more about it and also get leads to potential customers and partners from day one.

5) What has happened so far, what is the current position, and what are the future goals of your company?

We launched Hubdub at a US technology event called DEMO in January 2008. Since launch we have focused on refining the product and preparing it so that it can scale. In the second half of 2008 the focus is massively increasing the user base and distributing the functionality to partner sites. Longer term our aim is maximize the number of people using our technology and then introduce a number of premium revenue generating products.

6) Did any award schemes or grants help you along the way?

Yes, we applied for and successfully received an award of £40,000 from the Scottish Companies Innovation Scheme. We were also granted money for us to travel the US to launch Hubdub and meet investors. Finally we won the Edinburgh section of the Scottish Enterprise business plan competition and also were selected as one of the top 20 UK web start-ups to attend Web Mission 08.

7) What would you be doing if you hadn't started your own business?

Probably working for someone else dreaming about starting my own business. Generally, that is what I did from the time I left my last start-up in 2003. I enjoy working with big companies but start-ups are better.

8) What will you do if this project fails?

Failure isn't something I really think much about but statistically I probably should. 100% of my focus is on making Hubdub a success. Let's just say failure would have a lot of painful implications.

Tips / Experiences

If you have a business idea, start a blog to write about it. If you can't get people to be interested in your blog, they won't be interested in your business!
Developing a business takes time (Hubdub idea in 2003, launch 2008)
Of the 3 steps: Customer acquisition, engagement, monetisation; for web communities focus on user base growth instead of monetisation / generating revenue - if you have a mass user base, you will find out how to make money from it
Ask for advice!
Start with finding a product and the market for it - Prove the need of the product!
Business plans are less important (in the beginning), focus on the product, market and customer
BUT: Business plans are good for identifying bad ideas
The team has to be fully committed, part-time work is impossible
You have to become an expert for the industry
Address a hi-growth market
"Ideas are a commodity" - You can't raise money on an idea only
You need a great team:
- Know about your skills and strengths
- If your team is lacking in some area, investors will put someone in
- Team members need: Passion, enthusiasm and the ability to succeed
- You need to trust your team - handshake agreements should suffice, not legal contracts
- Focus on developing the product, not roles in the team