Why does Graham Cooke decide he wants to leave his position in one of the biggest companies in the world to start his own business?

I spoke to Graham Cooke, an ex-Google employee about his latest start-up, QuBit – QuBit is a customer data platform which extracts and processes customer behaviour on websites e.g how much time consumers spend on a site, what triggers a purchasing decision etc.

Before starting QuBit, Graham worked on Google Analytics and their website optimisation programme.

Below is the full interview.

Can you give you some background information about yourself, were you the entrepreneurial type growing up?

You could say that! I started a record label while I was still at school and then started my first technology business at University. That was aimed at providing video streaming services into public spaces and I ran that until I started my job at Google.

Tell me how the idea for QuBit came about?

Me and my co-founders worked together at Google working on a range of products focused on using data to improve the effectiveness of websites. It was great experience but, after a few years, we all saw the potential to create a focused suite of products that could do this for companies directly – out of that thought QuBit was born.

What were you doing before you started the company?

We all worked at Google in the UK and US, working on a range of products like Google Analytics and their website optimisation programme.

What is QuBit?

QuBit is a customer data platform. We work with companies to extract a whole range of data about customer behaviour on their websites and then process this information to create actionable insight into how the site can be optimised to improve efficiency and conversions.

We have a whole range of products including OpenTag, our tag management system, Exit Feedback, our customer feedback collection tool, Behavioural Attribution, a tool to correlate visitor’s source of origin with their subsequent activity on the site, and Behavioral Analytics, which looks in detail at what people are doing on the site across multiple visits.

All of these products come together to create a set of data points that can give a new level of insight into online customer behaviour.

What is QuBit trying to solve?

We’re a big data solution for online marketers. Traditional analytics packages are limited by the amount of data they can collect and process. We use commodity storage and processing along with innovative algorithms to collect and analyse huge quantities of data about customer behaviour, generating new insights and opening the door to new efficienes and optimisation opportunities.

Talk me through the first few months of running the business? What would you say was the hardest part of starting the business?

The most important part of building the business has been to create the right team. From the very beginning we’ve put a massive focus on finding the right people and getting them on board. Being based in London is great for this as there’s a massive network of people with the right experience and skills, but its also a challenge as there’s a lot of competition for the right talent.

One of the biggest challenges has been to stay focused. Given the breadth of what we do it would be all too easy to get sidetracked into a whole range of different things, but we have a clear mission and objective and we’ve been single minded in targeting that.

How were you able to fund the business?

We all cashed in our Google stock to fund the business, but we’ve since secured substantial angel funding from a private investor.

Would you say the initial idea for the company, or that your business model has changed since 2010?

The idea has remained constant, what has changed has been how we offer that. To begin with we took on a lot of consultancy style engagements with retailers to help us build our understanding and product sets. We’re now moving into a much more product-focused stage of the business where we’re taking those learnings and packaging them into a set of technology products that companies can use themselves to access and act upon data.

What would you say has been some of the most crucial that you’ve done to build the company to this level now?

The most crucial thing we’ve done is to stay focused on the goals of the company. Last summer we realised that we were trying to do too much and to build too many products. We took the hard decision to prune back what we were doing so that we stayed focused on what was achievable and valuable to clients.

What’s been your most memorable moment so far on your entrepreneurial journey?

I don’t know if its been one moment, but there are lots of milestones that really stand out for me. Whether its winning great clients like the BBC or Arcadia or reaching the point where we’re now processing many billions of interactions and hundreds of millions of individual users each month. Starting a business is a process, not an event, so for me each individual milestone is just as important as any one single occurrence.

What pieces of advices could you give to aspiring entrepreneurs out there?

Make sure you bring on the right people. When I started my video business at University I was the only founder and it was a real struggle to deal with everything on my own. I started QuBit with three other great people and we’ve built on that team by hiring a strong and diverse team of people who can each add a lot to the business.

Stay focused. Know what you’re setting out to do and stay focused on that goal. Too many companies get sidetracked into ideas that are superficially attractive or promise short term revenues. Getting drawn into non-core business can quickly detract from your core goal and will cost you in the long term.

What can we be expecting from you and QuBit in 2012?

I think you can expect us to continue to launch new and innovative products that complement our core proposition, you can expect us to sign some more major name retailers and publishers and I think you can expect us to continue to innovate in our space.

Do you need a degree to be an entrepreneur or is it something your born with? Or is it a bit of both? Some of the most famous entrepreneurs to date started their companies while at university. It’s not essential you wait till you get your degree and you will probably learn more by doing.

So who has built a successful company from their dorm room? Well I’m sure Mark Zuckerberg will be first to  spring to most people’s minds these days. But there have been many, so read on to see 10 great dorm room success stories.

1.) Mark Zuckerberg

Lets start with the obvious. In 2004 Zuckerberg created Facebook from his dorm room in Harvard. Facebook started of as just a Harvard ‘thing’ but as it rapidly grew Mark decided to drop out of Harvard and move to Palo Alto, home of silicon valley.

Facebook has gone on to become a regular part of our daily lives. Currently the site has over 600million users and is valued at around $50billion.

2010 even saw the release of the film ‘The Social Network’ based on Mark Zuckerberg and the creation of Facebook.

2.) Bill Gates

Bill Gates the founder of the most well known computer software company Microsoft. Gates, synonymous with the tag of richest man in the world, created Microsoft in 1975 at the age of 20. Earlier that year gates and school friend Paul Allen saw the release of the MITS Altair 8800 based on the Intel 8080 CPU and were inspired to start their own software company.

At the end of 1975 Gates took a leave of absence from Harvard, to work on Microsoft full time, never returning as a student.

At the close of 2010 fiscal year, Microsoft had $62.48 billion in net revenues and $18.76 billion in net income for the 12-month period

3.) Michael Dell

Michael Dell was a pre-med student at the University of Texas when he started Dell. In 1984 with $1000 and an idea he founded Dell. Starting at the university he attended he worked upgrading computers in the labs before applying for a vendor license so he could win bids on contracts for the State of Texas. He would go on to win these bids by not having the overheads of a store.

By the age of 27, Dell was the youngest CEO to have his company listed in the Fortune 500 corporations. Soon after in 1996 Dell started selling over the internet and not long after that were raking in over $1million in sales every day. In 2010 Michael Dell’s net worth was an estimated $14billion.

4.) Jerry Yang and David Filo – Yahoo!

Yahoo founded by Jerry Yang and David Filo in 1994 was the worlds biggest web directory/search engine before Google came along. The site, started by two electrical engineering graduate students at Stanford University grew rapidly during the Dot Com bubble, but struggled after the bubble burst.

Yahoo diversified it’s offering becoming a web portal and and his recognised as a leading online brand.

5.) Larry Page and Sergey Brin – Google

Sergey Brin graduated with an undergraduate degree in computer science from University of Maryland. After graduation, he moved to Stanford to acquire a Ph.D in computer science. There he eventually became friends with Larry Page, initially they didn’t particularly like each other.

They crammed their dormitory room with inexpensive computers and applied Brin’s data mining system to build a superior search engine. The program became so popular at Stanford that they decided to suspend their Ph.D studies to start up Google in a rented garage. In fact Sergey is still officially on leave!

6.) Shawn Fanning – Napster

Shawn Fanning founded Napster with his business partner Sean Parker in May 1999. Prior to it’s launch Shawn spent 4 months coding Napster, an online programme that made it easy to share and download music. Before it was shut down in 2001, it gained huge notoriety after becoming the target of many music industry backed lawsuits due to the P2P (peer-to-peer) nature of. Napster was the first massively popular free file sharing programme and has returned today as a legal paid service.

Shawn was studying at Boston’s Northeastern University at the time and was just getting into programming in his spare time. Within two years Napster had 80 million registered users.

7.) Matt Mullenweg – WordPress

Mullenweg was a 19 year old freshman at the University of Houston when he developed WordPress, back in 2002.

WordPress, has become the blogging service that most serious bloggers turn to. In fact this site has alot to thank Matt for as well. WordPress is currently used by 13% of the 1,000,000 biggest websites and has been downloaded almost 13 million times.

WordPress is continuously growing at a fast pace with Open source software being a large part of WordPress’ success.

8.) Paul Orfalea – Kinko’s

Paul started Kinko’s in 1970 while studying at the University of Southern California where he graduated from a year later. He started up his company from a 100 square foot space, on the University campus. His idea for Kinko’s, a photocopy chain, came after encountering a copy machine in the university library.

The company name came from a nickname he got while he was younger. He was called Kinko due to his curly red hair.

In 2000 the company was bought by FedEx for $2.4billion and it’s name became FedEx Office.

9.) Fred Smith – Fedex

FedEx it self, although not created while Fred Smith was a student, came from an idea he had while at Yale. In fact while an undergrad at Yale Fred wrote the FedEx concept in a term paper. The concept became reality in 1971 making a profit 4 years later and expected to see profits of $1.6billion in 2011.

Fred joked that this all came from what was probably a ‘C grade’ paper.

10.) Todd Krizelman and Stephan Paternot – TheGlobe.com

What was one of the fist social networks well before Myspace and Facebook, Todd Krizelman and Stephan Paternot founded the internet startup in 1994. Although it has since ceased operations as of 2008, TheGlobe posted the largest first day gain of any IPO when it went public on November 13, 1998.

The founders were undegrads at Cornell when they came across a primitive chatroom on the uversity networks. After TheGlobe.com issued its IPO the founders, 24 at the time, were thought to be worth about $100million each. This was the peak for the pair and after that it was all down hill.

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Google!

Yes you guessed it (Although the picture did give it away), Google topped the chart with 10 venture backed acquisitions. Twice as many as runner up Facebook. They may not have got Groupon, the one that got away, despite a $6billion bid, but they did manage to acquire AdMob Inc the mobile ad network for $750 million.

Google move up to top top spot after finishing in 3rd in 2009 with three deals. Facebook will look to catch up with Google in 2011 after raised hundreds of millions of dollars from Goldman Sachs. I can see them overhauling Google very soon.

Google is also the 4th most-active acquirer between 200 and 2009 with 25 deals. Cisco Systems Inc still lead the way there despite only making three acquisitions in 2010.

Zynga Game Network made it into 4th on the list with four acquisitions. Oh and they are only four years old as well.

To see the full list and find out more about Google’s acquisitions take a look a look at the Wall Street Journal Article.

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Facebook has raised $500m of an expected $2bn in new funding in a deal valuing the social networking site at about $50bn or £32bn. The social networking site has reportedly landed a cash injection from the investment bank Goldman Sachs and a Russian investor.

According to the FT, this means that Facebook is now worth more than either Time Warner or Yahoo.

Facebook which has 500 million active users is expected to use the investment to fund development of new products and possibly make acquisitions, the New York Times said.

Does this now mean that each of the 500million users on Facebook are worth $100?

Facebook has grown rapidly and overtook Google as the most visited website in 2010, according to Experian Hitwise.

Read more about what this means at the full New York Times story.

When people think about entrepreneurship, it often the possible lifestyles that people think about. The freedom of working your own hours, control of your business, the money being able to retire at 30 etc… Often the other parts of a career as an entrepreneur can be forgotten. So here is a brief breakdown of the good, bad and ugly sides of entrepreneurship.

The Good

The best part about being an entrepreneur for many people is the lifestyle it brings. The chance to be your own boss, making the decisions and seeing something that you built grow, is highly attractive.

Another great benefit is you can impact on the world, a lot of entrepreneurs find that the most motivating factor rather than money. Just look how Mark Zuckerberg has changed the world with Facebook. What about Google’s founders Larry Page and Sergey Brin?

Obviously with success comes money, a lot of money. Most of the richest people in the world started their own companies. Even if your company isn’t as big as those you still have a good chance of making more money than if you work for someone else.

Another reason why people choose to be an entrepreneur is the excitement it brings. The varying daily challenges that keep you on your toes. You will probably feel more fulfilled than the usual 9-5 job, since your responsibilities are down to you. You will be constantly learning every day which is what we are all about, learning and moving forward.

Also we excel when we are passionate about something and when you have your own business it will feel like your little baby which you can nurture and grow.

The Bad

So sometimes starting your own business works and you become successful and rich, but more often than not this isn’t the case. With about 80% of new businesses failing within the first year there is quite a high failure rate. This is normally due to lack of capital and/or bad management.

The lack of capital is the bad part to entrepreneurship. Not having the security that comes with a regular income is often what puts many people off. At the early stages of starting a business the lack of revenue coming in can represent a problem if you have many bills to pay or family to support. It is easier when you are younger and have fewer commitments but you might have to rough it for a while.

If you’re not careful you can also find yourself in a lot of debt and if your venture then goes belly up, you can find yourself in serious financial troubles. It is paramount to stay within your means and look at the long term future of the business rather than the short.

Watch out for those just looking for a piece of the pie. If your company does start to gain momentum you may start getting people looking to join purely in the hope of a pay off. These are not always the most helpful of people. When looking to hire people it can be difficult to spot these types.

Sometimes working as an entrepreneur you can get carried away only thinking about the potential future success which can sometimes be detrimental. If you enjoy the journey of building a successful start up rather than just the outcome you will be a better leader.

The Ugly

So the ugly side of entrepreneurship. Money can be the factor that leads to the ugly side. Every venture needs capital to be raised, whether it comes from savings, support from family and friends, bank loans or investors.

If you do borrow money from family and friends, it can cause problems when it comes to paying them back. If your start up becomes very successful then those who lent you money may try to claim more than you expect. Dealing with that situation, should you come across it, can be difficult and can ruin relationships.

Looking for investment from investors is a very desperate situation a lot of the time, since there is a lot of competition and this can lead to young entrepreneurs falling into traps. There are many bad investors out there looking to take advantage of inexperienced start up founders, by conning them out of equity with false promises.

Sometimes the lust for control can also become overpowering, leading to distrust and paranoia. Not trusting employees as you feel they may be taking advantage of you is harmful to the business and is something you need to watch out for. Make sure you get the right employees in the first place; it’s worth the extra effort.

Small businesses tend to be a high risk of being victimised by fraudulent activities. This is why entrepreneurs need to have a high regard for the protection of their data. If not, all the hard work you’ve put in could be wasted if you go out of business because of fraud.

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David Cameron today announced his vision for a ‘Silicon Valley’ in the East End of London. The high-tech hub to be based at the site of the Olympic village after 2012 has already attracted investment opportunities from top firms including ‘Facebook’, ‘Google’ and ‘Intel’.

Mr Cameron announced the news to entrepreneurs and investors, stating how he wanted London’s East End to rival Silicon Valley in California and evolve into the “world’s greatest technology centres”.

“We’re not just going to back the big businesses of today, we’re going to back the big businesses of tomorrow,” he goes onto say.

“We are firmly on the side of the high-growth, highly innovative companies of the future. Don’t doubt our ambition.”

“Right now, Silicon Valley is the leading place in the world for hi-tech growth and innovation. But there’s no reason why it has to be so predominant. Our ambition is to bring together the creativity and energy of Shoreditch and the incredible possibilities of the Olympic Park to help make East London one of the world’s great technology centres.”

David Cameron is planning to publish a blueprint for technology designed to make Britain “the most attractive place in the world to start and invest in innovative technology companies”.

This comes on the back of Google stating that it could never have set up in Britain due to strict regulations.

Mr Cameron has also announced a US style visa for foreign entrepreneurs looking to start up in the UK. Applicants would be required to have received investment toward their idea from investors, prior to getting it.

This is not the first time that the UK has reportedly found an alternative to the Valley, in the 80’s it was Bristol, Cambridge and the M4 corridor have been touted as possible venues but the latest ‘Silicon Valley’ seems to be naturally being built around Old Street roundabout.

With over a 100 young start ups and technology firms looking to take advantage of lower rent prices, this area has become the closest the UK has got to the valley and on its own right.

As much as I think this is a good idea, it is just theory and whether or not it will develop into something of the level of what they have in America, I am doubtful. At least though entrepreneurs are certainly being thought about and that can only be a good thing.

As well as investing in the area, there is a certainly culture which they have on the west side of America which will be hard to replicate. It is an interesting project and it will be interesting to see how it develops, but whatever happens it will take a quite a few years to establish itself to the level of the ‘Valley’.

So what are your thoughts? Good Idea?

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You might have realised that today’s date is 10.10.10 and so in honour here is 10 reasons why many start-ups fail:

1.) Dreaming:
The first reason why start-ups fail is because they never get started in the first place. Many people talk and talk about an idea, dream of how they will achieve it but never make the leap. This is an extremely common occurrence and sometimes there is good reason, but sometimes this empty talk can be a waste of time to entrepreneurs looking to work on a project.

2.) Too General:
Having an idea that has been done by everyone under the sun is not the best way to go about starting a business unless you have a differentiator or niche to your product/service. Trying to break into a market is very difficult unless you have something that sets you apart. You don’t need to invent the next Google or Facebook but make sure you concentrate on one thing and make sure you do it well. It’s simple but something that many people forget.

3.) No Plan:
Always, always set out a plan. Make sure you have an idea of what it is you are trying to do and write it down. Always refer back to it to make sure you aren’t wondering off track. You will encounter problems and things will never go exactly to plan, but make sure you have an idea of where you want to go and establish how you wish to go about it. Your Business Plan will continuously change but use it as a guide. It can also be very useful when it comes to looking for funding.

4.) Funding Illusion:
Don’t fall in too the trap of assuming that funding will be a given. Make sure you have a plan beyond receiving funding. If you don’t get it ensure your business still has a future. Sometimes you can end up getting carried away with trying to get investment that you waste time as it is a long process. It may be better to spend that time building the business.

5.) Ineffective Print Media:
Spending money on business cards and flyers is often a waste of time and money. In the early stages you will probably have little capital and so spend it wisely on areas which will be profitable. Also with your business changing rapidly these can be outdated fairly quickly. This form of media tends to be very ineffective, so don’t waste your time.

6.) The Website:
The design of a website can provide an instant image of your company to potential customers, don’t overload it with useless content and make sure it is kept simple an informative. Also at this early stage there is no point in spending hundreds or thousands on a fancy website, there are plenty of sites where you can easily design a free site. If you do feel you need a designer, limit the cost at this stage, keep it simple and clean. Try to negotiate to pay in instalments or get terms that allow you to get changes made for free, testing is an important part of any website. At least this way you can be making money to pay for the website design.

7.) Self Promotion:
Remember your customer doesn’t really care about you, they are there to solve a problem, so ensure your site is showing off what your business does not what you do.

8.) Untargeted Advertising:
Depending on your product/service you will need to target your advertising accordingly. If you are using offline media make sure you aren’t wasting money advertising to the wrong people. Always make sure that you know who your customers are. Then when deciding on advertising think for a moment will your target market see your advert. Also makes sure you have a call to action, tell them what to do. This leads me onto online marketing; there are many free ways to do this by using social media and blogging techniques. You can also use tools such as Google Adwords to gain customers through Pay-Per-Click (PPC) marketing, but again don’t get carried away trying to get as many people clicking your website as possible, make sure they are targeted and therefore more likely to lead to a conversion. Wasting money is the last thing you want to do at this stage.

9.) You Quit:
When things aren’t going well you quit. Well that isn’t going to get you anywhere. Make goals and motivate yourself to reach them. You will make mistakes and there will be challenges that is a given, its how you get through these that shows what your made off.

10.) Finding Your Market:
A big reason why many start-ups fail is because a company just cannot find enough customers. Either the product/service is too niche or the product/service may not be in demand. Ensure that you are not pricing customers out and make sure your product/service is of good quality. Make sure that you have enough potential customers to stay profitable beyond the early adopters.

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First of all if you are thinking about working in a start up because of a potential large pay day, then it probably isn’t right for you!

Working at a start-up is something else and tends to offer very different challenges to most jobs. Start-ups are in an exciting stage of development and you will be in the thick of it. There will be fewer employees and you will have greater responsibility.

If you join straight after university then working at a start-up will provide you with great experience, well as long as you have the right attitude that is. Working at a start-up is certainly more of a viable option in your early working years when you tend not to have much work experience or a family to look after.

If you are joining a start-up after years of experience then you will still be able to experience something different, probably a much faster paced and growing like crazy atmosphere. Managers in start ups are also much more open to new ideas and changes in the company are much easier to make while the company is smaller.

So what traits will you need to succeed in a start-up?

First of all you should be Self Motivated; you will be expected to deliver. At first you will get lots of help and teams are closer together, communication is better, but you will be expected to contribute very quickly so that leads me on to my next two points.

Organised and Quick Learner: You will be helped by your colleagues but you will have to learn quickly, pick up processes, tools used at the company and trends affecting the company. Start-ups need to grow rapidly, try gain market share and tend to have limited funds so staying ahead of the game is crucial. You must be able to spot this and not rely on others, don’t be afraid to express your ideas. Write stuff down, make use of post it notes, calendars etc… You must stay on top of your work and meet deadlines, what you do will have a bigger impact in a small company and everything you do will be noticed.

Friendly and Sociable: There is no point in making enemies here, you will need to get on with everyone and considering there may only be a few employees you won’t be able to hide. Be friendly, talk to everyone in the company, you may even be working side by side with the CEO so make sure you are affable, the last thing the CEO wants is someone who is causing rifts in the company. Start-ups normally are a small tight-knit group of people and know that they will have to work collectively to be successful.

Ambitious: You will need to fit into the inevitable ambitious company spirit; you will most likely be working with many entrepreneurial types. The company will be looking forward to a bigger future and so must you.

Hard Worker: You will get a lot of work and will need to make sure you can manage it, if you are having problems with a task then find out how to complete it, ask someone, Google it, find a book that will help you, be proactive.

Working at a start-up will be challenging but as well as experiencing big problems first hand (which you can learn a lot from) you will experience the highs that come in a growing start-up which will feel even more of an achievement being in a small company.

Remember you may not get a massive benefits package or taxis to and from work, free phone or staff cafeteria but you get different benefits.

Start-ups tend to have more of a focus on the employees, working for a start-up myself I know this first hand. Free lunches on Wednesdays, breakfast provided each morning, free sodas, Playstation and sofa in the games room! Ok not all start ups are like this but the emphasis on providing a good atmosphere for employees is consistent. Having a hard working yet fun loving motivated team is key to building a striving start-up. The especially fun yet hard working vibe of a start-up is hard to find in the corporate world, although it does exist.

If you are one of those who would like to start up your own company at some point in your life then working at a start-up provides a great insight to what it would be like and what challenges you may face. It will provide with some great experience.

So is it right for you?

Let me know what you think in the comments!

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Sam Altman is the founder and CEO of Loopt, which is a location-based social networking application for mobile platforms, that allows friends to find each other with greater ease. Sam founded Loopt in 2005 during his second year at Stanford University, where he studied computer science.

Sam Altman managed to raise $5 million in funding from New Enterprise Associates and Sequoia Capital when he was 19 years old and had just set up Loopt.

When he was 21 Business Week named Sam as “Tech’s Best Young Entrepreneur in Technology.”

After he completed his second year at University he decided to leave education and work on Loopt full time. Now he is competing with the likes of Google and EarthLink.
Loopt currently has well over 3million users and that is growing at a rate of 15% per month.

At the end of the day Altman says “There are some days when it looks like everything is going to blow up and other days when things look insanely good, if you let that get to you, you never actually get any work done.”

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When Susan Gregg was 17 she was heading off to Carnegie Mellon University, but she found her closet packed full of vintage clothes and shoes that she had collected.

So she decided to get rid of them, and what better way than to open an online boutique. That year, Susan began ModCloth.com right from her dorm room. She would often drive from uni to her southern Florida hometown to pick up more stock.

Soon the site was overwhelming, 60,000 visitors per month wanted more. That’s when Susan realised the potential of the business. She started looking for designers and suppliers, eventually finding a trade show in Las Vegas via Google search. Susan went to the show with the intention to find herself a designer, which she did.

Susan still needed to raise the capital to pay for her rising costs, so on the advice of her boyfriend she took out $50,000 in credit card debt with the rest coming in the form of loans from her boyfriend’s family.

It was a big step to take, but ultimately these are the risked you have to take if you want to make it big.

Since her original idea in 2002, she has come a long way, but it wasn’t until 2006 when she hired designers to create an original collection for the site, that things have really taken off.

As it stands today the site is getting over 2million visitors per month and ModCloth is looking to surpass the $50million mark in sales this year. Susan has also managed to raise $20million in new funding so that she can open up offices in San Francisco and Los Angeles as employees near 150.

Susan’s personality shines through when you look at the business, ModCloth is a social commerce and she makes sure that customers feel involved whether they are buying or not. There is even an opportunity for the customers to choose which styles go into production.

This is the kind of thinking that will help Susan continue to grow ModCloth well into the future.

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