Mission Labs was founded in 2016 with a clear goal – to disrupt the communications sector. Its founders believed that existing telecoms providers were outdated, complex and expensive, and they wanted to provide businesses with a “no ties, no jargon and no complexities” alternative.
“Business owners are regularly presented with poor customer experiences from incumbent telecoms vendors who make millions of pounds from their old-school solutions and approaches,” said co-founder Damian Hanson.
“Our core business product is CircleLoop, it’s a simple online business phone system and is designed to challenge the traditional telecoms industry with some new thinking.”
The business started out with just Hanson and David Hague, his business partner and co-founder. It now has 15 employees and recently made a number of senior management hires.
The co-founders initially funded the business alongside other private investors, coming together in a £1.5m seed fund round.
Real Business caught up with Hanson to find out more about the business’ funding experience, and why now is the right time to seize a scale-up opportunity in telecoms:
How did you know it was the right time to scale up?
We feel the telecoms sector is still off the pace in terms of the migration to cloud-based services, especially delivered in a pure application driven model. There is too much legacy in the way for most providers and many don’t want to make the shift because they have existing revenues they want to protect.
We know we have built our technology platform in the right way to start to challenge in the space in the coming years.
How can you tell how much funding you need?
Our business is based on monthly recurring revenue streams so we have good forward visibility of our trading, costs and, therefore, cash requirements. In situations where we are doing more service-centric projects, we would cost a project based on an estimated number of man days calculated based on a cost price plus mark-up basis.
How do you know what kind of finance is right for your business?
As a smaller business, it is more about looking at what types of finance you can tap into. Usually, this is limited based on the stage of the business you are at – factors like growth rates and operational progress.
For us, equity-based funding has always been the most accessible route. This we raised our seed round.
What tips do you have for other businesses for pitching a business to an investor?
I think my tips would be:
1. Prepare a clear plan and strategy document
2. Be open and honest in your approach
3. Set realistic expectations about future growth potential
4. Be clear about what you want investors to do/not do
5. Find investors that are also excited about your business
What pitfalls are out there for small businesses to avoid when it comes to seeking finance?
There are many, but I think the main pitfall I often see is one of timing. Trying to raise your investment at the right time to enable you to scale is key. If you do this too early, you may struggle to raise more funding in the future. On the flip side, if you do this too late, you are likely to be more desperate for cash and may end up giving away more equity than you initially intended.
What does scaling up mean to you? Are you focussing on technology, recruiting, turnover, funding or exporting?
Probably all of the above. But seriously, we have invested in growing the team so we can continue to build our technology and powerful applications.
We have recently made a raft of senior appointments and, now that the product is out of beta and we have secured our initial seed funding round, we will continue to build the team. We will also be accelerating our growth in the UK market by integrating CircleLoop into other complementary SaaS products, starting with CRM tools.
What are your plans for the next 12 months?
We want CircleLoop to become a front-of-mind name for SME telephony in the UK. After that, we could potentially look at international growth opportunities.