A first-time founder who just launched a new food hall startup shares 5 tips for starting a business during a crisis

  • The world is set to plunge deeper into recession, but that has not stopped ambitious founders from setting up new companies and raising capital.
  • One such founder is Dan Warne, formerly a senior executive at unicorn British food delivery startup Deliveroo. 
  • Warne has launched a new food hall business, Sessions Market, to rejuvenate town centers. Sessions opened the doors to its first venue on July 4.
  • We asked Warne for his advice to first-time founders setting up shop when there's a tough economic outlook.
  • Visit Business Insider's homepage for more stories.

Starting a company can be daunting at the best of times, let alone in the middle of a pandemic.

A slowing economy, weak job market, and poor funding prospects are likely to have knocked the confidence of many would-be founders. Fear of a recession drove almost one-third of investors to pull out of UK seed-stage investments in March.

But as some venture capital investors point out, many hugely successful tech founders have historically launched their startups in the wake of an economic downturn. Prominent tech companies like Spotify, Uber, and Airbnb all emerged in the wake of the 2008 global financial crisis.

One founder looking to brave the pandemic economy is Dan Warne, a former executive at Deliveroo.

While at the British food delivery startup, Warne helped the firm grow to become a unicorn startup valued at more than $2 billion. Just before Warne quit, Amazon bought a 16% stake in Deliveroo for $575 million in 2019.

In August 2019, Warne launched a new food business, Sessions Market, which looks to tap into a boom in upmarket food halls in the UK. The company has raised an undisclosed amount in Series A funding.

Building a food hall business is a slight change in pace from helping to an app-based business through hypergrowth, though he tells Business Insider he sees some similarities.

Analysts at property consultant GCW estimate a further 200 food halls could open across the UK in the next decade. 

On July 4, Warne and his 50-person team opened the doors to its first venue, Shelter Hall in Brighton. He plans to launch in Bristol next, with a number of other UK cities in the pipeline. 

Here's his advice for other founders launching when times are tough:

1. Don't be the founder who obsesses over everything

For your startup to succeed, you have to trust your employees, says Warne.

"You have to give autonomy to people to scale things with you … Allow them to be creative and to test things and to learn quickly and to develop off the back of what they learn," he says.

Giving people space to make their own mark often means you'll have more success than if you're the "classic founder who obsesses too much about everything," he adds. 

During his time working for Deliveroo and travel deals startup Travelzoo, Warne was able to experience this for himself. Now, he wants to give his employees at Sessions the same control, so that they are as invested in its success as he is.

"I'm trying to allow a degree of autonomy, a degree of people feeling as though this is theirs as much as it is mine, as much as it is our investors. That can be one of the most rewarding things for somebody working in a business," he says. 

2. Find partners who share your vision

An important part of making any business work is finding partners who share your vision.

In the middle of a pandemic or any other kind of crisis, it's even more crucial since your startup is likely to face even more challenges getting off the ground.

For Sessions, Warne says that his financial backers have been pivotal in weathering the last few months. This is because he took pains to choose investors who shared his vision for the company. 

"For us, sustainability is really important," says Warne. "Our business at Shelter Hall is 98% built with re-used materials, so we wanted to partner with an investor that shared the vision around that." This, he says, is why he chose Brighton-based VC firm Brighton Ventures, which focuses on sustainable investment.

Choosing a local venture firm was also important, as it is part of Sessions' ethos to prioritize locality. In turn, partnering with local restaurants, builders, and suppliers helped Warne to open despite the challenges posed by lockdown. 

"When things like COVID-19 happen and you have six weeks to try and turn around a build that originally you had slated for four months, you find an enormous amount of goodwill helps you to achieve those goals," he says. 

3. Bring in expertise when you need to

For founders pivoting to a different sector or area of an industry, as Warne has, filling the gaps in your expertise is particularly important given the additional challenges posed by COVID-19. 

This is something Warne realized early on. 

"I haven't operated a restaurant before and my goodness me there is an incredible amount to learn in a short period of time," says Warne. "We've had to bring in the right experience and the right staff in those areas."

This is why Warne chose hospitality VC firm Imbiba as his headline investor. "They have operational expertise in-house, which I felt I needed if I was to foray into a business that in parts at least is a hospitality business," he says.

4. Use your experience to give a fresh perspective

Having an alternative background can also have its advantages, says Warne, allowing "you [to] bring perhaps a different perspective to the industry."

For someone with Warne's background, that means you can "apply some of the learnings that you get from working in the technology business to a bricks and mortar style business."

For Warne, it also meant he could draw on his digital experience at Deliveroo to re-imagine the in-person dining experience. 

This has been particularly important with COVID-19 because of all the logistical challenges posed by social distancing measures.

Already having the digital infrastructure to support remote ordering has allowed Sessions to overcome these hurdles more easily.

5. Success comes down to luck as well as judgement

For your startup to succeed, "clearly you've got to be in the right place at the right time," says Warne

"Anyone's career is part luck, part judgement, to various different degrees," he adds, noting how serendipitous his timing was in joining a unicorn like Deliveroo at such an early stage of its growth.

But, however lucky you are, you will not succeed unless you make the most of the opportunity.

"On one level, [at Sessions] we've been really unlucky. Obviously COVID-19 was a massive challenge," says Warne. 

But, in many ways now is a good time to be launching, he says: "I think it is a model that's very well conditioned to this environment, that is highly supportive and conducive to helping some of these businesses get back on their feet."

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