The five major mistakes startups | Предприниматель

The five major mistakes startups

Story venture investor in Silicon Valley to work with Ukrainian start-ups.

Of the eight companies, the creation and development of which I was engaged for 21 years, half can be attributed to a successful, two good results, but only two have failed. When I happened to lose his company $ 35 million, I called my mother and told her about it. She paused for a long time, and then asked, “Now do you want them back?” I explained that I was willing to give not less than venture capitalists, on my next company. This is a typical example of Silicon Valley, the largest business cluster.

Now I first came to Russia, the homeland of his parents. I am pleased to be here, but still very happy that business is no longer a crime. I would like to describe their impressions of the startups that I managed to get to know here.

Emphasis on the idea of ​​

Of course, it is interesting to look pretty good idea of ​​the presentation. But it’s still not a business. The idea is still just an idea, even if it is the basis for your business. Ideas can be for all – children, dogs – but they are not profitable. The main question will always be a return on ideas.

I had a chance here to see a lot of presentations startups. Some were really impressive, but some were like my own 40 years ago. There was a detailed description of the idea, but the fact is that to describe it and get the investment – this is not the same thing. It is better to show who is the buyer, on what market you are targeting, where the sales channel. The original idea is often erroneous. It is absolutely normal. The entrepreneur can and should make mistakes, reflect on their mistakes and improve their project.

So personally, I prefer when the presentation is not only describes the idea. It’s better when it looks different. “Hi, recently we had an idea, and that’s what came out of it. We have made a site, and the first 50 people who watched it, have left terrible reviews. So we did the following … and attracted some fifty customers who have decided to order our product / service. And then we have added this, and thus increased the number of visitors and customers, and we have learned something new. ”

Repeat business models of major companies

The conventional wisdom about startups as mini-versions of large companies. But it is not. Startups are fundamentally different from large enterprises, they have their own characteristics. For large companies is characterized by the use of well-known business models. Startups also need to constantly find new, scalable business models, technologies and markets.

Those startups that fail to find new models, such as 90%, will leave the market. As many as 90 percent! Once I was invited to speak to a large audience, with a thousand people audience, and I reminded them that 950 of them work at McDonalds will be more profitable. But 50 of them will be able to earn millions of dollars.

Improper risk assessment

Startups some areas, such as health, science, biotechnology, have a high level of technological risk. You can understand that the technology does not work, just a few years. Cancer treatment – is not a question of market and consumer risks. It all depends on technology. While these companies do not calculate all the technological risks, it is not worth thinking about customers and markets.

But the majority of Internet startups is no technological risks. You can say anything, but you are not about technology startups. My opinion – every good developer will set up a base for any startup. The main case and the failure of major companies such consumer is thinking through the risks and the risks that are associated with the clientele. Internet start-ups fail not because they have no website, but due to lack of customers. Therefore, the main issue here is how you prove the investor, which will reduce all these risks.

Inability to learn from customers

First contact with the buyer does not maintain any business plan. All that is displayed in the presentation is just a point in time. But the presentation, I can not know whether you will learn something in the future. No one will invest in a point in time. Investor’s important to understand how fast, fast, and how wisely the entrepreneur can learn something from buyers and the market.

The secret of success of an entrepreneur is his ability to learn from consumers, but not his mind. Nobody finishes his business in the same form in which he began his. You need to constantly respond to customer behavior, rather than sit back and watch the situation on the market. Your startup should be changed taking into account customer feedback. This is one of the most important points for success.

Investor is not a rich uncle

I often have to explain to budding entrepreneurs that rich uncle and venture capitalist – this is not the same thing. Experienced investors usually have a portfolio of projects both 8.12. Every day they spend tens of selections to browse thousands of startups.

When preparing a presentation for investors should be aware that he has much more experience than you, more experienced mistakes and successes. For experienced Silicon Valley entrepreneurs and investors are critical of its values. I believe that the Russian venture cluster is necessary to work on it.

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