Over the past few years I have been investing in a number of different startups, and although there is something very exciting about starting up something new, and supporting an initiative, I have learned a few lessons in the process which might be worth considering.
Invest in the talent, not just the idea
There are plenty of ideas out there, but it all boils down to ability and execution. Looking back at my investments in startups, it is now quite obvious to me which ones had the potential, based purely on the enthusiasm and ability of the people pitching them, and their willingness to give up everything and do whatever it might take to make their startup dream come true.
Keep in mind, though, that great execution of bad ideas still results in failure—so you do need to get both sides of the equation right. Nevertheless, the team to me is the key. As the saying goes: “rather invest in a great team with an average idea than an average team with a great idea.”
Passion, passion, passion
To become really successful, I believe that genuine passion for the idea is the most important element—if you are going to put 16 hours a day into your business, it had better be something you love. Many startups are “just” in it to make money as their main objective, and although the money aspect is important, of course, keep in mind that a well-executed, innovative and useful idea for a sizeable number of people or businesses will attract money eventually.
I have seen my fair share of beautiful PowerPoint presentations, and some remarkable spreadsheets outlining the projected growth of a new business in just a few years (sometimes even a few short months). Common to most of these presentations is that way too many hours went into making the presentation look great, and not enough time into being realistic about how long most things take, the scaleability of the income in real life, and the inevitable bumps on the road getting there.
Are you solving a problem?
So what is a good idea? In my view, most good ideas are developed out of a need for something which is not currently available, or which is very complex or expensive. Some of the worst startup ideas I have come across are those based on the idea of just making a startup for the sake of it—not actually solving any problems or making anything that already exists smarter, better, easier or just cheaper.
How to get started?
If you have a great idea, knowledge about the topic, some skills and a lot of passion, I suggest you start off by searching the web extensively to make sure you fully understand the competition and how you will differentiate yourself—chances are that someone else out there is thinking along the same lines.
Once you have established that there is room for your idea, you should begin by reading about starting up a business, and attend events to learn as much as you possibly can by networking with like-minded people who might help you progress and avoid making the most obvious mistakes.
Try to get as far as you can before asking for funding—ideally, some proof of concept, or even proof that your idea can actually generate revenue of some sort, and has the ability to scale.
There are many places where you can get help and meet entrepreneurs—one of them is Startupism. Below is a bit of information about what they are trying to achieve. Feel free to get in touch with them at their next startupism event.
In the Bay Area, the word “startup” seems to naturally be part of everyday language and conversations. The surrounding areas of San Fran-Start-Up (as the city should rightfully be renamed) is unquestionably the juncture where innovative thinking, entrepreneurship, and a passion to change the world meet. The startup culture is, of course, not conﬁned only within the boundaries of the Bay Area – it’s all over the U.S.! We are absolutely amazed at how openly collaborative this culture is. Incubators, venture capitalists, and endless other resources are readily available to forward-thinkers who are hungry and determined enough to launch their own businesses.
Adversely, for international students like us who dawn from different parts of the world, the word and (more importantly) the culture of “startupism” is something completely new to us. Yes, it’s gaining some traction world-wide, but not at the pace and magnitude it is here. It is something our entrepreneurial minds have always been craving, but have never had to the opportunity to explore – until we came here.
Through Startupism, we not only hope to raise awareness of the startup culture both nationally and internationally, but we also hope to inspire young visionaries to get up and do something that will change the business world.