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Starting a business with no capital

It’s one of the very often asked questions at startup events. One of the unique skills of an entrepreneur is to create something with nothing. If you would have capital you would probably become an investor, not an entrepreneur.

One day a young entrepreneur asked me: “But I have to live and eat and I have no savings”. I asked him if he has a car. After answering, yes, an old BMW. I asked him to sell it. He looked at me like I’m from a different planet…. I told him that I sold my drums – which is much harder. He just walked away shaking his head. Recently somebody was much more appreciative. So here is my response:

  1. Create a sound plan about your product or service
  2. Look for customers who would want to buy it if you already had it
  3. Verify your idea based on their feedback
  4. Create a website with your plans and describe what you are going to offer
  5. Invite people to review and make sure any ordinary customer would
    a) understand, b) get excited and c) wants to buy it when you have it
  6. Start a crowdfunding campaign to ‘pre-sell’ your solution
  7. You got your first revenue so you can now build what you promised to provide.
  8. Do more of what worked well

Obviously there are quite some things to do during the process. I.e. to start with, find a co-founder, register the business and so forth. But I guess you get the idea.

It sounds not easy – but becoming a millionaire is simply speaking not easy. That’s why we have a growing gap between rich and poor. The number of people going for easy and enjoying a 360 degree social and live ensurance just have a hard time to get the extra mile hundred times a day.

 

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How to find your co-founder

You already started very very well – togetherness. Yet this is one of the biggest challenges of first time founders. Hence the long and detailed answer.

It takes teamwork to make a dream work.

People all to often simply focus on the act of “finding”. That doesn’t get you anywhere and you end up with nothing. Therefor my recommendation:

1) CO-FOUNDER

Make it very clear to yourself that you are actually looking for a co-founder, a partner for your entire business life. That co-founder should stay, no matter what. You will face rough times and need to get through together. The best way – by far – is to look for two co-founders, not one and share the equity of the company rather evenly 33, 33, 34%. You as the original idea giver earn the extra percent. But since the initial value of an idea is zero – don’t feel you should have more than that 1 extra percent. If you put in $34,000 the other two have to pony up $33,000 to participate. If they don’t want to give that much money (typically they claim they don’t have it), they are not worth being a partner in this venture. If they don’t have it, they can sell their car, their TV and so forth. Sounds radical and brutal – right? Unfortunately you all will have to make much more radical and brutal decisions in the next 10 years than that. Make sure everybody is “ALL IN”. Meaning they and you put all your eggs in one basket. If the company fails it hearts seriously and twice (financially and emotionally). Best founders are co-founders.

2) TRUST

With the above straightened out, forget trust. Period. Nobody can afford to let the company down. Every founder will be caring about one thing: Making this ventor work no matter what. Trust becomes a non issue.

3) TALENTS

Now make sure you look for exactly the talents you need and complement your talent. Start with making clear to yourself what you are really good at and what you love to do, day in and day out. Then write down what you just don’t like and hope to never do. Split the list of “don’t wants” and look for those talents. Assume you are an engineer do not look for another engineer no matter what. If you are an analyst, finance, production person look for the engineer and a visionary sales and marketing executer. Be very clear what you are looking for. Then go to LinkedIn and check if these talents actually exist :) If not – iterate.
Find the humanly best possible people.

Look for people who you could never – ever – afford to hire.

4) VISION

If your vision for the company’s future is not compelling and unclear – you would never attract top talents. Make sure you have a vision that compels others to look up to it. Your vision not only need to attract top talents, it need to attract customers, partners, investors, board members and so forth. No big vision, no big business, no good people.

5) SEARCH

After you went through the above exercise, your search will feel entirely different.
Promote your idea first. Instead of just searching for people to join, you will first promote your idea in your network. Give people the WOW. Let everybody know who you are looking for. Share the profiles of your ideal co-founder on your website, blog or something you can easily share with a link.
Adjust your LinkedIn profile. Put on your LinkedIn profile that you are looking for co-founders.
Go to meetups and conferences where you feel you find potential people and just talk to them. Business Cards may be out of date a bit but have them. Put your vision on the back of the card. Maybe hand written (of course printed). Share the card with everybody you like to hire and note their email address.
Directly contact people on LinkedIn. Connect and NEVER forget to send a comment with the connect request. Let them know what you are looking for and ask them if they know somebody in their network. I found some of my greatest talents that way.
Throw a party. You want to start a business. This is exciting enough to give a party. Rent a space in a fun and and inexpensive restaurant and just offer beer and sodas for everybody. It’s not that expensive but real fun. I did that once in Palo Alto and it is still remembered by many people. When you great everybody in a very short speech. Let them know that you can only do a follow on party when you have your co-founders. And once that is the case everybody is invited again. It worked wonders.
Advertise yourself. Buy yourself a banner for $100 and mount it on a small truck that you can rent for another $100. Drive and park around 11am at a university nearby, move on and hang out for a few minutes at around 12:00 in front of your biggest competitor. MOve on after just 5 to 10 minutes before they kick you out to the next. In the afternoon hang out at a train station and so forth.

And on it goes – get creative – get crazy… get into the mood of the greatest startup in 2019. :)

@AxelS

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Completely rethinking
economic development aid

DEVELOPMENT AID OF THE LAST 70 YEARS

Trying to help 3.5 Billion people in 75 of the poorest countries getting out of poverty seems to be a daunting task. In the past 75 years it failed, despite staggering 4.7 Trillion Dollar donations. Even if we try to be fast and complete the job in the next 10 years, we have another, major challenge: With 130 Million new babies born each year, we would need to nurture and educate 1.3 Billion newly evolving people in 10 years from now. Our job would never be completed.

HELPING FROM WITHIN

Ctrl-Alt-Del – Completely rethinking development aid. Why not applying the much admired Silicon Valley thinking here and develop a radically different perspective. Instead of trying to help an astronomic number of people across the globe – why not replicating what already worked so much better in the past: Building an economy from within a society through innovation and entrepreneurship – instead of donations that lead to a society that is perfectly educated to apply for more donations.

A PROVEN CONCEPT OVER CENTURIES

19th century Germany: a small number of entrepreneurs, including Carl Benz, Robert Bosch, Max Plank und one or two handful of others, created startups that should turn the nation into one of the most prosperous in the world. 150 years later, the 85 Million population is running a 4 Trillion$ economy.
In the 1950’s, in Northern California, USA: a small number of startups including Fairchild, Intel, Hewlett Packard, Apple and later on many others created products, that in just two or three decades revolutionized the world’s way we communicate. Silicon Valley became the epicenter of IT innovation. And short thereafter in the late 1990’s in South Korea: only three startups: Samsung, LG and Hyundai were necessary to turn one of the poorest countries on earth into one of the most developed nations just 2 decades later. The most interesting leaning: Innovation and entrepreneurship is geographically independent.

TALENTS ARE ALL OVER

During our travels around the globe we realized one incredibly important fact: a few exceptional talents are in any country – enough to change their whole economy for the better. We have seen exceptional people in Ghana, Nepal, Kenya, Peru, Bosnia, and other countries. We therefor know: unless the respective governments kill their nation through corruption or any major dictatorship – every nation on earth has enough engenius people to turn their country into a prosperous nation. What need to stop however is the stealing of foreign resources. Some hundred years ago was the stealing of natural resources, today it is the stealing of intellectual resources.

THE IDEA

If the poorest countries have some sort of Universities today. Some produce over 50,000+ academics like in Nepal. We (all of us together) should be able to empower the best of the best in each country to stay there, build a business and contribute to their own ecosystem. Within 10 years such a country could become a developed country. All we need is on average 100 top startups – which we can distill out of 1,000 who try. With 75 countries to develop, we are talking about 75,000 entrepreneurs. Now, I’m asking: isn’t it much more reasonable to help 75,000 entrepreneurs to fire up a self propelled economy, then trying to help 3.5 Billion people to survive?

WORLD INNOVATIONS FORUM

This is what the World Innovations Forum is all about. Obviously we can’t do that alone. But we know, we will get enough support, enough supporter, enough mentors and enough instructors to help 75,000 teams to thrive. This is what keeps us up and running every day.

What we exactly do?

1) Immediately helping 5,000 teams to understand what it takes to build a robust company that can go global and accompany the teams on every step of their way. We intent to hire approx 250 people locally to help us do that and look for another 1,000+ volunteers to do just a little but very meaningful support.

2) Building up investor networks and working on ways to make foreign investments much easier. A Swiss startup may look for $300,000 seed rounds. A Vietnamese startup can do the same for $30,000 and one in Nepal for $3,000.

3) Assembling partnerships with local and international organizations to build the ecosystems that truly enable entrepreneurs to build self propelled economies. To do so we reach out to universities, city councils, corporations, incubators, mentors, governments, technology provide and so forth.

Knowing that we will get the support, we already started. We have ambassadors in several countries and want to expand. We collaborate with the local embassies, met already over 1,000 entrepreneurs, presidents from universities and many politicians. Why not just join us.

“Prosperity for every nation”
may become the most promising project of mankind.

 

Axel Schultze

P.S.
Changing the world is what hundreds of thousands of entrepreneurs are doing every day – for their companies and their markets. It’s time to spend a tiny piece of time and maybe money to empower entrepreneurs in nations that are less fortunate with education, capital and support.

Join us

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What startup investors are looking for

One of the most often asked question from young entrepreneurs who don’t really live in one of the startup epicenters: “We don’t have enough investors in our region. How can I get funded?”

LIVING OFF THE GRID
Well, if you want what’s not available in your village, you need to do one of two things: get to the next bigger city or order online. In case of an investor you need to look for investors online and most likely then go meet them. If you are living in a rural area, you may indeed not get any investment. This is not because investors don’t want to travel to your location, but you are so isolated that your success is much less like than from your current or future competitors. Go where the action is :)

INVESTMENT
If not really in a rural area, it actually doesn’t matter where you are when it comes to finding investors. Investments are like water and always find the best way to an opportunity. This is why diamond mines in Africa, tech companies in Vietnam, car accessory vendors in Oshu, wholesale distributors in Munich and so forth got funded.

WHAT IS AN OPPORTUNITY
Sorry to say that, the problem isn’t the lack of venture capital, but the lack of fundable opportunities. Here is what investors are looking for:

  • Attractive business idea that makes sense
  • Businesses that are serving large markets
  • Stellar founders team that already invested everything they have in the startup
  • Rock solid market validation – more than 50 people already expressed interest
  • Minimum viable product that shows your idea is somewhat working
  • Well thought out business model (ideally a disruptive business model)
  • Great feedback from alpha testers of your MVP
  • Very good plan how to go to market

Here are a few tips
1) A day of a startup ceo – World Innovations Forum

2) Most common mistakes – World Innovations Forum

3) http://wiforum.org/2015/12/many-startups-fail

4) What is actually a great founders team – World Innovations Forum

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Eradicating Poverty

Instead of trying to help 3 Billion people from the 75 poorest countries to survive, we decided we want to focus on 1,500 innovative minds, the 20 best from each country to build their own self propelled economy.

PAST DEVELOPMENT AID EFFORTS
Since more than 50 years, the developed world is helping less developed countries by donating money. In a large portion of the world, even though donations have been increased, poverty has risen. In many cases due to corruption or bad management or due to the fact that we actually educated societies how to receive more donation and failed to educate them how they can become autonomous. In those poorest countries the main innovation is to find better ways to increase the level of donations.

It’s not about a possible waste of money – the old model is simply not sustainable when the population is growing as fast as it does.

NOT ALL NATIONS SEEK TO GROW
We – the World Innovations Forum leadership team – decided to split the world into two groups: Those who desire to bring their country to more prosperity and industrialization and those who decided to continue live their lives as their past generations did. There are countless tribes and even nations who just do not want to enter into a “developed life”. We see this even as part of some developed countries like the Amish in the United States. We feel nobody should have the right or ambition to force them into “our way of living”.

GROWTH NATION DEVELOPMENT
For those who are interested in rapidly evolving and catching up with the developed world, we see a chance to help them build their own economy from the ground up themselves and with their own ideas. By working with literally thousands of startups from around the planet we saw brilliant entrepreneurs from Ghana, Kenya, Nepal, Bosnia and pretty much any country. Today they leave their country and let a nation behind with no way of getting their innovation potential in order.

SUCCESS PATTERN
Whether it was Silicon Valley in the 1960’s, Germany in the mid/late 1800’s or recently South Korea after the year 2000, all innovative countries have the same pattern: An astounding small number of entrepreneurs started the innovation era in the respective country. All those nations were open to let them do their experimentation and had investors one way or the other to finance their growth. And if capital was not locally available FDI (Foreign Direct Investments) have been possible. The real wealth in all those countries have been driven be their ability to create a solid brand and then export into any conceivable market.

MISSION & ACTION
Based on our learning, we decided to embark on a mission to help build innovation ecosystems, train and select the best possible innovators and help them build a brand and export their solutions as good as humanly possible. To help finance their  growth, we started to build a global investor network and also work with local investors to invest through those top talents until they are globally successful. We focus on helping develop some handful of global minded entrepreneurs of the likes of Benz, Intel or Samsung. Rather than remotely trying to help billions of people, we are trying to build up an economy that is strong enough to help their population themselves.

TIMELINE
We believe for the next 15 years we still need development aid organizations who help in immediate support cases. At the same time, the World Innovations Forum is trying to create the basis for any country that wants to grow into prosperity. While doing so we help develop the next generation entrepreneurship that makes those countries self sufficient down the road. By 2035, we envision that all nations are on eye-level with each other and have similar levels of prosperity.

 

 

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