, , ,

Digitization is a mindset

OK in my previous post I talked about the European Digitization Issue. And rather giving it yet another abstract and very complicated explanation what it supposed to be, I’d rather talk about the effects it has today and why we it is a mind set and not a way of using machines. that solve all the problems.

CASE STUDY AMAZON

Beloved by many consumers – hated by many retailers.  Amazon a prime example for digitization. Not only Amazon but many catalog reseller before them understood that it will be impossible in the future to have a store with hundreds of thousands of products to choose from. It will be harder and harder to drive with your car into city centers buying a coffee machine and a mixer and a TV and a few other things and bring it to your car somewhere in a parking garage or actually carry it with a bus. But most importantly the seller with a less privileged brand but a very good product would have no chance to win in such an environment. And as a result we would have only a few global enterprise based products to choose from. The way to solve that problem was to involve the unbiased buyers to share their experience. Recommendations from other users, the information what other users also bought and the whole experience with other buyers was a breakthrough that could only work in a digital environment. Then the idea to let standard seller participate from the Amazon solution was yet another powerful move to integrate other sellers and at the same time make the offer even broader. While we have hundreds of thousands of online shops who are leveraging computer technology and software to sell their wares, it took companies many years to understand that the customer experience is so superior over any others that they could grow to the undisputed market leader. It wasn’t the technology but the mindset of Jeff Bezos to fully integrate the consumer as the most important part of a business success into the digital flow of their business. Today that includes the overview of what was purchased in the past, when, from whom and so forth. Also it included the return process and makes the consumer a part of the entire logistics chain. If we want to analyze Amazon versus other online shops – we may say that the degree of customer integration is by order of magnitude higher than from the other competitors and that could lead to saying the degree of digitization is much higher than from all competitors.

INTERESTING TO NOTE
In several countries or cities innovative businesses like Amazon are pushed out. The top case is Switzerland where companies are inspired to be digitized and innovative, but Amazon is not present in Switzerland. It’s mode so complicated that they give up. Yet Swiss consumers buy hundreds of millions worth of goods from amazon in other countries.

Germany: Crowdfunding startups is a great way to get some seed financing from the public. In most countries the digitization of fundraising is normal. Bafin, the regulatory administration in Germany seem to have no interest in supporting this way of digitization and so it is simply not happening. Germany however is one of the countries pushing digitization the most.

CASE STUDY UBER

Beloved by travelers, hated by taxi organizations. Also Uber is a prime example for digitization. The company was built based on the incredible bad customer experience when standing in line waiting for a taxi and looking at the line of taxis waiting to be used at the Las Vegas Airport. The idea was pushed further by the frustration of those who call a taxi and it never comes as well as the taxis that come to pickup a traveler who in the meantime just grabbed another taxi.  Many taxi organizations have been completely computerized and felt pretty digital but the customer experience was still terrible and the most important part of that business: the traveler was just not part of their digital processes at all. Uber developed a system where the traveler knew where the “taxi” they called is at any given point in time and the Uber driver already had the digital id of the caller and could theoretically request a payment if the passenger would just walk away, Similar to Amazon the widely understood business was disrupted by an organization  that included the customer into the already existing digital processes in a way that it completely outperformed the old business.

INTERESTING TO NOTE
Also here, countries that otherwise call for innovation and digitization, banned Uber as the taxi companies had no better idea to fight back by convincing lawyers and city officials to stop Uber in a different old fashion and somewhat corrupt way. In many cases the lobbyists from the disrupted industries fight back by pulling politicians into the game who don’t really know what is going on and rather block the innovation and digitization then helping embrace it.

SUMMARY

I can share hundreds of similar examples where we can look at Facebook in social networking, Google in search and advertising, HomeAway and Hotels, Expedia and travel agencies, E*Trade and broker business…. and very soon to come Banks, Insurance companies, Car Manufacturer, Hospitals and so forth.  All existing and future cases have one in common: The full integration of the customer experience (B2B and B2C) into the digital workflow will massively attack the old way of doing business.

To the contrary, not only Amazon and Uber are having problem to disrupt an old industry with their innovative models, AirBnB, BitCoin and many others face the same challenge.

Country official look for innovative technology to accelerate digitization. Yet stop it as soon as the degree of digitization is too high “in their very personal opinion, limited by the understanding of the technology and their effects”

/0 Comments/by
, , ,

Digitization in Europe

Digital is about 60 years old

The world started to go digital in the 1960’s with a big push from IBM. In the 80’s the digital world was developed further by bringing the power of digital to every desktop in form of a PC or laptop. In the 90’s with the rise of the Internet to every home and in the early 2000 years with social media to absolutely everybody and their dog. Digitization also branched out to mobile devices and with the inception of the iPhone computer power was at hand of virtually everybody in every continent by the 2010’s

Our Industry is fully computerized

Businesses obviously ask: “What the hell are they talking about, we have computers we do online banking, we have a website, our machines run with CMC systems, the products are designed with CAD system and the processes with an ERP system.  What is the big push about digital? Even the word digital is more than 30 years old. Right. Modern businesses in most European, US and Asian countries are at that level already. Most businesses have a high level of internal computerization or digitization.

So what is all the fuss about digitization then?

We are fully digital! No – and definitely no – YOU are not fully digitized. Your processes are as old as 30+ years. Your customers do not play any significant part in your processes and the degree of automation that helps customers versus automation that helps your internal organization  is roughly 100:1 in our organization’s favor. So what is digitization then?

I feel sorry but it is a misleading term, that has never been even explained in Europe and is absolutely NOT used in the US. Most of us in Silicon Valley has at least a smile with a sorrow face about Europe. But in the US economy that is actually completely down with no idea how to fix it is thankful for any confusion outside the US to give them time to find ways to fix the country. Unlike in the 60’s, 70’s, 80’s or 90’s where top notch US business people flew to Europe and showed them how to use computers, how to connect them in LANs, how to do e-commerce, how to use the Internet and how to do social media – absolutely nobody come to show us “digitization”. Why? The term does not exist. Google for “Digitization in the US” or “Obama and digitization” you will notice there are only a low number of findings and the content has nothing earth shattering.

Can we call the “digitization” push OFF? Please NO.

Yet there is a reason why Europe needs a weak-up call and the term “digitization” was just a word – unfortunately not explained too well. Compared to the US and now even in super fast growing China, what we call DIGITIZATION is ahead of Europe – again. Why?  Because Europeans follow advice and when reading the explanations that describe digitization or sometimes digitalization, it is so abstract and completely useless that people find their own way into something that is actually 180 degree opposite of the purpose of digitization: completely networked activities. Now – if I describe the term in my way I would do what many others do and at the end we have thousands of interpretations. Therefor I’d rather describe the effects of digitization in our normal day to day lives and in our businesses.

I will do that in the next post.

/0 Comments/by
, , , ,

Changing the innovation paradigm

Innovation gets funded with billions of $ all across the world. Hundreds of thousands of startups get founded every year. Yet 90% of the inventions, patented ideas, startups and corporate innovation labs do not succeed. If our crops would have been treated like our brain crops, humans would have extinct by now.

SOMETHING WENT REALLY WRONG

After a keynote at the European Commission’s Digital Agenda, I discussed a burning question with one of the officers. I asked: “Why is so much money poured into more and more inventions and innovative ideas but absolutely nothing in helping to get them to markets?” The answer was prompt and very clear: “Commercial success is the job of the entrepreneur, not of a government”. While I understood the rational behind the thinking, I still found it odd to let 90% of invested money evaporate, just because a more or less philosophical process. The result is not only lost opportunities but also widening the chasm between rich and poor, putting the leadership position of a nation in jeopardy and risking to loose talents who may find other nations more appealing.

Innovation that can’t be brought to market is of no value for the respective society and should not be funded with tax money.

WHAT PROFESSIONAL INVESTORS DO

The top venture investors nurture their investment from Idea to IPO. It’s the only way to get a significant return on investment. Plus they educate, mentor and coach their portfolio companies to bring them to maximum performance. And the result is stunning. instead of 90 % failure rate it’s only 75%. In other words they doubled the success rate of startups they have invested in. Unfortunately that is the tiny fraction of startups that had the privilege to move to Silicon Valley and get investments from some of the top VCs. But in the end, our “Innovation Crops” deliver a miserable 10% yield, while we know we could get it up to 25%.

We need to change the innovation paradigm

WHAT IS THE VALUE OF INNOVATION

I guess we can agree that innovation is perceived a key driver for progress and growth. But is that true?  Is it the innovation or is it the ability to bring new and different products to market and attract a huge amount of people to support it, buy it or otherwise engage with it. A less innovative product that is produced in huge quantities and attract a large global market is most likely creating more jobs, more revenue, more profits and therefor more taxes for the local community than a product that is much more innovative but nobody knows about it therefor the company may not even survive. The true value of innovation is created at the time that product or service is hitting large markets and get a lot of business.

ONLY SUCCESSFUL INNOVATION MEANS JOBS AND TAXES

If we can agree that a value is only created when the companies grows, creates jobs and pay taxes, we should also agree that funding the urge of developing something is less important that funding the the need to bring it to market. Creative minds will build innovative products whether they get funded or not. But only if economic success is supported afterwards the innovation is gaining in value. And if the core driver for Innovation Funds is job creation and prosperity we may need to reconsider the funding strategy and put some money aside for every amount of money spent in the invention itself.

NEW INNOVATION PARADIGM FOCUSING ON COMMERCIAL RESULTS

A new innovation support program needs to focus on commercial success more than anything else. That includes providing non bureaucratic processes and rules to actually be able to make global trade even as a startup. It means lowering regulatory barriers to an absolute minimum. It also means providing business education to leverage latest techniques for an efficient and successful go-to-market plan – something no university will ever be able to offer. And means that young startups are supported with international networks and concepts to leverage existing trade networks. And of course that some of the funds available for the invention itself is also made available to kick start the commercial success.

 

/0 Comments/by
, , , ,

Global Trade for every Startup

One of the big hurdles for entrepreneurs trying to grow fast and go international, are trade rules, currency considerations, trust, transaction financing, dealing with letter of credits and much more. Global trade for startups is virtually impossible. After getting global four times with our previous businesses, we decided to make it easy for all young entrepreneurs to go international. We started to design a global trade network, leveraging latest blockchain technology, smart contracts and our own global business know how.

Most super growth tech companies were still too slow

When we look back in time, Facebook demonstrated an unbelievable power of growth, yet it was too late in Asia. The same goes for Uber, Tesla and others. On one side conservative investors argue about speed to go international. Yet later stage investors argue about missed opportunities. Conventional growth techniques just did not allow mach faster growth than the current world leaders showed.

We don’t want to support monopolies, but….

Amazon for instance had a great chance to go global without anybody copying it right way. However new contenders like Alibaba do not stop taking market share bit by bit. That means monopolies find their contender quickly and that is a good thing, because we need diversity and options. But maybe it’s a good idea to give fragile startups an opportunity to go international even faster and then learn to defend their innovation at a later stage.

Blockchain based global trade for startups

Global trading platforms are the most used example when blockchain technology get’s explained to industry executives. However global enterprises can’t just rip out their conventional IT system and replace their gigantic databases with a blockchain. Nobody even knows if a slower blockchain would hold the load. That is very different with startups. Their problem in international trade is the initially small volume. For a blockchain however just right. Bringing thousands of startups quickly on a centralized system would be a nightmare. But using a self regulated decentralized solution a great opportunity. Building out interfaces to adopt the blockchain by a startup is easy – for enterprises a life long project. Making global trade rules standardized through smart contracts can be very easy adopted by a startup that has no real rules today. Just creating all the smart contracts for an enterprise would be a complex undertaking with lots of risks and liabilities.

The Society3 Blockchain would allow technology resellers in any corner of the world to safely buy and sell innovative technology that also comes from any place in the world. Tokenized businesses where anybody can trade anything makes the business much more valuable and much easier to conduct.

What does that mean in reality:

  1. Instead of creating, negotiating and working based on tens of pages of a distributor or sales contract written in many languages and considering many currencies, we invented self executing contracts that define the trade process once and for all. If adjustments are needed in future situations they will be adjusted for future deals as well.
  2. Instead of trying to understand the other trade party and developing some vague sort of trust, all players on the trade platform are authenticated and clearly identifiable. Trust development is taken over by the system.
  3. Orders can be placed by anybody and send to any trade partner. The fully decentralized trade model does not need any “distribution organization” in between. The blockchain and the corresponding user interfaces take care of the transactions and processes.
  4. Shipments are  made by the companies (startups) using any of the freight forwarder who docked onto the platform. Tracking and processing of all documents are taken care of by the blockchain and the corresponding self executing contracts.
  5. Delivery can be made to business partners or directly to end customers. Payments are made in crypto currency and every party takes care of the conversion of crypto into the respective local currency and back.
  6. Smart contracts keep track on both, the order flow and the shipment flow in digital form. Tax and customs documentation can be either printed when necessary or also digitally transferred.
  7. In case of a return due to a defective product, the same process goes reverse.
  8. Transaction cost is covered through miners getting paid for their job in tokens and only over time there maybe a small fee in the sub % range necessary to keep the platform up and running.
  9. Producer, customer, shipper, customs authorities and any other participant can be rated and that way develop reputation over time.
  10. The system provides unparalleled transparency due to its decentralized management at lowest possible cost.

Never before it was so easy to sell and buy products from all over the world to all over the world. Most of the expensive and delay causing intermediaries are reduced to one: the decentralized blockchain.

If you like to be part of the Global Trade System project, influence functionality and beta-test the first version of the GTS as soon as it comes out, please join the group and apply for the project.

GTS Project Application

Application link will be available soon

 

/0 Comments/by
, , , , ,

San Francisco Accelerator now online for entrepreneurs from around the world

With 50% external funding rate since its start in 2014, the S3 San Francisco Accelerator is one of the most successful accelerator programs out there. In 2015 Society3 was named top 100 most influential accelerator. Now we will make it available for all entrepreneur in the world – no matter where they live.

AN ONLINE VERSION OF THE SILICON VALLEY MINDSET

It is impossible to get millions of startups to San Francisco / Silicon Valley and have them participate in the unique spirit of open minded people, breaking all barriers to find solutions and collaborate day in and day out to create world class solutions. But what we can do is to create that same spirit and the same connectedness online so everybody can benefit. A mindset is not something that works physically and therefore is independent of the online or offline world.

EIGHT WEEK PROGRAM

The program is restructured for attendees to completely participate online. All workshop sessions will be done during the 8 week program wherever the entrepreneurs live. The typical program requires entrepreneurs to participate in the weekly online sessions on Wednesday where knowledge transfer, reviews and discussions take place. During the week, local or remote mentors maybe available. The anchor elements of the program include:
* Vision & Purpose of your business (1 week)
* Leadership, Talents & Culture (1 week)
* Disruptive business model development (2 weeks)
* Go-to-market strategy (1 week)
* Traction & Growth Hacking (2 weeks)
* Fundraising, from Seed to IPO (1 week)

The first online accelerator program (Flight 7) starts April 11.
Graduation and Demo Day is during the World Innovations Forum in Switzerland in June 2018

APPLICATION PROCESS

If you are interested in joining:
1) Make yourself more familiar with the PROGRAM DETAILS
2) Apply here: PROGRAM APPLICATION

 

 

/0 Comments/by
, , , , , , ,

Global Online Meeting April 5

SOCIETY3’S FIRST GLOBAL ONLINE MEETING

After creating one of the most successful accelerator programs and working with entrepreneurs for the past 4 years, we decided to take our vision global. Today we are represented in 25 countries. And since we cannot bring millions of entrepreneurs to Silicon Valley – we need to do something radical different. We, the founders of Society3, are used to disrupt and make a difference. Today we begin to make a difference in how entrepreneurs in all countries get supported, treated more equally and have a chance to become a big company as if they would have started in Silicon Valley.

We need to rethink our abilities to permanently collaborate on a global scale. Creating a simple copy of Silicon valley is not going to work and definitely not the very spirit of Silicon Valley. Disrupting the main disrupter is. The digital world already holds all the necessary assets. We don’t won’t to ‘improve’ Silicon Valley but stand on it’s shoulders taking the amazing culture that was created there to an all new level.


REGISTER CON CALL EAST
Best for attendees from Europe and Asia


REGISTER CON CALL WEST
Best for attendees from Europe, Africa and Americas

AGENDA

* THE NEW EXCHANGE
Creating a global exchange for innovative minds.
How can entrepreneurs, investors and enabler benefit.
What’s our experience after 20 years Silicon valley.
How can every entrepreneur around the world leverage
global connections.

* GLOBAL ACCELERATOR
Running the first global online accelerator so every
entrepreneur can join, no matter where they are.
Main topics are: Bold visions, disruptive business models,
zero budget go-to-market strategy, traction and growth
hacking, fundraising,

* INTERNATIONAL TRADE FOR EVERY STARTUP
Building the first global trading & transaction system for
young entrepreneurs using blockchain technology.
Getting business rolling into almost any country faster then
ever before imaginable – at nearly no cost.

There is no substitute for a great in person meeting, like there is no substitute for an amazing live concert. Yet we hear MP3 music every day. This online conference is about online engagements, creating a mindset for online collaboration and an experiment to create a permanently connect online ecosystem – very much like Silicon Valley.

HOW TO CREATE A SILICON VALLEY CULTURE?

Every group of autonomous people can create a culture. We are on the verge of creating an all new entrepreneurs culture and significantly increase startup success rates no matter where they are located.
We do not want to change anybody or their culture. But we want to connect those, globally, who already have a good idea about an open and sharing ecosystem where we all can learn from each other and build businesses who can grow fast, create new jobs and provide value.

On April 5 we want to talk about how we can do that and how the culture in Silicon Valley was created.
All you need is an internet connection and a way to listen and ideally talk online.

Please register here:


REGISTER CON CALL EAST
Best for attendees from Europe and Asia


REGISTER CON CALL WEST
Best for attendees from Europe, Africa and Americas

There is no charge to attend

/0 Comments/by
, , ,

Disruptive startups made in Switzerland

In March 2017, four startup teams graduated from the first accelerator program provided by Society3 in Switzerland. Each of the four teams worked in a Silicon Valley style program focusing on becoming the best in their category and eventually conquer global markets. Some of the teams already secured funding, others wait to gain more traction before they raise their first round.

In summer 2016, 68 teams applied for the program. After a free pitch training, they presented their story and eventually six teams have been selected to join the program. After the first week, two of the six teams did not make it to the next level. The remaining four teams went through a program of relentless execution. The focus was on solidifying their vision, create a disruptive business model, compile a zero budget go-to-market strategy, generate market traction and revenue and develop a long term capitalization strategy for their company.

Disruptive business models have shown time and time again to be the essential competitive weapon. More important than technology is the way business is conducted and customers are treated, serviced and supported after the sale. Transparent pricing models and superior processes typically beat any technology leadership as seen with Facebook/MySpace, Tesla/any other e-car, Google/Yahoo, Microsoft/Digital Research, and countless others.

The four Swiss startups all developed a level of disruption that will force any of their competitors to react to their offering one way or the other.

Artiazza

An art platform disrupting the art business by giving artists for the first time a way to participate in the value development of their art. Paintings, sculptures, or photographs sold on Artiazza have a unique identifier and can any time be resold by their own. If the owner can sell the art for more than the initial price, the artist gets a cut of the uptick. If the art gets sold again for more, the artist again gets a piece of the increase in value, no matter how often a painting, photo or sculpture changes hands. Artists will obviously prefer Artiazza over any other model as it is the first and only having the artist participate in the value development of their art.

Connexa

A online group and community platform for businesses and special interest groups. Unlike any available platform today that simply sells their platform for a license fee, the Connexa team developed monetization options for their platform to solve the budget problem most community managers have. Now rather than charging a license fee, they participate in the monetization and provide the community system for free. While there are millions of free online groups and communities out there, a community manager will rather use a free system that provides added values and allows them to monetize the system than invest in an online community which can easily run into six and seven figure license deals.

Sonect

Building virtual ATMs allowing anybody to get cash from theoretically everybody else. The disruptive business model will replace any conventional ATM. Instead of carrying the high cost of “cash-recycling”, banks can now let cash easily flown through the market without a physical hub and participates on the virtual transactions. Shops will be their first target customers, where the shop can offer cash any time to anybody and reduce their own cost of bringing lots of physical cash to the bank every day. Unlike the “cash-back” in the US and other countries, the virtual ATM solution is independent of a purchase and independent of the business that runs the virtual ATM.

Yamo

Providing the freshest baby food possible. Their disruptive business model will allow them to compete with even the largest baby food enterprises by going with their “fab-less production model”. Yamo, very much like the modern fab-less semiconductor industry can scale nearly infinite without any capital expenditure. The business model pushes the envelope of speed like never before imaginable. Baby food can now get even fresher than homemade. Baby food producer will sooner or later respond to the Yamo Business Model regardless of already spent billions in production equipment.

Axel Schultze, founder and CEO of Society3, and a serial entrepreneur who lived close to 20 years in Silicon Valley, explains: “While Society3 is an award-winning accelerator with a well thought out training camp, the key of our program and growing ecosystem is the way we think and the mindset we induce in our startups. it isn’t the technique to do something in certain ways – it is the mindset in which things get done. Startups find a space of open minded people who don’t argue why things may not work but wonder how the impossible may get done. Creating and transforming great ideas into market leading businesses through relentless execution, is only the result of such a mindset.”

The Society3 Accelerator is conducted in the Lucerne Technopark (D4). The next program is scheduled to start October 23, 2017 and startup/ scaleup teams can apply at https://society3.com/accelerator. The onboarding process will start with an introductory meeting for all applicants on August 31. Applicants get invited to a free pitch training on Oct 12 and the final acceptance will be made based on a pitch competition on Oct 17.

The accelerator is focusing on SecureTech, AutoTech, AI, Fin-Tech, Transport-Tech, LogisticsTech, FoodTech, IOT, ICT, Energy, and other society relevant innovations.

 

/0 Comments/by
, , , , ,

Compete successfully with enterprises as a startup

competing successful with enterprises - Society3

Once in a while I meet entrepreneurs with amazing ideas but they don’t know how they could compete with even the largest enterprises.

I started my first company from scratch with $20,000 and needed to compete with 3 other businesses, each $200 Million to $1 Billion in revenue – 10 years later we were market leader on a global scale ($5B in revenue)

My second company was a little more different

I started my third company right after the bubble burst and competed with two other competitors who had $70 Million and $68 Million cash in the bank from pre bubble rounds – I started with $500,000 – 5 years later we were close to acquire one but let go because the due diligence made clear there is nothing we could gain – being the market leader already.

Here is how we compete:

1) In each case we developed a disruptive business model. We completely went of the beaten path and redefined sales channels or we made payments in very different ways, provided transparency were was none, service integration in the pricing and so forth. It was the market that forced the competition to follow us and compete with us – or loose it.

2) I never competed based on technology, product functions or any of those short term win or loose features. I learned: “The best product never wins”. However we did have great technology because we had great engineers – yet it was not the winning factor in the end.

3) Business is done between people. I knew I can win more customers when I have a nicer team – and I always had a stellar team. :)

In retrospect: all big winners won with a superior business model and amazing teams.

Obviously I don’t know anything about your business and therefor it is hard to make more specific suggestions – but look at your business model and your team before you even spend a millisecond on your product when it comes to competing for market share.

A good read to make sure you can handle such a problem is the question to find great founders

/0 Comments/by
, , ,

MVP, Minimum Viable Product

There is a concept called MVP – Minimum Viable Product.

Even though the name kind of says it all, the concept “MINIMUM” – “VIABLE” – “PRODUCT” indicates that there are as few features as possible, it must kind of work and it is a product – most entrepreneurs interpret MVP as the early iteration of a product they want to build. But that is definitely not the case. Let me explain it in more details:

1) MINIMUM VP
An MVP is supposed to demonstrate your core functionality that shows how your product is different from others. And as such focus exclusively on the core mechanism and process of the new solution. If you build a self driving car, it would be perfectly OK to use an old VW beetle that may have no lights and only one seat. But if it is perfectly self steering – you made a great MVP. Try to implement as little features as possible. Every “nice to have” feature destructs unless it is absolutely necessary to show the core idea.

2) M VIABLE P
Be aware that the MVP will only be used by early adopters and need to be seen by investors and other key people. They are typically smart enough to abstract the concept and imagine where you want to take it. It just needs to show the core feature in a very solid way. It need to work over and over again. The function needs to be robust enough that anybody can envision you build the whole concept in a beautiful way later on. Equally important, let the users experiment with it BEFORE it is ready. You will want to learn as much as possible from those users to build the final product after their feedback. Redoing a product is not only much harder but a rather “ready” product may mislead users to a behavior they may not be able to articulate their pain – rather leave it open in an MVP.

3) MV PRODUCT
Make sure that you have a well thought out business model that is actually the disrupting part of your solution. EVERY business model is reflected in the MVP. If the business model is lame, your MVP will not be too catchy wither. Make the PRODUCT reflect your business model.

/0 Comments/by
, , , ,

Why so many startups fail

I’ve worked with over 100 startups in the past years and ran 5 businesses myself.

My experience – in this order: 

No. 1) Weak execution

Most failing startups could just not execute in a timely manner and/or showed a huge lack of judgment. They worked too hard on product features, too little with the market. They built too many “nice to have” features. They did not launch in time and did not work hard enough to build a use/customer base. Didn’t manage expenditures well enough. Failed to identify opportunities, failing to build strategic connection…

No. 2) No long term vision

It’s hard to convince a customer that your young startup is the right business if you just focus on your present product features. It’s hard to convince investors, partners, top talents if you can’t express where you want to take the company. 

As a result you won’t get enough traction and most likely fail.

No. 3) Superficial market/customer research

Lack of product-market fit. Very often startups develop products for themselves instead of for a large market. They keep their development too close to their chest instead of involving test customers very early on – even before they create their first prototype. The result is often to too far off from what the market needs. 

No. 4) Team weakness

No sense of urgency. Not fit enough on the technology side, not fit enough on the marketing side, not fit enough on the finance side, not fit enough on the operational side. 

5) Lack of connection power

Startup teams all too often underestimate the importance of building their own network of influential connections. Connections to influential users, influential industry groups, influential analysts, influential media, influential business alliances… Or they hope to find investors and mentors that provide those connections. In reality it’s just not working that way.

Re- money 

Many comments are made that money is one the problems. In all the cases and startups I’ve seen, lack of money never brought a startup down. Lack of funding is a function of one of the above issues – not a problem in itself. There is more money available than ever before – but the above weaknesses prevent startups to raise funding.

/0 Comments/by