What does a startup need to thrive?

20 01 2015

Last weekend I was invited to be a panelist on Radio NZ’s “The Weekend” programme with Lynn Freeman, discussing what it takes for startups to thrive.  You can hear the audio here:

I took some notes before the panel, of all of the things that I wanted to say – but of course in these situations you never really get to say everything you want to, so I thought it might be useful to share them.

TEAM

  • Diversity – leadership, sales, tech, project management.  You very rarely get these in one person.
  • Resilience – you have to be able to wake up every morning ready to be punched in the face repeatedly.
  • Adaptability – you need to be able to learn quickly from the active and passive feedback you’re getting, and pivot accordingly.

MARKET

  • Big enough to support your goals; this generally means going after a market of 7 billion (the world) versus 4 million (New Zealand)
  • Plenty of room for growth
  • One in which you have a valuable point of difference from your competitors

EXPERIENCE

  • Your team has experience in the domain you’re trying to attack.  There’s no point in trying to send a rocket to the moon if you’ve never seen the sky.
  • Track record in the tasks required to launch and operate your business.

PASSION

  • This is what will carry you through the dark times and keep you excited about the change you’re trying to affect in the market and the world

PRODUCT

  • You’re solving a significant problem that people actually have
  • It works, and can be shown to work
  • Potential customers are demonstrably willing to pay for it

COMMUNITY

  • You have a great network of fans and supporters
  • You’re operating in an ecosystem that supports you
  • You are making a real difference in your community

RESOURCES

  • You have enough money, or access to enough money to make your business fly
  • You have the ability and networks to establish and maintain a presence in remote markets. [see note below]

DISTRIBUTION

  • You have a way of getting your product or service in front of people so that they know you exist
  • You have a supply chain that is interested in working with you
  • If you’re selling direct, the product has in-built viral mechanisms to ensure your existing users are helping distribute your product
  • Lack of distribution is a common failure point for Kiwi startups.

LUCK

  • You need to make your own luck.  It helps to have a plan.  Seriously.

Note on resources: “No worries”, I hear you say, “We’re an Internet based business operating from New Zealand, the Internet brings us everywhere so that we don’t need to be there physically ourselves.”  If only.  Unfortunately, each geographic market has its own cultural, legal, and physical peculiarities, and there’s no substitute for actually being there to establish yourself.  Sure, there are pure plays like github or noip to which geography is completely irrelevant, but these are few and far between.

Other notes:

On the panel, Masha said that NZ is a useful test market, in that our demographics are similar to the rest of the developed world.  I’d argue that these similarities are usually very superficial. The killer difference between NZ and the rest of the world is the structure of our market.  There’s one degree of separation in NZ, and practically everyone knows or has easy access to everyone else.  The rest of the world does not operate like that – distribution is critical.  As a global startup, every week you spend chasing the New Zealand market is a week spent learning the wrong lessons.  To extend Steve Blank, don’t only get out of the building, get out of the country!

Finally, the number 8 wire mentality is killing us.  Sure, we’re great all-rounder generalists, very flexible, and very resourceful. This is great for building a prototype, but suboptimal for building a scalable business that can compete on the world stage.  By all means build your minimum viable product out of number 8 wire, but plan out which bits need to be shored up to be industrial strength as you scale.  And rather than relying on cousin Trev who has a passing acquaintance with a specialist aspect of your business, do bring in some people who have deep experience, rather than relying on mates and mates-of-mates to see you through.

 




Wellington, New Zealand’s Startup Capital

8 05 2014

I was invited to Auckland last week to The Project: Digital Disruption to discuss what’s happening in the Wellington startup scene.

Here are my slides:

Key points:

  • Wellington’s key advantage is its scale.  Everything is accessible within a 20 minute walk – but you need to plan for 30 minutes because you will bump into so many people on your way that are doing cool stuff.
  • We have a high density of tech startups, and a great culture to back it up
  • The weather is conducive to getting sh!t done
  • We have a rich startup ecosystem, which is becoming increasingly antifragile
  • Accelerators, incubators, investors, tertiary education providers, “big” tech, events, and support organisations all play their part
  • Promising trends:
    • Government “gets” it
    • Talent, capital, ideas and expertise are being continually recycled and refined to help us level-up
    • We’re attracting amazing people, and achieving critical mass
    • Things just keep getting better in a cambrian explosion of startups
  • The future is awesome, thanks to the hard work put in by many over a long time – we’re really starting to reap the rewards, and this seems certain to continue.
  • It’s all about the people



Parenthood, business, and investment

10 11 2013

I was recently interviewed by Sarah Spear at The Parentalist, a new blog featuring parents who are “making an impact on the world, in business and in their local communities”.

You listen to (or download) the audio:

Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.

Or watch the video:

On a related note, today I added the job “Parent at My Family” to my LinkedIn profile.  Why is that?  Parenthood teaches you:

  • Putting the needs of others ahead of your own
  • Functioning with next to no sleep
  • Dealing with life-and-death unexpected emergencies
  • Motivating others
  • Communicating with people with a wide range of skills
  • Managing conflicting priorities
  • Building community
  • Financial management in uncertain conditions
  • … and the list goes on …

All of these are critical skills for business success in general, and startup success in particular.

Enjoy.




The Big Idea: New Zealand’s real opportunity and challenge

15 01 2013

A decade is a very long time in the startup universe.

For New Zealand, the real opportunity and challenge is going to be to capitalise on the weightless economy, moving from more traditional physical commodities to producing valuable software, content, games, and other digital products.

That involves getting more closely connected on a person-to-person and business-to-business to the rest of the world. We need to find a balance between enjoying our isolation and participating and integrating with the rest of the world, whilst retaining our local integrity and character.

It won’t be easy, but it’s our collective job to make it happen.

See the full interview in The Big Idea




Summer of Tech: Building great businesses from Wellington, New Zealand

16 03 2011

In January 2011, I spoke to a Summer of Tech event about why Wellington and New Zealand are great places to start an online venture, and the importance of keeping your exit in mind.

Tech Entrepreneurship with Dave Moskovitz from SummerOfTech on Vimeo.




My advice to budding entrepreneurs

24 10 2010

A couple of months ago, the great people from MyFirstCompany.co.nz interviewed me to collect my sage advice for budding entrepreneurs.

Here is what I told them:

What is WebFund all about?


What’s the difference between a good idea and a good business idea?


What should I think about before approaching an investor?


How important is scalability for a business idea?


Are investors looking for individuals or teams?


You really need a team around you, and there’s no shame in sales!


How do I find the right business partners?


Start small, and talk to potential investors as early as possible.


What are investors looking for?


How do I test out my business idea? What if I fail?







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