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.
Diversity – leadership, sales, tech, project management. You very rarely get these in one person.
Adaptability – you need to be able to learn quickly from the active and passive feedback you’re getting, and pivot accordingly.
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
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.
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
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
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
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]
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.
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.
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.
Here’s my shopping list of criteria for good startups:
b) Clearly articulated market problem description
c) Significant addressable market size
d) Clearly identified market need (for the problem that is being solved)
a) Has both sales and engineering
b) Domain experience
c) Clean capital structure (if any)
d) Track record that demonstrates achievement and integrity
g) 2-3 People
h) Pragmatic approach
a) Web and/or mobile based
c) Addresses significant pain
f) Feeble competition
g) Sound business model
h) Capable of generating revenue quickly
i) Can exploit network effect
j) Novel and/or Freedom to Operate
Thanks to the RNZ team for a great on-air experience!