The five major mistakes startups Russian
Venture capitalist in Silicon Valley Steve Blank about his impressions of Russian startups.
In the 21 years I have been able to create and develop the 8 companies, half of them have already become publichnymim two work well, and the two simply failed. When I lost to one of his $ 35 million company, I called my mother and told her about it. She was silent for a long time, and then asked: "Do you have to return the money?". I explained that I had already met with venture capitalists who are willing to give me at least for my next company. This is how the Silicon Valley, the largest enterprise cluster.
Today, I am very pleased to be in Russia, the homeland of his parents. I come here for the first time, and I am glad that business in this country is not a crime anymore. I would like to share my impressions about startups, with whom I have been able to meet here.
The emphasis on the idea of
Beautiful slides and a good idea - it's interesting, but it's not business. The idea is just an idea, despite the fact that she - the core of your business. My dog probably have your own ideas, my children have ideas, but these ideas are unprofitable. Therefore, the main question: what ideas are profitable?
Here in Russia, I saw a lot of startups presentations. Presentations were some steep, but some reminded me of myself 40 years ago. They describe in detail the idea, but reveal it, and get investment from the fund - are two different things. Show me who is the buyer, a market where sales channel? The first idea, often turns out to be false. And that's fine. The entrepreneur should make mistakes, they should think and adjust their product. Therefore, I do not need to paint their idea. Show me more. "Hello, six months ago we had an idea. And what we've learned. We launched our site, and the first 40 visitors said it was the worst they had seen in his life. And that's what we did then ... and received 500 new customers who have expressed a desire to pay for our product / service. And then we add here is that, and then got the increase of visits, customers and were able to learn more new things. "
Copy business model of large company
Many believe that startups - is a mini-version of the big companies. But this is a mistake. They are very different, with its own peculiarities and differences. Large companies employ well-known business model. And startups must constantly look for new scalable business models, new markets, new technologies.
90% of start-ups fail to find a new model and leave the market. 90 percent! I remember how I once spoke to a large audience, where he was a thousand people, and I reminded them that 950 of them is better to go to work at McDonalds, because there they will earn more money. But 50 of them earn hundreds of millions of dollars.
Incorrect assessment of the risks
In some areas of start-ups have great technological risks: science, biotechnology and healthcare. Technology can not make money, but you will need years to find out. Will you treat cancer - is not a question of consumer and market risks. All tied to technology. While such companies do not have all the technological risks, they do not have to think about customers and market niches. But the majority of Internet start-ups simply do not have the technological risks. You can hate me for saying this, but your not about technology startups. I suppose that any good developer can configure the base for any Internet startup. The main case and the failure of such companies is thinking through consumer risks, and risks associated with customers. On the Internet start-ups fail because of a lack of customers, but not because of the fact that they do not have a website. Therefore, the main question - how are you going to prove to the investor, which reduces these risks.
The inability to learn from consumers
No business plan can not withstand the first contact with the customer. All that shows me in the presentation - it is only a point in time. But the presentation if you do not show me, will be able to learn at least something in the future. I will not invest in a point in time. I need to understand how fast, how soon, and how wise entrepreneur can learn from consumers and the market.
entrepreneur success secret is not in the mind, and the ability to learn from their customers. You've never done business the way you started it. You should not sit idly by and watch out for the development of the market, you must constantly respond to customer reaction. Your startup will vary based on feedback from your customers. And this is one of the most important things for success.
The investor - not rich uncle
I often explain to young entrepreneurs between the rich uncle and venture capitalist is a big difference. Experienced investors have from 8 to 12, the portfolio of projects simultaneously. On the day they are browsing to a thousand startups spend tens of selections.
When preparing a presentation for an investor, you should understand that it is several times more experienced than you, he has behind him more mistakes, more success. Experienced investors and experienced entrepreneurs - the most important values of the Valley. I believe that this is important, it is something we have to work and the Russian venture cluster.