Calling a digital startup 'tech' is so un-inclusive

'Tech' is so extremely un-inclusive; there are so few women, non-technical, or professionals, or business-development people, for that matter. They are not representative of all classes of entrepreneurs (but then again, neither are plumbers). 

What really is a 'tech' startup, anyway? 

Some will tell you that its a bunch of post-pubescent hoody-wearing, 'whiz-kids' all sitting together with laptops, building something 'cool'. 

Or perhaps someone with an online store, that sells widgets direct to the world from their garage? (That widget business must be booming).

Still others say that its a Venture Capital-backed (VC), technology-based company, based out of Silicon Valley, who are writing code, so that they will one day take over the world (or some other grandiose phrase).

No, a tech startup is simply a stage of a business entity, which predominately uses technology as the basis of its product, service delivery, or marketing mechanisms. (Which hopefully excludes fish & chip shops, franchises, management consultancies and life coaches).

I've come to recognise that 'tech-startup' really means "digital, disruptive, scalable and "enterprise-ready" businesses. (Note the emphasis on the last).

What about online businesses. aren't they tech startups too?

So often, even an online retailer will be lumped into the category of 'tech startup', though for $100, you can buy a trading & domain name, get a web-hosting account, setup a free online store, buy a cookie-cutter template and call yourself one.

Most of the industry reports analysing the startup space exclude them, though strangely, they are highly prevalent in pitching competitions and in VC reports like TechCrunch. 

So what about Google, Twitter, eBay, Paypal, Shoes of Prey etc. ? Aren't they innovative tech startups?

Well no, but many of them once were 'tech startups' (more on this in a minute).

Sure, there are many new form of innovation that come with those business models, but its are hardly 'innovation' in its purest sense. 

Consider this. Isn't Google (who make their money primarily from selling advertising), just the Yellow Pages online? Isn't Twitter just SMS for anyone with a smartphone? eBay just an online version of the old 'Trading Post'? (any 'The Castle' fans will be chiming in right here);  Paypal just an electonic version of a passbook savings account? Or Shoes of Prey just Williams the Shoeman online?

(Now before you get all up in arms, I'm am being a bit tongue-in-cheek here)

But, a solar/electric car, or clean fuel, or hi-speed rail, or cold-fusion, or break-through medical technologies that cure cancer or help paraplegics walk again etc? These are real forms of innovation. Its unfortunate that we see so few of these. (Though perhaps not for long).

So will I have to learn to code to become part of this 'digital revolution'?

I believe, that this is short stage in a larger cycle of growth, has occured in the same way as any other product or market lifecycle. The 'whiz-kids' are just the early-adopters of new business models, and methods of reaching or creating new markets. 

And this phase has been held artificially held over by the barriers to entry of technical capacity.  Its not that young graduates have better or more ideas; they simply have the life circumstances and the skills to build something and risk failure, where other more experienced people cant. 

When the rest of the business world catches up (as it has and will throughout history) those 'whiz-kids' will either have to run keep pace, or they will be over-run or swallowed up by those more experienced, more connected, more-capable and higher-achieving in the business community. And with it will go the ridiculous valuations (high & low) which seem to predominate the tech news cycles. 

By the way, I am in no way suggesting that we will be returning to the era of pre-industrial revolution. I do however recognise that we are at the dawn of a new era of revolution - the Age of the Entrepreneur.  

And now the barriers are coming down. I can hire a development team in Croatia, a sales team in Norway, a server in the cloud, a customer service team in the phillipines, a virtual assistant, and handle all of my marketing, advertising, PR, billing, accounting & administration online, all for less than a couple of full-time employees. Soon, the rest of my business needs, like strategy, legal & advisory will go that way too. 

At a very real and discernible point in the near-future, the focus of entrepreneurship in digital (tech, if you can't yet see it), will switch, driven by funders, founders and governments alike, to people who have the skills & capacity to imagine, build & scale an enterprise-ready business, not write code in a garage. 

So forget learning to code. 

Instead, learn to imagine, dream, build relationships, connect with people, prioritise, teach, develop products, build teams, identify & reach markets, solve real-world problems, share stories, and in doing so, live your dreams. 

This is how we will cure cancer, travel to stars, heal our planet, feed & clothe the world, and claim back our planet & our heritage, and become the people we were always meant to be. 

Because instead, in spending your time learning to code (as the advocates are now so loudly telling you), you could just be shortchanging your own, your family's, and the world's future. 

So what makes you such an expert on these things?

Actually, I'm not. 

I'm not a VC - few of those who are, have never risked their own money, or themselves spilt their blood, sweat, tears & years to build a startup (apologies for including those that have, eg @Hunterwalk).

I don't write code for a job, although I learnt to code as a teenager, and cut my teeth on Fortran, Pascal, Basic, Cobol before most whizkids' parents were out of high school. (And I know my way around HTML5/CSS & UX/UI).

What I have done, is 15+ Startups since '97, In social networking, hospitality, broadband, logistics, financial services, manufacturing, web-development, and hell's-bell's, even politics. And four not-for-profits. 

Before this, I had a long professional career in marketing and business development in business services, through the IT, manufacturing, logistics and building industries (industries which, despite what you may read in the tabloid press, will remain mainstays of our economy for decades to come). 

I don't claim to speak for the 'startup' industry as it currently stands. (In fact, most of what I talk about is at odds with it). I talk about the views, values, perspective & experience, as someone who has actually walked the startup path that so many aspire to. 

My audience, or 'tribe', are experienced professionals, who have a great idea, and arent sure what to do next.

If that's you, there I'd love to hear your idea, tell your story & help your achieve your vision of innovation. 

We might even change the world together. 

Twitter & Facebook: StartupFoundtn

Web: StartUpFoundation.com.au

Podcasts: RisingSTARtupS

MeetUps: Startling StartUp Ideas

LinkedIn: StartUp-Foundation-AU

Note the quasi-legal disclaimer: all brands mentioned here are property of their respective legal trademark owners, and no affiliation, validation, mis-representation or commercial promotion is here-by claimed or intended (even if it seemed like it).

Startup #10- a big opportunity with a Social Media Language Translator

Opportunity #10 is in a big space.

in late July 13, I took an idea to a Launch 48, a pitching competition & 'hackathon', with the idea to testing it, & perhaps forming a team around it, either for that idea, or maybe another. Not only did we win that competition, and put together a large team to build the opportunity,  I also learned a whole lot in the process.

What we created was a working prototype proof of concept and a business model for a very large startup, called TerraLingo (I'll come to the size of it in a minute), which is a social media language translator, with interesting big data analysis and corporate partnership opportunities.The challenge is that to build something within the opportunity space that we saw,that could scale at a worldwide level, would take easily between $20-30 million of venture capital over 3-5 years. Like many startups in that space, it had a high failure capacity.

The problem was that because most of our team was 30+, and would be initially part-time, no startup accelerator in Australia would've approved our application, which is seen as almost mandatory to obtaining tech VC seed capital. And the normal model means giving up a fair chunk of equity to a VC (often here at very unfavourable terms), in order to get the cash you need to grow the business to a big enough level. To do a startup well, means having cash, and spending that cash wisely, whilst we validate our model, whilst gaining traction and creating revenue.To grow it means a location to operate from, cash to pay for staff, research, services, consultants, advisors, software, business infrastructure etc

Also inherent in the problem for most of us older guys doing a startup, is that we have 'golden handcuffs', - obligations. We have wives (or husbands), kids, mortgages, school fees, lifestyles, etc. Which meant that life for us in a startup requires us to have a new (better) plan, none of which would work for a VC-funded venture (or at least, not for any of the one's I've met).

To make matters even worse, the local VC's that I directly pitched to didn't get it, so seed funding was going to be really hard, which meant we really needed a better plan. As my great mentor, Neville Christie, recently told me -"It's not a lack of resources that you suffer from; it's a lack of resourcefulness".

So the plan expanded to bootstrap through direct customer investment, and create a range of services to allow us to stretch our resulting cash further. We developed a model which should give us access to all the people, resources, mentors, corporate clients & money that we'll need to build out TerraLingo, without VC money at onerous terms (eg 2 x Participating, preferred stock, anti-dilution, ratchet clauses, board seats, controlling interests, and....... the list goes on). My apologies for the jargon.

To get really creative, we looked to our own ingenuity. For example, instead of us paying $7k per person at a co-working space (do the math on 3-12 people), we could operate from effectively our own venue that a separate group/team has setup for us, leaving the cash from that saved expense free for more important costs like marketing & a bigger team; instead of outsource our core requirements, we 'insource' them.

To generate cash, you should also get creative, and by spending our time seeking customer, rather than VC money (often called 'bootstrapping'), we not only would validate our startup but raise the value of the business before obtaining external financing. I'll demonstrate the value of this method in one line:-
Angelist recently raised a Series A round of $24m, on a $150m Valuation - a series A! in doing so, demonstrate how other startups could use them & replicate their model = more value in their clients and their model.

I'll lay out the whole plan shortly, but what we've been creating (on the side) has become a fully vertically integrated accelerator & co-working space model, for which TerraLingo would be an anchor client.

And with the early equity that we don't have to give up to an accelerator or VC, we can reserve a larger slice for the team, and offer some up to group of direct investors, advisors, consultants and mentors to accelerate our growth. Just like Ycombinator & 500 startups do. In effect we create our own VC model - and then allow other startups to piggyback onto our model, expanding it to support "from ideation to exit".

I promised you an outline of how big an opportunity TerraLingo is; to give you a sense of scale, it was announced yesterday that Topsy was acquired by Apple for $200 million, and DataShift is worth even more. Perhaps we were too late to the table, though its a shame that some of our 'clever' VC's didn't get it.

However, we think we might have 'accidentally' created something far more valuable.