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Thursday, 22 May 2014

Rising StartUps - A new podcast series about Startups, for Startups, byStartups on ..... (you guessed it) Starting Up



I live & love startups. Like the small of a new car, every new startup has their own unique appeal. A (hopefully) needed possible answer to a real-world problem, or a new market not yet identified. Each founder like a wide-eyed child with their vision of the future, and their startup a part of changing their part of the world.

And every new founder, whether first time out, 'up-at-bat' again, rookie, or experienced professional, is going to have some challenges; actually, lots of them. More than they can yet imagine.

When I broke free from a corporate career in 2004, there wasn't even a startup eco-system in Australia. Now, we have one that is burgeoning, but the stories that I hear are from overseas imports or from long-time-ago successes, most of whom that are way past the early days of their first hires, the challenges of early-stage funding, finding great mentors, and trusted advice, of connecting with co-founders, and mistakes, and bootstrapping and........, ok, you ge the picture.

So way past, that the stories might not yet (and might never) be of much help to the many people who are about to, thinking about, or have just started. (Though they are often inspirational, which is why I continue to go to select meetups to hear them.)

But mostly, I wanted to hear the stories of my peers; their challenges and successes, their gains and pains, their learnings and yearnings. But these stories didn't seem to exist. 

Which is why I started 'Rising STARTupS'.

At Tim Reid's suggestion (yes, Small  Business - Big Marketing -thanks Tim), and inspired by Nathan Chan of Foundr, I decided to try my hand at interviewing. After all, how hard could it be for some-one whose done a few startups already?

And what I found out is, that apart from having 'a good head for radio' (and a reasonable voice for it), it was a natural fit for my style of conversation. 

Before cutting the first of them, we agonised long and hard about the questions, trying to determine just what could draw out the greatest of responses. And I wanted to use a consistant format & questions, so that you, the audience, can compare the answers of each person, and take from each, just what you need.

We've already taped 14- (and have a another 36 planned for this year) which we will be publishing next week.

The first four so far (each with links to twitter) are:-
And I have to say, they are each unique, all brilliant, packed full of tips, gems & advice; timely, relevant, and helpful.
As well as the 25 min interviews with each founder, we've added a special topic, relevant to the content of each interview, and a review of some of the key points. As well, there will be links to some bonus downloads, cheatsheets, upcoming events and other startup news and views.

So subscribe (above) to this blog and we'll give you advance notice of the podcasts as soon as they are ready to go to air.

And one special request - if you like the interview series, tell your friends (whether by social or word). 

And if you have ideas about how we can improve, or know of a great Rising STARtup whose story is just begging to be told, tell us (there should be links on the right for both).

Thursday, 8 May 2014

Getting clear about why startups fail - the real truths behind failure(not for the faint-hearted)


I recently read a post about startups & why they fail. Given my background in startups, (15 personally, and hundreds in conversation), I couldn't help but address this mis-information.


The key reasons early stage businesses and startups fail is often a lack of 3 things: 
1. Clarity - about ‘who’ they are and what problem they solve in the market. 
2. Financial Mastery – knowing what to measure and what it all means (including how well their current marketing efforts are working) 
3. An Action Plan - that includes specific targets and strategies to ensure they stay focused.
However, Our team of 27 Mentors & advisors (who between them have helped thousands of startups) all agree
THESE 3 reasons ARE WRONG

Worse, taking this advice will cause you to focus on solving the wrong problems.

Not all advice is equal. Let me be frank. There are a lot of people out there giving advice on startups, that have never done one themselves, or worse, have never 'failed'.

But don't just take my word for it (which is the point of the article). Here's what a few 'failures' had to say on the topic.

The great NFL football coach, Tommy Lasorda famously said "About the only problem with success is that it does not teach you how to deal with failure". 

"Many of life's failures are people who did not realize how close they were to success when they gave up." -Thomas Alva Edison

"Develop success from failures. Discouragement and failure are two of the surest stepping stones to success." -Dale Carnegie

"I learned more from the one restaurant that didn't work than from all the ones that were successes." -Wolfgang Puck

"My imperfections and failures are as much a blessing from God as my successes and my talents and I lay them both at his feet." -Mahatma Gandhi

"Anyone who has never made a mistake has never tried anything new." -Albert Einstein

So let's get to it. 

There are 8 real reasons why startups fail,  and they boil down to 2 indesputable truths as to why entrepreneurs fail.
The 8 Reasons. 
1. You have the wrong, poor or mis-aligned guidance, or you don't heed it. 
(Note:, the rest all follow from this first one)
2. Your business model is flawed.
3. Your personal life sucks
4. Your team is weak, or non-existant.
5. Your strategy is mis-aligned with your vision. 
6. Your message is incongruent with your offering, or poorly crafted or delivered.
7. Your execution is 'sub-optimal'.
8. Your Resourcing skills  (finding customers, partners, suppliers, supporters, JVs, funders, fans, advocates) are not aligned with your capabilities. 

And the the great news is, because these things is these are all your responsibility, they are also within your control. 

There-in lies your opportunity. (And my own, for that matter).

And the 2 indisputable truths?

1. Your reason 'why' is not strong enough, or
2. Your compelling 'vision' is not big enough or powerful enough. 

Here's the best part. If you address the 2 first, you are halfway to fixing the 8 reasons. 

Again, don't take my word for it. Find out for yourself. Ask your own mentor/ advisors -show them this email. The clever ones might even manage a wry smile. 

If you'd like to learn more, we are about to launch 3 new weekly podcast series, the 1st of which is called 'Rising STARtupS' for startups, by startups, about (you guessed it)....starting up. 

We'll be promoting the podcasts through our meetup & LinkedIn groups, so join that & you'll get the updates. 

You can find the 'Startling' meetup group at meetup.com/Startling-Startup-Ideas-Group-Melbourne

And please share this with that person you know that has been talking for ages about starting 'one-day', and with your 'tribe'. 
Have a great day
Daniel Mumby
CEO & Founder
The Startup Accelerator for Professionals
- Presenter - Rising STARtupS Podcasts
- Events Co-Ordinator - Startling StartUp Ideas

Saturday, 3 May 2014

What is Startup Success really?

Why 15 startups? Can't you succeed at anything?

Great insight often comes from great guidance. One of my newer mentors (who didn't know much of my history) asked this question of me yesterday. 

Not because he was trying to be rude or critical, but because he recognised that anyone from outside of the startup space would genuinely ask that question. And it's a valid one. 

What do you call a success?

Is it a startup that went on to make it's founders millionaires? 

And what is failure?

Is it a failure to properly execute a strategy? To launch prematurely?

Or is it an idea that has inherenent weakness (as most do) that cant easily be overcome?

Or perhaps its an interesting idea, that you successfully launched but later ran out of resources (team/money/ execution) for? 

Or hits a unanswerable questions or barriers (such as scalability/ licencing/ politics/ market) ?

Or a launched business that you later closed because there was substantial risk (eg of itself of being disrupted)?  

Or perhaps you didn't know/ learn/ do / listen enough?

Or one of a hundred other reasons.

These are interesting questions, at least to me, and perhaps to a few other entrepreneurs. 

What I do know, is that the average number of projects that an entrepreneur has attempted before reaching substantial success (what ever that is) as a Founder (as opposed to an investor) appears to be between 8-14, according to the wise advice of 2 of my great mentors. 

Why is that important?
Because for every 1000 entrepreneurs who start the race, only a few will ever make it to this mythical finishing line (or perhaps its just a new starting line). 

Let me expand. A recent report by PWC, analysed the dropout rates of failed startups in Australia as being about 60%, which means that founder retry rates are 40%.

For example, in any one year if you had a cohort of 1000 aspiring entrepreneurs that had failed on their 1st attempt, 600 would leave, and 400 would retry. 

(In the absence of any data about the return rates of subsequent founders, we can only use that continuing ratio). 

So of the 400 that retry, (and because most of these will fail), only about 160 of these will go on to try a third time, and 64 a fourth, 25 a fifth. 

By the end of the time series that marks the 6th attempt, from the original cohort of 1000, we would have a very interesting statistic.

Only a handful of entrepreneurs will have successes, and an equivalent handful number will have achieved failure, both over approximately the same time scale. 

Both will have learned similar things, such as how to build & resource teams, overcome adversity, build connections, obtain great guidance, craft and deliver a compelling story, and engage an audience. 

Some will say that the main difference will likely only be the size of their wallets. 

However, one group will be disproportionately stronger in another area.

You can't buy it, borrow it, or lease it (though some might try to fake it). 
And once you have it, it can't be take from you. 

Character. 

Character comes not from money - it comes from facing & overcoming adversity. 

It is what defines, and refines you. It says what you will, or won't stand for. 

Character forces you to search your soul for who you really are. 

Character comes from standing against the small voice in your mind that tells you to take the 'easy' shortcut. 

Character comes from pushing on, when all about you have fallen, or given up, or taken the easy path.  

Character tells you get up again after you fall down. 

Character will cause others to rally around you when you fall, and reach out to you, to help you to your feet again

Character, is the compelling and endearing qualities of your integrity, values and standards, all wrapped up. 

Success is Character.

Sunday, 27 April 2014

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).

Are you on track with your startup idea, or 'pushing s#!t uphill"?

Time and again in customer conversations, I am reminded of why I'm building my current startup, (Startupfoundation.com.au).  Daily, I hear "That's exactly what I've been looking for", or "Where were you when I started x years ago?"

If you are talking to potential customers and not hearing those phrases, then you have a problem. A big one.

They (customers) might not care about your solution to their problem. Or perhaps you don't really understand their problems, or they just don't think you do.

Either way, you are now (and apologies for the vernacular) "pushing s#!t uphill", as we say downunder. Every 'conversion' is a battle, every conversation is a firefight, every sale is an Everest.  But it shouldnt be.

If "Minimum Viable Product", is a flawed propositon for you (as it is for many startups, such as for those by experienced professionals), why not start with a "Minimum Desirable Product"? 

Why not build something that not only solves the customers' problems, but that they care about enough to actually want to put down their hard-earned-readies for? Why not meet their needs the first time round, instead of taking 6 or 10 iteratons to get there, and alienating many of your ealy potential customers in the process?

I could describe in detail the difficulities of finding, & the very high cost of acquisition, for obtaining early leads. But its a simple fact; if your market loves your products 12 months sooner, that's 12 months of 'extra' conversions, referrals, revenue, repeat buiness, PR etc. Its probably the difference between you running out of 'runway' (personal or business capacity) and making it your next milestone. In short, the difference between succes & failure. 

So, before you build your 'product', let me ask you this. Would you hire a housing builder to build your dream home using an MVP, and then 'test & iterate' or would you want it done in a more desirable way?

Perhaps its time for a whole new way of thinking for building a digital startup. Perhaps its time to think about how to imagine the endgame & then reverse engineer the process, so that you start with a solid foundation. 

Or perhaps we should just change the way that we build houses?

Saturday, 26 April 2014

Who to believe when 2 opposing views miss the point about VC funding?

StartUpSmart published an article recently about the state of VC in Australia, and called out TechCrunch on some key data. 

http://www.startupsmart.com.au/financing-a-business/venture-capital/techcrunch-calls-out-australias-venture-capital-issues-investors-respond/2014042312147.html

However, I think both groups miss the point. As i highlighted in the (improved) comments.
 
"Its a interesting fact that Australian startups are seeking funding from overseas (typically the US) even at an earlier stage. Is it because Australia is not prepared to invest in Australian companies?

According to the last year's PWC report, the total amount invested in early stage startups in 2012 was $53m, and credible sources put the amount 2013 figure at 25% less, or $40m. 

The astounding fact is that there's a majority of founders, possibly 1200-1500,  (>80% of total new digital) startups pitching for this very small pool of funds.

Does this make you wonder why?

Perhaps its because investors know something that VCs, or us as founders, don't. Startups in Australia have yet to tap into our core strengths in the markets in which we have so much domain expertise. 

I hear so often that we should try and become more like silicon valley. With a (relativity) small consumer economy, we punch well above our weight (in GDP terms) in B2B/B2E. Eg mining, agriculture, manufacturing, healthcare, services, forestry, distribution (the list is very large) etc, yet we as a startup eceosystem, are all still focussed on building and finding 'unicorns' in consumer markets.

And we have at least 2 of the largest untapped funding pools available in the world. 

When we (startups) start building in sectors in which we can hold our own, funders (high net worth individuals, wholesale & retail funds, corporate investors and overseas investors alike) will flood the market with fiscal 'solutions'. 

I say that the fault is not one of funding, but of our own making, by not creating truly fundable opportunities.

As founders, we need to look to our areas of expertise, and hold our ground with conviction, when pitching these new ideas, instead of bending in the direction of every new breeze that blows. 

Instead of looking without, we should first be looking within."

Tuesday, 22 April 2014

Startup funding is everywhere

One of the most frequent problems that I hear from startup founders, and potential founders, is that they have no idea where they will find the money to quit their job, in order to build their 'great idea'.

And yet founders often ignore the single most important (and cheapest) sources of funding. Customers. 

Customers are also their most valuable type of validation. Forget metrics that don't matter, like pageviews, likes, or hits. It's paying customers. 

How many people have you spoken to this week that might be prepared to value what you do, enough to put down some coin?

Perhaps a better question is "Do you know where your customers are?"

They are everywhere, if you would but open your mouth. 

I had just finished the evening dinner with my co-founder, and another great successful startup team, preparing and backgrounding for our new 'Rising Startups' podcast series. 

After changing trains, I get talking with another in-transit passenger, 'Claude', who tells me that after finishing a 12 hour shift on his last day at work, he didn't even get so much as a thank you. 

(Can you imagine working for a company for 1825 days, and not even getting a 'thank-you'? Actually, perhaps you can.)

So I asked 'Claude' what he had done up until today for the last 5 years, and he proceeded to tell me for the next 6 or 7 minutes, including the fact that he & friend had a great idea for a business in his area of expertise, that he had always wanted to do. 

He stopped, and asked what I did. 
So did I fumble my lines, give him a wishy-washy answer, or give him some long diatribe?

No. I simply gave him the answer that I give to anyone, delivered naturally & openly. "We run a venture accelerator for experienced professionals with deep experience, who have a great idea, and aren't sure what to do next", was my reply. 

Measured, relaxed and authentic. Which by the way, is exactly how you should deliver yours too. 

His response was enthusiastically simple "have you got a card?"

Validation.

So if you want more funding than you can handle, do these four simple things, everyday.
1/ know your lines
2/ rehearse delivering them daily
3/ know what is important to your customers, and
4/ open your mouth

Thursday, 10 April 2014

Do you need a 'lighthouse' or 'a torch'?

Traditional wisdom says that to build a successful startup, that you must put your head down and relentlessly build, create, engage, pitch, compete, push, test, iterate, sell, etc etc, for 3-5 years, until you've achieved some measure of success, and then you can give back to your local startup community.

That is, become a lighthouse - "the shining light on the cliffs", to help others avoid the rocks of their journey.
This premise assumes that most of the people are already out on boats, and 'out to sea', and not walking through rough terrain on the land with no light to guide them. Which is often wrong.

Like explorers of old, entrepreneurs who've already launched their 'ships', have already hired their boats, financed their journey,  assembled their crews, charted their courses on maps, loaded the supplies for the journey and consulted others who've made the voyage before them. They know where they are going, and why.

However, the majority of startup ideas people are still on the cliffs above the shore. They still have all that to do before them. But first, they still have to clamber down through rocky cliffs just to reach the harbour. Most wont make it this far- many will lose their way and become lost in the night. Some will give up and turn back towards home, or lose their grip and fall, with their hopes & dreams dashed on the rocks far below.

Some will end up at the wrong harbour. Others will arrive, with no money to hire the crew & boats that they need; others still will find no suitable boat available, or that the journey they've planned isn't possible, viable or worthwhile. 
(There may be another post in this about pirates, mutinies, and ships lost at sea, but I'll save that for another day).

So I'll come back to this story in a moment.

We are building our startup and you want to do ....'What'?
"Yes, we are right in the middle of the build phase of our startup, and I want to put aside some time to help grow the startup community", was the conversation I had with one of my co-founders.

I had just told him that I had started up, not just a local meetup to help other startups, but also structured it as a 'group anywhere' (to encourage others to syndicate it) AND a LinkedIn group for online collaboration.

In order for our own venture to succeed, we also need as many of our brethren as possible, to reach the harbour, prepared and willing to continue their own journey.

They first need torches to make it down safely from the cliffs, before they need lighthouses.
Not only do we have all the torches we need, but we have torches to share. And to help our fellow journeyman, all we have to hand them out, and light them. (For some of you younger folk, there were torches of a different sort, in the days before batteries).

He looked at me incredulously for a minute..... And then the light went on in him too. 
So are you 'sharing your light' whilst still on the shore, or are you waiting until you've returned from your successful voyage?

If you want to shine your light, and are nearby, join us at Startling Startup Ideas Group Melbourne.

This group is "Q&A for Startups". The first local group (Melbourne) is now live, and we expect to begin planning our first events soon.

http://meetup.com/Startling-Startup-Ideas-Group-Melbourne
It's based around user-driven topics to help you start, launch or grow, so tell us -
-which topics are most important to you and
-which ones that you want first (and suggest others), decided by group voting.
For those of you that are in interstate or overseas locations, there's also an opportunity to join an online conversation, or expand the concept via syndicated meetups, so don't feel left out.
You can join & share the online conversation at http://www.linkedin.com/groups/Startling-Startup-Ideas-Group-6669314
Or, if you believe as we do, and would like to expand the face-to-face concept, reach out to me on Twitter @That_StartUpGuy or visit http://www.meetup.com/Startling-Startup-Ideas/
This is an initiative that is being supported by my newest startup, StartUp Foundation, which is 5 Stage venture Accelerator for experienced professionals. 

At StartUpFoundation.com.au, you can find out the 8 success factors which make the difference between massive success & failure in a startup - and they have almost nothing to do with which 'methodology' you use. Lets help you take your great ideas, and use them to help you break free from your day job and make that 'Leap of Faith'.

Wednesday, 2 April 2014

Do you LOVE what you do?

I truly believe that if something isn't fun, or that you can't make it fun, or at least have fun doing it (what ever it is), then you probably shouldn't be doing it. 

In fact, you should do something, anything else. 

We spend so much time doing 'something' as a profession, career or vocation; why not make it significant, engaging, and enjoyable?

Of course, for some people, doing something that isn't fun, is often about money, or other reasons; a means to an end, keeping up appearances, meeting others' expectations, or climbing a ladder. 

But I'm not speaking to that audience. I talking to those of you who are seeking your life's purpose; doing your 'thing', which will lead you to a life of significance & meaning. 

In seeking to achieve that through startup success, if you have a partner, there is something that you absolutely must do before, during & after your startup. You have an obligation to bring that person 'with you' on the journey. 

First and foremost, aren't you building something so that you and your partner can have a better life together? So why wouldn't you want to share the highs and lows?
Celebrate the successes? Share in the learning?

After all, if it really is all about the journey, isn't it also about who you share that journey with? 

I was married for many years to a very fearful person. Her main expression was 'There's no fun until the work is done'. And this is not an uncommon attitude. There are many people in the world who cannot 'let go', who have to own the process & micro manage it to its conclusion before they can relax. 

And yet, that holds them back from obtaining a state of 'flow', a positive, inspiring state of creativity, passion & productivity. Its exactly that state you need to get to in building a startup, where people just cant wait to engage with you. 

For reasons not relevant here, I am no longer with that person (though I harbour no resentment), but obviously there was a mis-match of psyches. This is a scarcity mentality, not one of abundance. (If you aren't sure what I mean, there are are some great books on the topic, but my favourite is 'Blue Ocean Strategy').

Some-one with that sort of attitude, will probably never understand the mentality required to create a startup (whether successful or not). The ebbs & flows of the tides of our world are too strong, too overwhelming, too uncontrollable. 

So before you quit your day job to do the thing that you've always wanted to (whether a startup or something else), think about your partner, and what they need; talk with them about where you want to go, and why. And then start thinking about positive strategies to bridge any gaps. 

And if you want to give yourself the best chance of success, do this with the advice, support & guidance, of a suitably experienced coach, advisor or mentor. 

Then you can love what you do, and so will the person that you love. That, my friends, is half the battle won right there, before even a single shot has been fired. 

Thursday, 27 March 2014

The smartest startup decison that I never made

Back in late 2010, immediately following the collapse of 2 concurrent startups, I started the discovery process on a startup idea in the Financial Services industry, which was built around the impending FOFA reforms.

It was an interesting arbitrage process in financial services, that we could bootstrap through to substantial growth, before expanding to include additional services, or sell to one of the dealer channels that would've been our customers. It  (the idea) had all the hallmarks of a successful idea; a scalable business with a compelling need, accessible market, viable value proposition, a low investment trajectory, an immediate path to customer revenue, deep-domain knowledge and market expertise, with a market willing to pay. In short, a 'unicorn'.

The compelling need was caused by a change to Financial Services legislation by the-then (Labour) Federal government, with an original start date of July 2013. It centred on whether Financial planners were authorised to give advice to clients (which they are), on matters pertaining to tax advice related to the FP advice (which they are generally not).

My co-founder, who apart from being a Chartered Accountant, had a long & successful entrepreneurial track record. He had recently gotten married, and had started working together with his new wife in the Financial Services industry as Financial Planners & Tax Advisors, which was how we had identified the opportunity.

After 6 months of customer discussions, problem identification, and solution design, things looked good to start scoping out the platform & service.

And then something weird happened; the spouse of the business co-founder suddenly started making demands on my co-founder, around our involvement together, which seemed completely at odds with the process of 2 people starting a venture. Without having a clue why (and I'm not considered to be socially inept), we had gone from having dinner parties at each others homes, to my co-founder telling me that I couldn't call  outside of business hours, lest his wife hear that we were talking together.

By this time, I had my own personal family challenges, so I made the critical decision to shelve the project, and put it down to a learning experience.Though to this day, i still have no understanding of the cause of the  'disappearing act' of my friend and co-founder. And perhaps I never will, but the process taught me some valuable lessons.

As it turns out, due to this week's announcement that the (now Liberal) Federal government has permanently shed the FOFA reforms, it would seem that I saved myself 3 years of hard work and effort in developing a startup through to being enterprise-ready. As I had previously developed a startup that turned out to be on the wrong side of government legislative changes before (which was around the National BroadBand Network), this meant I could apply an important valuable lesson, that I previously learnt.

So for a range of reasons, deciding to build that startup, was probably the smartest decisions that I never made.
However, as we get closer to our first seminar to support experienced professionals, - part of the first stage intake of our  new venture accelerator program  (StartUpFoundation.com.au) -  my take-aways from it, and the value and that I can pass on to other prospective entrepreneurs far outweighed the price I paid for the learning.

I make the observation specifically around these key areas, because as entrepreneurs (me included), so often when we have 'the solution', we just want to get into motion, and 'get it done'.  Doing so might cost you and your co-founders years and many hundreds of thousands of dollars in losses and opportunity costs, without getting some things clear first.  I am proud to say that I have never lost a dollar of investors’ money, perhaps because ideas, resourcing, team-building and execution have never been a problem for me.

Before you get to your ‘Go/No-Go’ decision point, here are some things that you must address.
  • Get your life in order - which includes making sure that the life partners of any participants in the venture understand where you are going, and how long & what it will take to get there.
  • Have a plan for when the life of your co-founder (or you) goes 'pear-shaped'. It will likely happen, so having those open discussions early, will help set the tone for open and considerate conversations in more difficult times.
    • Not doing so is probably the biggest unsung 'killer' of most early stage ventures.
  • Know what your 'stop-loss' strategy is at every point. Just as you do with your share portfolio, know what your entry & exit points are, especially if you aren't hitting all your milestones.
    • Getting the right types of mentoring & accountability guidance & is especially critical here, as is continuing the the conversation & involvement with life partners.
  •  Make sure that your exit or contingency strategies address the challenges of governmental or legislative risk. If you are building a model contingent on the economy, or governments doing "the logical thing", you could be in for a nasty surprise.
o    There are many things that stay the same when governments change, but ideologies or political philosophies aren't amongst them. Just because the government-of-the-day thinks 'A' or 'B' is a good idea, doesn't means their successors will.

And finally, you might need to grow up (occasionally)- unicorns don't really exist, except perhaps in our dreams. ;-)