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?

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."

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

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'.

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.