Archives for the month of: April, 2015

laserStartup founders are like elite athletes. They drive hard to acheive high performance or they don’t make the grade. We all know that the chances of survival for an early stage tech startup are extremely slim. The only way to improve the odds is to focus 100% on doing the right things. You need to do more than just read The Lean Startup. You can apply similar principles to every aspect of the business. We have helped over 500 startups over the past 3 years and have found that the following tips can make the difference between failure and success;

  • Do you have what it takes? - Are you the type of person who can focus 100% on one thing? Are you able to work 70 hour weeks for months on end. Great founders do not have to be academically accomplished. They do need to be able follow a vision with single minded passion and execute their ideas effectively. Founders should look very carefully at themselves and decide if this is what they want. Remember there is no safety net and no opportunity to take your foot off the gas.
  • Take on focused people - It’s no good being the only one in the team that is prepared to work. Find people who are equally committed and will share in the pain. Look for people who are better than you and who can complement your skills. There is no room for ego’s, either theirs or yours. The team needs to focus on getting the job done in the most effective way possible. Look for good product, UX and technical people who will keep the startup on course and make sure that their rewards are aligned to achieving a successful outcome.
  • Follow the right advice - Accurate and focused advice is like gold-dust but it is often extremely hard to access. Poor advice is worse than no advice at all. Start by accessing reputable online sources such as Steve Blank, Eric Ries, Paul Graham and David Rose. Don’t spend too much time on conceptual works like Crossing the Chasm. Remember this is all about focusing on practical solutions. Look for advisors with deep sector or technical knowledge but watch out for ‘consultants’ who may not be up-to-date with current business models or technology. Be very hard on potential advisors, even if they come through a programme such as an accelerator. Who you listen too is extremely important. It’s always a good idea to engage with people who have been there and done it before.
  • Keep the product simple – Products are becoming simpler. Uber, Airbnb and snapchat are all single function tools designed to solve easily identifiable problems. The Lean Startup helps here. Make sure you are solving a real issue that other people agree is a problem and will pay to solve. Obsess on this and validate rigorously with an MVP until you have a business model that works. If you can’t find one, fail fast and go back to the drawing board. Don’t pump capital into an idea that hasn’t been thoroughly tested.
  • Practice lean funding – Narrow down your routes to funding. Most founders spend months talking to investors who are never going to invest. Understand who is right for the stage you are at and has the right sector focus. Make sure you are talking to real investors and not consultants. Check that angels are currently investing and not invested out.

So do a startup effectively is all about keeping it as simple as possible. Strip down everything to the raw essentials and focus on these at all times. Avoid scope-creep where nice-to-have functions take over from the core propositions. Don’t engage in protracted partnership discussions during the early phases and be generally cautious  about offering meetings unless they get you closer to achieving your immediate goals. It’s easy to be be flattered into taking a meeting but it often takes your eye off the ball. Maintaining laser sharp focus for you and your team will greatly improve your chances of startup success.

Blog by Paul Dowling – Co-Founder of Dreamstake  the world’s first tech startup platform to match founders with the most appropriate investors using a unique startup rating system. This allows entrepreneurs and investors to monitor startup progress and inject capital and support when most needed. Startup founders can create profiles on the platform and get direct introductions to investors. We are constantly looking for great early stage tech startups. Investors please contact [email protected]

We have also recently launched an exclusive tech angel investment club in partnership with The Hoxton. HoxTech Angels will run invitation only angel investment evenings every last Monday of the month.

 

 

 

bankerWhichever way you look at it large numbers of bankers will lose their jobs due to the fintech revolution. Banks are one of the last bastions of the ‘big’ private corporate world. Their near monopolistic hold on our finances has been protected by legislation and regulation. However, this is about to change as a whole bunch of internet challengers move into their traditional space. Venture Scanner found more than 1,000 companies operating in at least 17 traditional financial sectors. Of these 481 have announced aggregate funding of at least $15B. Hopefully, this will be a good thing as an immense pool of talent currently deployed by the banks will shift to more productive pursuits.  What might be a bad thing for bankers will undoubtedly be to the advantage of the consumer. Here are a few ways in which the fintech revolution will play out;

Efficiency gains - Artificial Intelligence and machine learning will hollow out the financial sector by automating the jobs normally carried out by skilled professionals. Even jobs that we currently see as being highly skilled will be performed more efficiently by machines. We will see large swathes of middle management in fields such as insurance and trading made redundant by the widespread adoption of sophisticated algorithms.

Customer experience - Nimble challenger services delivered through an efficient mobile UX will revolutionise the customer experience. Providers such as  Squirrel, Square and Moni are already chipping away at the banking sector by providing a better customer experience at a lower cost. The consumer now expects to be able access services when they need them and wherever they are. The uberisation of our lives demands a far higher level of service than the banks have traditionally been able to provide.

Reduced transaction costs - Technology platforms can achieve large economies of scale across specialist activities. Providers such as MangoPay and Funding Circle can focus on bringing down costs within specific sectors in a way that banks cannot. The consumer will benefit from lower percentage costs for a whole range of services from foreign exchange through to money transfers and loans.

The bankless society - The Blockchain has the potential to radically transform the banking sector. As challengers nibble away at the non-core activities of the banks, the hollowed out structures will retrench to old style services. However, without the additional value add consumers will have little loyalty and would rather turn to peer-to-peer banking in the cloud.  This will be made possible by technologies such as the blockchain and crypto-currencies.

Customer perception of the banking system has never been less favourable. At the same time we are experiencing a fintech revolution where a new breed of popular services are rapidly emerging. The banks will try to leverage this technological change to their advantage but their monolithic structures and highly regulated environment crushes all innovation. Few of us will feel sorry as fintech marches forward to provide us all with a better experience at a lower cost.

Blog by Paul Dowling – Co-Founder of Dreamstake  the world’s first tech startup platform to match founders with the most appropriate investors using a unique startup rating system. This allows entrepreneurs and investors to monitor startup progress and inject capital and support when most needed. Startup founders can create profiles on the platform and get direct introductions to investors. We are constantly looking for great early stage tech startups. Investors please contact [email protected]

We have also recently launched an exclusive tech angel investment club in partnership with The Hoxton. HoxTech Angels will run invitation only angel investment evenings every last Monday of the month.

 

 

 

 

4-hourAre you working over the Easter holiday break?  If so, you may well be a startup founder. Funnily enough, I agree a lot of what Tim Ferriss says in his ’4-hour workweek’. He is right, especially in a tech startup it’s important to break away from the constraints of the corporate lifestyle, work extremely efficiently, outsource as many small tasks as possible but you then need to multiply the time he suggests spending on the business by about 20 times. Very few early stage tech startups will survive without their founder working flat out for the first 2 to 5 years of their business. Let’s look at the reasons;

Lack of resource - Tech startups drive efficiency from limited resources. Before the first round of funding startups are boot-strapping. Once the early rounds of funding are received founders are under extreme pressure from investors to meet deadlines. Even with funding they will still rarely have enough resource to fully meet the potential of the company,

Low probability of success - Startup founders face an uphill struggle to succeed in the most competitive market places on earth. With less than a 10% chance of hitting the big time, every little bit of effort put into the business increases that chance. If you don’t grab market share by working all hours, you can be sure your competitors will.

Continuous work cycle – luckily for workaholics, the startup work cycle never really stops. Operational activities such as dealing with customers, suppliers and investors, take place during the normal working week. However, marketing is a 24/7/365 activity. Most startups need to create maximum buzz in order to drive traffic across multiple time zones, so the more that goes in, the more that comes out.

High rewards - We shouldn’t forget that most tech founders are out to change the world in their own little way. This can bring massive rewards both in terms of satisfaction and personal wealth. There is plenty of time to sit on the beach when you are retired. Who wants to look back upon what could have been if they had only put more effort into executing their dream.

In summary, tech startups are not lifestyle businesses, unless your lifestyle is to view work as pleasure, which is possible. Work-life balance is not achievable unless you see work as your life. There will be a period of intense work where you will have to sacrifice some of the things that you hold very dear to you. However, you also owe it to yourself to maximise the chance of success and this can only happen if you are prepared to put 100 percent into achieving  your dream.

Blog by Paul Dowling – Co-Founder of Dreamstake  the world’s first tech startup platform to match founders with the most appropriate investors using a unique startup rating system. This allows entrepreneurs and investors to monitor startup progress and inject capital and support when most needed. Startup founders can create profiles on the platform and get direct introductions to investors. We are constantly looking for great early stage tech startups. Investors please contact [email protected]

We have also recently launched an exclusive tech angel investment club in partnership with The Hoxton. HoxTech Angels will run invitation only angel investment evenings every last Monday of the month.