Archives for the month of: January, 2017

Technological progress is threatened by dual threats from Trump and Brexit. The eco-system needs to show some backbone and stand up for our startup values.

trump farage

 

We have seen immense technological change over the last 2 decades, much of it enabled by the global spread of the internet. The pace of this change is only going to accelerate and represents a real opportunity to tackle some of most persistent challenges facing humanity. The internet has spawned a generation of hugely ambitious entrepreneurs intent on building global companies. However, it is exactly this rate of change that is alienating large sections of society who feel left behind.

Over the last 6 months we have witnessed a monumental onslught on our startup values. Trump and Brexit represent a threat to our open and progressive culture. Both would like to focus resources on populist policies such as re-envigourating traditional industries and allaying the fears of their core supporters. Neither understand the fragility of the startup eco-system and how easily it can be destroyed.

Startups thrive in eco-systems such as Silicon Valley and London. They demand a lot of support to prosper and can easily fail if this support isn’t forthcoming. These startup clusters attract the best brains from across the globe and cannot survive without continual access to this talent.

The recent inauguration of Donald Trump and the vote to leave the EU both represent a huge threat to the open and democratic ideals of the startup world. It will cut access to entrepreneurial talent that will be forced to go elsewhere. Trump and Brexit will redirect resources towards re-establishing traditional industries that will prove uncompetitive in the longer term and can’t hope to emulate the growth of digital businesses. This will hold back progress in tackling major issues such as eliminating disease, reducing poverty and improving education. All areas where technology is already making a major impact.

The Silicon Valley elite have been disappointing in their response to the threat; acquiescing to Trump rather than making a stand. Apart from a few exceptions their London equivalents have been equally feeble in response to Brexit. These are leaders who have access to the most powerful channels for protest in the world. For god’s sake, Trump has shown more gumption in using Twitter than the whole Silicon Valley eco-system put together.

If we want to ‘change the world’ we need to earn the right to do so. We need to get across the advantages that exponential technologies such as AI, genomics, robotics, blockchain and virtual reality can bring to society. We need to lobby strongly to promote our values of openness and diversity and how this will bring benefits to all. Most of all we need to recognise the threat and should voice our disapproval at every opportunity to any injustice being imposed on our friends and colleagues in the global startup community.

Blog by Paul Dowling — Co-Founder of Dreamstake the world’s first tech accelerator platform focusing entirely on taking startups from inception to Series A. Dreamstake identifies promising startups from universities and accelerators and provides them with access to the resources they need to achieve later stage success. This is achieved through a large programme run out of Google Campus in London and our own network of experts and investors.

FailsWe all make mistakes, especially when trying to do something for the first time. In fact, I think I have probably made all of these startup fails at some time or other.

The startup world is constantly evolving. However, most of these fails are not new. I would really like other entrepreneurs to learn from my mistakes. Avoiding these simple fails will increase your chance of building a successful startup and reduce the time it takes you to get there.

Don’t build before you are certain there is a burning need

Probably the most common mistake for founders to make is to build an MVP before establishing a need. You may have read articles that suggest that it is important to get an MVP out as quickly as possible. Right, but not before you can verify that there is a burning need for what you are about to build. It is easy to test demand for your product using pen and paper and open questioning. Check that you are solving a real problem and that there are no valid alternatives that the user might use. Obsess at this stage and do not move forward until you are absolutely certain that your solution will address the issue in question. If you do build an MVP without validation of the problem you will find engagement to be slow or non-existant and total reluctance from investors to get involved.

Don’t do it alone

Building a tech startup is a team activity. A single founder will never have the full set of capabilities or bandwidth to launch a startup on their own. At early stage there is very little else, apart from the team, for investors to judge the startup on. As well as the core team, surround yourself with experts. Persuading an advisory board to support you is good way to get validation for what you are doing. If they won’t come in, they probably don’t have confidence that you will make it. Listen to what they say and tweak your proposition if it makes sense.

Don’t be closed-minded

Although founders are expected to be strong, driven individuals, close-mindedness is a red flag to investors (and probably to clients and employees). It is important to listen to advice and decide what to act upon. Select advisors with relevant knowledge; either existing successful founders or individuals with deep sector experience. Don’t look for yes-men. It is much more valuable to find people who will give blunt feedback. Learn how to take tough love.

Don’t misjudge timing

It’s easy to be either to early or too late with an idea. A lot of what you read is hot is from a Venture Capital perspective. However, by the time you have got your startup off the ground the VCs will be exploring the next big thing. If what you are working on seems too familiar then you are probably too late. Many consumer apps are in this category. If you are coming in late, make sure that you can improve on whats already out there and be totally sure that users will switch from what they have become familiar with. It is also possible to be too early. Think Google Glass or the first iterations of tablets. Remember there is a difference between pure research and being a first mover in a commercial marketplace.

Don’t under-estimate how long it takes to raise capital

Raising capital is much more difficult than first-time founders ever imagine. It is also important to remember that it is not just the first round of funding to take into consideration. There is nothing worse than raising a simple seed round only to find that you can’t get VCs (or anyone else) interested, once you have burned through the cash. Work backwards from the VC round and estimate how much you need to raise at the seed stage to get there. Venture Capital firms are moving upwards and this has created a nasty gap, sometimes calling for a bridge round. In building the first seed round, find a lead investor and build around this individual. They will bring confidence and attract other investors. Allow 6 months for each round and make sure that you are investment ready before starting the process.

Blog by Paul Dowling — Co-Founder of Dreamstake the world’s first tech accelerator platform focusing entirely on taking startups from inception to Series A. Dreamstake identifies promising startups from universities and accelerators and provides them with access to the resources they need to achieve later stage success. This is achieved through a large programme run out of Google Campus in London and our own network of experts and investors.

Lean 2.0The Lean Startup by Eric Ries and other such works provided a great playbook for the last wave of internet startups. They detailed a clear methodology that founders could follow when developing reasonably simple technologies to address consumer needs. We have therefore seen a whole generation of startups executed using this highly effective approach. The lean methodology made launching a startup relatively simple for even a novice because it was possible to follow a series of simple well defined steps from validating the idea to scaling up.

The startup scene went through a transformational shift during 2016. We saw a move away from these relatively simple consumer apps to more substantial technologies such as AI and machine learning. These demand a more complex set of relationships to get them to market, often involving universities, education and health services, corporates and regulatory bodies.

However, the processes for creating startups have not adapted to reflect this. Peter Thiel’s, Zero-to-one and Steve Case’s, The Third Wave, do a good job of describing the changes we are encountering but don’t give much guidance for creating startups in this environment. Both point to the idea that we will be using deeper technologies to solve big problems and therefore suggest that lean methodologies will are too incremental in approach to deliver the complexity required. However, this is of little help if you are talking to investors about getting funding for your big idea.

This year, 2017, will see the mass adoption of technologies such as AI, AR/VR, Robotics, Blockchain and Genomics. Startups leveraging such technologies will no longer be able to slavishly follow the lean methodology. It is simply not designed to accomodate complex partnerships and development cycles needed in the next phase. Firstly, I would predict that universities will play a greater role in conducting the pure research needed to get these technologies to a point where they are commercially viable. Therefore Lean 2.0 will need to accommodate partnerships in a way that the original Lean is unable to do.

I think the key to this next stage of internet development is ‘Startup Culture’ itself. We have seen how startup founders have an amazing capacity to move mountains when they set out to do so. They are also prepared to take risk in a way that cannot happen in the corporate environment. I therefore feel that any new methodology needs to promote this ‘can do’ execution oriented approach but apply it to commercialising the deep research coming out of the academic sector.

Europe and London in particular is well placed to lead this next wave. We have strong universities that well connected and close to a vibrant startup scene. We need to think more about how startups will develop in a more technology driven environment and make sure that Governments encourage the right approach. We also need to adapt our own methodologies so as not to lose the agility that we have built up over the last few years.

Blog by Paul Dowling — Co-Founder of Dreamstake the world’s first tech accelerator platform focusing entirely on taking startups from inception to Series A. Dreamstake identifies promising startups from universities and accelerators and provides them with access to the resources they need to achieve later stage success. This is achieved through a large programme run out of Google Campus in London and our own network of experts and investors.