Archives for category: digital academy

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.

baby unicornAngel investors are often cautious about diving in too early when it comes to investing in early stage tech startups.  They argue that it is highly risky and that there is little quantitative data on which to judge performance. Of course this is correct but does the situation get any more favourable if you leave participation until later? We all know that even VCs have a poor record of picking winners. Surely it is better to make a larger number of smaller bets at early stage than risky larger amounts on later rounds when the valuations are poorer and you have less influence? Here are a few reasons for getting in early;

You can cherry-pick the best opportunities

In the current frothy market there is strong competition for VC ready startups.  However, at seed stage, there is the possibility of spotting a gem. Admittedly it takes more work and you may want build a relationship before committing but you can construct a portfolio of startups that play to your personal strengths and experience. I would advise networking like crazy in your designated sector, learn whats attracting VC investment and get in before the rest.

You can influence the outcomes

If you are first in, you can have a strong influence on the strategic outcomes of the startup that you invest in. You will want to pick strong founders in industry sectors where you have previous knowledge and contacts. You can build a powerful relationship in an advisory role and take away some of the burden from the founder in building the first full funding round. You can also bring the benefit of your experience and help the founder attract other investors.

You get a better valuation 

Clearly the earlier you invest the more favourable the valuation you will secure. This has the advantage that you will be able to construct a portfolio in which you hold equity in a great number of startups with higher equity share. The diversification of your portfolio is an essential part of achieving a higher return on your investment. If you spot opportunities early enough you will find that quite small individual investments can have a major impact.

I would advise founders to start building their funding rounds, bottom up, from very early in their startup lifecycle. They should identify smart investors who are able to add value during the early days and later bring in other investors to construct the full seed round. Most founders fail to realise that they will need a lead investor anyway. It is better for both parties to build the relationship early to obtain maximum benefit.

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 month.

 

It is true, that these days with enough patience you can learn absolutely any business skill online or offline, but where to find workshops for internet startups that’d be of great value for time and money?

There are all sort of online and offline workshops for internet startups and digital entrepreneurs, offered by ed tech (educational technology) startups and some very established players. I would like to highlight a couple of sources that I still myself, if I need to quickly freshen up my skills.

General Assembly London. Originally out of New York, these guys are now also fully established in London. You can attend all sort of useful sessions for technology entrepreneurs to learn skills from coding to growth hacking. Their prices start from about 15GBP per one session. You can also attend their full time courses over several weeks and become a certificated professional i.e. User Experience or Programming.

Coursera. Wanna learn from a Yale professor about financial markets or discover recent case studies in business analytics with Accenture? No problem, you can now do it online from your sofa for a very affordable price or sometimes even free. This company has international universities on board producing their online workshops, many of which are not only useful for digital businesses, but will help to build any professional skills.

LinkdIn’s Lynda.comOnline learning portal Lynda has been acquired by linkedin this past spring and is slowly becoming a well established online destination for anyone incl. digital and technology entrepreneurs wishing to polish their business skills and set up business online incl.  coding, online marketing , design, video etc. Their subscription model is very affordable for anyone and their range of online workshops is very wide with tutors from all countries and backgrounds.

Digital Business Academy is pretty much the  new offer from the British Government, which is trying really hard to support internet startups and digital entrepreneurs. They have a full range of online tutorials about how to start a business online. The great thing about it is that it is not only free but also produced mostly by established entrepreneurs from the tech industry. Seems that they know what they are talking about and have great case studies and practical examples.

Dreamstake Academy - we have been running free workshops for tech entrepreneurs and digital startups for three years. Since then we have had a chance to learn what are the most important and valuable for our entrepreneurs.  It is a free non-profit project and we now have some of the best tutors from all over Europe supporting us. We run up to 4 workshops for entrepreneurs per day with subjects including anything from Business Model Canvas to VC and angel funding for early stage tech businesses. You can become a member and sign up here.

Blog by Marina Atarova, 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 month.