- Am I building something that’s actually compelling?
- Do I have a good user interface, do I have a good product?
- Do I have a good product-market fit? Am I building something that’s actually interesting enough for the customers to use?
- Am I able to charge money for this product/service?
- Am I able to acquire the right amount of cash flow over time in order to become profitable?
These are just some of the questions that early-stage entrepreneurs ask themselves when they are starting a business, according to Husein Kanji. The road to actually building a business is paved with many obstacles, sometimes even with self-doubt and without a recipe for success, as every case is different.
At Techsylvania, we challenged investors and venture capitalists to share their part of the story and how they decide whether or not to invest in a business and we outlined some of the most important lessons we’ve learned so far, so we can lend a hand to entrepreneurs that want to give their business a check before going for funding.
🆕 Lesson 1
Brand new industries, brand new markets, brand new companies.
Husein characterized VCs as “momentum investors”. According to his checklist when he’s on the look for businesses to fund, the ones that get his attention are the ones that have the potential to turn into something really interesting. Usually, the disruptive shifts in the tech industry are generating new opportunities and that’s the point where a new company can capture all that value.
“So it’s not about your business plan or how good of a product you have, it’s really about the magnitude of the company: is this going to turn into something super interesting?”
*Apparently the millennial phenomenon of FOMO (the fear of missing out) is actually a thing around VCs also, so make sure that your product/service is so disruptive that you can trigger this around them.
🗺️ Lesson 2
Be in the right place.
What is a good place where you can get funding and start your business? When you’re a digital entrepreneur and want to have access to a larger market, you have to have this in mind.
Constantin Von Bergmann-Korn presented us Berlin as a great idea for starting a business. Besides the fact that it has a great startup ecosystem, this place has a friendly environment in general, it provides you with the right context to meet with like-minded peers and is super inclusive.
“As a founder, it’s not necessarily about what you know, but especially about whom you know.”
Berlin is a tech-hearted city and you can build a unique network being there. Of course, there are many other places where you can find the right context for your business, but Constantin put his town in such a good light that you just have to take it into consideration.
🦄 Lesson 3
Be interested, passionate, and… not completely sane.
Tim Draper is often on the look for new investments and he has a keen passion for entrepreneurship and entrepreneurs. He’s a strong believer in taking that first step that transforms your perspective on things and throws you in the business world.
What’s his secret about making his first million? Exactly this ☝️
“If you want to advance, you’ve got to be interested and passionate about one thing and then be willing to be interested and passionate about another, and then another, and then another.”
Taking steps is all about advancing, even if many of them are backward. Being willing to fail is the first lesson of entrepreneurship, according to Tim.
“You’ve got Elon Musk that says he’s going to Mars and then you’ve got 96% of the population that will say he’s crazy and the other 4% that will want to work for him. It’s that 4% that we’re looking for: the greatest engineers in the world, the greatest marketers, the greatest business modellers. If you have a goal, a wild mission like that, I think that ends up attracting the best and the brightest people of the world.
[…]
So if you’re starting a business right now and it qualifies in that category that it might not be completely sane, then send me your plan.”
🎬 Lesson 4
Just start that business.
“You have the world on your fingertips now. Your advantage is global distribution soft. You have the app store, you have Google Play, you have a global distribution, no matter where you sit.”
Stefan Glaenzer showed us something that maybe most entrepreneurs have in common: passion & determination. The most helpful confession was that he fails to see any risk in founding either a startup or a company, as the experience that comes with this is the most valuable and he doesn’t know anyone who has regretted doing this.
It’s the disrupters that change the world. Follow your vision and start that business!