September 2016

With thousands upon thousands of startups taking place as we speak the most resounding question asked is “how can I make my startup successful?”.  The result is a cascade of advise on what to do and how to do it, some with even a self-indulgent suggestion of their ability to help you reach acclaim.  Unfortunately while advice is abundant the proper question should be about how I can go about making my enterprise fail.  As many that have followed the time worn path of success blueprints they still fail?  For those giving advice its always reverts back to casual and common conditions that relate to market readiness, funding, immature ideas and even too lofty goals set.  In fact the real fact is that the failures were the things we did incorrectly.   To this end, I decided to create a list that reflects the many mistakes made.  Hoping that these will be taken serious, considered and appropriate action being taken.

  • Lack of market evaluation and planning.  Its not that there isn’t room but if you can’t differentiate or show aggressive value additions you will be met with resistance.
  • Too good to be true opportunists.  Yes, there are people lurking to capitalize on your dream.  These may come from a number of sources; investors, partners and even customers.  So beware and protect yourself on the fronts of intellectual property rights (IPR), business relationships and sales opportunities.
  • Marketing Failures.  Choosing the wrong medium (yes, you have to have a social media presence but if you customers are not acquiring from social media sources limit your investment) where your targets are located.  Deciding on where to promote is as crucial as what to promote and to whom.
  • Amateur packaging.  If it looks cheap it is cheap but the expectation remains the same as that of higher priced alternatives.
  • Failure to acknowledge the need for market conversion.  The best ideas have died for the sake of an inability to convert market.
  • Lack of vision beyond the present.  Because of shallow funding we are anxious for sales, funding and partner support.  But you need several alternative sources to pursue in order to create a balanced flow of revenue.
  • Knowing when to move on.  Most startups fail to look beyond wanting to have success.  Know when its right to move on and pass along the opportunity to others (hopefully these will be candidates that acquire your enterprise).  Staying with a success story reduces the overall return on investment unless you can establish success in the first 2 or 3 years.
  • Your profile.  The startup grows from you and your colleagues.  It moves from it being a personal endeavor to one that is professional.  Yet we continue to post and repost and share a individuals and not as newly founded enterprise heads.  As a result, your profile presence may be your liability and not your selling point.  Be mindful of the need to reset focus and know what image you are wishing to set.
  • Commitment.  We are all committed, but at what level?  Is this a part-time endeavor or a full fledged operation?  Do you have a location or is it your kitchen table?   Depending on the cost and the commitment that you are seeking will determine what you need to show your level of having skin in the game.
  • Spending like drunken sailors.  Money burns faster than gasoline.  Money spent must have value earned.  For this reason many investors choose to invest in elements of your business (like product development or market reach) rather than in operating expenses (office, salaries, supplies, etc).  Its the clear separation of overhead vs. value earning capitalized investment.
  • Lifting Alone.  You need to plan for support, you cannot sustain viability and growth without some form of assistance.  We are reluctant in doing so because we view this resource as labor and not as potential partners.  A startup must build a team and you as the innovative head (possibly) need to share in the wealth of the business with those that can and will commit.  Its an investment decision and not one of building size for the sake of size.  You need intellectual collaboration, division of effort, call for specialized talent, and in simple terms time bandwidth.  Without it time will pass, opportunities will be lost, and all for the sake of thinking an ‘alone’ pursuit will bring you wealth and fame.  Enterprises like Microsoft and Facebook, while seen as success stories of individuals was not possible without the involvement of a team that shared the outcome (good or bad).
  • Pitch Failure.   Know who you are talking with and what you want to achieve.  There are three basic groups;  customers, investors and partners.  Each has a need and you as the startup enterprise needs to speak to them in a way that satisfies their needs and is not clouded by excess information.
  • Over come YOUR fears.  As I have said numerous times, where you stand today is a road divided.  You will either succeed or you will fail.  But if you don’t take any step at all you will have failed when you may have had the chance to succeed.  It is important to understand your limitations and your strengths, making sure that these truthful and not simply you desire to have them be yours.  Others need to examine this in a critical and unbiased fashion to give you an idea of where you need to put forth efforts of improvement.
  • Unclear abstract market.  Vague but ambitious targets, not understanding geographic markets from vertical sector markets or the creation of markets (using viral strategies).  You just can’t announce here I am without considering who you are in a practical way.
  • Under utilization of channel partners.  Despite having the ability to create exposure, social media sources have their limitations.  There is nothing more powerful than feet on the ground (refer to Microsoft and their early engagement of Rogers from Altair).  Be selective and ever mindful of success and not another grand experiment gone bad.  Bad press will have dramatic effects on a startup.

In conclusion, these are a few common observations on how startups fail.  Hoping that if you have other reasons that you share them either on this blog or on a social media post.

Out of nothing grew a startup crazy.  Startups are nothing new, in fact every company since the beginning of time was a startup.  They grew and prospered because they did things right, made fewer mistakes and were able to ride the wave of opportunity.  At the same time there have been many who failed and will go down as hard lesson learned.  So why the present craze?

First of all governments see an obligation to create jobs without having to be the only source for employment.  For each job created there are a multitude of others who become the beneficiary of this.  Whether it be a merchant, our families, the community or government all will benefit.  We also benefit by becoming a productive part of the world community.  For the community, healthy commerce means that the quality of life can be improved upon.  Parks, schools, transportation and infrastructure are all advanced through the contribution of commerce.  Its for these very reasons that governments and communities are investing in the development of the startup up enterprise.  Unlike in the past where you were left to your demise, today we seek opportunities to avoid failures.

Let’s start out by establishing a few definitions.  A startup is an enterprise comprised of one or more people who have an idea for a role to play in commerce sector.  It doesn’t always have to be about ICT (Information Communication and Technology) although many regions have this as a pivotal service.  There are also companies with great ideas that rely upon ICT enablement in order to achieve their operating mission.  If I was asked what should the focus be, I would say both.  I believe that putting all of your eggs in one basket does not provide sufficient flexibility to address ever changing market conditions.  At the same time singular focus creates a market saturation that places competitive stress on other upstart enterprises (in an unhealthy manner).  The value of diversity increases the economics of scale by utilizing common discipline guidance across a broader audience base.  A incubator is a environment in which a startup can operate.  Normally associated with a facility/location, an incubator is accompanied by a shared space for learning and development.  For some the concept of an incubator can be met with a bit of reluctance, fearing that a concept or idea might be exploited by others.  Proper protection is always in order but this still allows for a general concept to be discussed without the fine details being disclosed.

When one considers becoming a part of the startup community you will be motivated by several reasons.

  • Education – Gaining crucial knowledge in areas of the unknown.  It isn’t enough to expect that you know even what you are missing and therefore your first steps become a general awareness about the overall startup landscape.
  • Visibility – Finding and establishing ways to be seen.  In most cases this is limited to local or regional market but seldom reaches beyond borders.  Exceptions like MaGIC Malaysia’s Accelerator Program which has reached out to foreign investors, advisors and successful incubator communities as are found in Silicon Valley, CA  USA.
  • Funding – Startups are poor, thinly funded with very steep needs for revenue flow to sustain formation and advancement.  Whether it be funding, alternative collaborative sharing, partnering, investing or seed capitalization the startup community attempts to fill a much needed void by providing a one stop shopping source for funders.
  • Infrastructure – For many startups their only resources are an idea, a computer and a cell phone.  The lack of physical space and a consistent location creates barriers.  This is the most expensive element found in the support of startups.  It takes community and governmental backing in order to provide this necessary element.  Failure to do so creates protracted time to implement.
  • Mentoring – It isn’t just about training if one cannot apply it to their situation.  All startups need objective and constructive examination of where they are at, what needs to be done, and what can be expected beyond the initial introductory period.  A key mistake is using what we might refer to as those ‘one hit wonders’, those individuals that have had ‘some’ success but lack in diversity of repetitive successes and experience.  At the same time its also a bit of a hazard to rely upon those with loads of experience but may lack in thinking beyond a single model.  So who is the mentor?  First and foremost is compassion and caring, startups are particularly frail and therefore need constructive neutering.  Secondly the mentor must be objective.  Just because the concept isn’t for you doesn’t mean that it fails in market potential.  Finally, and again these are ‘my’ opinions, the mentor must be creative.  Should a region aspire to create a startup community they might not find these elements all in one person but may require a broader composition of collective mentors in order to achieve balance.

Most recently I was involved in a startup competition comprised of both ICT and ICT enabled enterprises.  The two lessons that I shared are instrumental in knowing why you are there and what you are trying to achieve.

  1. Who is your pitch for?  Are you pitching to potential customers (meaning you are market ready), investors (meaning you are ready to go but you need fuel for your enterprise engine) or collaborators (you are ready but you need some help to introduce a broader market potential).  If you aren’t ready or you don’t know who you are addressing you need to step back and get your affairs in order.
  2. The best ideas will die if you don’t have a plan or a means to convert market thinking.  Maybe the timing isn’t right, or that your zeal for your concept is so great that you expect everyone else to jump on board.  Often they weigh superficially benefit and risk, you need to do likewise.

In conclusion, startups are in vogue at the moment.  My fear however is that with many man conceived initiatives that the luster will wear off and the forward progress will die.  To keep the dream alive the startup enterprises must prove their efforts, use these to justify the framework commitment and to recommit to the further development of positive measures to produce success and reduce failure risk.

Situation-Propose-Conflict, an all too common occurrence today.  Whether it be on a personal or professional level we find ourselves continually challenged by our mere existence under continual attack.  There are choices, we can avoid the conflict by retaining buried our proposal to a situation; we can propose and prepare for conflict or we can better understand the situation in order that we act appropriately.  It’s not just about others understanding the value that is often buried in the ‘proposal’ but also appreciating the spirit in which it is being offered.

I have a multi-cultural family and I often find that by sharing my beliefs I create conflict.  What starts out as good intentions often results in them being viewed as criticisms to which they cycle starts on a defensive tone.  So the question is how do you resolve it.  I can tell you this, old habits die hard and this is especially true for those that have a mindset that takes you from point A to point B.  Over the last several months I have been thinking about this, all the while continuing my direct and purposeful A-to-B mindset.  It came to me a short while ago that my message is being lost because I have failed to answer, for myself, why does this situation exist and how can we reach a common purpose.  It doesn’t matter whether it’s what the children watch,  joint planning on events (I almost said ‘important’ but there again that might also be questionable whether we are on the same page of thinking) or deciding on what to eat.  So what is it that I am really trying to achieve?  All the while I am thinking that I am preparing them for the future, for a place in a global society, when in fact I am possibly doing more damage by not allowing them to find a place in their own culture to grow from.  In this regard I am, in a round about way, inferring that their culture has problems to which I want them to avoid.  But in doing so I am not only isolating them, but also depriving them of growth and development.  So the hard pill that I need to swallow is to permit growth through experience and only intercede when disaster would be eminent.

Now let’s step forward in the context of business and the innovation/startup culture.  Over the course of my working career I have been blessed with advising hundreds of individuals and businesses.  From CEO to newbie, from global companies to incubator driven startups the same condition exists.  In various regions of the world the fact of age, race and nationality give you a certain privilege of attention.  With this gift comes a responsibility to exercise the same care and acts that are expected of me as a father.  It’s not that a foreigner knows more by comparison, its about the person having more experience and exposure to the world outside.  However, this all is lost when the message (Propose) meets the Situation that ultimately leads to conflict.  It’s not always visible it is often cloaked in silenced, fueled by buried emotion that later erupts in major conflicts.  To guide means to permit experiences to occur, to intercede when hazards are eminent but to counsel in such a way as to answer the question of ‘why’ are we doing this.  It’s far more than being a mentor, a guide, or a coach… its about caring enough to eliminate conflict (and unproductive and wasteful act) for the sake of situational improvement.  Therefore, as I have observed in myself and the acts of other mentors (guides or coaches), we need to stop and answer in our own minds the question of ‘why’.  But, we can’t stop there we must also totally understand the value and possible conditions that our decision to engage plays in the overall outcome.   I recently was involved in mentoring a group of startups.  Many were still in a formative and conceptual stage.  There were many things they needed to do, situations to consider, options to exercise and directions to go.  It would have been far to easy to start firing off lists that they needed to act upon.  Instead it was far better to look at what they had done and build upon this than to dismantle the house for the sake of one loose brick in the foundation.  What I observed was a remarkable transformation in outcome both in terms of progress as well as reach a basis of possible potential in these grassroot businesses.  Sadly however it isn’t without having a level of mortality.  In retrospect, I ask the question of why did a couple fall out of having interest?  Was it because of the message or was it something else?  Upon closer examination it was the direct result of readiness of their enterprises, they were barely a concept and therefore all they saw is barriers and not the light on the other side of those barriers.  At the same time the message became the barriers and not the solution.  As I have often said, whenever we have a condition we own 50% of the outcome and with that I take total and complete ownership.  How should I have reacted?  It goes back to being a father, it goes back to finding out how they see their situation and asking what they need to move ahead.  I should have done that rather than take them from zero to 100 in a series of direct and specific steps.  They weren’t ready for step two let alone step one hundred.  The years and the miles of experience brings about opportunities but they also bring about knowledge.  I plan to use this knowledge and my continual self-assessment to serve with a high degree of respect for the role I play.  Its not a role driven by the story line of others but driven by the unique realities exist.  The path, steps and speed of others are only a resource and not a template.

Beware of the SPC (Situation-Propose-Conflict) condition.  Culture is not bounded simply by nationality it is also a situation created by beliefs.  Understand why, determining need and maintaining a healthy observance of goals is mandatory.  Goals are important but at the same time they become a distraction on progress.  Require them but permit them to become realized organically and not through measured acts enabling progress.

Life has a funny way of passing.  A watch an example of a simple timepiece ticks the seconds, minutes, hours away on a day-in-day out basis.  When young the watch is used to know when to do certain things, whether to meet an appointment or simply help someone else who may have left their watch behind.  In today’s fast paced world the watch has become a symbol of class as a piece of jewelry.  Our cell phones now gives us precision accuracy that we can refer to as we need (which most likely is allot since we seem enamored by our dependency on it).

I think back to my very first watch, a very simple mechanical Timex that required winding every day or two.  It was cheap for the time, was simple a timepiece (no extra functions) but kept very accurate time.  As time passed my simple Timex was cast aside for a variety of other timepieces; a chronograph watch received as a Christmas gift, a fashionable square Seiko and later a Tag Heuer.  Each used almost solely as a timepiece, occasionally to reference the date (if it was graced by such a capability) but still exploited for that one simple function.  Today I don’t know where any of these timepieces are, I hope they all rest in good hands or at least once that can appreciate their sole intention to keep us alert to time.

The reason I decided to write about these was not some melancholy rendition of how time passes and the timepiece provides a reminder of where we are at, and the blah-blah journey of life.  Rather, it gave rise to how we work in life to survive, to capture those things to make us survive and to maybe even have a bit left over to enjoy the finer things.  I think of all of my watches and I wore them daily.  I didn’t put them in some protected show case to take out only on special occasions where I could flaunt my status.  I wore them because they were intended to be worn.   There have been many things in my life that I have been blessed with materialistically and the watches are simply one element.  I think of transportation and my first vehicle (Suzuki TS250) to my last vehicle before moving to Asia (Jaguar XJ8 Vanden Plas) with over 40 bought/sold some of which would be expensive classics today, the seven homes I owned, and untold amounts of ‘things’ that one accumulates over the period of a lifetime.  Today, it is a different set of accumulations, certainly not the grandeur of 40 years but still it serves a purpose and function.  I do not have remorse about this, it simply a condition as a result of the passage of time.  If one laments about what you had, or worse fight to protect what you have, you will be consumed by unhappiness.  The reason is that when your cup is full you can’t add the joys of life to it.

My trusted Timex was my prized possession.  Like children, our prized possessions, we need to love and appreciate for what they are, not expect anything more and be willing to let them go without remorse.  I really feel bad for those that will spend a lifetime focused on materialism (and we will all do it) but never fully appreciate the little things in life.  For me its about time and using it in the best possible way.