Join me in helping startups

One of the things, I find most pleasure in, is helping others succeed with their ideas and ventures. It’s a big part of the reason, why I joined People Ventures in the first place, as a core part of our DNA is helping the founders, we invest in, in very hands on ways moving their companies fast forward.

Because I like to help and see other great people help likeminded great people achieve great things, I have kicked-off a small experiment:

I have launched a Slack community for people with an interest in and passion for helping startups succeed. Here we chat and help each other out, because we care. We are people with ideas, founders, corporate profiles and investors all trying to chip in the best we can.

If you’re into helping others become greater than they already are, join today using this link and introduce yourself.

The only thing we ask is that you make a commitment to being open, accessible and active.

Many thanks for your participation and help. It’s so much appreciated.

(Photo by Stephen Phillips – Hostreviews.co.uk on Unsplash)

The beachhead pitfall

Every time I see a startup pitch for funding, the founders include an assessment of the size of the market, they are going after. The more detailed ones also give an assessment of the size of that market, they believe they can make their own and why.

It is all well and good. Sometimes I might even think that the slide is in the boilerplate department, where it’s there because it’s expected, but it’s not the most sexy or informative slide.

But what I have learned is that it is actually more important than that. That if you get this wrong or don’t think enough of it, you can potentially end up in a place, where you and your startup find yourselves stuck between a rock and a hard place.

Why that is has something to do with the first share of land, you grab in your market – the beachhead.

Normally, when we talk about beachheads, we refer to them as a representation of the segment you go for first in order to prove your value proposition and achieve the illustrious Product-Market Fit. It’s your assessment of where the best match between your customers pain and the relief, you can bring to the customer, is the best at this particular stage of your startups life.

You go after a beachhead, because you want to get traction ASAP to show your investors – and potentially also the first significant revenue to show for it. And it makes total sense.

But – and this is a big but – if you’re not mindful about the bigger market opportunity, your specific plans to get there and the narrative about what you’re doing right now, you run the real risk of getting stuck in the midst of what otherwise might look like a success.

What could potentially happen, if you’re not careful, is that your beachhead becomes your market. That what was once thought of as the first small slice of a big cake becomes the entire cake.

If that happens you may develop a super strong position in a niche market, but you will never be able to scale your business to the bigger market opportunity, you will need in order to find investors, who are willing to put up the ressources required to be there. In other words you risk turning into an ok business on the longer term rather than an amazing business. Which – without saying anything bad about ok businesses in general – just seems like a wasted opportunity.

And this is where we come back to the role of the beachhead.

It is super easy to get excited about your beachhead, when you start seeing traction in it. You naturally want more, and you want to build on the early success. And you can do that, but you need to control the narrative.

You need to keep telling yourself, your investors and everybody else who might listen that what you’re currently doing is NOT the end goal but just a beachhead. That while you’re killing it in your beach head, you understand the fundamental dynamics and value of your product in a larger context for different segments of customers, and you’re well on your way towards branching out.

Thus, your narrative and your operations becomes about the beachhead based on what a beachhead should be; a stepping tone towards making real landgrab in land. If you can balance the two stories about what’s happening now and where you’re taking it, you’ll have a much more compelling story to tell. Not least to the investors, you will need to enable you to get the ressources you need to make real landgrab and fulfill the potential, you set out to fulfill.

If you don’t get this right, the risk is that you end up becoming a de facto niche player doing a stellar job in too small a market that no investor really sees the upside in. And if that happens being able to move the needle and move inland will become infinitely harder. Just don’t go there, when there is an alternative that is so much better by just being more conscious about how you stay the course.

(Photo by frank mckenna on Unsplash)

The complexity trap

One of the great privileges of my job is that I get to meet a lot of different startups and their founder teams and hear about their ideas, and how they have the ambition to take on the world and conquer it.

Among these great people are also seasoned veterans trying to turn great insights into new startups with, based on pure logic, really interesting potential, but who still seem to struggle raising the necessary funding to take off. And when I come across them, I wonder why it is that they struggle, when everything else seems to check out?

Of course there can be an element of timing. They can be too early for the risk profile, an investor has, or they can be doing their work outside the field of interest to the investor. That all makes a ton of sense. But I think there is something much more fundamental at play.

When I look at what make investors tick, it is things that either cater directly to the particular interests or experience of the investor in question or just seems like a super easy sell in the pitch deck; a story which everybody can understand and relate to.

Let’s face it: As investors we look at a lot of different pitch decks, and I think it’s fair to say that it’s easier to remember and get excited about those with a really compelling, easy-to-understand story that seems like something you have heard about before, than it is connecting to a complex pain and an even more complex solution for something, you have little personal relationship with.

Remember, investors are not experts in everything. Some aren’t even experts in anything except investing (which is also an essential skill, to be sure). And they are not particular fond of being put in a position, where they are reminded of all the things that they don’t know.

When that happens, the lack of insight by experience translate directly to a feeling of increased risk, and instead of getting into a complex discussion, it’s just easier and less painless for the investor to say ‘No’ before the discussion move too far.

And it makes a ton of sense too. Because when you look at startups trying to solve complex problems for complex customers, there is a myriad of questions presenting themselves:

How will you position the product towards the customers? How will you engage in the dialogue and show that you can be of value? How will you onboard users? How will you make them stay? How will you facilitate the necessary changes to the way the customer works in day-to-day operations in order to have the full impact of your product (if it’s a B2B related product, of course) etc. etc.

There are just so many complex moving parts that it more than compensates for any great team or idea. Because as an investor you know that a lot of things have to go the right way in order for this startup to be truly successful. And we are generally not looking for cases where a lot of factors align in the right way, before the startups, we invest in, can become successful.

It’s perhaps a bit brutal and to some extend a crying shame. And the obvious risk of it all is of course that brilliant startups founded on the ‘wrong’ complex pain and solution won’t get the funding they need and thus won’t be able to have an impact on the world and ultimately be successful.

But I just think it’s collateral damage to the way that a lot of investing in startups happen; unless you’re lucky and you have that influential person on the investor side, who has insights gained through experience and just knows that the solution has real merit, you as a founder can have a hard time of getting your startup funded.

So, in essence, the best piece of advice, I can give you, if you’re a founder with a less compelling ‘simple’ story to sell is to really spend time on finding investors – angels, VCs – whatever who has the hands-on background and experience that will make them truly see the potential in what you’re doing and sign off to help you achieve your vision.

Because for complex solutions to complex issues you not only need investment – you also need real hands-on help making it happen.

(Photo by Timo Volz on Unsplash)

Time is (also) an investment

The other day I had the pleasure of meeting a mentee of mine, who is enrolled in DTUs board education.

The topic of our conversation?

“How do I qualify myself to go on boards of startups?”

The question is a good one. Because you need to bring something to the table in order to be relevant. Especially with the diverse needs and ever changing nature of a startup.

But then he followed up with an admission:

“I am not an investor.”

Wrong!

He is an investor. His capital? Experience, know-how – and time.

We often have a tendency to see money as the only type of investment. But I would argue that in an environment rich on capital at close to zero interest, there may be other types of investment that is worth just as much – sometimes perhaps even more.

Experience, know-how – and time.

After all, many of those who are offering their service to be on boards to help startups are people with years, perhaps even decades, of relevant experience. And depending on the need of the specific startup, they will be in a position to help the founders leapfrog their competition by getting sound advice and concrete action.

Because action is the only real differentiator. And this is where the investment of time comes into play. While giving advice may be good in itself, what makes the real difference is turning up your sleeves and get busy working alongside the team.

The right board members with the relevant experience can and should do this. And when they do they will be more than an investor;

They will have the potential to become an invaluable contributor.

(Photo: Pixabay.com)

The real drivers for success

One of the general misconceptions about startups is that too much value is being placed on the idea itself or the work you have already done, and not enough value is placed on what’s needed in order to get to where you want to be with your company in the future.

It is so easy to scoff at a product vision, but the reality of the matter is that when you define a bold and daring vision for your new venture, it becomes more apparent all the things you need to get in place in order to have any chance of getting there.

Let me mention a couple;

In-depth knowledge about the market, market dynamics and the customers, you’re addressing so you know what’s needed from the product(s) in order to get in front of the right future customers and actually convert into sales.

The talent needed to make things happen, so you make sure you have all the right competencies in place, which – if they are just remotely good at what they do – will have plenty of other options on the table than to join your merry crew.

The money needed to make the vision come through and fuel both the roadmap and the growth you have envisaged in order to get to the position, you want to get in.

And these are just to name a few.

The easy thing to do here is to just not care about these things, save them for later – and run into big, big trouble later on.

That happens;

When you build something nobody wants or there is just not a big enough market for. It remains the primary reason startups fail.

You cannot attract the talent you need because they have all chosen to join the other companies where they have a better feeling of what they are aspiring to do and they’re moving more diligently in the right direction.

Investors will turn their backs on you because your basically not fundable for above reasons or for something else.

See the connection here?

The best decision, you can make, is to focus less on past achievements and more on what is needed – not from you yourself necessarily but from everybody else – in order to get to where you want to be in a few years time. And then work towards ensuring that can actually happen.

That is going to make all the difference to your success.

(Photo: Pixabay.com)