Every startup will have a passionate entrepreneur behind it who fell in love with an idea enough to give it his all. But to succeed, that is not enough. Others have to fall in love with your idea too. Others include investors.
Here are the top traits that emerged out of the discussions. These are 3 key questions investors will seek answers from entrepreneurs before deciding on funding the startup.
1) Do you have the guts and drive to cross the dark valley?
“When an entrepreneur succeeds, there is so much glamour and halo attached to them. What is forgotten or undervalued is the walk through the dark valley entrepreneurs go through,” Vani Kola, Managing Director, Kalaari Capital, told us. Before she became a VC, Vani Kola had built two successful companies in Silicon Valley and exited them with billion-dollar valuation. “There are times when you can’t access capital, nobody believes in your idea, and even when you are winning or think you are winning, nobody really gives any value to the growth you are creating. Sometimes you don’t know how in the next six months you can take your business to the next level. There are so many lonely, dark spots in the growing of your business. As I have experienced those personally, I look at an entrepreneur and see, do they have the guts and drive inside them to cross that black hole? Will they get consumed by that? Will they quit or will they persevere?” This is one quality she looks for in an entrepreneur. “That elusive quality of perseverance — People who can compartmentalise these inevitable problems, which are costs every entrepreneur has to bear, and have immense faith on their product or service, and have a deep passion to pursue it — is something that I, having been an entrepreneur myself, empathise with. On the days things don’t go great, this quality will see the entrepreneur through,” she says.
2) Can you transmit your passion and faith to the investor?
At the stage of seed and series A round of funding, an entrepreneur doesn’t have the numbers to back him, and therefore investors have a tough decision before them. “You don’t know whether the business will take off or taper off; you don’t know whether the entrepreneur who delivered the business from ten thousand to five millions can actually build a business that looks like it can go to 50 millions. You don’t know whether the team is fully in place to do that. You don’t know whether the market sizing is yet niche or is it going to grow to a 20 million or is it going to cross that 100 million mark which everybody is looking for. And therefore an investor is far more hesitant,” explains Karthik Reddy, co-founder and managing partner of Blume Ventures. “The investors who eventually end up cutting the cheque are those who become equally passionate about solving all those questions. They see that spark in the entrepreneur. They see that market opportunity, just as the entrepreneur sees it. At seed, it is probably an extreme version of that shared passion and faith.”
3) How good is your team or can you build a great team?
However good your product is, however good a coder or business head you are, without a complimentary team member or without the ability to build a great organisation you are not going to survive and make it to series A, Karthik Reddy says. “The learning from three years of seed investing is that the team is more important in our evaluation matrix as we mature as a fund. Without a good team, even if you somehow make it to series A, you are probably going to falter before you get to series B, leave alone grand hundred million exit stories.” According to him, investors should walk away from the opportunity, however best the idea might be or however much they relate to the idea if the team isn’t strong enough or the entrepreneur looks unlikely to be a good team leader. “After all, an investor is not going to run the startup for the entrepreneur. So fundamentally, if they are not going to make their business work themselves, you shouldn’t invest in it.”
This is an edited version of a post originally posted at yourstory.com, by Malavika Velayanikal is Executive Editor of YourStory.com and Innovation Junkie. You are free to re-edit and repost this in your own blog or other use under Creative Commons Attribution 3.0 License terms, by giving credit with a link to www.startupcommons.org and the original post.
Start-up ecosystems around the world are scaling new heights. Startups raising millions of dollars and numbers are growing. Here are 9 things to consider before raising funds for a start-up:
1. Never have more than 3 founders
Too many cooks spoil the broth. Having 2-3 founders is an ideal choice. In case you need more experts, you can always hire them. In rare cases more than 3 founders stick together; if the number is more, ultimately, it boils down to 2 or 3. Having one founder is also a bad option. Having different perspectives and divided risks is always a favourable position to be in.
2. Analyse the market; the idea may be good, but the market may not be ready
It is primarily important to interpret the existing market scenario in terms of your idea. Broadcasting your idea at the right time is where most of the startups fail. Therefore, first analyse the market and then take a call. If needed keep patience and wait for the market to develop according to your perspective.
3. Pick the right mentors
Having the right mentors to guide you and help you manage risk is a blessing in disguise. Even though there are no hard-and-fast rules of choosing a mentor, make sure that your frequency and belief matches. A mentor should believe in your idea and ambition, as a result, making your journey easy and a learning experience.
4. Maintain your accounts
A list of expenses of the previous and the upcoming months should always be maintained. This helps you keep track of where the money is going and how much money will be needed. As a result, while going to an investor, you can always show them the accounts and logistically present the amount of funds required.
5. Ensure financial stability in your personal life
Giving up an existing job to start a venture is quite a challenging task. Knowing well that the risk may or may not bear fruit, it is of utmost importance to ensure that all the debts are cleared. Also, make sure that the medical insurance, family savings and credit cards are in place. Alongside, keep a minimum runway of 9-12 months. Once all the basic things are taken care of, it will become easier for the risk taker to concentrate on his venture.
6. Family money
Keeping personal reputation at stake is riskier. Considering that most startups fail, ideally, family money should not be more that 5-10% of the total investment.
7. Consider funds as a bonus
Planning a startup on the basis of bootstrapping is considered to be an ideal one. This helps you concentrate on your business completely rather than hunting for an investor. Also, this will help you control the company completely without any pressure from outside investors.
8. Go to 3-4 investors see what they are asking for
Meeting an investor can be a learning experience. Listen to all the questions he asks for after you give your presentation and make a note. Remember, those are the areas the investor is not comfortable with. The more you meet investors, the more you will be able to understand the loop holes in your venture.
9. When a startup does not work, it is good to accept it
The bitter truth is that approximately 80-90% of start-ups fail. It is good to make your call and move on if things don’t fall into place. Of course, this should be the last resort but as a risk taker, remember that at times you need to let things go.
This is an edited version of a post originally posted at yourstory.com, by Richa Maheshwari (reporter from Yourstory.com). You are free to re-edit and repost this in your own blog or other use under Creative Commons Attribution 3.0 License terms, by giving credit with a link to www.startupcommons.org and the original post.
Lessons from sustaining a startup for 3 years: It is all about people, Information, Team, Customers and Money
It has been three years building Hammer and Mop, and it seems like one long arduous trek- eventful and full of valuable lessons. There have been times when my limbs threatened to give up, but a look at the distant peak usually set things right again. Last year, it felt good completing two years out in the cold. We have now reached the base camp. There are some things I’ve learnt and thought it worthwhile to share:
It’s all about people
I cannot stress this enough. Right from the day I decided to start off on this trek, till the day I pitched my tent at the base of this peak I have been helped, advised, counselled by people with whom I share a genuine relationship that is mutually beneficial. Customers are people who you need to communicate with. Allies are people who need to get value out of an association. Team members are people who need to feel respected and a part of the game. Your family — with their unconditional love — only fear for your sanity. You are a human and you need to love yourself.
It’s all about information
Today, we are a team of individuals following certain processes and believing in certain ideas day after day. At all levels, our focus is hiring leaders who can grow with the company by lending their shoulders to the task. Distilling the broad vision to profile specific short term goals has helped us perk up performance and boost accountability. A team supervisor focuses only on cleanup quality, communications focuses only on information flow, and so on. Our mentors and well wishers help us keep a holistic perspective. While the team is a submarine working hard at being submerged, our mentors provide the periscope.
It’s all about your team
We are crazy about the peak and take lead to manage aspects while figuring out the way through the jungle. I didn’t know what to expect out of ‘employees’ three years back and my errors cost me my entire team once. Proper policies, complementary skills, mutual respect, clear communication and a healthy work environment play a big role. Most of my team consists of blue collar workers. The vicious circle of managing them is a misconception, because respect has to be earned. I have learned that everyone likes the peak, and is keen to play a well defined role in a performing team. Things fall apart if clarity is lost. In a jungle, we have realized that we need to have each other’s back and that has helped us keep going.
It’s all about your customers
And they are loveable humans too. Their expectations are pretty simple, and they pay, so keeping them happy is key to a successful business. They understand goof ups, empathise and offer support. Customers seek an honest relationship and are generous with compliments if things go well. They are generous with critical feedback if things don’t. I have been fortunate to have numerous patrons who have held our hands throughout, helping us get better at what we do. Negotiations have seldom been about money, they almost always transcend to intangibles if the game is played right. Customers seek trust, which is built by consistent service. Being open and apologetic about our weaknesses has helped us live.
It’s all about money
Not at the cost of ethics and quality. You might be in the business to contribute to the society, but you dig your own grave by not being focused on cash flow and profits. Money is the essential grease, profits can be reinvested for growth, healthy cash flow provides you with bandwidth to make your customers happier. An organisation needs to sustain itself and its people, and that’s why it needs to earn money. To ensure the same, for a young company like ours, that’s the CEO’s job.
It’s not about the comfort zone
At the start, I remember my co-founder urging me to be on the field and find recruits. “Go out and smell the fresh grass, ongoing analysis sitting in the comfort zone isn’t going to make things happen,” he had said. Finding our own spot is a trap, because the proactive explorers win. While it is essential for startup CEOs to know every aspect of the business they run by rolling up the sleeves, it is crucial they ask their senior team members to do the same too. A company won’t grow with leaders sticking to their offices. A company won’t grow without pushing all boundaries.
This is an edited version of a post originally posted at yourstory.com, by Sushrut Munje (Co-Founder of Hammer and MopYou are free to re-edit and repost this in your own blog or other use under Creative Commons Attribution 3.0 License terms, by giving credit with a link to www.startupcommons.org and the original post.
It is very typical to measure mature of startups ecosystems in terms of new startups, growing startups, investors, investments, exits, etc. and it makes sense as cities use these statistics in the best possible way to communicate their economic growth at high level and to attract other relevant people, investors, big companies, more entrepreneurs and other stakeholders.
These indicators are however the result of many smaller activities present in a startup ecosystem that contribute to these higher level results - as any startup ecosystem is the sum of multiple variables of an unbalanced equation inherent to the interactions of the startup ecosystem itself.
So, as you can figure out, you need much information to talk about matureness of startups ecosystems. But most of all, you need a good understanding and analysis of your startup ecosystem at different levels and mapping it usually is a good starting point to set up new strategies and achieve a better economic development.
But the thing is that properly mapping a startup ecosystem is more than just to create a good map to show who is who in your city or region. It is crucial to work at different levels and in more detail:
We truly believe everyone should work on this model, as it makes the investments to growth and innovation truly visible and measurable - as only the things that can be measured can be improved. And the faster the feedback loop, the faster things can be improved.
Actually we are working with this model with few key cities like Helsinki at ecosystem level and even more broadly with independent organizations and we are clearly seeing that it is possible to build a vibrant startup ecosystem in a city in three to five years, what is half or less, compared to known average.
Future entrepreneurs and current startups deserve this new scenario that we at Startup Commons are creating and we encourage others to contribute and develop innovation, better, faster and with less resources.
Are you a consultant or an entrepreneur?
- Learn more about Growth Academy Online Training & Certification Programs
Download our startup booklet and watch our videos to learn more about our framework to help startups to grow without "reinventing the wheel" and without wasting lot of time trying to connect the dots.
The framework is based on the startup development phases and aims to remove the highest universal risks on the startup journey.
In his new book, Biz Stone, the Co-founder of Twitter, discusses the power of creativity and how to harness it through stories from his remarkable life and career. Stone is known as the creative, effervescent, funny, charming, positive, optimistic, altruistic and yet remarkably savvy Co-founder of Twitter. His book Things a Little Bird Told Me: Confessions of the Creative Mind spans 224 pages and 18 chapters, and covers the pivotal and personal stories from his life along with lessons earned and learned the hard way.
Born in Boston in 1974, Biz Stone’s first startup was Xanga. He was recruited by Google in the early 2000s, and connected with Blogger founder Evan Williams; the pair later left to work on their own startup Odeo. Twitter was founded in 2007 after a hackathon when the original videocasting product did not pan out as materialised. Twitter’s dizzying global success led to Stone being recognised by ‘Time’ Magazine as one of the most influential persons in the world. His other books include Who Let the Blogs Out? A Hyperconnected Peek at the World of Weblogs.
“Creativity is what makes us unique, inspired and fulfilled. This book is about how to tap into the creativity in and around us all,” Stone begins.
Here areTop 20 Takeaways from his book, offering insights into creativity, ethics and global vision.
1. Create opportunities, don’t wait for them
“Opportunity is manufactured,” says Stone. Don’t wait for circumstances to align your stars, go ahead and make the opportunity yourself. He used this principle even in school days to create a lacrosse team since he was not good in other sports; he also landed his first job as a book cover designer by submitting a cover to the art director even though he was just interning as a delivery boy.
2. Start with an idea
Don’t dig into specifics first, start off with an idea. “If you take an idea and just hold it in your head, you unconsciously start to do things that advance you toward that goal,” says Stone. “Have confidence in your ideas before they even exist,” he advises. Sometimes even a sense of desperation that you will eventually get an idea will keep you going.
3. Invest emotionally in your idea
“If you don’t love what you are building, if you’re not an avid user yourself, then you will most likely fail even if you are doing everything else right,” says Stone. His startup Odeo did not go too far because he was not into audio podcasts himself, and therefore missed out on important features such as sound quality. Twitter, on the other hand, brought Stone much more joy and excitement. If you are not engaged, you cannot go on, there will be no gravity.
4. Creativity has infinite approaches
One thing Stone learnt as a book cover designer is that there are infinite approaches to frame, understand and solve a problem. If one of your creative ideas does not work or does not find acceptance, let go and move on to another one. Don’t take rejection personally. “Creativity is a renewable resource. Challenge yourself every day. Be as creative as you like, as often as you want, because you can never run out. Experience and creativity drive us to make unexpected offbeat connections. It is these non-linear steps that often lead to the greatest work,” explains Stone. He drew on this principle while working at Google – full of PhDs while Stone himself was a college dropout; he advocated a focus on the human aspects of tools and not just technical.
5. Learn to harness constraints for creativity
“Constraint inspires creativity,” says Stone, drawing on a number of examples, including his own. Steven Spielberg had a limited budget for the movie Jaws – so instead of creating an expensive replica, he decided to shoot from the ‘shark’s point of view’ – which turned out to be even scarier. Harrison Ford had the runs while shooting The Raiders of the Lost Ark – and instead of dueling a swordfighter in one scene, he just proposed a gunshot – which became an iconic moment in the film. Due to resource constraints, ARM came up with chips which were just not good enough for PCs – but ended up being perfect for cellphones. “Embrace your constraints. They are provocative. They are challenging. They wake you up. They make you more creative. They make you better,” says Stone. Detractors initially said Twitter’s 140 character limit was constraining – but that unleashed a new form of wit and creativity, and power for activists.
If you are an entrepreneur like me, I don’t need to tell you that there are characteristics that will help you out as a leader, for example, needing less sleep than the average person and being able to read people as if they are sitting across the table from you in a poker game. There are many resources for this kind of advice once you get your business moving. But what should you keep in mind when you are just building your business and its most important asset — its culture — from day one?
To help inspire you, I’ve collected four top insights for creating a winning culture from top business experts and added in my own experience with my company Vuclip and previous ventures.
1. Create a Meaningful Mission
Make sure everybody in the company has great opportunities, has a meaningful impact and are contributing to the good of society – Larry Page, Google co-Founder I agree wholeheartedly.
The best way to achieve meaningful impact is to focus on a mission that is close to your heart. The best companies inspire people by giving them an opportunity to do work that they believe in and enjoy. For example, I could not imagine doing anything else other than building a business that is fostering innovation at the intersection of the media and mobile technology worlds. And in turn, the company has attracted like-minded creative, vibrant employees that inspire me on a daily basis. Find that cause that inspires you and is the spirit of your business.
2. Honor Merit Over Tenure & Ideas Over Hierarchy
“When you become a leader, success is all about growing others.”— Jack Welch, former chairman and CEO of General Electric.
Enlightened leadership teams ask employees to contribute ideas because they recognize managers and executives don’t have all the answers. I believe in encouraging debate and action on ideas. By way of example, at my company we have a standing weekly “Concept-Accept” forum where anyone in the company can have an audience of all our executives. Typically there are multiple ideas presented each week and there is healthy debate and discussion on these ideas. Following that discussion, a concept is either green lighted to move to validation and productization or sent back to the drawing board for additional work. Many of our successful product capabilities have been built from ideas originating in these meetings. This fosters innovation and allows anyone and everyone to voice their ideas freely and be heard.
3. Inspire Authenticity ”Authenticity is the alignment of head, mouth, heart, and feet — thinking, saying, feeling, and doing the same thing — consistently. This builds trust, and followers love leaders they can trust.” —Lance Secretan, leadership theorist and former CEO of a Fortune 100 company.
A business and its leaders need to inspire people to be their true selves. I’ve observed that there is often a dichotomy between how people present themselves at work and their personal lives. And this is not a good use of energy. Employees should be focused on the business, outsmarting the competition, managing time well and collaborating with others, not on an inward battle. If you build an environment where people can have fun and connect with their creative instincts, you not only are empowering them to do their best, but in turn they are inspiring everyone around them. Ultimately, this makes for an exceptional company culture.
4. Embrace Risk
“In a world that is changing really quickly, the only strategy that is guaranteed to fail is not taking risks.” – Mark Zuckerberg, chairman and chief executive of Facebook
The status quo is no place for an adventurous, exciting, inspiring start-up with its eye on the prize. Here’s a personal example. When we were just getting Vuclip off the ground, not many saw the value in starting a company addressing the needs of emerging markets, the fragmentation of the mobile space was daunting, mobile networks in places like India vary with regards to reliability, not to mention that YouTube was already dominating the video market. We had a lot going against us. But the management team was excited by this challenge. We developed unique technology that no one else could build and went after this opportunity with everything we had. Today, we are thrilled that this risk paid off and so are the 120 million users that use Vuclip per month. My point is certainly not to brag. We’ve had just as many detours as we’ve had direct hits and we continue to learn from both. I wanted to illustrate that resting comfortably is not interesting and will likely not inspire your employees or customers for very long, so try something new, fun and exciting! In summary, if you can please indulge me just one more quote, I wanted to share one from Jack Dorsey Co-Founder of Twitter. He said — actually he tweeted – “success is never accidental.” And I agree. I believe amazing businesses arise from exceptional work cultures. If your business is a house, I see culture as the foundation. If your house is well built on top of a solid foundation of a meaningful mission, creativity, authenticity and smart risk, then the maintenance of that home is seamless. And being inside of it day after day is a joy. And if you are competitive like I am, then you can be satisfied you have the best house on the block.
This is an edited version of an post originally posted at yourstory.com, by Nickhil Jakatdar, a successful serial entrepreneur based in Silicon Valley. His latest venture, Vuclip is the world’s largest independent mobile video company with over 120 million users globally, with over 20 million users from India. You are free to re-edit and repost this in your own blog or other use under Creative Commons Attribution 3.0 License terms, by giving credit with a link to www.startupcommons.org and the original post.
James Haywood Rolling Jr. is associate professor of art education and leadership at Syracuse University. He has served on the board of directors of the National Art Education Association, and has authored three other books on arts and creativity. His recent book is Swarm Intelligence: What nature teaches us about shaping creative leadership (see my review). Rolling joins us in this exclusive interview on human creative behaviours in swarms, group intelligence, adaptive entrepreneurship, and music and Pixar Studios as examples of intersection between arts, science and entrepreneurship.
YS: How was your book received? What were some of the unusual responses and reactions you got?
A: The largest and most general audience for the book is those readers interested in cultivating their own creative growth or aiding the creative development of friends and loved ones. Swarm Intelligence also targets those who are interested in the power and potential of 21st century tools and techniques for developing and expanding their social networks or the effectiveness of their organizations and affinity groups, whether in face-to-face interpersonal interaction, in business circles, or over internet social and gaming networks. Swarm Intelligence will appeal to readers of books like Howard Rheingold’s Smart Mobs: The Next Social Revolution, and James Surowiecki’s The Wisdom of Crowds. However, what distinguishes Swarm Intelligence is its exploration of six crucial areas of human interaction through which individual creativity can be collectively fostered: social networks, systems, swarms, superorganisms, stories, and schools. It is interesting to note that the concepts in Swarm Intelligence have been equally provocative to arts policy makers on the West Coast, as evidenced by their response to a talk I was recently invited to give, as it has been with a totally unrelated group of children’s book authors. So there has already been a wide range of influence since the release of the book in November 2013.
YS: What are the typical challenges creative people face as they scale up their company from an innovating firm to a mature corporation?
A: The greatest challenge is in attempting to forge a path ahead as if a successful business was the hallmark of individual achievement alone. It is not. In the six years after Thomas Edison established his Menlo Park laboratory facilities in New Jersey, approximately 400 inventions were patented in his name. We like to talk of Edison’s individual genius but fail to recognize the collective intelligence of his team, one of whom has noted that Thomas Edison was so in sync within this hive of activity that “it is difficult to distinguish his actions from those of his colleagues.” Francis Jehl, one of his long-time assistants, also divulged that “Edison is in reality a collective noun and refers to the work of many men.”
YS: How are social media like Facebook, Twitter and Pinterest creating new kinds of swarms?
A: Online social networks enabled by Facebook, Twitter, and Pinterest create new kinds of creative swarms that are not solely the domain of any individual member, but also of the entire network of individuals. However, collaborative social networks have creative consequences. Sometimes what a network learns benefits only itself and is at the direct expense of its neighboring swarms of thinkers and doers. We can easily lose our ability to connect across networks and detach ourselves from the joy of common purpose, as we hide behind our network firewalls.
YS: What are some ways in which creative people can show their leadership in swarms?
A: There are actually four natural laws of swarm behavior that are also demonstrated by the best creative leaders. As a creative leader, you must first learn to: 1) chase after those directly ahead of you in the lead ranks; 2) separate from those too close for comfort; 3) align with those pacesetters moving right beside you; 4) and cohere with the cloud of peers around you as you all converge together toward a common and mutually advantageous target or goal.
YS: Are swarm effects generally short-term effects, or do swarms have long-term impacts?
A: It is crucial to understand that swarm intelligence is a problem-solving behavior that does not need to be altogether simultaneous, with all individuals working together on a single project outcome and arriving at one collective “aha!” moment. Rather, this collective intelligence may just as readily be distributed over time, with each individual ultimately contributing a separate outcome longitudinally toward a deepened overall understanding of the wide range of possible outcomes, extending the vision of every group member in the process. This is how cultures are formed; it is a long-term undertaking
Read the whole article on yourstory.com
Finding The Right Problem
The genius lies not in finding the right solution, but in the right problem. An enabling problem, as Thorpe puts it, allows imaginative solutions to spring up that are far removed from your original expectations. Aim for the impossible, but don’t look to the impossible to solve your problems. For example, a disabling problem would be wanting to fly like a bird by flapping your arms. But an enabling problem would be anything that gets your feet of the ground. Finding the right problem will expand your horizons and stretch your thinking. A disabling problem will only impose restrictions and negativity.
Breaking The Pattern
Humans are creatures of habit. The human mind is loath to do anything that takes it out of its comfort zone. Hence, people feel reluctant exercising, learning a new language or any such thing. Thorpe writes that Einstein was most successful when he was willing to consider anything, particularly ridiculous ideas. Breaking patterns tears you out of your rut by generating novel ideas that people are usually too practical to consider. Constantly pushing oneself to doing and trying new things every day is how patterns are broken and greatness achieved. As the quote goes, “Get comfortable with being uncomfortable. It will take you places.”
Breaking The Rules
Breaking rules is not a sign of rebellion which you must adopt to distinguish yourself from the majority. Rather, Thorpe comments, it is a focused, deliberate and systematic way of finding solutions. When you have exhausted all acceptable alternatives in your quest for the perfect answer to your problem, the only option is to break the rules and see what solutions it yields. Moreover, the kind of thinking that pathological training and compulsion to obey rules produces is not one that changed the world. Of course, obey the traffic rules and respect each other’s privacy. But in everyday life it is essential to break away from enforced norms and regulations to realize your true vision.
Grow The Solution
Einstein’s labour of love, the theory of relativity, was eight years in the can before it could be released to the world. Chances are, you already know how you are going to make your mark in the world. The prospect seem impossible, or difficult at the very least, because the idea is raw and obscure. It has to be protected, nurtured and nourished it in your own special ways so it can take root and flower. It requires effort, preparation and perseverance. The mass media would have us believe that all innovators are solution superstars who woke up with the perfect idea one fine morning. Einstein earnestly asks you to believe otherwise. ... read more on yourstory.com
There are many things in entrepreneurship that still remain the same after many years. In this case, we wanted to share the interview that Bambi Francisco from vator.tv did with Yoav Leitersdorf at Innovate!Europe conference, held in Zaragoza, Spain, some years ago.
It shares some great and simple to understand tips for new start-up entrepreneurs:
The one extra tip was, it’s OK to fail. European entrepreneurs seem to have VERY different viewpoint to failure. European failed entrepreneurs rarely continue as entrepreneurs and start something new, when in US the most successful entrepreneurs have failed in past. I think this is a VERY important lesson. Europeans should understand to value their biggest lesson that they get from their failure!
See the video for the full interview.
Why yes, that is my mirrored handwriting.
In the modern, networked society it's nothing short of a miracle that some traditional organizations make ends meet. However, in the longer term every inefficient organization will have to come to grips with the new world and adapt to the surroundings. That or face the consequences.
This post has a personal grounding to our organization at Grow VC. During the 2011 winter holidays we've spent time planning for the longer term and steering the direction of the ship so to speak. I've had an inkling that I wanted to bring forth in our discussion and it's become the topic of a larger discussion since then. This inkling is namely that in roughly a years time, at the end of 2012, the Grow VC team will have grown to over 100 individuals.
Why Not Make It a Thousand?
Delving into this subject of scaling the organization, our CEO retorted with a larger number. Why couldn't we instead be over a thousand in the organization after a year? After the intial shock and a few missed heartbeats, it all made sense. Most, if not all great long term organizations have over 1000 people.
Why did he ask me that? The reasoning is quite simple. If we think we can't – we never will. And if we don't believe it's possible, then we're in the wrong place.
We've gone through the path of scaling the organization and responsibilities, benchmarking and attracting the most brilliant people to our team and we've successfully passed 50 individuals (who we are immensely proud of might I add). How do you grow an organization from the initial team to fifty? Well, just make sure you recruit the best and the rest will follow. At least to a large extent. Fifty is a big number, but it's one that you can still handle by pulling the strings yourself. A thousand (1 0 0 0) on the other hand, you will need a separate recipe for.
No One Has a Clue
Scaling the organization past fifty individuals requires a different approach. I'm confident we as an organization can do it, that's not the issue. We've got heaps and heaps of confidence. How it will look, that's a completely different topic all together. In attempting to create an efficient, purposeful organization also past the first 100 people, we've looked at making it scalable in building value. We as an organization take scaling very seriously.
In developing any organization past a certain number, it becomes clear that no one has a clue. Sure all MBA books are filled ten dollar words on strategic management and how to guide a large organization. But can you really guide an organization of hundreds or over a thousand individuals? Look at how large organizations function, look at how much efficient time individuals have each day. We've approached this dilemma differently. We want to make it work.
Interconnected teams for an efficiently scaled startup. With our global operations on six continents, it's been important for us to have local people. For us this means people with real ownership, incentives and autonomy to make things happen – you know, entrepreneurs. Teams in this context are nothing but a collection of people, with the before mentioned attributes, who have a set goal, ultimately that is to build value in the organization. Teams mean local teams, task specific teams (e.g. development, UX etc) and functional teams (e.g. the dreaded 'management').
These teams are interconnected and they need to communicate amongst themselves, that is the interconnected part. They should be able to function autonomously, but they should also be able to leverage and learn from one another. The primary links should be between the teams themselves and the secondary links are to 'management'. The primary purpose of 'management' itself should be to provide the targets, metrics, priorities and support when needed in achieving the targets. But maybe most importantly, to get out of the way. Easier said than done, but what is the alternative? The pyramid? No thank you.
Guidelines - no Excuses
Brilliant people. Documented and proven processes that are constantly developed. Measured targets. The right culture.
This is more or less our recipe and so far we're sticking to it. With efficiency and purpose always in mind, everyone is required to build tangible value and get things done. If something doesn't work, fix it. If it does, improve it. It's all about purpose in a team like this and if you dont share the purpose, you aren't part of the team.
At the end of the day it's been a delight working with our driven team up to this point and I look forward to all the people that we add on to this journey of globally developing equity crowdfunding. And in our market there are figuratively over 7 billion people and we will find the most brilliant hundred or thousand or whatever may be the number. We've already gone through over 1500 applications and the pace keeps increasing. We will find all the right people, it's just a matter of time.
Clearly we at Grow VC are still the exception in terms of how organizations look and we will continue to push the envelope for a good many years. But how long are you willing to bet that the other approach still works? Or is it just a question of a process that no one has thought to question?
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