Getting Started - Creating Value in a Tech Startup

Turning ideas into companies, tips on making it happen…

The startup scene in Dublin is vibrant yet many have poured their hearts and minds into their startups, with little to no success to date. Over 90% of startups fail, which by the numbers alone are turning out newly seasoned and committed entrepreneurs who are more learned, more agile and capable of achieving success with a start up then was probable before. With the climate in Dublin and elsewhere nurturing start ups with grants, tax breaks and mentorship, there is never been a better time to start up a new business. As the world slowly recovers from a horrendous recession, we see the buds of new business in cases such as India’s announcement of a $1.5 billion fund for startups just a few weeks ago.

From my own start up experience and observations, here are some points you may consider as central to increasing a startup's chances of success:

• Start like you mean to finish. Plot out what you want to become in success with a start up. Is it the next multi billion dollar company or a business to support you and your family with no wish to expand the business beyond a “mom and pop store”?
• If successful, will you sell your business? If so, when will this be? Plot a company size in revenue, employees and asset size (value of assets to turnover of business) when you will start considering offers to be bought out.
• Embrace modern Risk Management. Risk mapping, risk registers, risk assessments, 3rd party country risk, financial risk reports are all useful and are a good way to see your mapped future unfold as you build your business. If done from the start, you build into your structure a culture of risk management and thus information awareness.
• Scaling Systems. If you want to be the next billion dollar enterprise, you need to think about how IT infrastructure, systems design and development will fit into this vision. Will it be costly or seamless to scale your IT resources to fit business needs? Bootstrapped startups have great opportunities to develop low cost scalable systems using cloud and hosting providers. How it’s designed and built however will determine its true worth in availability, stability and scalability.
• Your digital brand. Market yourself for credibility, expertise and leadership as a Founder. Build your social media profile and creds with consistent high quality posts, blog articles and actions online that reinforce your digital brand message. If you approach a VC for funding, they will investigate you thoroughly including social media because in a startup, it’s the people, not the products that make the bew business successful.
• Network Network Network. You need to find co-founders, business partners and indeed potential customers in the marketplace. Meetup.com is a great start in your networking efforts that you should approach strategically.
• Community. Make sure you build bridges with your marketplace but also with the startup community. The access to people and shared experience is incredibly useful especially to a newly minted entrepreneur.
• Marketing. Build your marketing efforts based on tested Marketing models such as the 4P (Product, Price, Place, Promotion) and seek inputs on how you can develop a marketing strategy and a marketing mix that fits your startup
• Finance. If you are not funded, be sure to bootstrap everything you do, make sure your efforts are within a projected finance curve (ie. within budget) to where your business will start earning money for itself or you can reasonably expect to get VC capital on board so you can develop your business into a self sustaining entity.
• Create Value, then create Customers. Make sure your market research and everything you see from that point on is consistent with your products and services creating value for the customer. Qualitative approaches to service quality influence pricing and also create repeat customers. If you cannot create value in your customer's eyes, you will not have any customers.
• Stay Flexible. Start ups often start with a great plan and product. When the marketplace interacts with the start up, it often turns into something very different. Be sure your startup is structured flexibly so you “touch base” with your customers in a manner that creates value for them in what you do.
• Disrupting a market? If your product revolutionises a market place by its disrupter effect, then be ready to capitalise upon it. Have base plans for this type of dynamism in place so you don’t waste time wondering about what approach to take to capitalise upon it. Large companies act fast in protecting their market share from disrupters, so be sure to have a plan.

The need for flexibility, dynamism and intelligence is never more relevant than it is today even with a support structure in place. As the information era moves onwards, more and more opportunities will appear for aspiring Entrepreneurs. Taking that opportunity and turning it into something meaningful is often a hard learnt lesson through business failure. Once the budding Entrepreneur does not give up, their time will come and the days, months and years of trying will be rewarded by success.

Sources/Credits

Pics;

www.entrepreneur.com

www.stacksocial.com

www.picjumbo.com

Credits;

Trading Internationally, are tomorrow's risks today's opportunities?

True North? Are we sailing in the right direction?

We love the world we live in! With tea from India, chocolate from Belgium and computers from the United States delighting us as consumers, what is not to love about our world? What is easy to overlook however is the incremental cost of such delights. Is the framework of globalisation as its delivery vehicle a viable true north for us to sail towards in business and indeed as a society? Whilst the benefits of globalisation has transformed the world we live in which is felt nearly everywhere we go, this does not answer the kernel question for the longer term; is our developed model of globalisation a true north to continuous and positive development in mankind’s march through time? If so, how do we wrestle with the enormity of trading internationally and what can we do to better reap the rewards for trading across international borders?

One thing is for sure, its not the first time we have tried it! John Maynard Keynes talked of globalisation when he lamented of how a gentleman in London could be sipping tea from India before August 1914. Keynes in the 1920’s went onto talk of internationalisation and how it did not prevent war complicating the ability of nations to be self-sufficient. After the Bretton Woods agreement (1944), of which Keynes was instrumental in its draft, the transformation from colonial globalism to modern economic globalism, as we know it was complete.

John Maynard Keynes
Source: Biographyonline.net

Globalisation 101 defines globalisation as “a process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology.” The more recent addition of highly impacting information technology has seeded a disruptor wave that is transforming the landscape, as we know it. For any person, small business or multinational, this brings great opportunities but only if one is astutely reading the global landscape and exercising information driven decision-making skills before venturing into international trade.

Thinking international trade, we often think big business, but if we are pursuing information and understanding, the resulting decision-making at any size or level will have increased efficacy leaving sustainable success as the likely outcome. In thinking about our “true north” in international trade, I believe we should consider the following elements as key in our organisational approach and management of our business in international trade.

Risk Management is key in gathering, quantifying, assessing, ranking and addressing risks, both positive and negative in relation to international trade. The focus on internal risk areas like company preparedness, supply chain length, financial risk, and organisational set up are as important as territory culture mapping, market demand analysis and risk assessments of any strategic entry into an international market. A business will never be successful if it cannot keep its promises to its customers and run its business in a solvent manner.

Geo-Political Risk should always be explored assessing impacting risks like the upheavals we have seen of late in many territories altering the trading landscape. The US/EU sanctions on Russia for its part in the chaos in the Ukraine is a good example why we should as international traders monitor geo-political risk and open up options in timely manner for remediation of identified risks.

Economic Risk is a reality for all businesses trading either directly or indirectly in the market place. After all, if your end customer cannot afford to buy your product, your business will not be successful. The macro economic indicators like GNP, GDP and Jobs Data are some good indicators of overall macro economic management of a country or territory. However, it's always advisable to dig a little deeper with activities like monitoring news outlets local to the territory to see what is ‘big news’ such as layoffs, potential strikes, new investments in business and local government infrastructure investments.

Currency/FX Risk is certainly an issue to consider if you are billing in local currency or have a treasury strategy that bill’s in a regional currency. Your investment in currency into your books through billing, FX purchases or complex financial products like forward contracts will bring loss and gain risks that your business needs to understand and integrate into its wider strategic plans for entry to the market place. For example, as the European Central Bank (ECB) is now considering minus interest rates on the already low ECB base rate, banks would be wise to reconsider their strategic plans and how they trade in the Eurozone given they could be subject to interest charges, not payments on the cash they bank on deposit. Another good example is the strict and sometimes volatile FX controls placed on foreign currency in China. Its impact merits consideration in any planning session involving the country.

Country/Trading Risk is another area to think about. How do you want to enter the market place? Are you sure of your demand side analysis? What are the pricing strategies for this market? Is it compatible with your supply chain and distribution model? Is indirect sales preference a temporary or permanent feature to be reviewed into the future? How will your branding be exposed and developed especially in an indirect sales model? What security will be required on the high-risk territories such as letters of credit, 3^rd party guarantees or more complex forms of security on trade? Will lengthening supply chains be an issue in the territory given its security and governance levels? Have you developed management plans addressing the identified risks from these posed questions?

Thinking about the main areas, the best way for entities big and small to start the process of collection, evaluation, ranking and output is to develop a risk register. Even on an excel spreadsheet, a risk register can be highly effective with the focus on risk classification (individual/group/aggregate risk), risk type (country/fx/internal/political/etc), risk grouping (link similar risks), risk weighting (what is the likelihood of it happening?), risk impact (the impact it will have on your business, financial and non financial). The other side of the risk register is the evaluated risk management response which should be acceptance (deal with it when it arises/reserve funds or resources for the eventually), mitigation (take steps to reduce the impact and/or risk weighting to acceptable levels), sharing (involve 3^rd parties whom can lower the level of risk you are exposed to) or rejection (risk is too high therefore you cannot proceed to exposure the company to that element/point).

This type of information driven approach will inform us of our ‘true north’ in trading internationally. The resulting outcomes will be based on a higher level of awareness and understanding, which can only herald greater success probability. So when trading internationally, I submit that if we all take greater care with our risk management approach, less will get trapped in the pitfalls and more success will befall those whom embrace information driven decision making and in enough numbers can alter the course and trajectory of our societies true north in international trade making it safer, more informed and less subject to humanities dark side that is as clandestine as it is plentiful for the international trader.