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Startups · Growth hacking

Not everyone wants to be a Startup

Peter Johnston Businesses are composed of pixels, bytes & atoms. All 3 change constantly. I make that change +ve.

November 21st, 2015

Lots of people have good ideas. But not everyone wants to live the startup dream - spending a year of their lives living on the breadline, going cap in hand to investors and living off promises of money someday in the future.

For example, I work in a University city. We have lots of clever ideas. There is an established system for the big ones, but there are lots of small ones too - things people have come across as part of their work - which are ignored by the big accelerators. The researchers and professors don't want to leave their research posts and - to be honest - would make terrible startup founders if they did.

I want to create a system where people can bring their startups to us - however small - and plug them into a team who can make them happen. One with expert technical platforms, a solid growth hacking team and the right domain expertise on hand. 
And, of course, a pool of good investors.

Anyone have any suggestions, ideas or sources of help?

James Thomson

November 21st, 2015

Actually, there could be a seed of something here.

Agreed there are lots of accelerators which seem mostly to have a positive impact. But I've approached a few tech ones up here and they all seem to require a software developer on board before they'll consider you.

Recruiting a good developer is difficult enough when you do know how to do it and can be a genuine minefield at the best of times. It's not a task I'd wish on the uninitiated as a poor decision can be very costly.

There's then the thought that actually do you genuinely need a full time CTO to run a simple app or web site - not everything is technically deep. Sure you need someone on hand and able to react quickly as you iterate and fault find, but I'm not certain this needs to be a full time team member - could easily be a company with a few good people.

I'd pondered on a similar idea for up here in the North East, where we have Durham, Newcastle, Northumbria, Teesside and Sunderland Universities all close together.

Never thought quite how to pitch it, though.

Give me a shout directly if you're interested in my findings so far.

Andrew Lockley Investments & consulting for tech startups

November 23rd, 2015

The industry is set up as if cash investment is the only real barrier to certain success. It isn't. Failure is near-certain, and cash is rarely the fix. Far more usually, it's symptomatic of a badly conceived business. It's not unrelated that accelerators are often seen as, or sold as, a panacea. This isn't true, and their cash-based scaling recipe for success can be very rigid - and often misguided and inappropriate. Most tech SMEs aren't in a position where simply a lack of money is separating them from success. If accelerators don't do much to directly solve these other, long-term issues (scaling, product/market fit, etc.), then they won't add much value. Often entrepreneurs need a lot of support solve these problems. Cheering and a desk doesn't cut it. Nor, in most cases, does unstructured, piecemeal mentoring. A

Bob Caspe CEO, Entrepreneurship & Innovation Global Education Programs at International Entrepreneurship Ctr

November 21st, 2015

At the IEC (http://iecpartners.com) we created a concept called E2B, or Entrepreneur to Business.

Basically we observed that many if not most of the business ideas that entrepreneurs were working on were destined to failure.  In most cases, the product ideas were consumer oriented, based upon the needs of the entrepreneur, and the cost of customer acquisition had not been considered by the founders who in turn spent most of their time on product development.  

My experience in high tech taught me that 90% of the cost of product introduction is marketing and sales, and only 10% is development.  Thus, most of these companies simply couldn't afford to get their products into the market and relied upon wishful thinking like "viral marketing."

The E2B process starts with a real, established businesses, that have a need, often for operational improvement, that a team of hard working, and bright entrepreneurs can accomplish.  The entrepreneurs are in most cases simply unfamiliar with the industry or the need.  

Our jobs, as an incubator, are to "make the match" and then to provide a framework and adult supervision.  

We begin by establishing relationships with large, well funded, often local, companies, and introduce them to teams of entrepreneurs who listen to their problems and create solutions.  We provide the framework that gives each what they want: the company gets a solution, the entrepreneurs get the opportunity to build an independent company albeit with their first customer already identified.

Let me not understate the complexity of this process.  Often, the entrepreneur is not ready to abandon their "narcissistic" tendencies and a belief that they are building the next "facebook."  As well, good engineering design and development practices need to be enforced so as to not "over promise and under deliver."  But, we have found that B2B as opposed to B2C is often lower risk and more satisfying to both parties.  And E2B offers a way to give both what they really want.

Jaudat Ali Co-Founder GiFsports

November 21st, 2015

Sounds like a novel idea.

The thing about a startup idea is the pain point behind it. And any great startup is fueled by the passion of the co-founders to resolve that pain. Alot of solutions, iterations and tweaks to a startup's product and business model come because the founders were passionate about it.

I don't know how you can replicate that in an environment where everyone isn't passionate about all the ideas.

Peter Johnston Businesses are composed of pixels, bytes & atoms. All 3 change constantly. I make that change +ve.

November 23rd, 2015

What a powerful set of responses. Thanks everybody.

How many of us watch Xfactor/Pop Idol and deride it. Yet much of what happens in Startups is the same - promising immense wealth and fame for little effort. We're being sold a dream. And for the same reason - so others can make money from our efforts.

Most startups aren't going to be the next Google, Facebook or Uber. They're either going to fail or settle down as small businesses, making a living for the founders and filling a niche in their sector. So why do we force them through the same accelerator/VC system as the big boys?

And 99% of startups don't even get started. The person/people with the idea look at the lifestyle, the risk, the hurdles and decide - not for me. Fear - perhaps. But Startups aren't for everyone. Would the idea would be better off with someone with the skills and connections to make it work? Perhaps knowledge trumps passion! After all most of us work everyday to bring someone else's idea to market.

Are Accelerators failing these startups? Many are focused on the quick buck - connecting the fledgling company into their systems, polishing it up and selling it on. Many don't provide what we see as basic help. And many mentors are just old guys in big companies who are fond of their own voice. Are Accelerators part of our business model, or us part of theirs?

And are we stuck in the industrial age? Product first, with customers seen as remote creatures whose only role is to provide revenue. When you put in business plans, investors seem happy to pay for product, but not for market development, people or connections. Perhaps they don't like assets that walk out the door at night.

Another industrial age mindset underpins University Spinout Innovation. Here it seems to take several years just to get IP and ten years to build a company. IP is the holy grail - with Oxford, for example, taking 50% of equity. Is this holding innovation back - almost certainly! Contrast it with modern business where product lifecycles are measured in months and the whole corporate business model changes every five years or so.

And the whole system seems so wasteful. When I was in Business Process, we worked out that there were only 5 core business processes - everything else was a variation on those five. In the same way most startups are creating a market to connect buyers and sellers, a social network for groups to interact or a product for sale/rental/lease. Do they all need to create these systems from scratch? Do we really need a code mountain with lots of developers working away with the same programmes to independently create the same functionality? Isn't that all a bit infinite monkeys and Shakespeare?

We need a system to:
Unearth small ideas and bring them to market, either as small companies or as products in a portfolio.
Allow inventors to pass ideas on to others with the skills and connections to make them happen, while still retaining a stake.
Stop startups from having to reinvent the wheel by setting up technology platforms, marketing systems and supply chains from scratch, instead creating a sort of platform as a service they can simply plug into.

I believe if we did this we would increase the number of startup ideas coming to market by at least 10x, reduce chances of failure by 10x and reduce the cost of a startup by 10x. 10x10x10x seems pretty good to me.

Last but not least, by sharing these ideas around between all of us assisting startups, we'd stop our own wasteful reinvention of the wheel. Any takers?

PS: I'll be contacting several of you offline to collaborate. Please don't see this as preaching - but a set of ideas everyone can build on. And I urge everyone to look at what LanVy Nugen is up to - perhaps we can create craft startups and collaborate to bring their products to market.



Andrew Lockley Investments & consulting for tech startups

November 21st, 2015

Sounds like an accelerator or incubator. There's many of these. The ones with focus seem to be the best of the smaller ones.

David Robinson Investor, Innovation & Entrepreneurial Consultant

November 21st, 2015

Here i Utah I am working with the Universities and a state agency called the Utah Science and Technology Research Initiative to create an ecosystem of innovation. There are several parts from I-Corps style Lean Canvas for technologies at the idea stage, accelerator help and money for early stage companies, interim management to help raise that Angel or Series A, support and direction from large companies, even a large Innovation Fund to support growth and development. Let's connect at Dave@TRAC-Team.com to discuss if you have an interest.

Thomas Kaled Business Development Consultant @ thomas.kaled@gmail.com

November 21st, 2015

Some good thoughts here @PeterJohnston including the development of an operational definition of 'big and small' but good ideas. Secondly without focus, a small idea in restaurants, manufacturing and in software,would appear to present staffing challenges. Economies of scale you might gain in the overhead labor functions of finance, admin, marketing, sales etc. are distinctly different hence you gain little. It is however an interesting concept that you have and an equally curious intellectual challenge to consider.

Bob Caspe CEO, Entrepreneurship & Innovation Global Education Programs at International Entrepreneurship Ctr

November 21st, 2015

I have visited many incubators in several countries, although clearly not anywhere near 7600, and my direct observation is that none offered any assistance that I could detect with marketing or sales.

David Austin Relentless problem solver and innovator.

November 24th, 2015

I respectfully couldn't disagree more with the sentiment that startups are only for "youngsters", and not for those with financial obligations and a nest egg that they might lose. Imagine if Ford, or Edison, or Tesla, or Bell, or Jobs, or Larry Page, or James Dyson, or Layman and Orville thought that way.