Exciting and potentially rewarding, start-up development is becoming a career of choice for many people across the globe. However, the area remains a minefield for many aspiring entrepreneurs, with only a tiny portion of start-ups eventually making it to the big league.
Last year, at the Open Innovations forum in Moscow, the world’s leading venture capitalists and angel investors highlighted the key principles that might help start-up founders increase their odds of success.
Create new value
Introduce something that hasn’t existed before, whether it is an innovative product or a new level of service. “We only focus on areas where we think we can make a difference. If we feel that other people are doing it fine, we don’t go into it,” said Virgin group founder Richard Branson.
Respond to the market need
Make sure there is a real market need for the product or service you have developed. “There are a lot of companies that have a wonderful solution to a problem that nobody cares about,” observed serial entrepreneur Nava Swersky Sofer.
Aim high
From the very beginning, set major goals and embrace the global market rather than focusing on a narrow group of customers. “Don’t play a local game, play a global game from day one,” said Yoram Tietz, managing partner of Ernst & Young Israel. “Starting a company that addresses a very small niche market is as much work as starting a company that addresses a very large market,” Nava Swersky Sofer added.
Build a great team
Your team is the cornerstone of your business, and a major competitive asset in the fight for investment. Put a strong emphasis on enhancing, developing and inspiring your staff. “A team could be destroyed very quickly if the leader is not a very good motivator,” Richard Branson warned.
Dare to take risks
There is no way to build a new venture and develop it into a large business without assuming a substantial amount of risks. “The rate of success is related to the risks you are taking,” Yoram Tietz underscored.
Do not be afraid of failures
Learn from your mistakes and treat them as steps you take to achieve your goals. “Sometimes things don’t work out, and that’s ok. Anyone who’s lived and worked in the Silicon Valley knows that’s just part of the game,” Nava Swersky Sofer said. “If you learned something, that does take you to the next level.
Prepare to work 24/7
Contrary to a popular impression, start-up entrepreneurship is on no account an easy path to success. “Running a start-up from the beginning is the most difficult job there is,” Yoram Tietz said. “If you are not coming with the stamina, you won’t be able to make it.”
Look for investors with the same mindset
In a search for funding, approach investors who might share your passion and recognise the need for your product. “It’s important to find investors that are compatible with you,” said John Kao, Chairman of the Institute for Large Scale Innovation. “You want to make sure that there is alignment in terms of your models, of what needs to happen.”
Keep your business idea concise
When applying for funding, make sure your business idea is not spread over a hundred pages. “A business plan should be able to be written on the back of an envelope,” said Richard Branson. “If I’m given a big fat document, I most likely won’t read it.”
Find time for yourself
No matter how busy your emerging business might keep you, don’t let yourself drown in it completely, damaging your health and hindering your personal growth. “Flying around the world, we are in a hustle and bustle. But we must find an hour for ourselves, because if we keep our bodies fit and healthy, then everything else is possible,” Richard Branson said.
The Open Innovations forum took place in Moscow on October 31 — November 3, 2012. Sign up for the forum updates to get notified about upcoming events.
www.independent.co.uk