ALMATY, Kazakhstan – As part of the March 19-20 Startup Tour in Kazakhstan’s second city, Skolkovo’s startup guru Pekka Viljakainen gave a master-class on initiating a high-tech business. During the Finn’s 35-minute presentation at the Almaty Management University, he explained his path to international success. Some of his advice was centered on communication - how to stand out from the crowd when appealing to investors for capital, for instance in pitch sessions. Other tips focused on the best attitude to adopt when entering business. Here, sk.ru ties together the common themes of the master-class:
Pekka Viljakainen gives a master-class at Almaty Management University. Photo: sk.ru
1. “Too much science, too little business.”
Time spent bogged down explaining algorithms, showing tedious flow diagrams and deploying technical jargon could be better spent on showing how the innovation will make money. Capture the investor’s imagination. Explanations can come later.
2. “Do not just ask for money.”
Viljakainen has sat through dozens of pitches in which the innovator has simply adopted a posture that screams: “I know everything myself, now give me a million dollars.” Asking for capital without a thorough explanation of how it will be spent is a red flag for investors.
The audience kept the Finn behind for a lively Q&A session after the talk. Photo: sk.ru
3. “Always offer a slice of equity.”
Investors are hard-wired to be wary of any company that asks for capital without offering a stake in the company in return. Naming a percentage stake for a dollar investment figure shows the startup has done the math on its own capitalization. Plus, “I always want a piece of the cake,” says Viljakainen.
4. “It’s good to be cautious, but not with your vision.’
Keep the day-to-day decision-making grounded in common sense, “but when you as an entrepreneur set a target, do not be cautious,” says Viljakainen. Ambition is what sets an innovator apart – it should not be hidden from investors.
Local budding entrepreneurs. Photo: sk.ru
5. “Trust people.”
The dream of entrepreneurs in many countries is to control everything. “Having your own factory” and micromanaging on a grand scale, as Viljakainen says. “I have seen startups where the CEO doesn’t even trust DHL. That is totally stupid,” says Viljakainen.
6. “Do not try to solve all the problems of the world by yourself.”
For scientists this is a big problem, and it follows on from point five. Identify your weak areas and purchase or hire to cover them. Focus on your innovation and the commercialization plan.
Viljakainen peppered his talk with anecdotes on successes and failures in the startup game. Photo: sk.ru
7. “Hire people with a different worldview.”
When you hire, investors are always impressed by diversity. Hiring your relatives or university buddies risks building a team that acquiesces to you rather than challenges you. Again, trust is paramount.
8. “Investors aren’t just sources of money.”
Even if you have grants, you will always need investment. Investors bring a lot more than money to the table. They bring experience and ideas, which are crucial within early-stage startups. They also open up new investment channels through syndicates and partnerships.
9. “Know all your competitors, wherever they are.”
Do not only analyze local competition, because in modern times companies in the most distant countries may soon have access to your customer base, if they don’t already. Provide an exhaustive breakdown of every rival company and show how your innovation compares in every key parameter.
10. “Failure? Rock n’ roll...”
Stay positive. You will almost certainly meet failure at some stage. This is a stress test for your innovation and for you as an entrepreneur. If you believe in your innovation passionately, you will also meet success. A positive attitude is key. “As we say in Finland, rock n’ roll,” Viljakainen says.
Pekka Viljakainen is an advisor to Skolkovo president Victor Vekselberg and also advises the Russian government on economic diversification. He launched his first company when he was 13 years old and grew a startup into a 20,000-employee firm. He is an angel investor and has stakes in nine Russian startup companies.