What about Startups ?

The period we are living in is more or less similar to the period between 1997-2002 when a number of experts at a number of large Financial Institutions and other specialists were looking at proposals of all kinds of .com start-ups. I would like to share with you some practical lessons learned from that period and from current experiences .

People may often forget to do a good competitor-analysis as part of a complete scan. Competitors can be potential providers from within the industry, but they can also come from another one, from cross-overs. Offline or online. You have to look at the possible ‘Ubers’ with substitute products and or services. Coming from outside of the traditional industry thus can actually be an advantage.

It is always a good starting point to look for areas of dissatisfaction with large groups of customers of large local, regional or global incumbents. In some countries, current providers have been focusing on cost-cutting. So then you know that many current customers are likely to suffer from bad customer service or are having negative customer experience overall with existing providers.

Startups do not have a unique business model nor do they earn sufficient earnings in the short term. In general, only a few traditional startups become successful. Of course, a viable long-term strategy and a sound business plan is a good thing to have, but the world is changing fast. Time-to-market and timing is currently more important in many cases then long-term profitability.

The knowledge and the skills of the management that is running the company and the people that are working within in the company are critical assets for a succesful startup. Also because of the exposure and the brand in the market.

Finally, I have learned that, spoken in general, good business propositions are short and they must be to the point. The document has to focus on the main topics. Only a small chapter is about the financials and projections. Again, that may sound a bit strange, but the numbers are actually of minor importance. It is more about HOW the startup is going to make money. And what the likelihood is that this will happen at all with the current management running it and when?

And at the end of the day, your gutfeeling is often as important and perhaps even more important than all the numbers combined.

Tony de Bree