Coming across this ad for EDS and having been in a Facebook debate today with my colleague Leila Henderson re Innovation vs Entrepreneurship/ialism prompted this post.
“Entrepreneurship/ialism is the building of any new business through a process of innovation” – Leila Henderson – CEO Newsmaker
Unwittingly I have been an Entrepreneur for most of my working life but only realised it recently. I have always looked at ways to improve and innovate no matter what my role in business has been as an employee, a director and more recently as a business owner and a consultant. I guess I have rarely been satisfied with the status quo.
Over the past five years I have been involved in getting a number of ventures going in Australia, SE Asia and China. As such I have learnt much about capital raising and getting beyond proof of concept. I now want to share some thoughts and ideas and approaches that have worked for us…eventually!
As a fully fledged, go it alone Entrepreneur you soon discover two things. Firstly it is like flying a plane while you are still building it…but coming out of the fledgling DP/MIS/IT industry in the 70s and 80s I was experienced in that. And secondly you don’t get too far without other peoples’ money.
This capital raising has been challenging and along the way I learned two lessons from colleagues with years of experience in the Finance Industry:
Capital is a Coward – Mike Oswald – Partner enovAsia
Meaning it is hard to get and even harder to get over the finishing line…in capital raising it ain’t over till it’s over and in your bank. And the true test of any new idea, business, product etc is will anyone want it enough to pay for it. So firstly make sure you can:
Get a customer – Neville Calvert – MD Calcorp
In terms of getting a customer before you have a product to even demonstrate, I have learned many valuable lessons from my partner at enovAsia Dean Stanton in terms of the power of the Immersion interviews. It’s a bit like Solution Selling before you have the product – identify the unmet need that is the cause of a problem that needs to be solved, develop the “what if” case study…present your solution to well qualified prospects and as such foreshadow a sale.
But more on that approach in future posts.
For now I want to focus on the reasons I believe most entrepreneurs fail to get projects off the ground even after they secure adequate funding.
In fact it can often be the securing of the funding that can be the beginning of the end…if it’s not the right funder. Too often investment comes with strings attached from finance people who are only interested in numbers, assess your business potential on a spreadsheet and as such don’t share the passion and the visions with you – the Entrepreneur…and pretty soon the spirit that drove the project fades.
Investors who have nothing to offer in terms of specific expertise and see it as a financial opportunity can also lead to over governance and conservatism in the quest to ensure they don’t lose but more often than not it means they won’t win either.
Often the investor wants to put in their people who know how to run a business or consultants who are experts in marketing etc. But if they are not the right people with empathy for what you are trying to achieve they will, at best, hinder not help.
So chose your investors well. Experience and expertise that is relevant is more valuable than just their money.
Also choose the best place to work from and I believe this is not always an incubator/start up co-working space etc that a Govt/VC may saddle you with. Rather than surround yourself with others like you why not find a co-working space that has a mix and variety of business types, people, age groups etc that can broaden your perspective on business and life in general. Since we have worked from That Space we have found many opportunities to collaborate and learn from people with diverse backgrounds…day in day out.
Sales and marketing is the next potential killer if the right people are not involved. Rather than go with consultants who may rape, pillage and plunder your investment or grant money find assistance that can actually deliver sales not just expensive advice. Always check relevant experience and relevance before committing to spend your money on consultants,.
Above all find people that have a Network of relevant connections in the markets in which you plan to operate…not just big fish in your current pond. Also don’t pay well meaning Government agencies to learn out loud along with you…on trade missions, expos etc. Find people who have been there and done it…and can open the right doors.
If possible choose expertise that can also deliver you a proven Sales and Marketing strategy and more so relevant structure and experience in the markets where you want to succeed.
Based on what we have learned as above from trial and error, we are setting up a model that we believe will work for us and help us to support others.
We have developed The enovAsia Accelerator Model to provide the support and assistance we think will address these issues
We have a structure that delivers money to get going, expertise to reach the market and what every start up needs quickly — Paying Customers.