I am part of a program which focuses on early-stage startup ideas. I am one of the mentors for the program. This program is focussed predominantly on educational & research institutes to enable the faculty, researchers and students to commercialize their ideas.
While program owner has done an exceptional job, the participants have not really thought through "IDEA". What I noticed when I attended the participants presentations, is some basic elements missing in the thought process.
- Their ideas are based on fundamental research and an assumed customer (in most cases are ideal but not real). However, this customer need was never validated with data from the market as well as research!
- When we develop products for Regulatory and Defence industry, the ecosystem plays a key role. I saw a medical project, where the team had no clear idea whether it is a medicine or a device. One basic rule I have learnt is any medical device should have substantial components which are single use (use and Throw). This ensures the revenue is continuous and will enable to amortize the development costs which are normally very high due to regulatory compliance requirements. Another team is developing a long endurance device, and they say it will be used in defence applications. However, having worked for the defence projects I can tell, convincing the defence forces a with new idea needs lots of validation and proof of the product/idea will work for 25 years which was never done so far and it takes 3 years before any product is inducted into the service. This means the startups need to have a huge funding and also clear vison about the technology developed is sustainable.
- Most of the ideas need capital equipment and processes. The teams have no idea on what it will take to convert the idea to product. In one particular case, the team has a proven process/product and have a pilot plant running. But scaling it commercially needs different thinking and many times it a game where basic financial knowledge is a must
- The teams are not clear about whether they address B2C or B2B and many times this confusion makes it difficult to convince the other side even to look at the idea
- One generic feeling I got was almost all the teams lacked business skills like how the business will look and scale over a long period
- Being in academics most of the projects focused on technical aspects it makes me recollect the old Murphy's law " WHEN YOU HAVE A HAMMER IN THE HAND EVERYTING ELSE LOOKS LIKE A NAIL"
- The bigger problem I see the program organisers face, is that when the companies come for selection, they are too deep in the project and many times converting the idea to a product looks like an afterthought.
- The program organisers have done a fantastic job of focusing on the areas I mentioned, but had the teams done some the basic background work earlier, things would have been better.
The reason why I wrote this is that this is a common problem I see with most of the startups. I did get some people asking me I am pointing out problems. The solutions are entirely dependent on the specific business. For example, the team that I am mentoring I am convinced that it is a B2B with the holding the responsibility for installation and maintenance, leaving the operation to regional downstream entrepreneurs will make them a big success as they in the middle of the "CIRCULAR ECONOMY" and that helps to make the business sustainable.
