Earn the right to win - its not a gift

In recent months there has been CONSIDERABLE airtime being given to the challenges the startup ecosystem is facing driven by the many failures and valuation downgrades.

This prompted me to consider my own experience. Over the last 7 years, in my new avatar as an angel investor, I have invested in 5 start-ups.?

Typically I have focused on sectors that I have some knowledge of (rather than just a portfolio investment) in the hope that I can add value beyond merely writing a cheque.

My primary filter has been a) the quality of the team b) credentials (not just academic) c) the uniqueness of the idea d) perseverance & execution capability e) skin in the game

The companies have been in 1. Health care 2. Logistics 3. Fintech 4. Deep tech AI and 5. Material science.?

Here's where they currently stand:

• One was a spectacular failure,
• One successfully pivoted to a new reality
• One is very successful and continues to grow
• One is patiently and sustainably kick-starting and
• One has shut down after persevering against all odds (& repaying investors )

A reasonable outcome for an angel investor!!!!

So as I think of why some worked and some didn’t, the reasons are pretty clear beyond the usual cliches of product/market fit, undercapitalized, team mismatch, excessive burn, me-too yadda, yadda, yadda?

My take on why some of my investments were successful & why some weren't:

1. Unplanned versus managed growth - and managing resources accordingly
2. Going it alone versus partnering. Know-to-all mindset
3. Compelling value (in the customers eyes not yours) versus commoditization.
4. Low barriers to entry versus sustainable differentiation
5. Internally focused versus customer-centric.
6. Moving up the value chain versus a race to the bottom

I often get asked/told that what does someone like me who's spent his entire with a US MNC know about the travails of a start up and what it takes to win.

My answer is that business fundamentals don't change - build and empower high performing teams, look after and prioritize your customers/employees, focus on solving real problems to stay relevant, be agile in responding to changing conditions, grow profitably to reward stakeholders who've entrusted you.

No magic wand/formula. Its the execution that differentiates the winners from the also-ran's.

#success #startupecosystem #winningmindset #leadershipskills