Why successful Startup Ideas could often be founder specific ?

Why successful Startup Ideas could often be founder specific ?

(Notes for new startups- Newsletter # 2)

Last fortnight, I wrote an article titled “ Identifying Startup Opportunities” discussing the various aspects to be noted by a founder.? I have already posted a couple of articles in my LinkedIn space. The first article unique challenges that first time entrepreneurs face on finding an idea to work on. Some of those points have also been covered in the first newsletter. There is another article , which could be of interest to you, and that deals with the importance of execution as much as the novelty of the idea, to be a successful venture.?

In this article, I would like to discuss why Startup ideas are founder or founders specific. There is a strong notion among people who want to start an organization to believe that they can start any venture irrespective of what is most suitable to them. This idea comes also from the belief that if one works very hard one can do anything. Of course, one has to work hard. At the sametime, it is important to evaluate whether the founder and his team is capable of pulling off an idea, which would also largely depend on the team’s current capabilities. The question is “Can the founders be effective in the particular business that they want to venture into?”. Smart founders instinctively know their strengths and select matching business opportunities.?

The current capabilities need not necessarily be like just having deep experience or technical knowledge, which certainly would help. But also whether the founder group has some kind of unfair advantage. These unfair advantages often cannot be developed by the founder from nothing. These are things that happen to you and your team members by sheer chance and luck. Things which are not in your control most of the? time. In addition to this, how capable are founding members to learn something very new and continue to learn more as and when required on the job.?

Things such as the place of your birth, where you went to school, who you know already and what you have done before you decided to become an entrepreneur. This is not about discrimination of a person based on his or her background, which may also play some role. It is about looking at what comes to one naturally, who one can connect with, what advantages his business has because of the place where he comes from, and how his friends and relatives and family members can help him. In addition to this some natural talent, such as being able to sell well, or write good software programs or design hardware systems, or have the ability to assemble a team and motivate them etc. In certain cases, one's ability to invest money during the early days, from his own means or through his network or ability to work long hours without getting tired. It may also be an inclination to travel to different places without having to schedule and expect great convenience while traveling etc. It is hard to list all the skills and capabilities here. But a great founder will instinctively know what all capabilities are required in his or her business and whether he or she is capable of learning them fluidly.?

Whether we like it or not, based on the type of business, industry, technology area and business model, certain unique skill, ability and inclination would help the founder. Not all of us can do all the jobs well. Of course, these kinds of talents, ability and skill can be from one of the members of the founding team.?

These innate advantages must be leveraged by the entrepreneur to reduce the amount of effort that one has to put in building the company. After all, building an organization from scratch is a long, arduous and time consuming process, fretting with tons of risk.?

We cannot expect people to do certain types of jobs that do not naturally come to the founding team members. When such a key job is outsourced to an employee or an outside agency, expect that during the early days, success would elude the startup.?

For example, a good product which could not be taken to market well, certainly fails. This gap can only be filled by a founding team member who has the capability to sell.??

The following graphical illustration will help us understand the complex journey of a startup during the early days.

The picture above depicts the typical journey of a startup. There are typically three zones in any startup. Zone 1 represents the period, during which the founding team has all the energy and enthusiasm initially, but after sometime, they figure that they are not moving fast enough. After the initial euphoria, realism strikes hard and the company goes down and it is as if the entire effort is sliding the organization into a valley. Aptly this second zone is named as valley of death. This is the time, the founder would realize that most of the assumptions that were made during the early days were not correct and the venture demands more effort, energy, resources than what the team could mobilize.?

This is precisely the Zone in which the unfair advantage of the founder comes handy to turn the venture around early and fast, to gain traction and move to zone three, which is a stable growth zone.?

If a founder selects an area which is not aligned to his or her best strength, the depth and width of the Valley of Death keeps on increasing. The goal of the founder is to keep the Valley of Death as small as possible and also one should be able to reduce the time and also the depth.?

People who tend to assume that they can compensate for such unfair advantages tend to underestimate the time they have to spend in the Valley of Death zone. Usually most startups fail in this zone. Among other reasons startups fail include, failure to address product - market fit, there is lack of demand, founders capability to produce and deliver products or services in the price point at expected quality and price, inability to sell, inability to raise funds, misunderstanding among partners etc. With each of these challenges, the time spent in the Valley of Death will increase. When a startup spends too much time in the Valley of Death, usually it is because the founders would have assumed initially that they would compensate for the unfair advantage by working hard. And usually it may not be sufficient. This is exactly when the natural advantage works to the advantage of the venture.

In other words, for some founders certain businesses would have worked because the demands and timing of the venture would have matched to their innate advantages. In those cases, where failure becomes real, the founder would have misjudged the required skills, capabilities and resources that are needed to lead the venture to success.?

Everything like hard work, intelligence and capabilities are always required in winning the startup game. But playing to one’s inherent strengths enhances the chances of success of the venture.?

What do you think about this article? Share your thoughts and let us discuss.?