Kicking off your own startup and maintaining it is by no means an easy task. You need effort, dedication and sheer determination to see it through. This was what was discussed at the Colombo Tech Startup Seminar 2017. Organized by StartupX Foundry with ICTA as the National Partner, the Colombo Tech Startup Seminar took place on the 2nd of May 2017 at the Lavander Room of the BMICH. The event featured a host of renowned and distinguished industry speakers.
Pete, the ex-Vice President of Product Development at Yahoo and also the Founder of Gamespot spoke to the audience about the Lean Startup. This is a methodology whose aim is to shorten the product development cycle by utilizing a combination of experimentation, iterative product releases and learning through validation.
For startups, especially at the beginning, things feel a lot like taking off a runway. You’re off to greater and greater heights. In reality though, what happens is you barely have enough lift to get off the ground. Pete draws inspiration from the Book “The Lean Startup” by Eric Ries. According to Pete, any startup at the beginning will have 3 things:
To start a new venture, you have to be in love with the idea. Unfortunately, you end up being blind to the flaws in your idea. In the beginning, everything is an assumption, and some of these assumptions are wrong. Some of these assumptions are:
If you are able to get the key assumptions right, then the rest of the assumptions would fall into place. But in order to get them to fall into place, we first need to see what these key assumptions are. Pete explained them as Value assumptions and Growth assumptions.
Having identified these two categories of assumptions, Pete gave an example of GO24, a content aggregator akin to Reddit with content in multiple languages. It had all the Value assumptions and two of the Growth assumptions as well, but was too expensive to reach customers effectively. This meant the whole thing wasn’t going to work. The catch here is that the company found this out after they had spent all their funding.
No battle plan ever survives first contact with the enemy – Field Marshall Helmuth Karl Bernhard Graf von Moltke
Everybody has a plan till they get punched in the mouth – Mike Tyson
Using these two quotes, Pete also explained that no matter how much you plan, you will never know the results until you launch your product or service. Rather than go all out and develop the product, a better approach would be to build a small component, launch it, measure it and then see if it’s successful and then add more components.
Pete then went on to explain that in any product, roughly 1/3 of its features represent 90% of the overall customer value. Essentially 90% of the customer base of a product will only use 1/3 of its features so it’s vital to make sure that that portion is perfectly developed as a majority of people will be using it. The remainder is split with 9% being the second highest and 1% being the third highest. If your MVP or Minimum Viable Product look incomplete, that’s actually a good sign according to Pete. He also added that if you’re not embarrassed by your product, you’ve launched it too late.
Pete then went on to give examples of some questions that people who are just getting into startups may ask. One such question was “What if someone steals your idea?” Well, according to research done, at any given time there are approximately 10 people around the world who have the same idea you have. The question is, which one’s idea would be more successful? What if we give customers a bad first impression? Well, Pete says, think of them as customers you’re sacrificing for the greater good of the product.
Part of the challenge of being an entrepreneur is to choose between doing what’s right or doing what’s comfortable.
The biggest question asked is “What if our MVP fails?”. To that, Pete gave an example of a product that failed. Called ExpertCity, this was a provider of Web-based desktop access and help-desk services. It was later acquired by Citrix Systems for $225 million and renamed the service to GoToMyPC, which was again a Remote Desktop application. They had value assumptions but no growth assumption. Following GoToMyPC, the company’s next iteration was GoToMeeting which was an instant success. The lesson here was choosing whether to Persevere or to Pivot. If you feel that your product is failing, then pivoting it to another direction would be a better idea as long as you know the risks involved.
Alexander is the CEO and Co-Founder of StartupLab who spoke to the audience about the Startup Journey. The journey is not very predictable, Alexander says. He then proceeded to give the audience a an introduction to his company Startup Lab. Startups in Norway are frowned upon with preference going to investments in real estate etc. Alexander and his team are trying to change all that. Over the last 5 years, StartupLabs has supported over 200 tech startups of which around 2/3 are still growing.
Alexander used the example of Opera and their browser. The journey began in 1996 to develop a browser. To this date, it remains to be one of the strangest business plans in the history of the internet.
Alexander also used examples of products such as Zwipe ID and Huddly and explained their startup journey, the challenges they faced and also the hurdles they had to overcome, especially when it comes convincing people to use your product and to make them see that it is indeed a viable product or service. Having a vision is good, Alexander said, but the trick is to convince people of that vision and also make them trust you. Even the most successful companies find it hard to do that despite their success and efforts.
Alexander then went on to talk about the startups that are invested in StartupLabs. Accordingly, StartupLabs has invested in 20 of the 60 companies that reside in the premises of the company.
Dag started off this presentation by giving a background about himself. He has been a part of the hardware, software and consulting industries and acquired vast amounts of knowledge with regard to all of them. He explained how the goal of any startup is to head to New York or Silicon Valley and make a name for themselves.
But in fact, that is one of the most difficult places to settle down and work from. Dag then proceeded to talk about two Startups he was involved with.
Bylineme is essentially a marketplace for articles, images and videos, connecting journalists, writers, photographers and video producers with publishers and companies. Established in 2015, the company received financing from Founders Fund and Investinor, which is a company that invests in private companies aiming for international growth and expansion. As such, Bylineme managed to successfully raise USD$700,000 as funding. In addition, they’ve also been seeking accelerator participation in New York. Dag further went on to explain about the global team at Bylineme and proceeded to provide a breakdown of their traits and characteristics.
This is a tool that captures and analyzes the intent of your customers and the outcome of their engagement with your business. Essentially it checks whether or not your goal was met when you used an online service. The company came out of NetLife Research, a company that handles websites and digital services from concept to completion. Currently, ownership of Task Analytics is divided into two parts where a third is owned by the management of task Analytics and the rest is owned by NetLife Research. The original idea was to establish company in the USA and hire people to manage the business. This turned out to be a tad out of the league of NetLife and they couldn’t finance it. A team of 3 freelancers was hired to drive the growth with outlook to be a success based 10% equity stake in the company.
Half of the workforce in the US will be freelancers by 2020 – Dag Honningsvåg
In conclusion of his presentation, Dag offered these Key takeaways: Think in terms of global position from the beginning and build your global team if possible. Broaden your network. Share your experience. You will receive a lot of good advice. The growing mobile workforce is trending in many countries. With those remarks, Dag’s presentation came to a close.
The panel discussion was moderated by Mangala Karunaratne, CEO of Calcey Technologies.It revolved around questions such as what makes a Lean startup successful. Some interesting questions asked were how to gain traction with a product via influence, and also about using crowdfunding to gain funding.
Aloka spoke to the audience about taking the plunge when it comes to startups. According to statistics and research carried out, 9/10 startups fail. Aloka’s session dealt with what a budding startup should know and the characteristics they should cultivate.
Throughout his presentation, Aloka gave some key points such as not to yourself too seriously. You need to know when to floor it and when to cruise. The more information you have, the better your decisions will be. Rather than thinking of your ideas think of them as a project. There will be one that will be more viable than the rest. Talk to more people. The more insights, the better your product.
The key is not to prioritize what’s on your schedule, but to schedule your priorities – Stephen Covey
He also emphasized that any budding entrepreneur with a startup should invest in building up a really good team that can add something to your product, and also to work out funding for your product so that you have the necessary finances to see it through. If you have all these, it’s time to take the plunge.
He started off by saying that there are a lot of global accelerators for startups. These can be categorized into standalone accelerators, corporate accelerators and Telco Accelerators. He also spoke about the increasingly crowded unicorn club. These are a collection of startups that are each valued at over USD $1 Billion. These have increased over the last years. But Alex urges the audience to not wait for a unicorn to come their way.
Alex then gave an example of Oslo, the capital of Norway. In 2010, Norway had a small population, a relatively high level of education, a fairly expensive cost of living and salaries, strong economy, low unemployment rate at 2.5% and 4.3% in 2017. In addition, it also had a lot of talent but no one was willing to work for a startup. Despite having a sound capital market, no one wants to invest in startups. This was due to being perceived as an unattractive asset class following the dotcom boom. Accordingly, only 4-5% of tech gazelles were venture backed. A Gazelle in the tech industry is an extremely fast-growing company, which maintains consistent expansion of both employment and turnover over a prolonged period. He then spoke about the evolution of the Oslo Ecosystem from 2010-2017, where things have certainly changed.
At the end of his presentation, Alex put forth a few key findings such as learning from others, but making sure that you understand and adapt to your assumptions. If you don’t make a bet that the ecosystem will evolve, then don’t do it. He also urged entrepreneurs to understand what triggers the chain of events such as population of startups, media/buzz, role models, corporates, angels etc.
According to Dumindra, an angel investor is basically “a guy who has a load of money and wants to take a risk with it rather than putting it in the bank or stock market”. In comparison to lenders, angels are more flexible. Recently, crowdfunding platforms have opened doors to many people to invest in startups.
What do angels look for? They look at the passion or commitment of the person. They also see if you can impress them or not. Furthermore, they look for the scalability of your business, barriers to entry, and also an appropriate valuation. They are also useful contacts to strategic partners, lawyers, bankers, accountants, customers, employees and also access to a network of entrepreneurs.
Is it easy to get angel funding? “Definitely not”, Dumindra says. Money and angels are not unlimited. They are fussy as they know there’s a risk in investing in your startup. He then spoke about the type of investors such as individual angel investors, Angel investor networks, crowdfunding sources and corporate angels.
Investors like to know what’s happening and don’t like surprises – Dumindra Rathnayake
Even though we are a small developing nation, we have a story to be proud of, Dumindra stated. And it is indeed true. We have an angel investor network aka the Lanka Angel Network. We have Corporate Angels and we even have a crowdfunding platform which is Crowdisland. Following Dumindra’s session, the second half of the Panel Discussion at the Colombo Tech Startup Seminar resumed.
This consisted of question that dealt with how to increase customer base, gender issues, and even Sinhala funding. After a series of interesting questions, it was time to bring the event’s proceedings to a close.
With tokens handed out to each of the speakers, the first ever Colombo Tech Startup Seminar came to a close.
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