Startup Guide Issue 16 | Page 22

Wha t c oul d t he g ov e r nme nt do? The g ov e r nme nt s houl d ne v e r i n v e s t i n a s ma l l s t a r t up be c a us e i t i s t he wor s t bus i ne s s pa r t ne r y ou c a n ha v e . Ev e n a l a r g e c ompa n y wi l l c ol l a ps e i f i t pa r t ne r s up wi t h a g ov e r nme nt f i r m. Whi l e t he g ov e r nme nt c a n’ t di r e c t l y i n v e s t i n a s ma l l bus i ne s s , i t c a n e nc our a g e v e nt ur e f unds a nd t he s e we a l t h y bus i ne s s me n t o s ha r e t he r i s k whe n i n v e s t i ng i n t e c h c ompa ni e s . L e t ’ s l ook a t t he e xa mpl e of I s r a e l , whi c h i s c a l l e d t he ‘ s t a r t up na t i on’ . The r e , a s t a r t up g oe s t o t he g ov e r nme nt a nd t he y s t a r t a f und c a l l e d t he ‘ Y oz ma h F und’ . I t ’ s a f und of f unds a nd i t g oe s t o l a r g e v e nt ur e c a pi t a l i s t s or we a l t h y bus i ne s s me n a nd of f e r s t ha t t he g ov e r nme nt w oul d unde r wr i t e t he i r r i s k b y put t i ng i n ma t c hi ng f unds . I n r e t ur n, t he bus i ne s s me n a r e r e s pons i bl e f or s e e k i ng out g ood i n v e s t me nt s ; s e e k i ng out g ood c ons ume r s f or t he m a nd ma k i ng s ur e t ha t t he s t a r t ups s uc c e e d. A l ot of t i mes , s omeone comes up wi t h an i dea, cons i der t hat t her e’ s pot ent i al i n t he mar ket f or i t ; t hey f i nd s omeone who i s r eady t o i nves t . I n your opi ni on, what i s t he i mpor t ance of i nves t or s doi ng mar ket r es ear ch t o under s t and an i dea, whi ch s eems t o have pot ent i al . Do you t hi nk s t ar t ups s houl d i nves t a bi t of t i me i n r es ear chi ng t he mar ket pot ent i al and whet her t he i dea woul d act ual l y wor k? Ac t ua l l y my f a v or i t e g uy t o l e a r n t hi s f r om i s s ome one c a l l e d S t e v e Bl a nk . He ha s wr i t t e n a nd t a ug ht ma s s i v e l y a bout t hi s a nd r i g ht l y s o. As e nt r e pr e ne ur s a r e s t a c k i ng , wha t c ome s t o us na t ur a l l y i s bui l di ng s t uf f , c omi ng up wi t h i de a s , a na l y z i ng ot he r s t a r t ups , t r y i ng t o f i nd c l one s t a r t ups wi t hout unde r s t a ndi ng t he ma r k e t . I n our c a s e , t he r e wa s a t e a m wor k i ng on t he t e c h; t ha t t ha t t e a m wa s not f i ni s he d bui l di ng t he pr oduc t , but we s t a r t e d ma k i ng c a l l s a nd da t a g a t he r i ng a nd f a c t f i ndi ng t r i ps t o t he c ons ume r s of t he t e c hnol og y wa y be f or e i t wa s f i ni s he d - t ha t i s how i mpor t a nt i t i s . S e l l i ng i s ha r d be c a us e y ou ha v e t o ov e r e xa g g e r a t e , s o i t doe s n’ t c ome na t ur a l l y t o us . T wo, whe n y ou a r e s e l l i ng , y our wor l dv i e w c a n g e t c ha l l e ng e d a nd i t i s unpl e a s a nt be c a us e i f y ou a r e i nt r oduc i ng a n i de a , s ome one c oul d que s t i on i t s unf a mi l i a r i t y . I r e c e nt l y s a w a t we e t t ha t s a i d ‘ s e l l i ng i s l i k e e x e r c i s e , no one l i k e s doi ng i t , but onc e y ou g e t i nt o i t , y ou e nj oy i t ’ . He nc e , I be l i e v e t ha t i t ' s a wa y of s oc i a l i z i ng a nd a l s o doi ng ma r k e t r e s e a r c h, whi c h me a ns y ou g o t a l k t o t he c ons ume r be f or e y ou’ v e bui l t y our s t uf f . Ot he r wi s e a n y de v e l opme nt i s j us t a f e w mont hs of de v e l opme nt of s ome t hi ng t ha t no one i s e v e r g oi ng t o us e . Cont i nui ng on t hi s , we can s ay t hat t he f undament al di f f er ence bet ween s el l i ng and mar ket i ng i s f r om a def i ni t i on per s pect i ve t hat you do mar ket r es ear ch f i r s t and i f you do mar ket r es ear ch, you i dent i f y t he need and s at i s f y i t , t hat ' s wher e your chances of s ucces s ar e much hi gher as compar ed t o maki ng a pr oduct and t hen f i ndi ng a buyer f or i t ? Tha t i s c or r e c t . As a f ounde r , y ou ha v e t o do bot h a s y ou don’ t ha v e a ma r k e t i ng t e a m or a s a l e s t e a m. Whe n I wor k e d a t PI TB, I ha d t he r e s our c e s t o bui l d a l a r g e ope r a t i on. And on my l a s t AR, pa y r ol l wa s a bout 1738 pe opl e , s o I c oul d bui l d a 2000 pe opl e or g a ni z a t i on a nd t he r e f or e , I c oul d bui l d a l l t he s e l a y e r s a nd a l l t he s e de di c a t e d f unc t i ons . We ha d a n e ng a g e me nt ma na g e r who f ul f i l l e d t he f unc t i on of g oi ng i n a de pa r t me nt a nd e ng a g i ng t he m, s e l l i ng ne w i de a s a nd wha t we c oul d do wi t h t he m a nd t he n we woul d ha v e a de v e l opme nt t e a m. Tha t ' s how de v e l opme nt a nd ma na g e me nt c ons ul t a nc y wor k s f or i ns t a nc e . The y a r e pe opl e who g e ne r a t e t he de ma nd f or y ou, who unde r s t a nd t he ma r k e t f or y ou, t he n t he r e a r e pe opl e who bui l d s t uf f a nd t he n t he r e a r e pe opl e who g o t o s e l l i t . Now a s a n e nt r e pr e ne ur , y ou a r e 4 pe r s ons s o y ou wi l l ha v e t o do e v e r y t hi ng . Y ou ha v e t o do a dmi ni s t r a t i on, y ou ha v e t o do f i na nc i ng , y ou ha v e t o do ma r k e t i ng , y ou ha v e t o do s a l e s a nd t he n y ou ha v e t o be a pr oduc t ma na g e r .