Startup Guide Issue 16 | Page 11

I N A WORL D WHERE EVERYONE WANTS TO BE A UNI CORN, BE A COCKROACH The s t a r t up e c os y s t e m i s g r owi ng a l l ov e r t he wor l d a nd we a r e he a r i ng a bout how c e r t a i n s t a r t ups a r e be c omi ng uni c or ns . Howe v e r , t he r e i s a n i nc r e a s i ng wor l dwi de s hi f t t owa r ds t he c oc k r oa c h s t a r t up s e t up a nd i t ha s be e n e v a l ua t e d t o be muc h mor e s ui t a bl e t ha n t he uni c or n s e t up . S o, wha t a r e c oc k r oa c h s t a r t ups ? T o g e t a be t t e r unde r s t a ndi ng of a c oc k r oa c h s t a r t up , t hi nk a bout t he t hr e e mos t i mpor t a nt t r a i t s of a c oc k r oa c h: 1. I t c a n s t a y a l i v e f or we e k s wi t hout i t s he a d 2. I t g r ows dr a s t i c a l l y 3. I t c a n g o wi t hout f ood f or a r e a l l y l ong t i me Now, a c oc k r oa c h s t a r t up a l s o ha s qui t e s i mi l a r c ha r a c t e r i s t i c s ; i t c a n k e e p mov i ng t owa r ds i t s g oa l de s pi t e f a c i ng mul t i pl e s t r ug g l e s a nd c ha ng e s i n t he ma r k e t , t he i r g r owt h i s n’ t t oo r a pi d a s c ompa r e d t o ot he r s t a r t ups , but i t i s f a s t e noug h a nd t he y a r e c ons i de r e d c ompa r a t i v e l y l e s s r i s k y i n t e r ms of i n v e s t me nt . A c oc k r oa c h s t a r t up i s not i n a hur r y t o g r ow, but i t doe s n’ t me a n t ha t t he f ounde r s do not wa nt mone y a nd e xpa ns i on; t he y j us t wa i t f or t he r i g ht mome nt t o i n v e s t t he i r t i me a nd mone y . I n a ddi t i on t o t ha t , t he y a v oi d s pe ndi ng mone y on a s s e t s t ha t a r e f i x e d; t he i r s t r a t e g y r e v ol v e s a r ound s a v i ng mone y . F or t hi s , t he y us ua l l y r e nt out c o- wor k i ng s pa c e s r a t he r t ha n owni ng a nd i n v e s t i ng i n a n of f i c e ! The f oc us of a c oc k r oa c h s t a r t up i s a l wa y s mor e on i nc r e a s i ng r e v e n ue s a nd pr of i t s b y i mpr ov i ng t he i r pr oduc t or s e r v i c e a nd not on be i ng t he f a v or i t e i n t he ma r k e t . J us t l i k e a c oc k r oa c h, t he s e s t a r t ups ha v e t he a bi l i t y of s ur v i v i ng i n t oug h c ondi t i ons b y ha v i ng a r e a l pr oduc t or s e r v i c e .