In Venture capital world there are a series of “do’s” and “don’t’s”. Don’t shoot yourself in the foot. Here are a few tips to avoid those pitfalls.
“Our numbers are conservative.” – We’ve heard this a lot. Nobody believes it. We get it – start-ups are hard and unexpected things happen (always). We want a realistic look at your forecast. Instead of this, explain your thought process as to how you got to your “conservative” estimate.
“Please sign our NDA.” – Venture Capitalists hear pitches all the time and remember they invest in great entrepreneurs.This request makes you look like you don’t know the ropes. Rather voice the fact that you’re pre-market – A venture Capitalist will be able to take it from there with the proper understanding and decorum to respect your privacy.
“There’s no competition.” – There is always competition. Think strategically about the way you intend to serve your customers and broaden your thought process to encompass these solutions.
“Which of my two ideas do you like better?” – You should choose which business idea to pursue based on which will make the biggest impact. They are looking for start-up leaders with conviction, not wishy-washy softies.
“I’ll have to get back to you on that.” – Now this is alright if it’s about one or two points, but if there are too many details that you don’t know cold, on the spot, it shows you are not close enough to the business or that you haven’t truly thought it all the way through. Know the answers to questions.
Avoid these missteps and let your passion shine through – you’ll be well on your way to changing the world with your idea, helped out by your friendly neighborhood venture capitalist.
We all make mistakes especially when it comes to entrepreneurs including but not limited to technology mistakes, marketing mistakes, advertising mistakes, financial mistakes, human resource mistake, and more. Some mistakes will slow the business down, while some can be so disastrous and bring the business to a complete halt.
Here are a few insightful tips and advise from other successful entrepreneurs.
Hide from problems
Be all things to all potential customers
Try to do too much at the start
Ignore the answers you get to the questions you ask
Anything we do in life has a level of risk, it is knowing when to take a risk and when not too. The challenge is to avoid the bad risks, while actively seeking and managing the smart risks.
Here is a collection of smart risks for start-up businesses:
Focus on a tough customer problem rather than a fun technology.
Schedule frequent updates to your solution to maintain growth
Plan to deliver a family of products, rather than a one-trick pony.
Implement a modern real business model. Providing everything free, and growing users to the max for years, like Twitter TWTR -0.23% and Facebook, is a high-risk approach requiring deep pockets.
Find a strategic partner to accelerate growth.
Use metrics to measure results of marketing initiatives.
Recruit the best team members and provide incentives.
Build your business with minimum outside funding. Strategically, you need a plan to survive through organic growth, with outside funding to effectively accelerate scaling.
Don’t rely on conservative forecasts to reduce risk
Be a leader rather than following in the footsteps of another.
An age-old measure of start-up health is how much time top executives spend on containing bad risks, versus proactively exploring new risk opportunities. If the majority of your time is in recovery mode, your whole start up is likely a bad risk.
When one starts a business it is important to have the right tools and know where to get the right support. Below is a list of books that are full of wise advice to help you on your new journey.
Business Model Generation by Alexander Osterwalder
This book will help you PLAN right.
How to Win Friends and Influence People by Dale Carnegie
People Skills are essential. This is all-important to the entrepreneur.
The Power of Habit: Why We Do What We Do in Life and Business by Charles Duhigg
By understanding the patterns of human behaviour – predictions can be made that an entrepreneur can take advantage of.
The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses by Eric Ries
Technology has made it possible for companies to be started quickly and cheaply, with an internet market of billions. A lean model does away with wasteful operations and anything a customer is not willing to pay extra for.
The Intelligent Investor by Benjamin Graham
Warren Buffet regards this book as Brilliant. If you are wanting to upskill yourself in trading. This is necessary read.
Cold Calling Techniques (That Really Work) by Stephen Schiffman As an entrepreneur, you are going to have to pick up the phone and convince someone you do not know well to do something that benefits you greatly. Imagine the power of developing a skill like that—that is what this book is for.
The Founder’s Dilemma by Noam Wasserman
Wasserman’s work focuses on circumnavigating disaster through preparation.
Steve Jobs by Walter Isaacson
You are forced to ponder the question of what success actually means and whether the prices we pay to realize our visions are too high. A must read.
Books are important resources. One can never know too much. Knowledge is Power. You do not have to read every book out there, but choose the ones that are really going to affect your life and business.
South Africa’s IT gurus will ultimately get the opportunity to become a component of the worldwide technological community subsequent to Google unveiling the establishment of its cutting edge technology start-up incubator in Cape Town.
The world’s number one online company has asked tech innovators residing in South Africa to participate in their six-month Umbono programme, a new pilot programme for Google that will, if successful, be carried out in other countries.
The programme is going to act as a springboard when it comes to tech entrepreneurs, transforming their computer- or mobile-based creative ideas directly into business enterprises.
Umbono (isiZulu, meaning “vision” or “idea”) will give successful applicants with approximately R173 000 (US$25 000) and R346 000 ($50 000) in equity start up funds, in addition to free work space at Hub Cape Town, business training, free bandwidth, mentorship as well as the means to access expertise, networking and marketing events to assist the participant grow and develop.
As reported by a Google press release, the programme’s main focus is to encourage and support growth throughout the South African developer community. Google is at the same time attempting to make the internet available to a lot more people in Africa as a result of this programme.
The selected groups definitely will reap the benefits of a mentor base consisting of local and international industry professionals. Team members will have to be in a position to legally live and work in South Africa to be able to be eligible.
Umbono’s programme manager Johanna Kollar explained the mentor base is an essential component of the initiative. Industry professionals will offer assistance and guidance on subject areas including product design, commercialisation, legal incorporation and valuation.
Kollar added the fact that experts, whom she refers to as Googlers, are going to take part on a volunteer basis.
“Our Googlers coming from all over the world, who will be volunteering their time, are generally enthusiastic about technology in Africa and will also be in a position to give support to teams with the issues they encounter, whether it be relating to product, business or technical front,” she explained.
Cape Town is Africa’s technology capital
The Mother City ended up being selected as the incubator’s base of operations for the reason that it is quickly becoming Africa’s very own Silicon Valley. The city has, in the past few years, positioned itself as being a centre of innovation and technology as a consequence of projects most notably the Silicon Cape Foundation, an IT networking body which happens to be working together with Google in running Umbono.
Foundation board member Justin Spratt suggested the programme will provide technology enthusiasts the chance they require to learn and grow. “There quite a bit of natural talent and enthusiasm for technology in Cape Town, and several concepts only require that window of opportunity,” said Spratt.
Bandwidth Barn, a Cape Town-based business incubator, have also been brought on board. Together with the Silicon Cape Foundation, Bandwidth Barn is there to offer help and support to the chosen groups as well as to guarantee they make the most out of their six months.
The city in addition boasts highly regarded tertiary institutes, particularly the University of Cape Town and Stellenbosch University, which happen to have formidable IT courses adn programs.
For Kollar, Cape Town provides the ingredients that enable it to be the perfect environment to operate a tech-based company. She added that at this moment in time there are no plans to expand the incubator to other areas.
Making reference to local start-ups such as Yola, MXit and Twangoo, Google South Africa’s country manager Luke Mckend stated that this energetic tech scene applied not only to Cape Town, but also the entire country.
“Google’s latest investment with Umbono is an excellent expansion of our overall strategy in the region to bolster the web ecosystem,” stated McKend.
There is still have time to apply for up and coming tech gurus
The selection committee is going to consist of angel investors – those individuals that ordinarily invest their own personal money into start-ups – and Google employees, who will subsequently select the individuals based upon a variety of specifications and requirements including the feasiblility of the business idea, applicability and suitability to regional and global needs, as well as the ability to bring the idea from concept to execution.
The first round of application will be ending on the 15th of April. Having said that, the website is going to continu to accept applications past the deadline. Kollar stated that the application process will continue to remain open year-round for the reason that individuals always have good ideas.
She described the prospective successful applicants as enthusiastic and passionate when it comes to technology and dedicated to their business idea, explaining the fact that they needs to be prepared to see their idea through to the prototype and, thereafter, utilize their particular technical skills to drive the product to the next level.
“Beyond that, groups will need to have the vision to scale their prototype or product to a regional or global business,” she explained.
She revealed that Google intends to select a minimum of five teams for this year’s programme, however added that this number would be determined by the quality of the teams coupled with interest coming from the angel investors, who will acquire a 10% share in the business in return for their financial contribution.
According to the Google website, the programme prefers teams to apply despite the fact that individuals are allowed. Having said that, individuals are discouraged from making an application if they do not possess a computer programming prior experience, which happens to be one of many requirements.
Candidates are permitted to submit several ideas but are encouraged to submit one formidable idea instead simply because it will probably stand a better possibility of being successful.