How to avoid Startup Failure?
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The document outlines strategies to avoid startup failure by emphasizing the importance of aligning with the right team, conducting thorough market research, and creating effective revenue models. It highlights common pitfalls such as poor hiring practices, inadequate market understanding, and mismanagement of financial resources. Investors prioritize factors like market size, business model effectiveness, and the uniqueness of the company when considering backing startups.
How to avoid Startup Failure?
- 1. Triin Linamagi Alexandre Covello @triinlinamagi @angels_cube How to avoid Startup Failure?
- 2. Triin Linamagi @triinlinamagi Founder & Brand Strategist, Bahoui Head of Product at Jobatar and UK correspondent for Startup magazine Co-Founder. Alexandre Covello @angels_cube Founder & CEO, AngelsCube Co-Chair - Screening Committee, Harvard Business School Angels of London
- 4. Bubble or not bubble?
- 5. Too much money chasing to few deals… or too many deals?
- 6. European VC backed companies raised $2.5bn on 264 deals
- 7. Early-stage deals reach highest quarter in 2 years: $1.5bn/462 deals
- 8. So you want to be an entrepreneur?
- 9. The Bad News 80-90% of the startups fail
- 10. The Good News You have not failed, but just found 10,000 ways that didn’t work! Failure leads to success but it’s always better to learn from others mistakes and make less of your own!
- 12. • Single founder • Complementing each other in skill-set • Different visions and level of commitment • Hiring wrong people • No trust in your people/micromanagement • It’s nobody’s job Wrong Team
- 13. How to prevent this? 1. Align yourself with individuals who have the right combination of: –Knowledge –Ability –Motivation 2. Empower them with the right tools 3. Keep them motivated and engaged (Hint: be a leader!)
- 14. Ideas change, products are redesigned, markets can take unexpected turns, but people tend not to change that much. Great founders attract great teams and that’s how you create great company culture!
- 15. YOU DON’T BUILD A BUSINESS -YOU BUILD PEOPLE- AND THEN PEOPLE BUILD THE BUSINESS
- 17. Not asking simple questions Not talking to enough prospective customers Avoiding already existing market Selling a product that is not ready or waiting for too long to sell Product/Market fit #Failure 1 #Failure 2 #Failure 3 #Failure 4
- 18. If your startup never existed, the world would be worse off because ….
- 19. How to prevent this? 1. Before starting a business spend time researching the market, its size, its needs and pain points 2. Conduct focus groups, market interviews, surveys, etc. 3. Be candid: conduct your research with people in the know (not yes-sayers)
- 20. Running Out Of £££ Too Fast #Mistake 1 – relying on investment and not generating revenue #Mistake 2 – carelessly spending money on useless features #Mistake 3 – spending your marketing budget with no control #Mistake 4 – investing in wrong people #Mistake 5 - founders don’t want to give up a piece of pie #Mistake 6 – budgets were not planned properly
- 21. Hot to prevent this? 1. Identify what element of your product you can charge for 2. Determine who will pay, why they will pay and when they will pay! 3. Understand what revenue model works best for your target audience 4. Devise go to market strategy to reach out to your customers 5. Allocate the resources needed to execute on the strategy 6. (Not an option, or for the happy few:… keep fundraising!) (Hint: show me the money!)
- 22. Not Being Able To Support Growth Can your business model sustain growth? Is it bringing more in than out? How do you support growth?
- 23. How to prevent this? 1. Focus on retention first 2. The product is not everything 3. There is no silver bullet (except for hard work) 4. Be focused 5. Measure (invest in data and analytics) 6. Experiment 7. Dig and learn 8. Don’t be afraid to double down 9. Allocate the right resources 10. Be ready to change and adapt
- 24. What does the investor say?
- 25. Would you back these guys?
- 26. What investors look for… 1. Large addressable market size 2. Effective business model 3. Company uniqueness 4. Background and experience in the industry 5. Financial performance
- 27. What did billion dollar companies (really) looked like at Series A • 1. Easy to dismiss ideas • 2. Competitive Markets • 3. Reinventing Customer Behaviour • 4. Untested Founders • 5. Zero Monetisation
- 28. Thank you!