A question many start-ups may end up with if they don't have a structure of execution after funding.......,
Let's start the story of a young entrepreneur who has a brilliant idea, his research and friends validate the idea and encourage him to explore more. He starts working very hard on making an impressive presentation, while constantly validating his idea and taking it to the next level. He has two options, go to the venture firm directly or go to an accelerator to kick start the networking and helping build the roadmap to the VC. Either way, his roadmap is not clearly laid out for after funding. Just like the fish in the picture that could swim to the surface but still does not know how to cross the big wooden barrier ...
Now, let's explore both options that lead to funding:
Accelerator: Excellent place to start, when you have limited exposure to the start-up ecosystem. The support with advisors/mentors, day-to-day operations, pitch perfection, team building, resources, tools, product idea validation and shaping, networking with the right crowd and finally the funding. The path looks well established, clearly laid out and with full support. I like this roadmap. Accelerators do a great deal of work in helping start-ups get up from ground zero to be the next big hero..
Direct Reach Out: Here the entrepreneur will directly work on building the team, product idea validation and shaping, networking, pitch perfection and finally presenting to the Venture firm for funding...
The structure is similar in both cases, but the effort and support are different. This does show us a clear direction on what is needed to get the right funding. Unfortunately, I have seen many start-ups struggling after the funding. Why is that?
Let's explore ...
While aim for funding can be the first milestone, to succeed, a start-ups biggest challenge starts after it receives the funds ( sometimes after series A, sometimes after Series B ). Shaping an idea takes time and so does funding, but many entrepreneurs forget to look beyond the funding plan (I call it efficient use of all resources for a productive growth) and by the time they realize, the time has lapsed for building future director for the company... to make a start-up successful, it is important to build a strong team, have a product or service roadmap, have the marketing, branding and business development effort lined up and as work-in-progress
Many entrepreneurs are aware of the structure but overlook the implementation, thus leading to a bumpy road. Let's explore each factor:
Strong Team- what is that?
The essence of a start-up is in acquiring technical expertise, however, the executive team should also be people savvy and be more as a listener than a speaker, because of many a time, listening helps relate the idea better to fill the gap. At my first job at United Airlines, the top executives had to work at the ticketing center one day in a quarter to understand the ground level problem. I still follow and implement whenever possible.
Product Roadmap- hmmm.....
A topic considered challenging for the first time entrepreneurs. We all plan our product roadmap keeping in mind the company will either go public (IPO) or get acquired (M&A). That is great, but planning a roadmap is to see how well you can support building the product with the additional resources that can be added once the funding comes through is important. Many start-ups have asked me on how to plan resources without the clarity on funding. It is true that you cannot have a detailed picture, but waiting to plan after funding is a lost cause as you missed a lot of time pre-planning. My general suggestion to all start-ups, keep the plan ready, keep the team ready with the funding amount you are expecting. Within a few meetings with the investor, you will get an idea on how viable your product idea is to move forward or pivot.
Marketing, Branding....:
Thank you, to social media for helping in the most cost effective way. For many, social media marketing has made branding easy compared to the traditional marketing. At times, social media can be very friendly yet challenging. While it has been easy to do a shout out, email marketing, and spreading the work across the different networks has become a breeze, but staying on top of the news ( to maintain the branding) is getting harder. To solve this problem now we have social media analyst or evangelist roles added to the marketing department. While the importance of marketing department is growing, one should start planning for the revenue generating sector- "Sales"
Sales...
The volume of sales defines the product demand and quality. Sales open doors to reality, every idea can be great but only sales give a decent breakdown on the future of the product. I call it the " Hercules " of the company as the revenue depends on how well a product is sold. I have attended a decent number of screening events and every time I see the question of " how will you sell" comes up. The future use of a technology depends on the product/service sales. Some may argue that M&A can be a great way to show the success, which is true but Sales show the future for a product.
Most of the first-time entrepreneurs I have mentored believe in having a working prototype ready before investing in marketing. It can be the right approach if your product lifecycle is short and does not need a growth path even then if you wait for too long, you miss on brand building. Product roadmap and branding go hand in hand. The long wait till all works to invest the money for marketing is an old tale now. Go ahead and be visible through every enhancement and update on your start-up, product, and the team
Silicon valley is a land of opportunity and we have been blessed with many successful start-ups. The success does not come just by a great idea but by understanding the challenges and planning ahead to build the right way...
So next time you plan a start-up, don't stop at funding, go ahead and plan the execution to build a team and a company you worked hard for. Be the fish that not just plans to swim to the surface but also has a plan laid out to cross the wooden barrier...
As many say ...
Every success comes from the right and timely planning.....
