Ten Myths Slowing Down Entrepreneurs In Emerging Markets

One of the biggest advantages of a rising ecosystem is that a rising tide lifts all boats. I found myself in Chicago in 2012 when the tech startup scene was budding and getting energy from a small coworking space called 1871. Today, 1871 boasts of being the largest innovation hub in Chicago and attracts entrepreneurs from all over the world. Just a tiny testament the growth that one can expect over a short five-year span. As such, if you find yourself in an emerging ecosystem such as India, South Africa or Dubai; know that not all roads lead to Silicon Valley. You can definitely swing by for a peek at the world’s largest innovation ecosystem and learn a thing or two about it’s ‘Can do’ attitude or learn how the ‘early adopter’ culture and mindset have made it stand part. Reality is that your ecosystem likely has a few key things that might just be the answer you’re looking for.

Here’s my take on busting some of the common myths that entrepreneurs are likely to believe in an emerging ecosystem.

1. Tech startups should not bootstrap.

Bootstrapping is not bad. Investors in a typical emerging startup ecosystem don’t want to invest unless there’s some revenue or customer traction. A lot of entrepreneurs stop at the idea thinking there may not be much to do without venture funding. Do think about how you can build a business that is revenue positive and not necessarily profitable. Even if you break even, you have discovered a good business model to start testing with. Contrary to perception, bootstrapping is in the DNA across the US and entrepreneurs here do not dismiss it. As an example, Contextmedia bootstrapped for a long time since it was founded in 2006 before raising venture funding as part of a Series A round in 2017.

2. It’s tough to be credible when no one knows you.

Unless you have a brand name mentor or advisor, or a brand name university it is likely that you’re not viewed as a credible technologist or entrepreneur. Taking your startup brand and yours up a notch will pay dividends. This is no means rocket science and doesn’t have to be hard. No one is expecting you to be on TechCrunch overnight. It coudl start with small steps, a simple partnership Microsoft or a local company, an even that you attended or a conference you spoke at. Credibility will build over time as long as you consistently show up. As an example, Chicago-based startup, Cleversafe had a partnership with IBM that they built over the years and eventually got acquired by IBM.

3. Local problems are just not cool enough.

Putting restaurant menus online was about solving a local problem in Chicago. Two college students were sitting late at night dreaming that food would just come to them instead of scouring the bitter cold streets that winter semester. Matt Maloney and Mike Evans applied for the business plan competition in their b-school and in a matter of ten years, the company had it’s IPO.

So, what are the nuances of your ecosystem? What’s keeping you awake? What are the problems around you in your city? Looking to solve local problems may not appear cool or innovative at first but, often you’re closest to the problem and in fact, may have hit upon a real problem to solve. Now that doesn’t mean you stick to growing your company locally or for that matter funding it locally either. For example, Grubhub kept their roots in Chicago but, ultimately took funding from VCs in the valley as part of their third round of venture funding. This helped them tap into expertise and scale the company across the east coast of the US.

4. Failure is not ok.

If you pivot, it’s ok. I’ve known one startup for five years now and they’ve had three solutions, multiple partnerships, 18-month pivots and have had 4 pivots so far. Failure is acceptable and we tend to be harsher when we’re bootstrapping. One of the advantages that entrepreneurs from Silicon valley emboy is the absolute tranquility with failure. If you haven’t failed, you haven’t tried and so, Failure is completely OK!

5. Traditional enterprise companies are boring.

At least a few times in most conversations with entrepreneurs, I hear how Microsoft or IBM are too big or too hard to work with. Take that up a notch when it comes to traditional companies such as Comcast or Statefarm that started out as service providers and are only now undergoing what we call a digital transformation. Typically, entrepeneurs will dismiss their local enterprise companies in favor of smaller innovative startups for partnership. Here’s the one thing you need to know. If you’re looking to solve for credibility or looking to tap into a huge salesforce or looking for an exit, which I’m sure most entrepreneurs are, the typical traditional enterprise has a lot to offer. You just need to be patient and work with them through the hoops. Very simply,

  1. Identify a Fortune 500 company that is local to you.
  2. Learn about their business model and offerings.
  3. Strategize and think about how can you can help them innovate or be relevant in today’s changing technology landscape.

Companies such as Samsung, Comcast, Statefarm, Kimberley Clark and many others have built innovation programs across the world. It’s not only about Google, AWS, Facebook or Microsoft. These traditional companies are not agile but have a burning need to survive via innovation and that’s where you come in!

6. Focus on building for one ecosystem only.

UAE-based Namshi and Souq(now acquired by Amazon) and all are focused on one ecosystem which seems to be working well for these startups because they’re tapping into a hyper-local need for e-commerce. But, if you’re building a technology solution, how do you build for more than one ecosystem?

Validating your business model locally may help but, if you plan ahead with a rollout strategy globally from the beginning that might put you on the map faster, literally! This is especially true for companies outside the valley that may be bogged down by government regulations and policy in their market. Even Uber had a global strategy to start with and quickly scaled across other markets internationally. Asking the question around scale and rollout upfront can save a lot of time cutting out the competition but, more importantly, tapping into the strengths of your solution which or may not be timely in your local market. For example, a video streaming solution in the Midwest may not be as attractive to an investor who is looking for hard revenue numbers. Scale that minimally to the west coast and now you have early adopter technologists with an eager mindset looking to invest.

7. Accelerators are the holy grail for startup success.

Accelerators and co-working spaces are great and if you get into one, hats off to you! However, if you’re in a deep pocket of South Africa or the Middle-east, chances are that your local startup hub may not boast of the typical brand names one hears about in Silicon Valley. That doesn’t mean you are passing up on an opportunity. You can look online for resources and there are plenty! Novoed is an example of one such platform which has great sources including the Technology Entrepreneurship course being taught for Free!

The classic mistake that entrepreneurs make is to think that they don’t need to think through and educate themselves much because they have the best advisors or had a successful exit in the past with another business. Building a tech startup may have similarities but, isn’t the same as building a commodity business. It’s also not identical to owning P&L responsibilities at a large corporation. Simply step back and take the time to educate yourself on how to build a technology startup vs. using the business model that may have worked in other commodity businesses. Fun fact – even if you did have a successful exit from a tech startup, chances are that you’re going to need to at least tweak your business model instead of going wholesale and applying it to another industry. Serial entrepreneur or not, a little of education and awareness will go a long way. Leverage online educational resources.

8. I need to grind and do everything.

You’re one person. There’s only so much you can take on when it comes to your startup. Start thinking about how you can automate the stuff that is eating away at your creative time. Online payments, payroll, expenses, logo creation are just a few things where you’re either not the expert or might benefit from some help. If you can’t find a local bank, write an email to an international bank or service provider making the case for why they should consider partnering with your startup.

Many law firms, banks, and other service providers give away free credits to entrepreneurs in the US and globally. Use them. Automate the non-critical path work items and get them out of your way. Enough said.

9. Showing up is tough.

With a million things on your mind including the challenges of your local startup scene, it can seem daunting to be in front of Sam Altman from YCombinator or Dave McClure from 500 startups. Showing up in Silicon Valley may mean spending lots of money on travel and with a scrappy startup budget, that is undoubtedly tough!

It is true that a lot of investments happen when there is an in-person relationship. Fact is that I’ve seen investors make bets and at minimum indulge in conversations with entrepreneurs overseas. From Canada or the Middle East, there are micro VCs and venture funds all over the US who would love low valuations and high returns. The unfair advantage that an emerging market brings is low cost to build and thus likely a lower valuation for investors. Moreover, some of the brand name VCs do take tours across the world meeting promising entrepreneurs. Several hubs like 1871 invite entrepreneurs from Kenya, India and other markets to connect with the local leaders.  Build relationships online via Skype to start with, learn and tap into exchange programs for entrepreneurs and grants. Ultimately, if you can, travel and be present in person to build partnerships with people that will truly drive your business. Showing up in person globally with a shoestring budget is tough but, it’s easy to show up and be present in your ecosystem and online.

10. Government regulations create a rigid top-down mindset.

Government regulations don’t have to prevent you from scaling your business. Build locally but, scale globally.

If you can incorporate in the US or at minimum partner in the US to get access to resources, you can start moving away from some of this local rigidity. Startups that have nothing to do with the US have also succeeded but, there is a fluidity in the ecosystem that may bring technical, business or education resources to you.

For example, Snapchat and Skype are banned in Dubai. If you have a partner in the US and are using those channels for distribution, you can seamlessly integrate and work around the ‘local system’.

As you solve locally, build simpler iterations that you can then roll out globally. As an example, Uber is working around the local regulation in the Middle East that prevents individuals from driving due to visa constraints. In Dubai, they solve for this by teaming up with the limosine service providers instead of the individual drivers. The thing to learn here is that the same product when rolled out globally may need tweaks that can eventually help boost the local business too.

Think about how you can creatively work around local regulations but, also the issues that you may run into in other markets where you may have the first-mover advantage. Leverage other markets to double down on your strengths. As soon as you hit barriers locally or have hit product market fit locally, start thinking about rollout outside your city or country.

Lastly, if you’re in an emerging market and running into one of these issues or seem to be stuck with your startup business, I’d love to hear from you! Write in. To learn more, you can see the full video behind this post. This is an excerpt from a talk that I gave at in5 in Dubai.

Startups, Technology, and Investing in Chicago

Over the past decade, the Chicago startup community has seen incredible growth. More than ever, it’s possible to build a business anywhere and Chicago has become a uniquely vibrant tech community.

chicago

 Marina Dedes and Adam London from Lightbank have put together this amazing guide to Chicago’s startup ecosystem. The guide covers a little bit about Chicago’s history, who are leaders in the startup community and provides a great starting point for those that are new to the city. Lastly, the guide also covers the huge set of resources that are available to entrepreneurs. Amazing work by a brilliant team and a great summary overall.


Startup Principles : Are You Winning The Hearts And Minds Of Your Customers?

 What you produce doesn’t have to make money but, it does have to benefit people. Last week, I had the opportunity to visit Boston to attend the PIPELINE Entrepreneurs Fellowship module. One of the talks during the module covered the importance of customers. If you have a strong customer base, that is the single most important success driver.

So how do you win the hearts and minds of customers and how do you become a successful startup?

Here are five things you can do to win your customers,

1. Know your customers

Don’t just know them through numbers, know them intimately and in every which way you can. Their likes and dislikes, demographics, behaviors, background, what influences them, where do they seek advice, what do they read and where do they spend their time. The best solutions are built with a solid understanding of customers.

2. Identify why your customers should care about your product

Take the time and understand the needs and pains of your customers. Where are they coming from? What is their motivation? Is your product going to solve a painful problem or will it relieve some worries? Does your product meet needs or does it simply satisfy wants? Identify the core set of features that your customers will truly care about and then eliminate the rest.

3. Don’t build products for everyone but, focus on a target market

Products which are for everyone aren’t for anyone. Positioning your brand and product so they hit the target market effectively is key to the success of any company. Your customers won’t fall in love unless they feel that the product speaks to them.

4. No one needs your product, customers want benefits

It’s true. We don’t wake up wanting to ride the bus or drive the car to work. We simply want to reach our workplace. Similarly, no one needs the product, they care about the benefits. As you take off on this journey of customer satisfaction, focus on the benefits of your product. Let go of the bells and whistles and truly seek a strong value proposition.

5. Win-win-win-win… win as many ways as you can

Creating a win-win situation with your users, customers, partners and distributors is key to keeping everyone happy including you. The best way to do this is by spending time with your stakeholders and understanding what drives success for everyone.

 

Startup Principles : Do You Have The Right Support System For Your Startup?

 

A support system is critical to the success of a startup. In meeting with early and late stage startups over the past several months, I’ve realized that the most successful startups have a solid foundation and infrastructure in place. And I mean the type of infrastructure that is made of people, networks and associations. Here are a few key areas that you should be focusing on to help find the right support system,

Connect with a strong set of mentors & advisers

As your startup matures from conception to being a vetted solution, the first thing to do is find a strong set of mentors. Look for experienced professionals, entrepreneurs and business leaders to help guide you.

When you establish your company, you will soon need to look for strong advisors on your board. Your board of advisors would include your investors, industry experts, technologists and seasoned entrepreneurs. These people are your guiding stars in a world filled with ambiguity and analysis paralysis.

Programmatic support to build a solid foundation

This is the type of support that you can get via top accelerators such as TechStars, from companies such as Microsoft that support entrepreneurs via the BizSpark program  as well as venture challenges and business plan competitions. Organizations such as Founder Institute hold classes for new entrepreneurs while Startup Weekend hosts a weekend full of startup activities to get your feet wet. As you can see, depending on where you are – from idea to startup, from early stage to mature stages, there’s programmatic support available for everyone.

Media and promotional networks for marketing

Based on the city, there are local companies such as Entrepreneurs Unpluggd that cover startups as well as national and global companies such as Tasty Trade  and Mashable  that help promote your success story. As you establish your startup and want to get the word out, a strong media campaign can help promote your solution and drive customers. Press releases can make a huge impact on the perception of your brand. Microsoft’s BizSpark network has a blog for ‘Featured Startups’ which provides a voice and platform to reach out to the global community of approx. 50,000 startups.

Funding to sustain and grow

From friends and family to angel investors to Venture Capital funds; startups wouldn’t be anywhere without the funding behind the product. A lot has been said about funding startups and ways to get funding. Suffice to say that without the financial support, your new venture may not take flight. Outreach to angel investors in your area, financial institutions or approaching venture capital funds focused on startups, are some of the options available to you.

As you take off on this sky-rocketing journey, a strong support system can make all the difference between reaching the stars and rocking it as a startup or fading away into the distance!

This post is part of my blog posts at Inc-Well NBC Chicago

Startup Principles : Are You Building ‘Great’ Products?

After having shipped enterprise and small business products over the past seven years, here are a few things that I have learned along the way. This is a simple checklist of six things to help you build great products as a startup.

Solve a real problem

Many startups run into corner cases and problems that are silo or specific to a niche. Truly understanding the problem and determining whether or not customers are satisfied with your proposed solution will help pave the way for solid building blocks of a product. There are several problems to solve. Some problems are real and will drive you as an entrepreneur. Pick a problem that is close to your heart, something you may have experienced or seen others experience.

Validate your solution

You can do this by conducting interviews, surveys, simply walking out of your office building and talking to potential customers. The biggest mistake that companies make is to focus on their creative and amazing solution without asking customers if they are willing to pay for it. Validating your solution makes it easy to qualify any assumptions you have made and avoid building products that no one will use.

Perform competitive analysis

Competitive analysis requires researching the market for alternate solutions. It’s easy to look at your innovation and fall in love with it. Take the time to understand the market and the various options that are available to consumers. Learn more about your competitors and their differentiators. What are your barriers to entry in the market? Competitive analysis helps distinguish your product and brand.

Build iteratively

The biggest lesson one can learn from agile methodologies is to build iteratively. Start with a small feature set and work on a strong foundation. Prioritize and truly understand what will constitute the minimum viable product. Then, build it. Understand the importance of the user need and the satisfaction that a user will get after using the product. Do not allow scope creep or gold-plating to absorb the time and resources you have on hand.

Start with a small scope, build iterations and create high customer value. This will help you validate the product, fail fast and make corrections along the way.

Have a strong value proposition

A strong value proposition creates a solid foundation. Take some time and ask questions about the product. What are the benefits to users? Why would they use your product instead of going to the competitor? What makes you unique and what makes your product unique? Define a strong value proposition which will enable users to identify with your product. This also means putting together a value proposition statement that defines at the highest level what your product will deliver. It is also a formalized way to share your product concept and gather user feedback.

Leverage tools to help stay organized

Feature checklists, UI design guidelines, Storyboards, Burn down charts and the list goes on. There are several tools that you can leverage to stay organized as you build iteratively. Time, scope, resources, quality, risk, communication and cost are some of the parameters that you will need to plan for and track. Staying organized while you develop your product is critical. This will help you avoid the trap of exceeding time and budget.

Lastly, focus on your team and make sure you cater to the needs of your rock star team. Great teams build great products!

This post is part of my blog posts at Inc-Well NBC Chicago

Startup Principles : Do You Have A Rockstar Team?

Every Thursday is an opportunity for me to meet budding entrepreneurs and startups at one of the most happening co-working spaces in Chicago, 1871  . After having met several teams and heard lots of pitches, there are three key things that I find are common amidst rockstar teams.

Align talent with roles

This might sound easy but, in reality, the biggest organizations fail at channeling the skills of their employees in the right direction. Often, the extroverts end up in a cubicle and the introverts are pushed to managerial positions. If you are good at something, make sure that your team is aware of your strengths and weaknesses.

Embrace the fact that as a startup, your strength lies in your team and your team cannot function unless the right people are executing in each role.

When I met Sparkreel , its co-founder was open to me about his business development skills. He let me know that he wasn’t the ‘technical’ guy but, would love to learn about how Microsoft can help them. Having these open and honest conversations with your team and partners upfront can save a lot of overhead in the long term.

Have a close knit team with a few members

The number of people on your team can help expedite or slow down decisions. Especially when you’re an early-stage startup and exploring ideas, too many opinions may simply stall progress. The goal is to fail fast and be iterative. Vision, product management, technical mindset, people management, business and process development are important skills. This could mean having two or three people with the right combination of these diverse skills.

A homogeneous team, no control on product development and too many big guns may be the perfect trap for failure as a team.

The folks over at Walk.by seem to have the perfect balance of a serial entrepreneur combined with a technical mindset, helping them build fast and target their market effectively.

Mentors & advisors

The best way to learn is through experiences and mistakes that others have made. This saves times and energy especially when you’re early to the game and inexperienced. I won’t get too much into this one. Suffice to say that with any new venture in life, having a mentor to guide you through is always helpful.

Chicago based startup, Adyapper has a great set of advisors giving the team constant feedback and helping it grow.

Enjoy the process of team-building and meeting wonderful people. It’s all about connecting and finding those sparks that will ignite the next big idea across brilliant minds!

This post is part of my blog posts at Inc-Well NBC Chicago

Startup Principles : Are You A Smart And Sexy Startup?

Last year I took Stanford’s Technology Entrepreneurship Venture Lab course which covers the process technology entrepreneurs take to start their companies and methodologies pioneered in the Silicon Valley. It started with two assignments and went full force into a four month project. Now, that’s almost the same time it takes to launch a startup!

At the time, I had experienced shipping releases for Office 2007 and Bing and was managing the globalization project for the Windows 8 Store. In spite of all the product development experience behind me, I was blown away with Chuck Eesley’s iterative approach. Chuck started teaching this course last year and is the Assistant Professor of Management Science and Engineering at Stanford University. The course started with 37,606 teams and making it to the top #10 was no small feat .  Our team did it!

In October, I moved from Seattle to Chicago and changed roles from a Technology lead in the Windows 8 Store engineering group to being a Startup Technologist out in the wild with startups. Today, my typical week includes holding office hours at coworking spaces, meeting entrepreneurs every day, judging elevator pitches, debugging code, connecting startups to resources  and a big bag of goodies through Microsoft’s entrepreneurship program

So, why am I telling you this story?

Well, over the past few years, I have identified five things that differentiate smart and sexy startups from the average Joe startup. This helps me dedicate and focus my energy on the hot and happening rock stars. Helping those who are committed to their own success.

Here’s how you can transform yours into a smart and sexy startup to shine through this crowded landscape and maximize your success.

Build a rock star team

Shying away from the comfort of casual and loose, these startups prefer a tight ship. A solid, committed and diverse team helped us reach the top 10 teams on Stanford’s venture lab. Our team delegated in alignment with strengths, balancing the art of leading and following with trust. Our initial meetings were all about getting in sync and challenging each other respectfully to create high quality outcomes.

For example, Solomo connects customers and businesses via social, mobile and local solutions and based in Chicago. They have a tightly knit, well balanced team that came together in 2011.

Create a cancer drug, not candy! Then, make it viable.

As one of the top teams at the end of the Technology Entrepreneurship course, my team at Stanford’s venture lab pitched to a VC in the Silicon Valley. The feedback we got was, ‘Build a cancer drug – a product that people need; not candy – a nice-to have product’.

This doesn’t mean you solve for world hunger or create the next Twitter.

It means you create a solution that is best at one thing, solves a real problem and addresses a gap in the market. As you research for problems to solve, look for solutions that reduce time, cost lesser and save effort for your customers while maintaining a barrier to entry in the market. Our team pivoted several times before landing on our final value proposition and that is ok.

Elevate Digital  from Chicago revolutionized advertising through its interactive digital kiosks and created a solution for advertisers, marketers and consumers and wrapped with a pretty bow!

Find the right support system to doll you up inside out

Angels, VCs and top accelerators such as TechStars Chicago help build connections and get businesses off the ground. The sassy startup also keeps an open mind to everything else. Large technology companies such as Microsoft support entrepreneurs via the BizSpark program that provides technology, marketing and funding resources. Media companies for startups such as Tech Cocktail routinely invite entrepreneurs to deliver key notes and promote networking. Venture challenges and business plan competitions held at universities are great to connect with the community and make the right connections.

No startup succeeds on its own and a smart, sexy startup always needs experts to glamorize and succeed.

Take for example, SkyVu from Omaha. The SkyVu team partnered with WildBrain Entertainment to bring its Battle Bears mobile game to Hollywood and is expanding to a full season TV series, action figures and toys.

Win the hearts and minds of customers

A stellar startup is always on the lookout for strategies to widen its sales funnel and consistently explore ways to connect with customers including but, not limited to social media. Embracing new technology ecosystems across Windows 8; exploring ways to gamify and reward; connecting consumers to experts are just a few ways that startups are engaging the end customer.

You will never hear from your customers if you don’t leave the building! Meet your customers in person. Listen, feel, observe and absorb their feedback into your product where it makes sense. Identify a target segment that works best with your mantra.

Emerging startups such as Georama from Chicago, engage their fan base via travel trivia each day. This has led to 11,000 likes from 150 in three months. The well-known Quora has redefined search and answers by connecting users to people they admire and respect.

A startup of substance works hard to create a strong business model

Keeping marginal costs low and activating customers at scale is a balancing act mastered by the successful startup.

Dwolla from Iowa, creates a mobile payment solution that side-steps credit cards and links directly to bank accounts taking 25 cents for every transaction, and is already moving 30-50 million per month on its platform.

If you understand the lifetime value of customers and tally it against the high-heel cost of customer acquisition, and if you can iterate with limited data points, you’re setup for nothing but, success!

The key is to test out every hypotheses and be open to the trends of change with a clear focus.

This post is part of my blog posts at Inc-Well NBC Chicago

Share Your Favorite SXSW Video Moments

BizSpark knows that mobile video is the thing this year. So, to make it even more a thing, our evangelist  team asked Chicago-based startup, Sparkreel if we could use their technology to promote the awesome stuff that is happening at SXSW.

So, if you have a Windows / Android / iphone, you can share your videos and enable an awesome experience for everyone attending SXSW. You will be able to share your videos of the tragically hip on the go, and when it comes to eating food at our MeatUp barbecue party in downtown Austin, you can share your favorite vid of your favorite developer getting sloppy with the ribs.

Here’s how it works:

  1. Capture a video moment at SXSW – cool booth, new technology/gadget, great keynote, street madness, concert action, anything!
  2. 1-step mobile sharing – email the video straight from your smartphone to sxsw@sparkreel.com and make the subject line the video’s title. That’s all it takes!

We can’t wait for you to see all of your videos!

Please make sure you abide by the Photo & Video policy at SXSW
For more on how SparkReel can be the video crowdsourcing engine for your brand, website or event, click here.

To quickly register your username and share past SXSW video moments, click the JOIN button on the Reel below: