Startup Ideas that don't make the mark

Click for Readable HTML Version

<h1>Startup Ideas that don't make the mark</h1> <p align=right>by Bernard Leong</p> <div align=justify>Recently, we have been receiving a lot of applications for the funding commissioned by MDA. There are good and bad ideas. Of course, some of them will be getting “No, I am sorry to inform you that….” from us. it should not mean to you that it is the end of the road if we don’t fund you. If you believe in your idea so much, you should continue the search for funding. Even better, try to do a startup without funding, like some of our resident contributors, Cobalt Paladin, Design Sojourn, Weichang, Der Shing and myself have done. Through a few correspondences and meeting some self-proclaimed and crappy “entrepreneurs”, I have set up a list of reasons why they don’t make the mark. I have also placed some notes in this post to tell people what kind of entries will end up in our rubbish bin. Here are three reasons why we are ready to reject them. <B>1. One man show is bound to fail.</B> Despite how much we tell everyone that a team is important, some Singaporeans are still doing that. Usually when an entrepreneur tells me that he runs a one man show, three possibilities come to my mind: (i) he cannot inspire people to work with him, (ii) he cannot scale his business and hence his profit margins will be extremely low or (iii) he does not know how to grow his business. Good businesses require tight-knitted small teams and great business demands a vast number of good and strong teams. This is one problem I see with single inventors. If I keep trying to help them and gather people around them and they still do nothing, this demonstrates that they just cannot handle people. If you are still not convinced by my reasoning, here is a story which I can share with you. Years back when I was in Cambridge, a brilliant German inventor I know approached a friend of mine from the United States to do business development. They formed a startup and I thought that the technology was fantastic to make the next Google. This is what exactly happened. One day, the inventor came to me and asked me about business models in my area of specialisation. I was baffled and told him that I was no expert of his industry. Then he continued to ask me what book to read about this. I told him to look up a few references. In the end, I realized that he did not trust my friend at all about business models. For every subject from financials to writing business plans, he had read every book. However, in the end, the business failed horribly. Luckily, my American friend did not suffer badly from the experience. Within seconds he quit the venture, a well-respected serial entrepreneur (and business angel who have done numerous technology startups and sold them to high bidders) in the Cambridge cluster called him and offered him a CEO job for the new startup. The moral of the story is trust which is cardinal to some of our Asian cultures. Remember, you cannot be the CEO, the accountant, the business development director, the public relations and the inventor all at one time. It’s impossible to work like that. So, if you want to convince us, show us if you have a team of two at least, where the other person possess complementary skills to what you don’t have. <B>2. Derivatives vs Imitations</B> Some companies successfully did it through imitating what a successful big company do. For example, Baidu, the Chinese search engine took wholesale from Google. However, that can work if you can harness a domestic market as big as China, India or Brazil. Some founders try to do this in Singapore and find that their markets are so limited that it amounts nothing at all. As a matter of fact, Baidu is not really an imitation, but a derivative of Google operating in a niche market, namely the customers all write and read the Chinese language. Of course, if you make a derivative from an existing product, you have a problem. The problem is not just your technology being challenged on the intellectual property front. The real problem is actually the market share that you are getting. Recently, Justin mentioned that if Chad Young did YouTube in Singapore, the company would not have flourished because of all the laws and regulations in the country. Actually, he is about half right. The real reason why Chad Hurley can get backers is because he has leverage of the market. Even if all the companies will sue him, the investors in Silicon Valley or the web 2.0 market will not ignore the amount of customers his website has generated. If you want to be in the internet business, you either have the top class technology or have the most customers. You can attack the niche market but be prepared that I will ask, “Are the people buying your product make up the top 20% of the income group in Singapore?” <B>3. Half hearted Efforts and Risk Adversity</B> If you want to do something, go all the way for it. If you want to take money from someone, be prepared to subject yourself to control from the investor. If you want to do both, you better go with full efforts. A lot of people talks about their ideas, but I have seen no prototypes. Believe it or not, even for a blog like SG Entrepreneurs, we wrote a business plan before getting the blog started. We even knew when we must get resident contributors to expand our base. It is quite easy to copy what we are doing in this blog, and I have seen copycats which have died along the way. We go all the way to get our system up and we try to implement everything possible. We never think that profits will come so quickly. Here is something that Singaporeans need to learn: you must be prepared to suffer as an entrepreneur, otherwise join a company and work as an employee. Recently, I was watching a documentary called “High Net Worth” where the interviewer talks to Donald Trump why he does not encourage people to be entrepreneurs. Paraphrasing Trump’s words, if you are not prepared to work 24-7 for your business or find people and ways to enhance your brand and product, don’t be an entrepreneur and go be an employee. Not everyone is suitable to be entrepreneurs. It is the kind of advice that I like to give to some one man shows, who after a few years, are still one man shows. </div> <p align=center>Article source: <a href="http://www.ArticlePros.com/business/entrepreneurs/article-58090.html">ArticlePros.com</a></p> <table align=center width=550 cellspacing=1 bgcolor=silver cellpadding=5> <tr bgcolor=antiquewhite> <td> <p align=center><b>About the author</b></p> <p align=justify>Bernard Leong is currently an adjunct assistant professor at the National University of Singapore (NUS). He sits on the steering committee for the <a href="mailto:Start-Up@Singapore">Start-Up@Singapore</a> business plan competition, and he is also the founder of <a target="_new" href="http://www.sgentrepreneurs.com">http://www.sgentrepreneurs.com</a>. To learn more about the <a href="mailto:Start-Up@Singapore">Start-Up@Singapore</a> business plan competition, please visit <a target="_new" href="http://www.startup.org.sg">http://www.startup.org.sg</a> </p> <p align=center><input type=button class=asubm value="Other articles by Bernard Leong" onclick="document.location='http://www.ArticlePros.com/author.php?Bernard Leong'" style="height:20px;cursor:hand"></p> </td> </tr> </table>