More tips for startups
(The previous article in this series is In search of Investments: how not to fly into the web of "divorce".)
Andrey Stadnik, BFM Group UkraineOver the past ten years, there has been a certain revival in the market of investments in startup projects.
However, "thanks" to our general mentality, political, economic situation, and often banal illiteracy, the overall investment climate in our country is still too damp for the rapid growth of the professional population. Moreover, among both project owners and those who would potentially be interested in entering into such projects with their capital.
Apparently, more than one generation of startups and investors will turn into humus on the way to evolution. Although, however, the general situation is still better than the beginning of the 90s, when money for business development could only be taken from bandits at crazy interest rates, and reporting on the expenditure of funds was obtained through a thermorectal cryptanalyzer.
A lot of "kind" words could be said about our homegrown investors, but, firstly, the topic has already been partially raised by me earlier, and secondly, it is necessary to fight with the cause, not the effect.
The reason is that ideas that require 100% funding are very often born from people who do not have their own management experience. They are not accustomed to how to work with projects. They have no idea about most aspects of financial and economic activity. They are disgusted by the strict rules of reporting, control and planning on the part of the financing party.
Unfortunately, many startups significantly overestimate their experience and knowledge. And as a result, they spend time on stillborn projects. Even if they are lucky, and they still find a good "business angel", their projects often do not even reach the break-even point.
From practice, developers of IT projects (software, monetization of Internet resources, etc.) and innovators-inventors (even yesterday, as a rule, people of science) sin to a greater extent.
These "project geniuses" very often have a kind of feeling of poor relatives, whom everyone around is simply obliged to help. And most importantly, for free.
They are completely confident that their idea is promising. The future investor's insight into all the details with conducting his own research, studying technologies, comprehensive market research, determining risks, developing a business plan, etc. - only his personal problems. As well as those that will follow the launch of the project. "I am a genius, I came up with a mega–promising project, and only for this you already owe me a lifetime."
There is often a clear bias towards personal exclusivity. Both young people and inventors who have spent their whole lives at the department, white-haired inventors often do not understand that status is determined by the assessment of others. To whom there is a longer queue for his resources, he will put forward his working conditions.
If investors don't line up for your idea, it's not the outside world that needs to be blamed, but to draw appropriate conclusions and start working according to the established rules.
Many startups should overcome their cognitive dissonance and understand a simple thing. Any unreasonable idea is worth absolutely nothing. Not because the raw idea itself is bad or unviable, but because it has not yet been confirmed by anything.
No matter how brilliant the idea may be, it must be correctly calculated and justified on paper. And in order to do this, it is necessary not to wander in the clouds, but to turn on thinking and try to see it under implementation.
Figuratively speaking, by implementing your idea, you are laying the foundation for a new business. If the foundation is calculated incorrectly, then future loads on it can lead to the destruction of the entire building. And no matter what some comrades imagine, but calculating this very foundation is the task of a startup, not an investor.
The owner of the project is obliged to work it out qualitatively. And to go to the investor not with a bare idea sucked out of a finger, but with an absolutely complete understanding of all the details and aspects of the operational business without exception.
Of course, narrow-profile specialists do not always have organizational skills and experience. Everything is simple here.
- If you know how to generate ideas, generate them.
- If you know how to program, program;
- If you know how to manage a team, manage a team;
- If you know how to analyze the market, analyze it;
- If you know how to keep managerial, accounting, tax records – keep records;
- If you know how to do financial analysis and planning, do it.
But when you will be able to do all this at the same time and efficiently – then look for funding.
A startup must first work out his idea to the extent that it is possible to lay down a preliminary business model. And it makes absolutely no difference whether it is the creation of a software product, the creation of a social network for fans of burning wood, the construction of a plant for the production of burbulyator with a side figaster or the creation of a new system bank. For any business, the financial and organizational models are completely identical.
- It is necessary to know the estimate of all stages before the commissioning of the facility (costs of the preparatory period).
- It is required to study the market, its capacity, competitors, and development potential.
- A preliminary technological project (on production topics) must be completed.
- It is necessary to take into account all factors (raw materials, resources) that affect the direct cost of final products. It is necessary to have sufficient experience in order to estimate the projected management costs (FOT, utilities, transport, administrative, etc.).
- Have an idea of the legal component of the business.
- And only then all the information received can be combined into a single document called a business plan.
It should be understood that the business plan itself is just a useless stack of papers if it is not preceded by thorough pre-investment research.
At the same time, there is nothing worse than coming to a potential investor without any information about the project on paper at all.
Excuses that, following Kozma Prutkov, it is impossible to embrace the immensity are groundless. In the yard of the XXI century, if anyone has not noticed.
When I graduated from the Kiev Polytechnic University in the early 90s, the common phrase was that a specialist could improve his qualifications, or receive information, confidently using the scientific library and alphabetical indexes. Now there is the Internet and search engines. What prevents a startup from delving into the details of his project before looking for investments?
In order to at least convince the investor that you can effectively manage the project, you need to know all the nuances of its implementation without exception.
At the same time, it is not necessary to know all the subtleties and details of resolving these nuances. You need to know about their existence. It is necessary to be able to select specialized specialists, set tasks for them and monitor their implementation. But the head must also know the conceptual solution of such tasks.
If the startup does not want to get out of the creative state in principle, the deadline for such a project can only be the sale or transfer of ideas and technologies to management. Well, everyone knows how intellectual property protection works here.
Portal "Eternal youth" http://vechnayamolodost.ru11.05.2011