Alexandre Khae Wu Navarro
Last weekend I took part in the FinTech Startup Weekend at Cambridge Judge Business School in the UK. Since I come from a more technical background, mostly engineering and machine learning, I thought it would be an interesting experience to familiarise myself with these events. This way, I would be better prepared to pitch and develop an idea at a future event.
Apart from learning more about pitching, the business canvas and some basic MBA tools, the event allowed me to gain several insights into the more subjective aspects of starting a company. These aspects comprise a wide range of subjects from product design to spotting the signs that your team probably has a focus issue. I tried to distil these lessons down to four core concepts:
An exercise in faith and reason
Eventually you will need to face the hard truth that founding a company is a ludicrous idea from a risk perspective. The odds against the success of new companies are slim and, even if you succeed in the early startup phase, there is a chance your company might never leave the startup zone (and become one of the so-called zombie startups).
Therefore, if you want to found a new company, you definitely need to have a deep connection to your product and business idea. I advocate that either this should arise from experience, gained through scrutiny of current products and business strategies, or through actual hands-on experience. While the romantic idea of a sudden stroke of genius may be very attractive, these ideas usually do not survive even a simple internet search.
However, one should never rely on faith alone: there is a time to be reasonable as well. A healthy dose of scepticism is crucial to a considered analysis of your business idea. Too much self-identification with the customer can be detrimental as it introduces a 'sloppiness bias' in the analysis. People who are over-excited about an idea tend to downplay all possible setbacks and assume that demand exists which is simply not there. Moreover, over-optimism leads teams to take business assumptions for granted with little or no evidence to back them up. In a short, putting yourself in the customer's shoes is valuable, but you should not get carried away.
The people element
No matter how smart, fit and well prepared you are, founding a company and developing a product is too much work for just one person. We cannot forget the time-to-market element in product development and, workload aside, a fresh perspective is usually welcome.
This leads us to the important people element of the startup equation. Most advice on founding a company mentions the need to be careful who you collaborate with, often mentioning some the legal aspects of company share allocations. But before you get anywhere near that stage, you must first find people to help you get to that stage.
That means you need to find people you like to work with and who complement your skill set. It is a mistake to choose a team with the same characteristics as you. A group that focuses too much on the business side but forgets all about the product is as problematic as a group of techies who only focus on adding product features irrespective of market response.
This brings us to the startup's focus. Initially, focus on the actual product, without losing sight of the business case - not the other way around. This is may seem counterintuitive, but when you are starting a new company, you do not have the resources to build anything more than the core of your business. Nothing is more at the core of a startup other than its product.
That is exactly why MVPs are important. They help shape your product and your business model to the real world. This forces small startups to use the same techniques major engineering companies use for new projects: Font-End Loading (FEL) development. Roughly speaking, in FEL methodology, a new project starts with back-of-the-envelope design and calculations to check if the business case is worth a more thorough study. If the answer is negative, the business should pivot, otherwise the team develops the design further and rechecks its economic feasibility. Considering this at every step of the creation of a MVP helps to maintain focus on the business case.
Another crucial point for a startup that is set up during an entrepreneurial event such as a startup weekend is that one should always strive to make a case that outlives the event and not to tailor it only to the judging criteria. Focussing just on ticking boxes to meet the competition's criteria will not be enough to build a sustainable business. Moreover, by striving to think beyond the competition, the startup should automatically meet the criteria of any serious competition.
In conclusion, I feel I have gained a lot of experience out of a single startup weekend, and I emphatically recommend that anyone who is interested in gaining some insight into entrepreneurship takes part in events such as the one I attended.
Maybe more importantly, the greatest lesson I took from this event was that assuming a critical position, observing and drawing lessons from such events is crucial to avoid simple but crippling mistakes when starting your own business.