Earlier this year, I had the pleasure of attending one of the first Melbourne Knowledge Week sessions by Henrik Scheel, a Danish serial entrepreneur and the Founder of Startup Experience. He was in Australia on behalf of SPARK, an experiential program designed to give students of Deakin University an opportunity to see, experience, and relate to the early stages of the entrepreneurial path.
1. Good ideas don't care where they come from.
Whether you live in Melbourne, Sydney, San Francisco, Uluru or Timbuktu, a good idea is a good idea - so don't let where you are, restrict how much potential you think an idea has. Don't wait until you can move downtown, or afford that trip to Silicon Valley to start brainstorming. Good ideas are created all over the world - so make the most of wherever you are and give it 100%.
2. The best entrepreneurs are the ones who created something from necessity.
Producing a cell phone in a brand new metallic color, or a designing an app that offers a new way of playing a game, both are all good and well – but the best innovations and ideas are those which help people. Social entrepreneurship is what we need more of in the world - which not just make lives better, but save lives.
3. The biggest challenge in corporations these days is the possibility of being disrupted.
The biggest taxi company in the world owns no vehicles: Uber. The biggest accommodation company in the world owns no real estate: Airbnb. The biggest content website in the world creates none of its own content: Facebook. What this means is that every company in the world is at risk, because there could easily be a new player in the market who shakes up the traditional model with innovations. So it's important companies stay up to date with customers needs and wants, and aren't being afraid to adopt to new technology before a startup comes in and takes over.
4. Sell it before you build it.
Crowdfunding is a great way to start a business. Not only will you get customers before you've built a product, obtain exposure for your brand for free (basically) - you will also get one of the most overlooked, yet important things: Data. With good amounts of data, you will understand what a customer wants before completely investing in the final solution, giving you the chance to learn how to price it, what features to have and what options to offer.
5. Internal conflicts are bad for business.
It is very important that co-founders have clear responsibilities upfront, and split equity accordingly. It would be considered a big red flag to an investor if a company was split 4-way for a group of 4, all with 25% each just because "they were all friends and created it together".
It's important to identify if one is doing much more of the work, that they are getting the amount of equity deserved - because if not, they will eventually feel like they are not getting the amount of effort they are putting in, making the company vulnerable
6. There IS a right and wrong time to pitch to an investor.
Pitch before you have built a Minimal Viable Product (MVP) and you'll go in the 'No thanks' pile. Want to pitch without having done Market Research? You must be dreaming. Pitch without surveying customers, let alone knowing who your target market is, and you've officially just wasted everyone's time - including your own.
So when can you pitch? When you have something to show, know what exactly you're selling, to who, for how much, and how you're going to scale. If you don't know half of these things or more (nor have a Startup Canvas) then you honestly aren't ready to speak to anyone who could help you get the money to invest.