Imagine two entrepreneurs both equally talented. With the same brilliant idea but just in two different places in the world starting up their venture. One in a Utopia for innovative startups much like the Silicon Valley and one in a place where innovative startups are not often recognized or even understood.
Every time you attend one of the several technology Barcamps or startup events organized across the globe, you can’t help but realize just how many fantastic, innovative ideas people have to develop great new technologies and web products. Every one of these events and gatherings reveals new ideas, beta versions of applications and new technologies that are game-changing. Yet, how often do so many of these great start up ideas (especially in developing countries) disappear into thin air just months after they look so promising?
Across developing countries which clearly have immense untapped talent the environment to nurture these startups, secure early stage funding and get the inputs required at that stage are lacking. The ideas are plenty. The potential to execute them is abundant. The support framework to help support the idea while it tries to manifest itself into a business…is a missing piece. It may exist but it’s not nearly as abundant as the talent or ideas. In these markets the entrepreneurs seem willing to take a leap but as they do, often find themselves asking “where are the angels???”
Having seen a number of startups with great ideas come and go you notice there have to be some inequalities which may influence how startup-friendly or not a place is. Also having spoken with a number of budding entrepreneurs (often first time) here is what one would find if they dug into the causes of their early disappearing acts:
Lack of Early Stage VCs & Angel Investors – While there can be well established capital markets in these places most of these are geared towards the large investments segment and not towards early stage startups. As a result too many entrepreneurs are vying for the attention of a handful of investors which means many great ideas end without a chance to grow. (The opposite can be seen in areas which have a lot of angel investors and smaller numbers of entrepreneurs where ideas not as robust can also pass through)
Inexperience In Innovative Technologies Investments – In developing places investment activities are more cautious and investments into innovative or new technologies is often considered risky. Investors tend to keep away from this space and those who don’t look for higher returns as a pre-condition for financing. It’s not angel funding or seed funding but loans rather.
Lack of Passion & Focus – Entrepreneurs may “give up” too easily without the approval stamp of investors and this could often be a case of ‘lack of passion and focus’. Instead of focusing on results from the original plan they can be swayed to come up with new ideas trying to become attractive to investors by any means except for showing results and building value.
Difficulty Building A Strong Team – While talent in places can be plenty it doesn’t mean that talent will be accessible for free or even for equity. While entrepreneurs for whom funding is a challenge, securing the talent needed to build his / her core team would be an even bigger challenge as it’s hard to find the right people who have a similar belief in the idea and an entrepreneurial mindset willing to work for equity or future reward.
Lack Of Guidance & Mentors – Having good guidance is critical especially for relatively less experienced entrepreneurs and no matter how great the idea is, making the right choices and sharpening the business as one goes along is important. It’s nice to have the right set of people to bounce ideas and questions off. It’s not always easy in a number of places. Without a nurturing environment where the business can get regular inputs in the form or knowledge and advice mistakes which have already been made by others in the past can be repeated.
Challenging Eco-system – You can’t grow grapes in the Antarctic. The conditions are just not right. Similarly, startups can often thrive in places where everything and everyone around them creates the right eco-system for them to grow. Investors who understand them, people who understand them, potential talent that understands them and knows what they are doing and how they work. It’s almost as if everyone speaks your language no matter where you are. In an environment where the needs of startups are not understood, the job of building one and growing just becomes that much harder.
Two similar sets of entrepreneurs in two different places around world both with an equally great idea may not have the same journey. One could be a smooth ride and the other could be like driving down Mount Kilimanjaro on a horse-cart loaded with tin cans…going backwards! Wouldn’t it be great if every entrepreneur and investor could just go to Silicon Valley and create the ideal conditions for growth so that every good idea has an equal chance? But they can….and we are building it together right here. With Grow VC, we can create more equal opportunities for entrepreneurs!!!
