Don’t seek out industry players with just an idea and straightaway ask where you can go for money
If you are truly committed to your idea, then also be prepared to make the necessary sacrifices
SOME people are just not meant be entrepreneurs.
The inspiration for this opinion piece (read: rant) comes from recent interactions I’ve had with a reader who sought me out for insight and advice on getting started on his own entrepreneurial journey.
Now, I will never profess to be an expert on this space or topic, but I acknowledge that my role as a journalist who covers the scene means I am well placed to point budding entrepreneurs in the (hopefully) right direction and people.
It is a role I wholeheartedly embrace and do my best to fulfill, considering it my own small contribution to the development of Malaysia’s fledgling start-up ecosystem.
But sometimes, oh just sometimes, I confess I do feel like strangling a few of these young hopefuls.
If just having ideas was all it took to be a multi-millionaire, I’d be sipping an icy cold cocktail (complete with frilly umbrella) on the front deck of my beachside property in the Maldives by now – in fact, many of us would be.
Alas, it’s not.
The young chap I was interacting with exhibited what I’d like to call the “major red flags” of entrepreneurship: He sought money before market validation; he was reluctant to share his idea for fear of intellectual property theft yet bemoaned the lack of interest; and last but not least, he chose to ask questions easily answered by a quick search on the Internet.
What follows is my open address to not just this young chap but to all out there who are considering starting a business.
Ideas are cheap
Don’t seek out players in the industry with just an idea and straightaway ask where you can go for money. Even start-ups in the high-tech space submit vigorous research papers, a fleshed-out hypothesis and plan before they are granted those multimillion-dollar grants for R&D.
Don’t keep obsessing about getting funding in order to achieve your dream; you should be already working on making it happen, with the money part trailing behind as a close second.
Even with extensive research of existing competitors, never assume that your idea is unique to this world when speaking to investors – they are not stupid and they listen to dozens of pitches on a weekly, if not daily, basis.
Chances are, they probably already listened to a pitch similar to yours 30 minutes before you walked through their door.
For those who are aware their idea is a twist on an existing model, here’s a little tip from Jeffery Paine of Golden Gate Ventures: Investors are definitely open to clones, but you must demonstrate that your vision has a differentiator to the power of 10!
Yes, of course getting money first off the bat would make things easier; who wouldn’t want that? But the era of ‘grantpreneurs’ is coming to a close; the Government is rolling back on funding, with the private sector and its much higher threshold for evaluation expected to pick up the slack.
If you are truly committed to your start-up idea, then you have to also be prepared to make the sacrifices necessary to achieve it.
Before you say it’s not possible let me point you to one Jared Lim of Loanstreet who worked a regular job, lived frugally and saved up for two years before launching his product.
It has been said that it’s best to launch first, then seek funding. With proper market validation for your product, not only would you get the attention of investors but be in a much better bargaining position as well. But even if you do get market validation, the hard work does not stop there.
Like my colleague Karamjit Singh said: “It IS supposed to be hard to raise money!”
According to him, there were only two times in Malaysia’s history when it was ‘easier’, not easy, to raise money. The first was in the 1999 to end-2000 period, the fun days of the dotcom bubble. The other time was in 2008 when Multimedia Development Corporation (MDeC) was giving out pre-seed grants of RM150,000 (US$48,000) each.
So be prepared to knock on plenty of doors.
To share or not to share
Let me first say that yes, IP theft has happened before and will happen again. Individuals have repeatedly demonstrated throughout history that the human race is not so pure as to be respectful of the ‘property’ of others.
But unless you share with others as much detail as possible, be they potential co-founders, staff or investors, how can you expect to get them to believe in your vision to the extent they want to put money or sweat into making it happen?
Don’t tell me that your product is “like Facebook” – that says nothing. Don’t say that you’d like to share more but are fearful of getting your idea potentially stolen. That’s the fastest route to failure.
Most founders realize that they can’t do it alone and need the support and participation of others with different skillsets to turn their vision into reality. So unless you learn to trust others, why should they trust you?
Sharing information is the risk we all take in business, and in life. Just be smart about it.
Don’t tell the entire tale to random strangers you meet at an event. Get to know them first, identify the people you have chemistry and intellectual attunement with, and develop those relationships.
Have faith in your own ability to judge people and be open to sharing when you feel the time is right.
Should your idea be that easily replicated by others even without the benefit of your own clarity about the situation, then the question must be asked: How valuable is the idea in the first place?
“Ideas are cheap,” notes Daniel Cerventus Lim, a long-time veteran of the start-up scene who’s mentored his fair share of budding entrepreneurs. “It all boils down to execution and your own take on an existing model; you must always know what your key advantage is.”
And if you truly can’t find those kindred spirits to join you from day one, then suck it up and learn to code (if you’re a business guy) or learn how to draft business plans (if you’re a programmer).
Let me Google that for you
I am probably one of hundreds, if not thousands of people – be they journalists, venture capitalists or entrepreneurs – around the world who write about start-ups and entrepreneurship.
Every conceivable topic or angle related to this space has been written and re-written online, in print and even aired in broadcast. Others with much better credentials have covered even what I’ve outlined in this very article.
Veteran journalists always tell their juniors “there is no such thing as a stupid question,” which is true, but there is such a thing as asking a redundant question.
So do your homework and read everything you can find on topics you are not sure about.
“If you keep asking people questions easily answered online, it doesn’t make for a good impression. And worse if you ask it of an investor, because it will lower your perceived value,” Lim says.
You don’t have to know everything but you should demonstrate that you have exhausted all available avenues for information.
The start-up scene is one filled with people who all have the following in common – they are extremely resourceful and extremely hungry. The internal mantra goes like this: “If there is no way, I will find a way.”
I would say that in the last couple of years, the start-up community in Malaysia has witnessed a revival of sorts, with more people keen on the idea of building their own companies and optimistic about favorable market conditions in which to do so.
But that doesn’t mean you should.
The life of an entrepreneur is a hard one, filled with uncertainty. An existence marked by extreme highs and lows. It is not meant for the fainthearted, the lazy, the uncommitted or the ones who feel entitled.
Of course should you succeed, the payoffs are immense, as evidenced by the steady stream of multimillion-dollar buyout reports which pepper our daily news feed.
An old friend who's founded his own company says he pins the following quote on his desktop to keep himself going: "Entrepreneurship is living a few years of your life like most people won't, so that you can spend the rest of your life like most people can't."
Every industry needs that constant flow of fresh blood joining the ranks and we, as observers of the space, are always happy when we come across new up-and-coming talents making their mark.
But nothing disheartens us more than meeting newbies who jump in with unrealistic expectations and bad attitudes.
If you are uncertain about whether you are suited to this life – and yes, it is a lifestyle, not just a job or profession – the best way to find out is to gain some experience first. You could even join an existing start-up to get a sneak peek at what could be in store for you.
And if you were wondering whether you’re exempt from this pseudo-lecture about managing expectations and attitudes, I’d say you would be if you were operating on the same plain as “whiz kids” such as 17-year-old Nick D’Aloisio.
But if all the above already turns you off the entire idea of entrepreneurship, then there is really only one thing left for me to say.
Give up that pipedream of earning your first million before the age of 30 and go get yourself a normal job. There’s nothing wrong with that.
Angels with pitchforks, VCs who don't venture
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Raising money IS supposed to be hard!
Where ideas don’t count; not at first anyway
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