A lot of people lost money when they bet on the Internet to be the next business centre stage. They were not wrong, they just got the timing wrong by about five years. By 2001, the bubble was deflating at full speed. A majority of the dot-coms ceased trading after burning through their venture capital, many having never made a ″net″ profit. Investors often referred to these failed dot-coms as “dot-bombs.” Five years later the internet came in full force.
If you still think you have a knack for choosing/backing startups that will succeed chances are that you are picking only average startups at the expense of great ones. Consider this hypothetical story. A young bloke comes to your Venture Capital company (if you do not have a VC just imagine you have one.) The kid tells you he wants to download the entire internet onto his computer. He has his foreign school friend with him and together they have developed software that can go online and download the internet and sort the pages onto their personal computer. Each time they download a miniscule fraction of the internet it will cost you $10 000 and to make matters worse they do not even know how or when their business will make money if ever. They do not even have marketing skills, their logo is ugly and uninspired and as an added bonus they cannot even spell.Despite all this they want to retain control of their company after you have funded it. You will most likely laugh them off and shut the door hard behind them. Except you have just missed an opportunity to invest in Google! Five years later you would have been a billionaire.
So how can you start or identify a great startup? The first essential ingredient for a startup is, it has to focus on the user with the belief that all else will follow. The user’s needs and requirements have to take the centre stage of the startup. As pointed out above Google was formed with the prevailing belief being that users wanted a way to search the internet in an affordable (free) way and obtain accurate and uninfluenced results- the later equates to integrity by your startup. So what is it that the Zimbabwean user wants most dearly? At the top of my list are things like: a fast affordable internet connection, more local content that is not meshed up within international content, less bureaucratic ways to interact with the government and their banks-a local CDN would be nice too.
Services have been developed that attempt to meet these wants and needs but most do have shortcomings. ISPs and IAPs have come up with various packages which are great except they never bothered to address the rural population needs- why not start with rural growth points. Hauna growth point, in my rural area has a bustling population of tech hungry people who could support a VSAT based Wimax base station. EcoCash like most solutions of its nature has no API for reasons best known to Econet. In fact most local telecoms operators have made it their business to inhibit the growth of viable ecosystems. For startups to succeed the existing monopolies have to adapt a don’t be evil attitude.
A successful start up needs people- a passionate team of people that works in sync to achieve a common goal. The truth is that most tech startups were formed by duos or teams. William Gates and Paul Allen formed Microsoft; Steve Jobs, The Other Steve and Ronald Wayne formed Apple Inc; Bill Hewlett and David Packard formed HP; Jerry Yang and David Filo formed Yahoo!; Larry Brin and Sergey Brin formed Google. Partners can complement each other in terms of skills in fact one of the requirements for an idea to be funded by 88mph.ac is a partner- if you do not have one they will attempt to find one for you.The fact is you need people. Not just any people — passionate people. You need to create a culture of innovation, and the best way of doing this is by letting people follow their passion. The founders of the startup have to be passionate about their innovation to the extent they view it,not as work, but their baby.
In addition the startup founders need to be in possession of good leadership skills so as to foster a loyal work force. This often involves them settling for a management style between a democracy and Laissez-Faire. Most of Google’s innovations like Google News, Dictionary, Image Search, Google Plus, Gmail, Open ID and Google earth started off during the 20% time. The surest indication of trouble is when your employees start calling it “your company.” (“Kambani yenyu maboss / Kambani dzavo idzi.”) The truth is most local managers, in a manner reminiscent of the 2008 crisis period, often crack the whip when they should be offering a carrot. Their attitude is that the worker is generally lazy, does not like work and will evade responsibility. The result is that this management perception usually results in the unconscious infection of the workforce who tend to shape their attitude around management’s.
All the above count for nothing if your startup has no reason to exist.At the heart of every startup there must be a problem that must be solved. Most startups often make the mistake of creating products for a problem that either does not exist locally or assuming that the problem exists in the same form it does on the international scene. It has been said, “Think global, act local.” For example the most prevalent reason for the failure of e-commerce startups in Zimbabwe is due to the absence of a widely recognised payment system.
A lot of startups simply stuck their heads into the sand and launched e-commerce sites with a credit card based checkout and no wonder they failed. Whilst at it, it needs to be mentioned that people hate writing cheques and banks hate issuing cheque books even more. www.gtel.co.zw seems to have mastered the art of doing e-commerce in Zimbabwe: it includes EcoCash in its checkout options something most startups need to start doing in addition to adopting and adhering to local customs. Why is there no Miss Zimbabwe app so you can vote for your favorite lady? Why is Ubuntu Shonastill failing?
As Google experienced: if you develop,using a passionate team, a user oriented product that, solves a specific real problem then success is yours for the taking. If your job is to pick the horses: pick a startup that is run by passionate people, is developing or has developed a user oriented product that solves a real and pressing problem. You do that and you’ve got yourself a winner mate! Do it wrong and you will get yourself a dot-bomb.
image via imgur.com