Starting up, integrating up

COMMUNITY STARTUP

Is entrepreneurship a facilitator to cultural and social integration?

Lately, while talking with a friend who recently started up an ethnic newco in the food distribution industry, he suggested that young entrepreneurs, especially if established in foreign countries as a migrant business should make an extensive use of funding/crowdfunding platforms not just for mere financial reasons but also in order to accomplish a social and a cultural task.

Is difficult to get investors to know about us, to soundly evaluate our own specific needs and values and overcome their scepticism especially when our idea is designed mainly to serve local communities or minorities” he said.  Therefore he added “with my success I can produce value for my community and beyond, but even with my failure I’ll spread my cultural and entrepreneurial values and I’ll get more and more people and potential investor to know and appreciate them; I’ll make it easier for myself and for future entrepreneurs like me”

The same happens for some interesting Muslim startups reported troubles in tapping capital sources from investors that can fully understand Shariah rules and appropriately value their markets.

This sometimes impairs value creation within the territory where those startups act, because they just don’t have some appropriate partners providing services overthere.

Entrepreneurship therefore can represent a way to overcome problems and favourite integration, and forums, angel investors, mainstream VC and equity-based financing can probably in this case boost this process much better than other traditional financing channels.

And this is important, because entrepreneurship is inherently a growth, transcultural and transborder factor for society, because for its nature believes in value creation, communication with an always larger base of consumers, growth through partnership etc etc

We all know, 9 times out of 10 starting up isn’t successful at all. What we do with this stories? We learn from failure, is the most common answer. For ethnic, migrant community and minority entrepreneurship probably there is an extra value and meaning to learn, even from their stories of failure, and this extra value to be learned is about starting a “mind the gap/close the gap” process.

Investing in a migrant or minority startup represents in facts a higher risk from investor’s perspective. There is a cultural gap to overcome. Their “traditional” questions to every startupper are:

  1. Is this idea viable/feasible?
  2. Will it be enough to overcome customer laziness?

For a community or an ethnic startup, the typical additional questions are:

  1. Are we culturally prepared to understand the value of this proposal
  2. Is this consistent and compatible with our rules and regulations
  3. Is this niche-market big enough for getting the expected reward?
  4. Will it ever be bigger (will this product of service ever become a mainstream one)?

…and sometimes these additional questions are likely to completely stop the process.

However, not always this way to think is correct as well as not necessarily an ethnic startup represents a riskier activity. For the same reasons, serving a market niche is not necessarily a bad thing, especially if that niche gives the access attractive, uncontested blue ocean and the proposed idea is really innovative.

Therefore, using a mainstream funding platform, a crowdfunding platform etc can represent a way to make it easier for you and for the future entrepreneurs who will accept the challenge, because this tools generally give to the ethnic, migrant and minority startuppers the possibility to tell their stories, exchange their point of views with other entrepreneurs, to get investors more familiar with their business views, with the values they are trying  to carry in their business plans.

Tell always your story, then!!! And, most of all, the difficulties you experienced.

Every entrepreneur should get the same chances of presenting their idea and of being objectively evaluated for the value of their plans.

To make this chance of integration trough entrepreneurship something more than a dream, such a kind of startups certainly need more than others:

  • To have a special assistance on their business plan, not providing generic models but taylor-made ones;
  • to get some clear specifications regarding the different legal and juridical forms for a start ‐up, and related issues i.e. from fiscal responsibility point of view;
  • to gain the access to funding platforms able to give space for their stories and connecting them properly with potential investors;
  • to get incubation services able to encourage a cross fertilization process between entrepreneurs sharing different ideas and cultures, avoiding isolation and dangerous monocultural approaches;
  • to obtain the access to training services to acquire an appropriate financial culture and the possibility to adopt suitable financial products.

The secrets behind a product specification

What is a Product Specification?

Is what makes you stay tuned with customers’ problem.

The official way to define sounds something like: “a document that provides critical defining information about a product and a full set of requirements; it may include images that visually illustrate the product and note distinguishing characteristics”

inizio target

So product specification is what makes you sure to hit the target with your business idea.

You simply cannot wait for customer request. They will be:

 

THE MIST

generic (what your customer is telling you likely will be reported to your competitors too)

misleading because of information asymmetries (f.i. about new technologies they don’t know/use)

chaotic and full with expressed but also with unexpressed/implicit requirements (obvious for them, not necessarily for you!!!)

not innovative (customer is lazy and used to what is already standing in the market, you are the innovator!!!!)

So to get out of the “customer mist” you need to be proactive and anticipate customer requests; and in order to do that you have to:

write down a one- page product specification (there are endless models on the net to use for this purpose)

ask different people with different roles in your company to do the same exercise.

You will soon realize that also in your company there are many ways to see and describe the product and to write down its requirements, its structure, the operations/processes behind it.

TRE VISIONI

 

Don’t get scared and work as a team, constantly asking yourself:

  • What are we building and why/for who?

  • What kind of customer problem we have in mind to fix?

  • What we want to achieve? How the final product will look like?

  • How we can reasonably and reliably measure its success?

You’ll then realize that your ideas will finally start to converge. Welcome back to your company’s purest pirit: its vision!!!

CONVERGENZA

Having a product specification (the sooner, the better) in the early stage of firm development will help you to:

-reducing costs and investements;

-establishing a moreclear and productive relationship with partners (f.i supply chain, outsourcers, etc);

-reducing risks;

– getting quickly and efficiently customer attention and trust

-having a guarantee of customer satisfaction

 

…AND FEEDBACK!!!

inizio target

Yes because, through the specification, you can start a continuous process of improvement and optimization, getting precise and punctual feedback by partners and customers.

Test: the key

the key

THE TEST

Here the solution….

THE CHEST– FIRM’S IDENTITY

the chest

 

The chest represents your own company or better, the perception that you have of it. If it is small, it may indicate an identity that is not yet well defined. A chest well located and grounded in the landscape, on the contrary, indicates confidence in your own means. A very large and heavy chest, like a metal chest  or a chest closed with a padlock, could indicate excessive rigidity and lack of readiness for change. An open chest, damaged or suspended in the air could indicate doubts or uncertainties about the business idea.

THE BOAT – THE VISION AND THE PLAN

the boat

 

The boat represents the business objective to be achieved, the related vision and planning. It also represents entrepreneurial inspiration. A boat of a light colour can represent the search for an ideal perfection of the business model, that in your perception remains somehow still partially unexpressed. A boat that shakes a lot in the waves can denote your impatience. A blue boat can denote confidence in the technical and operational potential of your company. A black boat may indicate a desire to make one’s own business plan more serious and complete. Is the boat very far? If it is far from the chest or offshore, then it means that maybe you are experiencing or perceiving difficulties with regard to the realization of your project or that it is actually perceived as stressful. If the boat is already at sea near the chest, you are ready to embark on your entrepreneurial journey. However, if it is in bad condition or even out of the water, it may indicate that you have some doubts about the realization of your project. If there is someone on the boat ready to steer the boat for you, it may indicate some doubts or a lack of  leadership skills.

THE QUAY – STAKEHOLDERS AND RELATIONSHIP

the quay

 

The quay represents your chance of crafting business relationships and collaborations in general. If it is small or damaged, you probably cannot rely on many partners who can help you realize your business idea: either you are not surrounded by the right people or you are too suspicious and not able or interested in working in a team or in a network

THE STORM – THE TROUBLES

the storm

 

The storm represents the difficulties encountered in realizing one’s business idea. After the storm passes you should review all the positions and changes caused in your scenario. After the storm you can evaluate your assertiveness and resilience, your ability to react to everyday problems.

 

Who,exactly, are your stakeholders?

STAKEHOLDER

We insisted on this subject so many times. Startupping for us is the art of involving someone with the development of an idea able to create value.

But exactly with who are you supposed to communicate?

With stakeholders, obviously, one may say. A stakeholder is anyone with an interest in your business.

But sometimes this area of business planning is neglected and even the word “stakeholder” is so generic and hazy.

A more common and widespread way to consider the problem is: a stakeholder is anyone we could meet along our entrepreneurial journey and that shows, proves or somehow pretends to have something to say about us and the way me manage our business. Or maybe, someone we would like (in our dreams) to have as stakeholder.

We believe that in reality stakeholder engagement is a value creating/mandatory activity to be performed on a regular basis since the very first moment in your startup development.  At least for two very good reasons:

corporate identity: you can engage with third parties only if you know who you are. Any entity willing to communicate with another one should beforehand define its identity. There is no communication if there is not a well defined “me” area and and therefore an external environment to relate with (“the others” area) So is in business too.

risk management: excluding some specific and internal risk factors, strictly connected with technical aspects related to the supplied service/product, all the rest is somehow originated by the nature of the relationship with stakeholders. Probably, the same concept of risk is deeply linked with stakeholders. If risk is defined by the likelihood of an event and the caused damage, is clear that the concept of damage is bonded (and it changes accordingly) with stakeholder’s perspective. Damage for customers (not getting what they paid for)  damage caused to investors (not getting their reward),damage caused to community (f.i   the environmental impacts). So is important to involve them in their risk management approach: the sooner, the better.

But who these stakeholders might be?

  • Investors – owners, bank, VC or investor
  • Business consultants – someone providing specific and valued knowledge
  • HR – management/owners and staff; the interest of human resources in the business’ performance is therefore obvious; addictionally, management may have extra concerns concerning risk and liability (depending on startup’s liability status, the owners might have risk to their personal wealth)
  • Customers – increasingly looking forward to know everything not just about your product/service but instead about the firm itself, and moreover about you as a founder. This means that nowadays there are increasingly more ways a customer may assume to be affected/influenced by your company’s behaviour. Take into the due account this aspect!
  • Suppliers – and moreover outsourcers, controlling specific and value-adding processes of your value chain
  • Government, authorities and certification bodies– concerned about business health, business compliance and reputation, impacts on society, local community , public health and on environment and of course in having firms able to pay taxes.
  • Media

And, once you started with this stakeholder management process, what about your goals?

They should be at least some of the following:

increase their risk tolerance towards having a relationship/investing/collaborating with your firm

increase their trust, not just in your product/service nor in the firm, but in you as a manager and/or as a founder

increase their commitment, for instance with your vision, your business model or just your value proposal

making them always willing to tell you the truth about you and your company: this topic is of course strictly related with the concept of trust and with your ability of making them feeling comfortable when communicating with your firm’s representatives.

On failure and innovation

Failure and Innovaton by William J. Rossi

 

sisifo

Fail Early, Fail Fast; Failure is OK; Learn from Failure; Failure is the Successful Entrepreneur’s Right of Passage.  These phrases, like thinking out of the box, have become commonplace, even trite.  They are a part of every academic entrepreneurship program that I know.  They are used by most speakers in speeches to young entrepreneurs throughout the world.

People have known for at least several hundred years that one learns from failure.  You tell a child to not touch a stove because it’s hot.  So, what is hot to a child?  Some things simply have to be experienced, and failure allowed to happen for the learning to take place.  But it’s only recently that we have begun talking so much about it, and integrating it into entrepreneurship education.

I began teaching Creativity to entrepreneurship students about 15 years ago, and wondered at the time whether creativity could actually be taught.  After developing the course and teaching it the first time, my skepticism was put to rest.  Due in part to an initiative by a colleague at Stanford, Tina Seelig, who put forward the notion that there was value in teaching creativity by having students write down their failures, I asked my students in that first class to create a Failure Resume.  Of course, initially my students thought that was stupid and I was crazy, but subsequently it became a favorite part of the course.  My objectives in this assignment were three-fold.  First, I wanted students to acknowledge that they had experienced failures.  (Their failures were acknowledged by writing them down.)  Second, I wanted them to learn from their failures by examining the specific changes made in the conduct of their lives to prevent reoccurrence of those same failures.  (If changes aren’t made, one is destined to repeat the same failure.  Learning occurs.)

The third objective was therapeutic: I wanted them to realize that despite all those failures they had acknowledged, things came out pretty well for them.  (They all were students in a premier program at a premier institution.)

Today everyone seems to be talking about learning from failure, and the Failure Resume now is a pretty common tool used at a number of institutions.  At the end of April a professor at Princeton University, Johannes Haushofer, published his Failure CV on Twitter…to encourage others to keep trying in the face of disappointment… and had an almost instantaneous 33,500+ shares and 473 comments.

While I’m glad to see that many are talking about learning from failure, my concern is that it’ll be relegated to obscurity by becoming as commonplace as thinking out of the box, simply by too many people taking about it without thinking about it.  The reality in business today is that firms that do not continually innovate will die.  Innovation and failure go hand-in-hand.  Innovation requires taking risk, and when you take risk, you will sometimes fail.  It simply is not possible that one can continually succeed when taking risk.  Failure is inevitable.  The key is to examine each failure when it occurs to understand its causes, and make specific changes to prevent reoccurrence of that same failure.  Then try again.  Failure is OK; it’s part of the innovation process.

Remember though that if you fail nine times at some initiative, it doesn’t follow that you’ll be successful on the tenth try.  Success depends on you having learned nine lessons from those failures.  Ultimate success after failure is not a numbers game; it’s a lesson learning game.

William Rossi is Professor Emeritus of Entrepreneurship at the University of Florida, having taught at both in the undergraduate and graduate Entrepreneurship Program there for 15 years.  Prior to teaching, Professor Rossi initially held several senior level positions with Ford, Goodrich and Picker International.  After relocating to Florida in 1986, Rossi worked in executive management positions in smaller entrepreneurial companies and was a principal in several.  Rossi holds a Master of Science degree in Operations Research from the University of Massachusetts and an undergraduate degree in mechanical and industrial engineering from Ohio University.

 

Is every entrepreneur a storyteller?

CANTASTORIE

Is startupping a mission or a call?

For some aspect, is probably both.

Whatever are your company’s values and vision/mission and your point of view about entrepreneurship there’s  little doubt about the fact that being an entrepreneur has some relevant impact on society and not just within the business world and that an entrepreneur can create many different startups keeping for all his carrier distinguishing characteristics related to his personality, approach, personal values and so on.

So probably, being an entrepreneur is a call that may be characterised from time to time by different, sometimes highly connected missions.

In my personal experience, there is something that connects all startuppers I’ve ever met.

Is not necessarily the attitude to take a risk, because not all entrepreneurs know how to handle risk or have a clear perception of it; but is not necessarily dynamism, or the leadership, because sometimes entrepreneurs do not display excellent qualities in this field.

The quality that connects them all is the ability to tell a story. They are entrepreneurs because they are willing to tell something about their experience and concerning their vision of the future. They love to tell stories because when you tell a story to somebody else, suddenly your relationship with the audience changes forever and so does your mutual understanding of the world. That experience is not anymore just yours, ma is immediately belonging to a whole community.

Teling is sharing.They know how to tell stories because they are trained by the endless meeting they have to face with stakeholders, clients, investors.

And most of the times, they tell a story into another story: their personal story, in facts, is most of the times the necessary prologue for effectively telling their company’s story.

So if telling a story is the unifying quality, in how many ways it can help you developing a startup?

STORYTELLING

HELPS BECAUSE
YOU AS ENTREPRENEUR IT ESTABLISHES PERSONAL CREDIBILITY
YOU AS ENTREPRENEUR IT MAKES CLEAR BOTH YOUR CALL AND YOUR MISSION AS ENTREPRENEUR
YOU AS ENTREPRENEUR OFTEN A STORY REPRESENTS THE SOURCE OF THE FOUNDER’S CALL/PASSION
YOU AS ENTREPRENEUR IT TELLS TO EVERYBODY NOT JUST WHY YOUR COMPANY IS SPECIAL BUT WHY YOU ARE UNIQUE.
EXPLAINING YOUR COMPANY’S MISSION IT MAKES CLEAR ITS UNIQUENESS
DESCRIBING YOUR COMPANY’S ROOTS IT MAKES POSSIBLE FOR AUDIENCE UNDESTANDING NON JUST YOUR ORGANIZATIONAL CHART (F.I. ROLES AND RESPONSIBILITIES) BUT THE WAY YOU ARE, THE PLACE WHERE YOU WORK, THE ATMOSPHERE ETC
FULLY DESCRIBING YOUR BRANDING POLICY EVERY BRAND NEEDS/HAS A STORY BEHING, SOMETIMES A GREAT STORY TO TELL
DESCRIBING YOUR BUSINESS PLAN IN A FEW WORDS BECAUSE BY DEFINITION EVERY STORY, NO MATTER HOW SHORT, IF IT’S A GREAT STORY HAS A BEGINNING, A MIDDLE AND AN END …EXACTLY LIKE YOU BP!
CREATING COMPETITIVE ADVANTAGE IN PITCHING, IT MAY HAS THE SAME VALUE THAT A SIGNATURE SONG HAS FOR A SINGER.  EVERYBODY, RECEINVING THE PROPER TRAINING CAN TALK ABOUT ECONOMICS AND/OR TECHNICAL DETAILS…BUT NOBODY CAN TELLA YOUR STORY THE WAY YOU DO IT. IF IT HAPPENS…THE SONG NEVER SOUNDS THE SAME!
INVESTORS DECIDING A STORY IS NOT JUST DESCRIBING YOUR IDEA (LIKE EVERY GOOD BP ALREADY DOES QUITE EFFICIENTLY) BUT WHY YOU FIRST CHOSE FOR IT. BECAUSE YOU ARE, AS ENTREPRENEUR, THE VERY FIRST CUSTOMER OF YOUR OWN COMPANY!!
COMMUNICATION TELLING A STORY IS THE MOST VALUED AND LONG TERM (AND DIFFICULT!)  WAY OF COMMUNICATING WITH COMPANY’S STAKEHOLDERS
GIVING CUSTOMERS SOMETHING NICE TO PLAY WITH
IF THE STORY IS GOOD THEY WILL SPREAD IT ALL AROUND, MAKING YOUR COMPANY POPULAR FAR BEYOND YOUR WILDEST DREAMS. ABOUT THIS SPECIFIC POINT, REMEMBER THAT, WHETHER YOU WANT OR NOT, THAT WILL HAPPEN ANYWAY. WE ALL CREATE CONTINUOSLY STORIES AND RITUALS ABOUT EVERY ASPECT OF OUR DAILY LIVES. SO  CUSTOMER NEED TO CREATE A STORY AROUND YOUR COMPANY, AND THAT CAN EITHER POSITIVE OR NEGATIVE, BUT DEFINTELY NOT UNDER YOUR CONTROL, SO WHY NOT  TO USE IT TO YOUR OWN ADVANTAGE?

The Naked Pitcher Book available starting September 1st

001.jpg

The Naked Pitcher represents the essence of an approach that proved to be effective with many different startups in the Euro-Mediterranean region.
In my experience with many young entrepreneurs from all over the world, I realized that very often what they really need beforehand are very basical informations on how to manage a consistent, quick and affective approach about strategy, postponing to a different and future stage further and more complete insights.

Just as very often we talk about MVP and any other mean useful to reduce time to market, so there must to be a way to reduce learning time when approaching strategy and the essental concepts of business modeling.

Time is scarce and all they want to know is:

– how to present their idea;
– how to depict an affective business plan;
– why the two above-mentioned points are so important;
– how to pitch communicating their business idea at its best.

 

In the Naked Pitcher Book we try to provide a credible answer to these questions.

What color is your startup?

colori

What color is your startup?

Using colors for your brand, presentations, packaging, web site and corporate fonts never happens by accident.

Every firm has a personality, and founder’s personality reflects on startup style. The same for colors used by entrepreneurs. What is your startup most dominant personality trait? Colors can reveal that.

At the other side, avoid using the wrong colors seems very important because it might turn customers away, and it may damage your corporate image in many other ways because is strictly connected with how people perceive you and your organization.

A few interesting facts:

  • Colors are commonly and widely used to assess personality, ability to work in groups, product and brand impact, customer reaction etc;
  • Blue shows up in 33% of the top 100 brands, while red comes second by showing up in 29% of the brands, followed by black or greyscale and then yellow or gold;
  • 95% of the top 100 brands only use one or two colors;
  • Growing corporate investments on a comprehensive corporate branding project that includes corporate fonts (and therefore colors) on order to enhance corporate identity.

tabella colori startup

Value left ih the shade

cono d'ombra

Sometimes ideas and projects into a startup are so good that we forget about the rest.

What is left in the shade?

  1. Skills and organizational roles: watch out for over specialization into your firm. At least once in a while try to measure/assess the distance between who you were (as a founder) and who you are (as a manager in charge of something into a startup): anything you aren’t completely satisfied about? Is the upskilling process working well enough?
  2. 2. Ideas: not just because one idea was successful you have to kill the others. Always good to have what is actually very often missing: an archive of previously developed ideas (even the unsuccessful ones)
  3. Corporate image: being a brilliant startupper and a kind of ingenious craftsman may be good at the very beginning but then you need a project for building up and consolidating of your brand image as well as for gathering feedback and refine your brand identity.
  4. Investments: the progression of your idea on the market will sooner or later reach a plateau. What’s next for keeping firm alive? Investments in training, company culture, internal communication and management feedback tools (no feedback is even worse of negative feedback), research & development are needed and space should be left for it
  5. Roots: roots are part of your company. No matter how short it can be, but your company story is very important as well as is fully understanding the…roots of your success! How determinant the context was (and is) in your success? Most of the times, fighting for success, this aspect is underestimated and that may lead to wrong evaluation of the next development steps of your startup. Never let that pursuit of success get in the way of your company identity.

Product or service startup dilemma? a real waste of time!

produt vs services

What is best? Starting up a product or a service -based startup? It looks like an interesting question but in reality it’s a waste of time.

When you startup a company there is a business idea, an intuition that slowly and hopefully turns into something more consistent: a business model. And a business model is then represented by the best answer an entrepreneur can find to the eternal question “based on which key competitive advantages and market scenarios my company will get paid?”.  As you can see, no mention of product or service.

In facts there is no dualism, instead there is very often integration. Very few products and services are used in a vacuum, and a firm is most of the times to be considered mature when is able to think in terms of product-services integrated platforms.

Firms are, by definition, a living organism: therefore they are continuously looking for a balance with the external environment and internally between their various parts. How original this equilibrium can be, it depends on the adopted business model. Another thing firms do sometimes is adopting a mimetic behaviour, which aims to imitate some specific entrepreneurial act of established and/or successful target-organizations. This endless search for balance and imitative behaviour sometimes request a change or an integration on firm’s core domain: transition and diversification.  So is most of the times really pointless to say that a service-based model is better than a product-based one or viceversa.  That choice will be instead a natural consequence of a well done and deep analysis of your business model and its various potential alternatives.

However, keep in mind that if you stick to your vision, in the end as an entrepreneur you are selling a way to fix someone’s problems and therefore make the world a better place to be: as long as this in going to happen, your customers can’t care less if according to you they  are purchasing a product of a service. All that they want is a pleasant solution to experience in order to break free from uncertainty and satisfy some of their needs.

Here some of the question you can better ask yourself, instead of puzzling on product vs service dilemma:

  1. What is exactly requested by your business model at an early stage?
  2. Will you start selling a product or a service? Which one will be ready for market in the quickest time? Can they be effectively integrated?
  3. Which approach, product or services –like, guaranties to the firm a wider and more various number of potential customers? How can they best be locked –in? (f.i.Microsoft, Apple business model)
  4. Is the product or service approach the most efficient one in order to raise entry barriers against your potential competitors?
  5. What about the profit margins? What’s best for your firm?
  6. Is product or service what makes you unique? In other words, what of the two things really represents the most valuable side of your business model in terms of related competitive advantages
  7. What are exactly the setup costs in both cases?
  8. Which approach offers the best chances of scaling up?
  9. Can you think of a minimum viable product or instead a m.v. service?
  10. What exactly happens all around your customer before, during and after the adoption of your product or service? Is product or service standing at the centre of this cluster of processes and events?
  11. What kind of product and services (f.i. pre and post sales assistance, training and consulting services, etc) can be complemetary and/or integrated with yours?
  12. Is product or service the characteristic of your firm which is harder to imitate?