A few days ago I had the pleasure of organizing a Startup pitching event for the Asnjor VC investment group, the Swedish female-only Business Angel & VC group that stands up to its name (Nordic Goddesses). They have trained more than 150 women in Sweden in investment knowledge since 2016 and together they invest in startups and much more…
In this private session, I had the opportunity to present three of the most promising and upcoming startups in Andalucia.
- RedClaimer. A Legaltech Startup based in Cordoba, which has automated the small debt claim procedure and made it possible that the full procedure is completed without the need for a lawyer, in less than 15 days with all the required documentation and most importantly for a fraction of the cost of what a lawyer would generally charge.
- Checkin Scan. A Proptech Startup based in Mijas Costa, which has automated the process of signing in guests for the short-term vacation rental business. Once again saving hours of time for the operators and the authorities.
- BEB1. A Fintech Startup based in Marbella, which has built a Banking As A Software (BaaS) platform, that is fully modular. This enables the Startup to not only offer its services to Banks but also as an Embedded Finance solution to any Large Enterprise or SME that is looking to digitalize its system or improve its e-commerce services.
I started the presentation by explaining and emphasizing one thing. “Why is it that Passion & Vision are the most important ingredients to look for in a Startup?”
In my upcoming book titled “Passion & Vision: The Ingredients of a successful Startup” I answer and prove just this and in this session, I explained the same.
Two of the questions I ask all entrepreneurs I meet are:
A) What would you do if you won the lottery tomorrow?
B) What if no one ever invested in your project, then how far would you go?
The combination of the above two questions answers my questions. Is the entrepreneur really passionate about their project and if they have a vision for what they want to achieve!
Over the past 20 years, I have been a subscriber of The Financial Times Weekend issue and very often the first article I turn to read is “Lunch with FT”. Lunch with FT is where one of their correspondents has lunch with someone who has achieved something in their lives. More than often, many of the people they interview are those whom I had not heard of before. They come from all walks of life and one thing shines through all these interviews.
I can say that without exception all those interviewed had one thing in common. They had all followed their passion, against all odds, against all advice and they had a clear vision.
The problem with many startup founders is that they start their vision by becoming famous and earning lots of money. This issue is exasperated by VCs overvaluing untested ideas with extremely high valuations, creating an environment where many startup founders stop chasing their passion and dream and start chasing VCs for investment money.
Having worked with a number of Accelerators, Incubators, and VCs, I have seen this over-valuation firsthand. In-house projects are given priority because the VC gets a better deal and a higher share and a false/forced culture of “TRY TO MAKE IT HAPPEN” is created.
It was refreshing to see female investors who understand the importance of this concept and that are equally well-versed in analyzing the startup potential and the numbers. One cannot exist without the other, and yet if only one is lacking the chances of success is drastically reduced. The fact that so many startups give up as soon as the funding dries should speak for itself.
In the book “Start with Why”, Simon Sinek explains this point with how this comes to the WHY & WHAT of the startup founders. Teams that focus on “What” often fail and those that start with “Why” are capable of extraordinary achievements.
To give it context. Teams that start with “WHAT” are focused on Fame & Prestige that comes with achieving success, whereas teams that are focused on WHY are focused and interested in solving a problem. This one simple approach defines the approach. If the passion is in problem-solving or if the entrepreneur has changed their passion for glory.
He gives one of the best examples which is that of the Wright brothers vs Samuel Pierpont Langley.
Langley had the connections, not only that he received all the funding he required to make it happen. He was put in charge of being the first man to fly. He received the investment and financial backing to hire the best people and resources. Yet WHAT he was interested in was the glory of the SUCCESS that came with it.
On the other hand, the Wright brothers had nothing other than a bicycle repair shop, a few team members, and the PASSION that dwarfed all the brain power of Langley’s team. Together they were interested in discovering the WHY each experiment failed, WHY weight balance was an important aspect, and WHY … They were passionately interested in solving the problem, and they did.
Today’s examples of Startup failures like that of Langely are abundant, from WeWork to NextDoor. They are products of Venture Capital investment that have hammered a none profitable project and founders engrossed in the WHAT to creating a bad image for what Startups are all are about.
In my selection of startups I have worked with and have set up, my number question has been WHY. Why are we doing this? and Why is it important?
The three startups I presented in this last presentation all had one thing in common. All three founders were interested in solving a problem. With and without investment they had pushed beyond those that had received 10X more investment and they had achieved relatively better results.
I may be wrong but if we look at history, time and time again those who were only interested in the Glory of the end result have failed in most cases, but the ones who have followed their passion have succeeded and seen the light at the end of the tunnel.