Regular "bad" advice startups

Over the past ten years there has been some recovery in the investment market in the startup projects.
However, "thanks" to our general mentality, political and economic situation, and often banal illiteracy, the overall investment climate, we still dampish for rapid growth of high population of professionals. And, as among project owners, and those who potentially would be interested in these projects include their own capital.
Apparently, no one else generation startups and investors turn to humus on the path to evolution. While, however, the overall situation is still better than the early 90's when the money for business development could be taken only under the frenzied interest bandits, and reporting of money spent was obtained by termorektalnogo kriptoanalizatora.

About our home-grown investors could say a lot of "good" words, but, first, the topic is already partially raised by me earlier, and secondly, must fight with the cause, rather than a consequence.

The reason is that the idea of ??requiring 100% financing, often are born to people who do not have their own management experience. They are not trained in how to work with projects. They have no idea about most aspects of financial and economic activity. They were repelled strict rules of reporting, monitoring and planning on the part of the financier.
Too many startups (unfortunately) significantly overestimate their experience and knowledge. As a result, spend time on projects stillborn. Even if they are lucky, and they do find a good "business angel", their projects often do not survive even to the point of breaking even.

From experience, it is more sinned, developers of IT projects (software, Internet monetization - of resources, etc.) and the innovators - inventors (yesterday, as a rule, men of science).

These "design genius" is often a sort of feeling of poor relations, which are just around the obligation to help. And most importantly, free.
They are fully convinced that their "idea" perspective.Understanding of the future investor in the details of conducting their own research, the study of technology, comprehensive market research, identifying risks, developing a business plan, etc. - Only his personal problems. As well as those that followed the launch of the project.
"I'm a genius, I thought the mega ambitious project, and it's only for you I must have in life."

There is often a clear bias in favor of personal exceptionalism. How many young people, and stood all his life in the department, gray-haired inventors often do not realize that the status is determined by the assessment of others. Who stands for the resources of a long line - that will determine their conditions of work.
If investors are not lining up for your idea in turn, should not blame the world, and draw appropriate conclusions and start working on the established rules.

Many startups should overcome his cognitive dissonance and understand a simple thing. Any unreasonable idea - do not anything. Not because the crude idea in itself is bad or not viable, but because of the fact that it does not yet confirmed.
No matter how brilliant the idea was not, it must correctly calculate and justify on paper.
And for that would do this, we should not head in the clouds, and to include thinking and try to see it underway.
Figuratively speaking, realizing the idea, you are laying the foundation for new business.

If the foundation is designed correctly, the future burden on it may lead to the destruction of the building.
And that would be there myself, some comrades have imagined, but this estimate is the foundation - the problem is startups, rather than the investor.

Project owner shall be obliged to work out qualitatively. And the investor does not go with bare idea sucked from a finger, and with absolutely full understanding of any and all parts and aspects of the operational business.

To be sure, narrow-profile experts are not always present organizational skills and experience. It's simple.

-Do you know how to generate ideas - generates.

-Do you know how to program - program;

-Do you know how to manage a team - manage a team;

-Do you know how to analyze the market - Analyses;

-Do you know how to lead a management, accounting, tax accounting - accounting contend;

-Do you know how to do financial analysis and planning - in doing.

But when all this is going to be able to do simultaneously and accurately - then seek funding.

Startups must first work out his idea to the extent that it is possible to combine the preliminary business model.

And absolutely no difference whether it is creating the software, create a social network for lovers of burning wood, building a plant for the production of side-burbulyatorov figasterom or create a new system of the bank. For any business financial and organizational models are identical.

You need to know an estimate of all stages up to commissioning (the costs of the preparatory period).
Required to study the market, its capacity, competitors, potential for development.
Should be performed pre-technological project (due to production issues). Must take into account all factors (raw materials, resources) that affect the direct cost of the final products. It should have sufficient experience in order to rate projected costs of administration (payroll, utilities, transportation, administrative, etc.). Understand the legal component of the business.
But just then, all information combined into a single document called a business plan.

It should be understood that the mere business plan is just a pile of useless pieces of paper unless it is preceded by thorough preparation is not pre-investment studies.

However, there is nothing worse than to come to a potential investor without any information about the project as described in the paper.

Excuses that, following Prutkov Kozma, we can not embrace the boundless, groundless.

At the XXI century, if someone had not noticed.

When in the early 90's I graduated from the Kiev Polytechnic, standard phrase was that the specialist can improve their qualifications, or to receive information and confidently using a research library and index.
Now there is an Internet and search engines.

What prevents startups before to look for investment, to understand the details of your project?

In order to at least convince investors that you can effectively manage a project, you need to know every single nuance of its implementation.
This does not necessarily know all the nuances and details of the resolution of these nuances.
We need to know about their existence. We must be able to select specialists, set them tasks and monitor performance. But the conceptual resolution of these problems head also needs to know.

If startups in principle does not want to leave the creative state - deadlines of this project can only be a sale or transfer of management ideas and technologies. Well, as we employ the protection of intellectual property - known to all.


Andrei Stadnik
BFM Group Ukraine

17 October 2011
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