Entrepreneurship has been a long journey for me. In a way, it has been a culture inculcated by my parents into my left and right brains ever since I was a child. My late father used to love sharing his business ideas. Moreover, he would have encouraged me to always keep my eyes open for opportunities. I recall, as a child, going on holiday with him and exercise the business creativity skill. He would have held my hands while walking down the main road in Riccione, a holiday destination in Italy. Then he would have pointed at some store and commented that they could (or should) have done this or that to attract more clients. Then later in the evening, while having dinner, he would have brought up some business ideas, always keeping the customer as a central point.
I grew up thinking of ways to make clients happy. Of course, I made mistakes at times, but the foundation received from my dad turned out to be one of the most useful skills I have learned.
Over the past few years, I became interested in the startup culture, as an alternative way of doing business. My father couldn’t really grasp the concept of “Tech Valuation”. His approach was more “brick and mortar”. He could not clearly understand why a tech startup could have been worth billions while being in a loss. I admit that sometimes doesn’t make sense to me too. Take Uber at its best: worth in the billions while losing billions. My father believed in bootstrapping businesses: you put your money in, work hard, take your profit, re-invest in your business, repeat.
But I recall a lesson learned from another great man and an extraordinary entrepreneur, the car maker Giuseppe Fornasari, who once told me: “An entrepreneur cannot complain about lacking capital for investment, because sourcing capital from investors is as crucial as executing. If you can’t get investors to trust you with their money, you are not an entrepreneur.” As harsh as it sounds, this is the main reason why so many entrepreneurs fail in their business.
Recently I have been part of a success story, where one of the businesses was funded by a third party investor. It is such a rewarding experience, although the joy is somehow numbed by the fact that funding is not a goal, it is just a start towards further business expansion. Hence, the ability to fundraise, although crucial, cannot be seen as the only necessity.
From an implementation perspective, everything becomes easier when a startup is funded, especially when looking at the soft spots in the market. For instance, a startup with no funding follows the entrepreneur. If the entrepreneur is based in a country, unlikely there will be a relocation, even if needed, until funding is achieved.
Subsequently, after funding, an entrepreneur would need to look at the industry from a geographic expansion perspective. Ideally, such an analysis should take place even before the fundraising exercise.
Some entrepreneurs tend to look at their industry strictly within the comfort zone of their location, hence performing poorly when attempting to expand to other countries. A wiser approach, and in my opinion one of the crucial elements for successful fundraising, is to plan ahead which country “need your startup” the most. Similarly, which country has the easiest regulation that would allow your startup to exist.
Once pinpointed such countries on a map, then fundraising becomes simpler because usually investors can be categorised by stage, industry, and geography. This approach worked like magic during my last fundraising, because I was able to look at the world map without restrictions, tailoring my pitch to investors based on their geography of interest. Of course, the stage and the industry were already a match.
To conclude, I believe that, firstly, a startup should keep the focus on customer satisfaction when designing the product or service. Secondly, it is absolutely essential to have access to investors. Not only that, but also being able to gain their trust.
Lastly, it is pivotal to look at the world map and do the homework, find out where else you should go next. Lacking any of these 3 requirements would cause a possible pitfall. I see this happening all the time with food-related businesses, both for products and services. For instance, never assume that what you like, is what the rest of the world likes. Similarly, don’t assume that if you have a habit, everyone else has it too. It is the case of food delivery services, so popular in some parts of the world, and totally useless in others.
Another example is looking at the problem/solution on a local scale. A Russian citizen might think that a professional social network is absolutely needed, but that would be applicable only to the few countries where Linkedin is not accessible or available.
In both of the examples, the chances of reaching investors interested in a global scale startup would be slimmed down, resulting in a potentially successful local startup, or simply another imminent shut-down.
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