According to CB Insights there are 361 Unicorns in the world. A recent report in Strategy + Business reveals China has about 200 startups less than 10 years old and have valuations of 1B or more. 70% of them are preparing to go global.
I have been a fan of Guy Raz and How I Built this from NPR. I look forward to its episodes and have heard some truly fascinating stories of grit, determinations and growth. This is where I heard the Whole Foods Story from John Mackey ( remember the multibillion dollar Amazon acquisition?), of Jerry Murrell of Five Guys and a Burger, Melanie Perkins of Canva and today James Dyson and his vacuum cleaner story.
There is normally a lot of hype around any new tech that comes into the horizon. Specially those VC’s think will deliver the next bunch of Unicorns. Last year it was Blockchain (and the mad rush of ICO’s when unthinkable amounts of money was raised on the back of white papers). This year it is AI/ML. There is hardly a product that does not have a customer slide on AI. And how their cutting edge disruption will be driven by AI. A lot are deep fakes. Some are onto something. A lot simple decision tree based outputs.
Some one had to call it out. Fred Wilson did. Why call the “highly valued venture backed startups” Unicorns? In his post yesterday in his much read blog avc.com he suggests ‘Whales’ instead. Whales are rare but whales are real. Just like the highly valued startups.
I am thinking a lot about Startups and the new generation business and how today we can so easily jump start. The cloud, open source, gig economy, co-working spaces. They all make it easier than ever to get us started. You get the drift. That’s quite obvious as I am in the middle of one with Pitch.Link. The challenges of something new that in turn challenges the status quo is for another discussion. Today let’s talk about Value. The Value that we need to deliver to our prospective customers which in turn helps us get to sustainable revenue. That sounds simple, right? It could be the route to Startup Success Rate going from the current 10% to, say 50%. Occam’s Razor!
Getting press and coverage, and in turn building links back to your site is a big challenge startups face. While you are busy building, validating your product, trying to get the first 10 paying customers you are following Paul Graham’s advice and doing things that don’t scale. Add to this for tactical measures as many of them will provide a big pay back.
The Startup life full of challenges. Managing relationship through difficult situations that need discussions and decisions is critical. Not without reason co-founder conflicts seem to be one of the key reasons for startup failures. That made me reflect on how many of our difficult discussions with colleagues and contemporaries devolve into nothingness and how we can possibly change the approach to make it more meaningful. Giving feedback or discussing tactical issues at hand can be tricky. They tend to land up in debates, the need to defend ones position becomes imperative. It is rare to have an environment which is safe and open for the group to share openly and that’s where the Gestalt (language) Protocol comes in.
Lindsey Rogers Cook, editor for Digital Storytelling and Training at the New York Times wrote this very interesting piece on How We Helped Our Reporters Learn to Love Spreadsheets. One of the key reasons Journalists became journalists was because they were not interested in Math. Or so we thought. But it is now apparent that an increasing number of journalistic disciplines are dependent on data and those who control the narrative – governments, politicians and corporations all want to twist those numbers in support of their own agendas. It is akin to the earlier question of whether Journalists should learn to code. While the answer to that was a resounding “No” , those who did learn to code went on to “have mashed databases to discover wrongdoing, designed immersive experiences that transport readers to new places and created tools that change the way we work.”
Earlier this month David Cummings raised this question in his blog On Startups – Why the lack of a Strategic plan?
Why indeed?
I was meeting with Rahul Gupta, a prolific angel investor in New Delhi and he echoed very similar thoughts. Why is it that founders are not able to articulate their priorities in a simple 5 quarterly targets format? Many a times, according to Rahul, the fact that there is no-one outside the team to whom the team/founder is accountable, makes the difference.
Will start with the Good news. According to Tomasz Tunguz the fundraising scene has become extremely sophisticated “along three dimensions: diversity of product offering, pricing sophistication, and efficiency of investment processes.” The types of rounds and ways to raise them has become more science than art. Five flavors of seed, wide range of A, B and C rounds with a wide array of sources – “Founders can raise $7M Series As and $15M Series As. Would you like a series A from a generalist fund or a specialist fund? Founders can raise a $15M Series B or a $200M Series B. Would you like that Series B from an opportunity fund, an SPV funded by direct LP investment or from a third part?” The options of IPO, ICO, secondary markets, venture debt – for businesses with the right indicators neither valuation nor money is going to be a problem, according to TomTunguz all indications are that 2019 will be a strong fundraising market.
