Culture and education create barriers to innovation.
Recently my interview for www.segodnya.ua, one of the most important newspaper in Ukraine, was released. In the interview I give precious strategies and suggestions to startups in how to use Digital Marketing to get new investors and validate their business.
However, the interview is in Russian or Ukrainian (here the link). I decided to post here the full interview in English to be read by everyone. In Bold you can find the newspaper questions, followed by my answers. Enjoy.
1. Now the world is ruled by innovations — and those entrepreneurs who are create a promising startup in which investors will believe — can create some kind of fashion of technologies for decades ahead. Where do business angels look for such talents?
Today’s world is characterised by competition. Companies are facing a new challenge, clients have more power than ever. The Digital world offers to clients the possibility to select between a broader variety of products and services. Companies, in order to succeed need to invest hard in innovation and marketing. A new generation of entrepreneurs has the goal of disrupting the status quo and create new business models to attract clients.
Angel investors look for innovative startups but, more than that, look for disruptive innovators. Universities and accelerators offer a great possibility to look for innovators, however, at Targeto, we think that more than Innovators, companies need marketers.
As stated above, in a super competitive world, everything is about marketing and defeat competition. In fact, a great marketer of himself is going to be well suitable to market a startup in the future.
The idea is to search for niche influencers and people who are developing skills in terms of knowledge sharing their thoughts both online and offline. The idea of thinking outside the box and being able to be followed is the main take over that a great founder can transmit to the startup. Angel investors need founders who are great innovators and are able to stand up from the crowd. The most important advice for angel investors is to look for digital experts who are already well placed. The main advice for start uppers is to market themselves and to create their audience online sharing expertise, knowledge and innovation.
2. What characteristics should a person have in order investors pay attention to his startup? Does age, education, experience in a particular sector matter? What should be the idea — a startup should be as innovative as it can change the view on familiar things or it is better to act in old way and develop applications, start-ups, accessories to improve existing products and services? Which of these methods in creating a startup will get funding surely?
Best startup founders are the ones who are able to be different and disruptive. This means transmitting their skills in their companies and in their life. Investors look for leader profiles, people who have a vision and a clear idea of where they are going.
New generations, such as millennials, are seen as innovators, however older generations have more experience and a broader view of the industry most of the time.
Startups are not about founder’s personal characteristics such as age, education, experience but about soft skills, such as leadership, innovation and management vision. These skills need to be supported by a clear startup idea, created to well suited the needs of the market and the targeted geo where to develop the company.
The idea on which develop the startup should be related to the needs of the market. It is precious to address needs already existent on the market more than creating a new idea and then develop also the needs of clients, educating the clients.
The world is constantly changing and has different needs and movements. From the beginning of 2000s we saw the rise of digital platforms, then websites, then app development, right now we are in the Saas (software as a service) era. It is ideal to develop a startup based on an idea of making an industry better, relying on that industry demand. Creating a new industry and trying to create a demand is way harder and there are less percentage to succeed. However, if done correctly, creating a great startup margins are higher. Investors have a risk aversion, if they want to risk more, they invest on startups who wants to create a new industry hoping in a better Return on the investment, if the are less risk adverse, they invest in innovative projects in existents industry. The suggestion for startups that are looking for investments is to define their mission and search for the Investor who suits it the best in terms of risk aversion.
3. In the economy of developed countries, in particular, the USA, special attention pays to the ideas of students. And many investors are ready to invest in their ideas in the hope that start-ups will become profitable. As practice shows, the part of such high-tech ideas is growing in the economies of such countries. Is it true, that students of advanced universities are the engines for development of the world’s economy? Are there risks on this way?
Developed countries universities are able to create innovation thanks to their knowledge, expertise and resources. However, innovation relies also on culture. Innovation means changing the status quo, and in some countries, even if developed, it is hard to think differently. For example, countries who rely on respect and hierarchies are less innovative.
Culture could be also represented by education in a certain way. Students learn methods and a way of thinking. In some ways this creates some borders for innovation. Sometimes great ideas are far away from universities because their founders are not educated and then able to develop their personal view on changing world’s industries. Great innovation is not about education, is about reading the world’s needs.
4. Which startups are more likely to fail? Can you tell us about the greatest startups’ failures that you remember? Can you advise people who want to realize their idea how to look for an investor properly and what mistakes are unforgivable in the search of funding?
Startups are all born to create value. The main reason of failure is not connected to some particular industry but to a lack of validation from the market. Sometimes, startups live in a bubble of product creation where most of the funds are used to create the best product ever, projecting it and investing in research and development.
However, startups need to go on the market as soon as possible in order to validate the idea with the real judge, the market. My personal suggestion is to create a basic product and to launch it investing in a great Marketing strategy. Once the product gets the traction from the market can be updated and developed better according to the clients’ feedbacks and needs. It is mandatory today to share value and always listen to the market. 42% of startups went belly up because there was no market need for their product or service. Less development, more marketing!
One good example is Everpix, a service that offered a cloud solution to upload, organize and curate photos, that spent years in developing a perfect product, with no technical bugs and that was working perfectly. However, when they start selling it, they discovered that there was no demand for such a product and their sales strategy was too weak. The final result was a disaster for the company.
People who want to realize their idea need to understand that attracting investors is like attracting customers, investors are the clients of our idea and clients need marketing. A basic product and a great marketing strategy are going to attract interested investors and growth faster.
5. What is your opinion, as a business angel, which areas in science and technology are the most productive for creating new startups? Why?
There is not a specific answer. The best startup is the one that see an issue or a demand in an industry and works hard to deliver a great result to the clients, whatever is the industry or the area of science.
6. How do you see the world of creating startups in 10 years? How can innovations change life, work, medical care, etc.?
I think most of the future startups are going to be digital and artificial intelligence oriented. The digital world is already part of our life and is going to be even more present in the next years. Successful startups are going to be the ones able to mix artificial intelligence with daily needs.
7. Is it worth to change education in schools now and introduce subjects where they will talk about creativity, develop the ability to monetize ideas, etc. After all, perhaps, now we need to change the human mentality, since competition with robots in the future may increase the level of unemployment among people. And who knows, maybe many of us will have to create our workplace by offering new ideas, services, products to the society?
Creativity should be stimulated at school and pupils should be motivated to think differently, not only because of the rise of robots and artificial intelligence, but also to make them stand from the crowd. Information is everywhere today and only the best will be captured by the audience targeted. Great marketing and great innovation are connected in a perfect use of creativity.
8. What is your opinion, how the implantation of the digital economy can change the mechanisms of new startups investing? It might become a common tool when ordinary people can invest their money — in the amount of $ 500 or $ 5000 — in promising ideas (like, for example, in the purchase of precious metals) and then receive income from these investments?
New source of investment can help the whole startup industry. Crowdfunding platforms have already launched a new way of financing giving the possibility to companies of scaling their business model.
New small investment founds made by small investors can not only innovate the industry and move more money into innovation but also move more people into research and studying of startups, improving the industry growth.
Read the full interview in Russian here: https://www.segodnya.ua/economics/finance/nikolo-manika-obrazovanie-sozdaet-barery-dlya-innovaciy-1227966.html
