I had the privilege of being a mentor on the Belgium bus at this year’s Startupbus Europe that wrapped at the Pirate Summit in Cologne on 7th September 2016 and wanted to share some thoughts, learnings and recommendations.
For those who have no idea of what StartupBus is, please view this video:
This post is in two parts, the first section is more specific to tech & platform focus of the ideas at StartupBus Europe and the second part is advice for participants of open hackathons (an open hackathon is where participants are not limited to a building something for a specific industry or corporate interest).
Part 1: General observations on tech & platform focus at StartupBus Europe 2016
- AR/VR: 4 months ago mass adoption of augmented reality seemed like it was years away..then Pokemon Go happened. The developer community in this space is growing rapidly and was apparent wit the 3 out of the 22 StartupBus Europe teams being being in AR/VR.
- Chat Bots: are coming faster than we think. Two teams built functioning chat bots that were live on Facebook messenger by demo day (in 72 hours). User adoption of chat bots will be accelerated as the they become more intelligent with more use over time. Mary Meeker’s latest Internet Trend Report points out that most Gen Y would prefer customer service interactions with brands over chat versus phone – which does not surprise me given that they were the generation that grew up with MSN messenger & SMS.
- Starting day one as a platform: instead of creating apps to serve direct users, creating platforms for other entities to use at scale certainly has its commercial & scale benefits. The winning team, Trustful Voting, which enables secure voting using blockchain & NFC technologies is perfect example of how the team demonstrated a use case for their tech (voting for political elections) but also showed how their tech and business was built for multiple applications across industries. Similarly, another team AudioBeacon, which enables users to place audio pins on Google Maps demonstrated a use case for their tech for the visually impaired, but also showed how commercial partners were extremely interested in licensing their tech for other uses (travel & entertainment industries specifically)
Part 2: Advice for Open Hackathon Participants (not limited to StartupBus participants)
- Gain understanding of a P&L: We have a clear gap in startup ecosystem where very few founders (and hustlers) understand the elements of the P&L and the impacts it has on profitably & likeliness to scale.
- Understanding cash flow: not understanding cash flow is the number one reason new businesses fail. If you’re serious about taking your hackathon idea to being a real startup, know your numbers. This will only impress future partners and give you confidence in understanding your business.
- I would rather see a Startup bootstrapping and breaking even, rather than someone who is burning cash to acquire one off/short term customers. No denying this is very difficult to do from day one, but specifically if you’re a first time founder – get to know your numbers better than anyone else in your team.
- Protip: if you ever get the chance: work in the commercial function of a hyper growth startup or large company where you own the numbers, right down to margin/operating profit.
- Gain Dev Knowledge (non tech participants): learn the core platforms, what they do, why they do it etc. Protip: Always ask your hacker friends what they code in and what they do with it & like about it. Nod and pretend to understand. Then ask why they feel its important
- Learn to draw: communicating complexity through wireframes at hacks is 100x faster than explaining your idea to your hacker/wider team
- Differentiate, specifically with marketplace startup ideas: creating a niche marketplace is frequent idea choice at the moment: but very few teams explain their acquisition & differentiation strategy.
- Key question to answer is “What makes you 10x better than the incumbent market leader?”
- “Build and they will come” mentality does not work in spaces that are already cluttered with competitors.
Please stop relying on:
- One partner’s API (or data source) for your USP: Most tech startups can be summarised in the following way:
- Inputs – what data goes into your app/service
- Processing – what does your app/service do with it
- Outputs – what recommendations/suggestions/decisions does your app/service provides
- If your startup relies solely on one entity’s API for your idea (specifically if that entity is a private one) you’re kinda at their mercy… try public APIs where possible and/or unlock value by mixing multiple points of data to come up with the solution to the problem you’re trying to solve.
- Affiliate marketing programs for your only source of revenue. Warren Buffet advises “Never depend on a single source of income”. Always think about the value adds (the surprise and delight moments) you can provide your users & how you can monetise them.
- “Selling the data” as a source of revenue from day one (unless you have people on the team who’ve commercialised data previously). Given the privacy laws in most western markets this is really hard to do in the beginning and you really only make money from this once your startup is acquired (think Dollar Shave Club & Unilever). Turning Data into information/insights isn’t as easy as extracting numbers onto an spreadsheet and giving it to a client to make decisions from it