Startup Founders are the New Bankers
Every now and then, we hear a story about a successful startup company that is funded by a venture company – bringing along a new disruptive technology into the market.
For example, Grab is the darling of South East Asia right now. Its founder is the grandson of Tan Chong Motors’ CEO and within 6 years of its establishment, Grab is valued at USD 6 billion, four times the size of the company founded by his grandfather 46 years ago.
Tesla, on the other hand, has a market capitalization of USD 60 billion and it made a total of USD 11 billion in revenue last year. On the contrary, Ford’s 2017 revenue is about USD 157 billion when its market capitalization only stands at USD 39 billion.
Is this the model of the New Economy that we’ve read so much about in the previous years up to the burst of the dot-com bubble in the early 2000s?
During the dot-com bubble, stories of dot-coms dominated every mainstream media. It was a gold rush! Every company must carry the name with them. At that particular time, the moment dot-com becomes part of your company’s name, people will see you as the next Bill Gates.
I seem to recall a company offering online haircut service and it received millions of funding from investors due to the booming of dot-coms. It was a high-risk, uncalculated move. VCs were pumping monies into all sorts of dot-com businesses in the hope of finding another Netscape or Yahoo.
Then suddenly, the dot-com bubble burst! It wiped out a total of USD 5 trillion in market value.
The word ‘dot-com’ turned poisonous. Companies with ‘dot-com’ embedded in their names became the world’s laughing stock. Whiz kids were no longer golden. That was the end of the New Economy.
Hell no, the New Economy is still kicking. In fact, the dot-com burst has changed our perception of almost everything. It continues to gain momentum and one thing we know for sure, it is unstoppable.
Dot-com companies now have a brand new name – Startup Company. It sounds sexy and the title ‘Startup Founder’ is even sexier.
The New Economy is reshaping our current economy. Do you know that global online shopping revenues reached USD 400 billion in the year 2017 and it is growing by 24% year on year? It already stands at 8% of the total worldwide retail sales.
Jeff Bezos was a disruptor-in-chief, thanks to the success of Amazon. He was the face of online shopping until recently the retail giant, WalMart acquired Jet.com for USD 3.3 billion and thus, making online retail as part of Walmart’s core strategy.
Online shopping business is no longer sexy, it has lost its disruptiveness. Startups must have energetic and brilliant Founders who carry disruptive ideas and they must be willing to work hard on that ideas.
With the Internet, the popularity of mobile devices supports from an established corporation, universities, and governments are highly increasing. Startups and Founders are having the time of their lives. But the question remains, where do any wannabe start?
There is a simple formula for wannabe Founders to follow:
- A well-connected seed funder
- Stanford University certificates
- Coach to help overcome upcoming challenges including how to pitch
Did I forget to mention the missing disruptive ideas?
Well, as we can see, it is not important, we just need to copy or steal innovatively. Steve Jobs stole Xerox’s pointing device idea whereas Bill Gates took Steve Jobs’ graphical user interface. As it turns out, Uber is not the first company disrupting with the ride-sharing idea.
After all, quoting Picasso’s famous quote – Good Artist Copy, Great Artist Steal.
Well-connected seed funders will ensure the success of your business as it will secure their investments. They will introduce you to all their friends in the financial and media industry. They may even convince the government to bend some rules for your disruptive ideas. With some success, you are on your way to Series A, Series B, Series C, and many more fundings.
Uber has additional six rounds of funding, which is after their Series G in the year of 2016. I am not sure whether they will run out of letters soon.
If you already have a funder, you may not need to have a certificate from Stanford Unversity. But, it will sure help you go big, polishing your reputation even further. Successful Startup Founders or VCs have their roots traced back to prestigious universities such as Stanford, Yale, Harvard or MIT. Together, they have over USD 30 billion investment in startups with their endowment funds.
You may not know it, but any VCs working with them may be your next funder!
Next, you need a coach who specializes in delivering a 5-minute pitch. This will be a life-changing 5 minutes. Because truth to be told, nobody cares how good you are. If you fail in during this 5 minutes, you are a loser. It does sound unfair, but that is just how capitalism works.
It is fascinating to see how much focus you can push in those short minutes, preferably skipping the aesthetics part of the business. As we know, VCs are super busy and you don’t want to waste their precious time with trivial information.
Disruptive ideas are not that hard to find. Just look around, and I am sure you will find many that inspire you. Then, all you have to do is apply some big data analysis correlating your customers’ preferences to your company’s core business. There you go, you are now an entrepreneur with a big data company in tow.
Next, start punching in those numbers. Do the math – keep your funder on the loop, practice your pitch and you are en route to being the next disruptor millionaire founder!
An additional piece of advice, buy a pair of black sneakers, a pair of jeans, and a plain T-shirt. You will soon be on a magazine cover.
Forget everything you have ever learned about accounting. Balance Sheet, as well as P&L, are not important in the world of Startup. Cashflow and growth are what matters. With seed funding, build up the perfect story to attract Series A funder. After that, with their money, you can buy the market. With progressive growth, you can start making your way to the Series B funder.
Forget about selling your product, buy your market. This is a mantra that you would want to remember.
And by now, you would have understood the whole process, right? Just keep repeating the same cycle, and you will do just fine.
I truly believe that the Founders behind some of the world’s most successful startups are superhuman. Even if you manage to follow the formula to a tee, a Founder must possess a huge capacity to digest the investment and to be able to actively turn it into growth.
However, it is okay to fail. At least you fail fearlessly. After all, only 20% business passes their first year.