After spending the last couple of years, 2013 and 2014, in and around the Start-Up Scene I can’t help but feel it’s become an industry in and of itself.
A promotion today made me think about this again when I read the details. We have another solution at work that’s 4 to 6 months away from going commercial even if it does turn out to be for invitation only Beta customers, and this promotion looked good for us at first. The promotion is by a prominent player in the Start-Up Scene with the backing supposedly of a major Australian bank. You can get $75K if your pitch wins. You get $50K of that up-front and you get the remaining $25K once you have a functioning MVP. Part of the deal is that you get to participate in the promoter’s incubator where they will help with product development and marketing and what not, at cost. So it looks like you need to spend at least a portion of your $75K on the promoter’s services.
I’ve seen this over and over again and have heard the same story from a number of start-ups I’ve helped. This same promoter offered to get involved in one start-up if they, the start-up, paid the “incubator” $80K. That’s ass about isn’t it?
My colleagues and I have seen the same thing. The whole Start-Up Scene has become a business. The information evenings, the courses, the pitch nights. In one way or another, they exist to generate revenue, not to identify and recognise truly worthwhile prospective businesses that they help with funding and guidance.
What happened before Start-Up existed?
People started businesses.
Look at all the hugely successful international businesses around today, in 2015, and I mean the hugely successful ones. There was no Start-Up Scene, they just did what needed to be done. They worked long hours, sacrificed food, clothing and what ever to fund their way until they had approached hundreds of people asking for help, whether that was guidance or funding and often just another introduction, until finally they found someone that “got it”.
The three of us, who are all closer to 50 than we care to admit, spent too much time in the Start-Up Scene but for the last six months we’ve focussed on the “Mature Start-Up” or the “Elevated Start-Up” approach as I like to call it. There’s too much noise in the Start-Up Scene. There’s all the graduates or teenagers who have marvellous and exciting ideas, spending time with all the mentors and advisors and panel judges, pitching ideas that unfortunately most of them do not have the skill, experience or where-with-all to bring to fruition, even if they do pique the interest of a participant judge, investor or promotor, who, it seems, will want an obscene amount of equity for a small amount of cash.
Just quickly on the whole mentor thing in the Start-Up Scene. After participating in many of these “gatherings”, and being paired up with a mentor, I can confidently say that there’s an opportunity out there for a start-up that teaches reasonably successful business people how to be an effective mentor. It made me think back when businesses would put the most accomplished developer, accountant, lawyer in charge of the team or department. Just because someone has been successful at their chosen field does not mean they’ll be an effective leader. The same goes for mentors. Just because you did well with a business or two does not mean you have the skills to guide others, especially with their businesses in areas that may be vastly different to the field within which you were successful.
OK, back to the Start-Up Scene. We’ve done the hard work approaching individuals. We’ve leveraged relationships with family, friends and strangers and we’ve managed to meet some remarkable people, many of which have loads of money and none of which have given us any, yet. Yet! We haven’t had the right solution yet but they’ve given us an enormous amount of valuable feedback, information and referrals and more often than not for the simple cost of a cup of coffee and a toasted sandwich.
This approach seems far more productive.
Here’s to the Mature Start-Up. Here’s to the Start-Up Scene that’s elevated above the noise. Here’s to the partnerships between the old dudes and dudettes, working hard and long as we’ve done our entire career and creating some wonderful businesses. Have a read of this Venture Beat article and you’ll know there’s already tremendous success from mature start-uppers and lots of opportunity available for those with skills and life experience.
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