How the start-up process can derail

I have been so fortunate to have been involved in a number of large start-ups in my career and assisting in smaller start-ups. Nothing makes my heart happier than the idea that you can start with a blank page to set up a company around a good to brilliant idea. I’m guessing this will be the same feeling as an architect has with the design of a new building or house.

Starting capital

I now see that the term “start-up” becomes more and more of a buzzword. To my opinion there is a reason for this: many people see start-ups as a potential cash machine. Because wouldn’t it be something to be involved in the creation of a new technology that conquers the world? The problem is, however, that from the moment a young start-up team is labeled as “high-flyer”, they do not get the opportunity to work out the full concepts of their idea and their company. Of course every start-up wants access to capital to get properly started, so inexperience will often result in accepting capital with gratitude. The label then instantly raises the stakes and the original start-up team will be put under much pressure to deliver return on investment as quickly as possible. Unfortunately, that is also the fastest way to take any form of flow out of the team; flow they would have had in a safer environment to have their idea come to full fruition. Experience teaches us that ideas often lead to other concepts than initially imagined. The risk of overlooking other possibilities is very big because the moment investors adopt the initial idea, this has to be worked out at high speed.

Solid team

There is another way of derailing the engine of a young start-up; I call this the “expert trap”. Because many ideas for start-ups are generated by people who are driven by the content of the idea in their own knowledge field, they often underestimate the other skills needed to build a viable company and to generate income. The almost standard operating procedure is to spend little to no time on the formation of a solid team. People often think that the contents of the idea will be sufficient. And so they build a team of kindred spirits and knowledge. Topics like legal, financial and commercial support often are considered at too late a stage. Most important is the fact that the team do not know where their principles differ and where their professional allergies lie, making it extremely hard to overcome the set backs that every start-up has to deal with.

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