That’s the most common reality which confronts almost all first-time entrepreneurs stuck at the idea stage nowadays. I say nowadays because even a decade ago VCs & angels were ready to fund brilliant ideas. But no more, due to obvious reasons. The apprehension that a brilliant idea can be killed by poor or inadequate execution has become too pronounced to risk investment.
So, what’s an idea worth in the contemporary startup ecosystem? And does it at all matter if ‘the next big idea’ is backed up by realistic vision and a workable roadmap, sans the minimum viable product (MVP)? Is that considered adequate for VCs to loosen their purse? If we go by the general trend in this matter, the answer is no. Let me share a personal anecdote which explains this sentiment.
I was on a flight from Malé to Delhi a few months ago where I met a co-passenger who was an angel investor from Dubai with business interests in property market, hotels and shipping. During our conversation, it became clear to me that the gentleman was keenly looking at opportunities to invest in Indian startups. Naturally, I grabbed on to the opportunity to ‘test the water’ and very briefly shared an idea which I hit upon more than a year ago (summarized below). Without going into too many details I informed him how it has the potential to revolutionize the B2B dealings of the hospitality industry and the way it procures its supplies. I also discussed the scaling potential and how big it can become.
To my surprise, the gentleman loved the idea a lot and thought it to be really ‘interesting’. So much so that he offered to know more and invited me for a drink during our transit halt in Bangalore. I think he saw value in it because of his business interests in the hospitality sector and he ‘related’ to the real problem solving ability the idea offered.
Although it was undoubtedly my eureka moment, I was also nervous as I was not prepared for this eventuality. All I had was a simple presentation that I managed to make a week earlier.
During our meeting over pints of beer at Bangalore airport, the gentleman further enquired about revenue streams and the current status of the business. The first part was easy as I had a clear outlook about the ways the venture will make money (lots of it!). It was the latter query which proved to be the damp squib – I could see his enthusiasm diminishing after realizing that the idea was limited to paper and hasn’t been acted upon. Not having any timelines at that moment also didn’t help. The meeting ended, with him extending his best wishes and as a courtesy offering to keep an eye on ‘how I go’.
It is for anyone to see what stopped an investor from exploring alignment with a potentially exciting business – idea not followed by execution.
Even now, as I write, I am struggling to go beyond the idea stage. The two most compelling reasons are:
- No co-founders – I am not a tech guy so there’s no way I can start on this project without help from those with expertise of designing products which are core to solving the problems I have identified
- No finance – It is a balance sheet business (knowledge courtesy: Alok’s presentation) so needs sizeable cash injection to start but funding and funders have only paid visits in my dreams so far!
My idea in a nutshell – To create a one-of-its-kind B2B marketplace for the global hospitality industry which will solve one if its key problems, both saving money and increasing efficiency. The marketplace model aside, for which there is no direct peer at the moment, currently most hospitality software solutions are aimed at making front-end business (guest related) of hotels profitable and efficient. My idea deals with the back-end problems (sourcing, procurement, cost management, logistics et al). Companies like Oracle and SAP provide advanced products somewhat related to the idea but not as a consolidated offering which offers almost end-to-end solutions to the industry. An Indian business which comes close to the idea is Oyobazar but it is a fraction of the proposed startup’s size, scale and potential so doesn’t qualify to be a direct competition in the near future.
Why will it work? Simply because apart from genuinely solving cost and efficiency related pain points, it offers many value propositions which the industry cannot overlook.
Now, without any further ado and considering all the scenarios mentioned above, let me come to the crux of the matter and ask the experts the following:
- Can the premise that an idea cannot be funded be reversed? What does an entrepreneur need to do to achieve his funding goals bearing in mind that he neither has any prior record of starting up nor he has the technical expertise to convince friends, family or fools for bootstrapping?
- How does an individual in my position find the right co-founders for the project? I realize that there may not be a set template to find individuals who share your passion but how do I leverage the ‘pull factor’ of my idea to attract the fellow travellers in this exciting journey?
- Knowing that the idea is a winner (I can prove it) and bootstrapping or conventional funding are not possible (due to lack of MVP), are there any other options left to give it flight? In other words, and on a similar note, since it is a balance sheet business and the idea cannot see the light of day unless funded from the word go, are there VC firms out there who could be interested in the idea?
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Little bit about me: A budding entrepreneur who believes that solving problems is an innate human trait and with unflinching hunger to succeed, eagerness to learn, discipline, unlimited passion and some luck most of us are capable of creating awesome solutions to problems faced by individuals and businesses.
If one goes by conventional yardsticks to establish the ‘pedigree’ of a successful entrepreneur, I may not tick most of the boxes. But haven’t the clichés been broken many times earlier?
My professional grooming has been in the alcoholic beverages and hospitality industries where I also dabbled in a consulting business for some time without much success.
As mentioned earlier, I am not from a tech background but thanks to a stint with one of the world’s top online businesses in its domain (Wine-Searcher.com), I am fully aware of the empowering ability of technology (who’s not nowadays, unless he/she lives under a rock?). This learning has played a major role in formulating the idea I have shared above.
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I am counting on the collective wisdom and knowledge of expert Rodinhoods to guide me in finding ways to give wings to my ideas. Any referral to keen investors would be fantastic, so would be leads to interested CTO/Co-founders!
Cheers!