Many of my high school cross country races were held at Holmdel Park in new Jersey. The course was notorious for a huge hill about two thirds of the way through every 5km race. Almost everyone would slow down and many would walk as they struggled to complete the race. The pain was greatest at this point in the race, and everyone else was taking it easy. Our coach’s advice was to do the opposite. He told us to accelerate up the hill! Those that avoided the natural tendency to slow down during the tough parts were more likely to pass competitors, more likely to remain energized for the rest of the race, and more likely to win.
This lesson applies to entrepreneurship too. Like a cross country race, entrepreneurship is full of major obstacles: key employees leave, you don’t get the funding you wanted, a major bug causes downtime, and a thousand more.
Of course, these events happen in big companies too, but when it is your baby and you are racing against time to reach your next milestone, the emotional impact can be huge. You even start to become jealous of your friends who work 9-5 in giant corporations! Especially when you have that particular thought, it’s time to realize that it’s time to accelerate up the hill. This is exactly the time you need to keep fighting and remember that you owe it to yourself to make it to the next challenge.
Entrepreneurship is a rollercoaster of highs and lows. Celebrating the highs comes naturally to most, but it takes discipline and determination to accelerate through the low points. Those that remain disciplined in tough times are more likely to win the race, whether that means having a successful exit, or having the ability to look back and say you did everything possible to make the company successful.
This is an older video from 2010 in which James Hong, founder of HotorNot, discusses startups in Asia, specifically Singapore. He touches on what I’ll call the role-model effect, where people decide to become entrepreneurs once they are exposed to the successes of others. In many countries, there may be a snowball effect in which successful startups inspire an increasing number of people to try out their hand at becoming founders, which results in an increasing number of successes and so on. I imagine it especially helps when the big successes are in the consumer area so that more people are exposed to them (like Facebook, Google, etc. in the U.S.)
James notes that Singapore in particular is doing a good job of encouraging an entrepreneurial culture and promoting incubators. Check it out:
The President and CEO share their vision for the future of Endeavor, a non-profit focused on promoting entrepreneurship in the developing world. What an inspiring organization!
A recent question on Quora asked: When will venture capitalists start to invest in Egypt and Tunisia? The answer on Quora alluded to all the reasons that VCs don’t invest much in Europe, compounded by current political instability in the Middle East.
Techwadi, a nonprofit focused on building bridges between Silicon Valley and entrepreneurs in the Middle East and North Africa, is trying to change that perception. Last week, an event put on by Techwadi at Stanford convinced me that the region has huge potential to produce many successful startups.
Of course, there are significant challenges in these countries. One founder that presented at the event mentioned that simply registering the company in Egypt would take many months, and the legal infrastructure was so lacking that it would be extremely difficult to simply divide shares among his cofounders. There are problems that governments must take extremely so they do not serve as obstacles to entrepeneurship.
Yet the event provided evidence of multiple bright spots, most notably, the entrepreneurs themselves. Several extremely passionate and bright founders presented. One was working on an Egyptian location-based network called Intafeen. The founder was a very experienced ex-Googler who had assembled a team focused on localizing mobile innovations in the Middle East. The level of cultural understanding and localization would be very difficult for an American company to copy. Another early stage company was founded by a very well-spoken engineer and inventor with dozens of patents to his name. The company is not launched yet, but it looks very promising.
Also, the level of support and engagement from the Arab community in Silicon Valley seems very strong as evidenced by the recent Techwadi event. In addition to numerous mentors, several investors also participated, including Saeed Amidi, founder of Amidzad Partners, and the Chairman of Techwadi, Ossama Hassanein. Congratulations to them as well as the entrepreneurs who are spearheading a movement to promote technology entrepreneurship in the MENA region.
Technology entrepreneurship has great potential for global economic development, especially as the lessons of Silicon Valley are spread beyond northern California. This is not a trivial process, but many small steps can add up to great change.
One small step is for the World Bank and other development organizations to shift the language they use to describe startups. Very simply, they should call them “startups” rather than SMEs.
A SME is a small or medium sized business defined by the World Bank and various countries simply by annual revenue and number of employees. The exact yardstick varies, but the World Bank SME department defines a SME as having less than $15M in annual revenue and less than 300 employees.
A startup is a very particular type of business. It is a business with founders typically shooting to create immense value for shareholders, employees and customers. VCs typically seek to back high-growth companies that could be worth 100s of millions or billions of dollars. Those that are successful hire thousands of people, train employees, create massive wealth and inspire other startups to be founded. While individual startup success is difficult to achieve, countries that create fertile environments for startups will be significantly better off than their peers.
While SMEs are critical to every economy, the majority aren’t gunning to revolutionize their industries and create disruptive change. The reason the distinction in language is important is that the problems faced by technilogy startups are different than those faced by most SMEs. And by lumping startups in with SMEs, development organizations may fool themselves into thinking they are solving the entire problem when they are only working on part of it.
Technology startups need particular environments to improve their chances of success. Some of their needs overlap with other SMEs while some do not. The World Bank, United Nations and other development organizations need programs specifically geared toward startups to maximize their impact.
Plus, acronyms are just plain less inspiring. What would you rather be part of: a startup or a SME?
Years ago, I learned one of the key pieces of startup wisdom from a serial entrepreneur and instructor at Stanford named Steve Blank. He repeated it over and over in class: “Get out of the building!”
By this he meant that the best thing you can do as an entrepreneur is to talk to potential customers. Too many entrepreneurs stay inside their garage or office and work on what they think people want, instead of validating actual demand by going out into the world and talking to people.
Fast forward to this week. I had the pleasure of hosting a group of young entrepreneurs from Ghana at my startup near San Francisco. They were in the process of getting WAY out of their buildings. Most had never left Ghana, but they decided to trek all the way out to San Francisco to demo their products at the LAUNCH conference.
These entrepreneurs were launching their companies out of the Meltwater Foundations’ incubator in Accra, Ghana. The companies they had started are as follows:
–NandiMobile, SMS customer support
–Streemio, mobile music streaming
–RetailTower, helps online merchants integrate with comparison shopping engines
What most impressed me was the entrepreneurs’ knowledge and familiarity with the same startup lessons that people discuss here in Silicon Valley. One of the entrepreneurs asked me if I had any advice for B2B companies. I responded that I thought that the most important thing was the same no matter whether the startup was B2B or B2C. The advice: Get out of the building and talk to customers.
One of the entrepreneurs nodded and said: “Must be Steve Blank!” Just another piece of evidence supporting the globalization of entrepreneurial wisdom. I wish these entrepreneurs much success!
I had the pleasure of attending the Stanford Africa Forum Entrepreneurship and Development conference on January 29th, 2011. The panels covered everything from education and social entrepreneurship to investing and mobile technology. Here are five things that I took away from the conference:
1. Africa is in need of more angels who understand early stage technology startups. Mbugua Njihia who chairs Mobile Monday in Kenya got a laugh when he said: Angel investors? That’s a dream in Kenya!
2. Africa is ready for large-scale private equity. Thomas Gibian who runs a $1.8B private equity firm in Africa called ECP, said they had invested in almost every country on the continent. A few that were left out were Ethiopia because the government is too involved in the private sector, and Mozambique, where it has so far been difficult to find anything of scale.
3. Africa needs more middle managers. Mark Neuman of the Limited Brands, said that if he had one wish, it would be for more middle managers. That’s one of the key missing components. If that’s true in textiles, I wonder if it is true for technology companies as well.
4. SMS technology is very, very powerful. Nadim Mahmud, who graduated Yale in 2008, co-founded FrontlineSMS:Medic. This organization is making a huge difference in facilitating the flow of health information in rural areas in multiple countries in Africa.
5. Mobile payments matter. Menekse Gencer, who consults on the subject, highlighted that most people in the world don’t have bank accounts, but an increasing amount have access to mobile phones. Many countries will skip computer-based banking and head straight to their phones.