Start-up is a buzzword, for sure! The opportunities it offers seem to be colossal. Bangladesh is a nation of more than 160 million with a growing youth population; it is inevitable that new businesses will flourish to serve this growth. In addition to the growing population, technology adaptation certainly opens doors for opportunities. The organisation that the author represents, the Toru Institute, works with founders of impact-based startups, broadly targeting the United Nations' Sustainable Development Goals. It has incubated entrepreneurs across sectors in education, healthcare, financial inclusion, job creation, agriculture, etc. namely 10-minute school, Shop up, Sheba.xyz, Deligram, Solshare, ifarmer, MARS, Aamar Taka and many more. Toru Institute does not only see the idea or the business, but also the positive impact the founder can create in the society.
Amidst the huge opportunity, there is a big challenge that is prevailing in the entire startup scene. The focus often goes to flashy elements such as making announcement of funding, partnerships and one-week to 3-month bootcamps. The question that stakeholders often need to ask is what does it take to scale innovations to enterprises? Most investors in Bangladesh aim to replicate Silicon Valley, but end up thinking of short term existence. The author also believes that current Silicon Valley's investing style is not a great fit for this ecosystem. For instance, the entrepreneurs and market here are not ready to scale faster. There is an obsession with the method of the West that stakeholders try to apply to the startups here. However, it fails... The world is not a Silicon Valley! The current Silicon Valley as people know is focuses on an investment model where nine out of 10 startups fail. And this seems like a normal! That is surely ridiculous. The amount of money wasted in those nine which failed, can feed many homeless across the world if not anything else. There is an underlying reason of why they fail and only "money" cannot solve it.
The problem goes deeper in this country. For instance, what is the objective of hosing so many business competitions in universities? It is wrongly perceived by the audience, judges and participants as "pitching" for startups, whereas it should be seen as the mere seeding of the entrepreneurial mindset. These early stage platforms that inspire youths are misleading their mindset. Taking an innovative idea to market and scale is unimaginably hard for anyone. Moreover, not all ideas can be presented in an elevator pitch. Entrepreneurs and their visions are much more than a pitch. One has to look deeper into them to be able to support them. Ideas do not remain the way it is at that moment, innovations pivot. So, judging someone based on idea is surely not a good "idea" ; rather, investors or supporters have to look at the intrinsic factors of the personality of the founders.
The author believes; factors behind successfully scaled innovation in a market splits into intrinsic and extrinsic factors. An innovator is not the same as an entrepreneur; and entrepreneur is not the same as a businessman. The risk of an entrepreneur is much more than that of a businessman. Entrepreneurs innovate; while businessmen replicate. There is nothing wrong with either, the journey of a businessman is as exceedingly hard. However, in addition to the role of being a businessman; an entrepreneur has to be far more resilient as the product or services are new to the market. The entrepreneur not only has to educate the market and adapt to it; he or she has to work on building the enterprise, policy, funding, regulatory affairs and most importantly adopt a different space of leadership. What he or she is trying to do; it does not exist and in addition will face a lot of challenges from the old ways of doing things.
Extrinsic factors: If the extrinsic factors are examined, the first question needs to be asked is if this solution properly solve the problem of the user? What is the incremental value in relation to the monetary value of availing the new product? Is anyone else solving this problem? If it is a dire need, why anyone has not solved it yet, or what are the learnings from someone who tried. Often, people are obsessed with their own solutions and miss an actual pain point that users will value. This pitfall is framed well in the principles of design thinking. There needs to be a clear distinction between a product for business and incremental innovation on someone else's product. The other person who is the market leader can sometimes bring the solution with limited cost when someone's visionary product is merely a feature extension of theirs.
* Behavioural shift: Cultural adaptation is another big issue. It is not about the product or service only. Unless it is hugely trusted by the stakeholders and user group; scaling is nearly impossible. There are many products which were before time and were not able to educate the market; or did not have the patience capital from investors. A shining example of success in behavioural shift is the women empowerment in Bangladesh. A defined goal and incremental steps adhering yet changing the culture moved Bangladesh to be a nation where more girls go to primary schools than boys. This happened through multidisciplinary work in advocacy, communication, policy shift, service delivery and so on. One cannot bring an innovation in the void, nor can you address every stakeholder from the beginning. It is deep rooted in collaborative execution and patience.
* Engagement with investors: Let us differentiate between judges and investors. Most judges do not go to a 'pitching sessions' with a pot of their own money. Often the money awarded at the end of a three minute pitch is a short lived glory. This becomes challenging when founders meet the real investors! There arises a huge scope for mismatch between a founder's vision and that of an investor's. If investors select only via a PowerPoint pitch, they might have cognitive bias! Not every entrepreneur is an extrovert who will wow an investor with articulation. Pitches should be seen as an engagement with potential investors or stakeholders and not just for fundraising. To build enterprises, investors need to give much more effort. Giving money without necessary support, such as nurturing skills; is not going to help the innovator. Further, an investor and entrepreneur has to match at values and goals. If investors are too nosey on day to day decision making or short term minded, an innovation might never see the light of the day. They have to explore the understanding of the ability of the entrepreneur as well as skill sets the investor can hone.
* Skill transfer: Irrespective of the new industry and product of the startup, there are certain skills that are transferable from many existing industries. There is a dire need for institutions and funders to identify them and match them. It is not always the CEO of a company who does the job. Global and local businesses have years of experience that can be channeled. Start-ups are often identified as ''tech'' upstarts. However, there is rarely a start-up that is exclusively a tech unicorn. They are sector specific start-ups, such as education, agriculture, transportation, access to finance and so on, which are enabled by technology. There is a huge skill requirement from the existing sectors and business functions to these startups. Stakeholders should emphasize channelling resources from the existing sectors and business functions towards these startups!
Moving to intrinsic
These intrinsic factors are non-measurable but super critical. As mentioned earlier, one thing about innovation is that it often pivots. There are lots of ideas and products that aspiring entrepreneurs come in with initially and move away from it as time passes. This is completely fine. Toru Institute has coached and worked with many on the pivot. This surely requires the startup to be able to be empathetic towards the users. People are often so engrossed with their own innovation and fear that the world would judge them if they pivot. There is another common mental block, "someone will steal my idea!" which holds the founder back. This fear proves true rarely, if ever and if they do, it is because the barrier to the entry was too low and/or the other person or team executed much better. People often say ideas change the world; that idea should be seen as the inception and nothing more. Ideas come in dimes and dozens; it is the implementation that changes the world. One can crunch numbers, give the best presentation and speak impeccable English but if they do not have the humane characters with commitment and resilience for the journey, they cannot be successful leaders tomorrow. Businesses will come and go, ideas will evolve; what is far more important is the person who is leading it. It is how they learn and interact with peers. Important questions should be asked that are they able to reflect on the pros and cons through self-reflection and then build a team? Are they active listeners? People often pitch their best self and audience gets impressed. However, more shocking question that should be asked is how many times he or she failed and what happened next? The reflection of innovators' patience, hunger, drive for excellence and finally their ability to learn from multiple sources should be evaluated. Not every founder will be a great CEO and not every CEO will be a founder.
Some of the characters to look for and nurture are: lifelong learner, willingness to grow and learn, complex problem solving, emotional intelligence, critical thinking, creativity, active listening, empathy, cognitive flexibility, decision making, resilience, interdisciplinary learning, active learning and growth mindset, leadership and people management skills.
Many investors, who are often visionaries themselves, do look into these factors. But what is important is academic institutions, funders, event organisers, high net individuals and others in the ecosystem to stop obsessing on pitching events and quick fixes to problems; if their real objective is to build a culture of innovation and impact. We need to focus on building a generation to be empathic thinkers and some of them to be entrepreneurs. The successful businesses are the result of the right culture and mindset. Silicon Valley culture emerged from educational institutions that teachs people to think although these days it pivoted around the obsessive valuation game. So, before start-ups, let us build the right culture and mindset first.
Saif Kamal is the founder of Toru Institute. He can be reached at firstname.lastname@example.org
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