01:32
aaronchua
They are swore to secrecy like their life depend on it
I always believe in this: if your only competitive advantage is your idea, it is not something worth supporting. I have came across entrepreneurs who refuses to send me any information about their ideas and yet expect me to fund them. They are afraid of so many things that it becomes a pain just communicating to them. This is a clear signal that I am wasting my time.
They have not change their business models since day 1
It is a fine line between being persistent and being stubborn. We have seen successful startups adapting their business plans as new insights are gained. However, some of the people I talk to have refused to change even when it is quite clear that their ideas cannot work. Some models for example can easily be validated by crunching some numbers. If the numbers doesn't make sense, it is time for you to rethink your plans.
They talk about markets all the time
As a startup, your compettive advantage is not in spotting undertapped markets. What I want to hear is your approach: what kind of institutional or even product innovations you are building to tap into these markets. Unfortunately, some entrepreneurs I talk to only tell me how big the potential market is, how they have to move quickly and why I need to fund them because of this. All these are fine as long as you are also able to say why you are the one that can succeed. There is a big difference between spotting a market and having the capability to tap into them.
They don't treat their customers with respect
Slightly related to the above point is that most entrepreneurs treat their customers like commodities. They treat customer like numbers, rather than real human beings with needs and wants. I think that in this new economy, paying respect to your customers might be the biggest source of advantage. The Web has given us personal voices. Nobody wants to be treated like anybody else anymore.
They try to do too many things and have too many ideas.
This is a slightly tricker filter. Many times, startups who are successful have laser like focus on their products and their customers. They don't think much about anything else. On the other hand, I have seen some entrepreneurs wanting to do this and that, without realising these are totally separate businesses and each requires different business processes.
The above are alarm bells that have been built within me over the years. They are not definite. Some of the alarms might turn out to be false alarms. However, in general, they work pretty well for me so far.
Posted in: Singapore startup environment
