What is a Startup?
We all well understand that a startup is always about an idea of how to impact a customer. But, this is just where it all begins. What we don’t always give credit to is how startups have a far-reaching ripple effect on the socio-economic fabric of the demography in which they operate. I ran into a brilliant definition of entrepreneurship that is now one of my personal favorites.
Entrepreneurship exists in the tiny space between madness and genius; and, its journey requires a few cross border violations across both madness and genius to get to the final destination.
You have to be somewhat CRAZY to be an entrepreneur, but you also have to be a genius. You need to have something inside your brain that doesn’t exist anywhere else; a concept that hasn’t never been tested before or a modification of an older venture. Entrepreneurs do not live in some capitalist utopia; they sweat the hard stuff.
The three most harmful addictions are heroin, carbohydrates, and a monthly salary. (@nntaleb)
It is a funny tweet from the Lebanese-American essayist and statistician, Nassim Nicholas Taleb, but it couldn’t be more correct. The power of the monthly salary is so strong that it may be hard for some people to walk away from that kind of stability predictability.
…Entrepreneurs are too contrarian in nature to be swayed by the seductiveness of a “stable career,” although that in itself is not a stable comfort for the working class folks with the unpredictability of global economies.
…Let’s be clear, everyone who is laid off should not start a business. However, a layoff is a great catalyst if you’re already thinking about making the move.
When you’re fired or let go, many fall into the trap of focusing energy on the people who “wronged” you. Just the opposite. Look at the firing as a blessing in disguise and motivation to reevaluate your life. Put everything on the table—new opportunities you have been ignoring, industries you’re interested, and starting your own gig.
Warning: a caveat from founder of Virgin Group, Richard Branson:
Launching your own business is one of the most rewarding and fulfilling things you can do. And while thoughtful risk-taking is something to be encouraged, it’s important to keep in mind that most new businesses fail within the first year and a half. So before you give up the security of a steady paycheck, you need to be as sure as possible that the risk is worth it.
Anyway, moving along.
The African Entrepreneur blog is a platform set up for the great, ingenious minds of this great continent who want to build businesses that change the world. We believe now, more than ever, our people should move from a consumer to a producer mentality. Only through being productive by delivering products and services of value do we transform the narrative of the our continent. There has never been a time in history so ripe enough for new ventures as it is now globally. A host of recent multi-billion dollar deals for small start-ups, particularly in the tech arena, have helped fuel many people’s dreams.
Facebook paid a cool $19bn for messaging app WhatsApp when it had just 50 employees and had only been in existence for six years.
The internet giant also paid $1bn for photo-sharing smartphone app Instagram, which was less than two years old and had only 13 staff.
Similarly, Yahoo shelled out $1.1bn for blogging service Tumblr, founded just six years earlier.
These indeed are exciting times.
500Startups, a Silicon Valley venture-capital firm with more than $175 million under management is targeting companies engaged in technologies, software, online marketplaces and e-commerce, seeking its first investments in Nigerian technology companies as Africa’s most-populous nation encourages industries that will reduce its reliance on oil.
Don’t get too excited, though. News like this make it tempting to think that with the right idea serious wealth is just around the corner, yet the stark truth is that most start-ups fail.
In the end, the biggest determinant of success for a start-up firm is how convincingly a founder is able to convey their own excitement about the business. You’ve got to love your business. It’s got to be connected to you and it’s got to be meaningful for you. If you can create the same passion in investors then the sky’s the limit.