Three Very Troubling Trends in Entrepreneurship
It seems to me that entrepreneurship has shifted gears in the past few years and while a lot of it has resulted in a very good evolution, I have noticed three trends that seem troubling to me.
1. What happened to boot strapping and sweat equity? Way too much focus on getting big funding early on instead of concentrating on the idea and the launch of the startup.
I am seeing way too many startup founders drinking the kool aid from some accelerator programs, angel investor and VCs pushing startups to get very early access to money...all this, in exchange for a disproportionally large percentage of the startup's equity. Too often, the founders agree based on a valuation which is unrealistic and quite frankly way too early to get right. Instead of focusing on their new business idea or product and funding it via good old boot strapping and lots of sweat, these founders spend all their time developing and tweaking PowerPoints for pitching to various investors. The result, they neglect their product development and give up valuable time that should be spent in front of potential users and future customers of their product. This lost time equals to a burn rate that eats away at their runway and leaves them exposed to the sharks and dragons.
2. What happened to substance? Way too much focus on getting a great pitch for investors instead of concentrating on getting a great strategy.
I am seeing an increasing number of founders and co-founders spend way too much time working on their pitch instead of their market penetration strategy. The focus seems to shift from improving the pitch and at times pitching a story that differs from the strategy, just to have a great pitch and have a 5 minute of stardom. The result, they neglect to improve on their strategy and loose site of market data that may be pointing to a modified strategy or a necessary pivot. Ultimately, this leads to missed opportunities to get it right.
3. What happened to selling a good product? Way too much talk from entrepreneurs about selling their early MVP instead of getting the product right.
I have heard so many entrepreneurs state that they are selling their FIRST MVP. Frankly, most buyers/purchasers in medium to large companies do not know the entrepreneurial jargon and MVP. Unless you really know what an MVP is, who in their right mind buys anything that is described as minimally viable? Even most early adopters want a half decent finished product. It doesn't have to be perfect, but it better work and do what it says. The MVP concept is meant to capture the sweet spot between over-investing in too many features and waiting too late to launch versus launching something too early that simply won't make it. Unfortunately, everyone is throwing the term "MVP" around without truly understanding what it refers to. A MVP is a tool to mature your new idea to a minimum level of functionality and quality that is also repeatable and scalable. The result. Too many entrepreneurs are going around telling their potential clients that they are selling them a minimally viable product when they are referring to a very early prototype, which fall way short of a true MVP and results in NO SALES.
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