An estimated 90 per cent of startups fail and after four hours on the StartupBus hack-a-thon today I think I know why.
Somewhere past Goulburn, rumbling down the highway from Sydney towards Melbourne, 23 entrepreneurs had finished pitching their ideas and begun recruiting team members ahead of a weekend-long road trip during which they need to build a viable startup that can be pitched in front of more than a thousand people at SydStart on Tuesday.
After listening to over 20 potential ideas it became very apparent why the startup fail rate is so high.
Just because you have an idea doesn’t mean you should launch a startup.
People are full of ideas. They really are like seagulls circling a stray chip – never in short supply.
On the bus, ideas pitched included:
- a coffee subscription app
- a virtual retailer where you can design, try, and buy a pair of 3D-printed glasses
- an on-demand push app for charities which need funding around a specific event
- a networking app connecting travelling business people
- a real estate app which guides a first time buyer through the process of purchasing a home
The key here is weeding out the good ones from the average or blue sky ones. And that takes a lot of talking and even more coffee.
“A lot of people will look at a product as ‘here’s a features set’ rather than ‘here’s a problem which should be solved’,” StartupBus assistant conductor and former Huffington Post director of community Justin Isaf said.
While it’s unrealistic to think you can create a billion dollar company in 72 hours on a bus, it is a good test situation which puts some of the big problems startups encounter over extended periods of time in a super-concentrated environment.
There is a theme amongst early-stage startup entrepreneurs of keeping the idea on the down low for fear of someone stealing their concept and running off with it. Big mistake.
“If you’re not talking to people you’re going to build the wrong the thing,” Isaf said.
StartupBus founder and chief Elias Bizannes said: “You spend so long on unimportant things and what really matters is getting market validation.
“You should always be breaking things and doing something different.”
Garnering opinion and airing out a concept can be the difference between a startup idea with traction and one that stays solidly dragging in the dirt.
“Put yourself in the shoes of someone that uses it,” Isaf said.
“Most ideas I listen to, I think ‘you’re so detached from reality’…fur coats for dogs is not a good idea.
“The danger is getting caught up in your own world.
“Everything has been done the difference is how well you do it. It all comes down to how you can execute it.”
So the first lesson from StartupBus is if you have an idea, don’t build it and don’t write it down – if you come back to it in six months then maybe it was a good idea – if you don’t think of it again it probably wasn’t.
Alex Heber is on the road with the Australian StartupBus, a three-day trip in which a group of entrepreneurs will try to build a set of innovative technology companies over the course of a three-day bus ride. The journey finishes next week back in Sydney in time for the SydStart finals.