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Death is the default for startups, reckons Amazon Web Services Technology Evangelist Simone Brunozzi. Apart from having a really cool Twitter handle @Simon, Brunozzi has founded a few startups himself, so speaks with some authority.
Speaking at a Tech4Africa conference in Johannesburg he mentioned that there was quite a bit of confusion at what constituted a “startup”. He emphasised that most new businesses in the world were actually not startups, but were “service companies”.
I guess they like to call themselves “startups” because it’s very funky and trendy to call yourself one these days. But to qualify as a startup, says Brunozzi — the company needs to be a business that scales. This means it can grow big, really big. It has the potential to go global — and this is what makes startups attractive (and risky) for investors.
He quotes Ycombinator founder Paul Graham as saying that startups will mostly fail because they are “trying to solve problems that other people have failed to solve… so chances are you will fail”.
Brunozzi laughs at the idea of people asking him to sign non-disclosure agreements for their ideas. He emphasised current thinking in the startup tech scene: Ideas are worth nothing, and it’s the execution that means everything.
“There is no value in an idea. The value is in how you execute that idea, and how you adapt and make new learnings along the way. There is nothing in an idea,” he says.
How to avoid failure
So you are a startup, and you are going to fail. This is not particularly reassuring. But Brunozzi has some tips to avoid failure:
- Environment: You need to work in an environment where there are other startups, trying to achieve the same thing as you. This creates support and allows an entrepreneur to cross-pollinate ideas and resources.
- Chance: There is a huge amount of chance and luck involved in being successful, but you reduce the chance if you surround yourself in an environment where there are startups, VCs and the people that matter — chances are you will meet the right people. This poses challenges for budding entrepreneurs that are not in key centres. But there is activity in places like Silicon Cape and Kenya’s iHub.
How startups can get ahead
Brunozzi gives some pointers on where startups can reduce the kind of “friction” that typically gets in the way of their business:
- Cloud computing — has lowered the barrier for startups and allows cost-effective scaling, “democratising computing”. Get on the cloud.
- Agile Development — try to be as agile as possible in developing your web service or product.
- Learn how to scale — don’t focus on your small regional market of a few million people, go global.
- Investors — try to get a sense of what investors want. Really try and understand what they want. Don’t go in the pitch with your own ideas and expect success.
- Incubators are super important — most successful startups have incubators behind them. Most entrepreneurs can’t do a startup with scale without some kind of incubation.
- Reuse — reuse as much code and as many services as you can, from cloud computing to frameworks to open source code. Don’t try do everything yourself. This allows you to focus on the things that matter.
Africa a great startup continent?
Brunozzi likes emerging markets such as Africa. He thinks Africa is beautiful, but more importantly he reckons the continent could be a major centre for startup activity. He speaks of an existing focus on Mobile, allowing entrepreneurs on the continent to “dive right into the hottest thing today”.
He sees a “great African entrepreneurial spirit”, a spark in the eyes of Africans he has met. There is much to improve on, but Africans are motivated to make this change and change the world. He’s noticed an “incredible energy and optimism” which he does not see in his native Europe — and it’s again driven by this need for change. He also reckons that one billion people is a large market, mostly untapped.
Brunozzi predicts a “Big African Wave“, referring to the Twitter hashtag #TBAW. “It’s going to happen”.
Let’s hope it happens soon.