“Nobody said it was easy; No one ever said it would be this hard” The lyrics to Coldplay’s love song could well be suited for the thousands of entrepreneurs trying to get their excellent idea past the paper stage.
20% of startups fail the first year and although this may seem a high number, it also means 80% of startups make it through that first year. The harsh reality is that five years after 50% of the companies are gone. Even if there are several reasons behind this reality, we will repeatedly be told that one of the main realities behind business failure is the lack of funding. It might be useful to question this statement.
Do startups have a realistic budget expectation at an early stage? In what percentage are budgets increasing year by year? Is it reasonable? Are the yearly expenses well chosen? One can run out of money for several reasons, hence one can do several things to avoid this situation. If a startup perceives its only choice of action is fund attraction and retention, it can easily slip to the forgotten 50%. By the way, it is less straining on the startup members to die early. Pulling the company along for 5 years can leave everyone’s moral and pockets ‘out of battery’.
What can a robotic startup do to maximize its chance of success? There are some aspects every entrepreneur should keep in mind and plan to tackle since the very beginning.
- Legal and regulatory aspects can overflow a beginner entrepreneur. Legal aspects change from country to country and no business can flourish without tackling issues like intellectual property, equity and incorporation. iLINC, the European Network of Law Incubators facilitates the provision of free legal support to start-ups. Other companies like Jag Shaw Baker or IT IP Law can also be of great help. Regarding standardization the ISO/TC 299 covers the robotics standards catalogue from the general requirements to safety including specificities for collaborative robots or medical equipment. The standardization guidelines are under development for certain areas of work where startups might be trying to enter. It is always wise to keep in touch with euRobotics which has a cross domain topic group on Standardization and a non-technical topic group covering Ethical, Legal and Socio-Economic Issues.
- A sound business is key for success. Many companies offer business support or mentoring when developing business models and defining market strategies. The experience, emotional intelligence and networks mentors possess are assets that can not be easily attained in a short time span. Not all mentors will be able to provide all types of support; it is therefore useful to know what one wants to benefit from when contacting this business experts. In startup events mentoring is sometimes offered in pill forms, for a short time during the event, other a mentor is part of the team for a longer period. Through their Entrepreneurs’ Club TECNALIA Ventures boosts technological startups´ business relationships. Mentoring in robotics can also be found in incubators such as Robotdalen, RoboCluster, and Blue Ocean Robotics where there is an opportunity to get to know the ecosystem.
- Technological support is often a differentiating factor in accelerators. Accelerators like ROBOTT-NETand RobotUnion will include technological support in their acceleration processes. The right accelerator, one that is well aligned with the startup will help you speed up. Amongst the most important criteria are startup vertical, common or shared goals, resources the startup offers, equity conditions and their time schedule. There is a lack of awareness in European Scaleups in the robotic sector of what is actually available in research organizations and therefore potentially transferable for industrial development. This gap relates to duplicities of efforts, higher costs, times of development and time-to-market. Accelerators like RobotUnion aim at providing technological development support together with mentoring, funding and access to private investment together with 223k€ of equity free in cash. RobotUnion is a project funded by the European Commission where high end research and technology centres like VTT, DTI, TU DELFT, TECNALIA and PIAP offer the differentiating added support on robotic technologies such as human robot interaction or artificial intelligence.
- All stakeholders need to be involved to make sure there is a clear value proposition. The value chain needs to be clearly identified to understand who our client is and make sure our client is engaged in the creative and development process as a tool to enhance future satisfaction and acceptance. For consumer products customer engagement will have to be set from early on. Even if there are companies out there that can work out the user engagement for you, I can not emphasize enough the importance of a close relationship with your client. No company should substitute your presence. The value proposition will help you understand the core activities of your startup.
- Funding possibilities are found in a variety of forms ranging from crowdfunding to venture capital firms, including P2P lending platforms or the previously mentioned incubators and accelerators.
- Startups are in need of speed. The above mentioned accelerators make an effort to put together the most appropriate resources to help a startup flourish as fast as possible.
“First, have a definite, clear practical ideal; a goal, an objective. Second, have the necessary means to achieve your ends; wisdom, money, materials, and methods. Third, adjust all your means to that end.”, Aristotle
Good team, good work and good luck!