A few months back I had the pleasure of speaking with the crew over at Duke’s InCube – the university-funded, residential incubator – about whether it’s possible for a group of students juggling the rigors of college life to turn paper napkin ideas into real businesses. Well, as of last Friday the the time had come for students to put up or shut up as Duke University hosted the InCube Demo Day.
With nearly 100 Triangle-area entrepreneurs, investors and students in attendance, 13 InCube companies presented themselves to a panel compromised of Tobi Walter of Shoeboxed.com, John Austin of Groundwork Labs and Lister Delgado of IDEA Fund Partners. Respectful in tone, but nonetheless tough, the panel lobbed questions about product feature choices, marketplace potential and business models to students that were clearly eager to grow their startups well beyond the confines of Duke’s walls.
And there are a number of companies well on their way to commercialization. You have Sid Kandan bringing interior 3D mapping technology from the lab to the masses; Tatiana Birgisson of Mati Tea launching packaged tea business that has already acquired real customers and Alex Brown of Crowdcourse providing a platform for community-driven education.
However, what I found most interesting wasn’t the success of the InCube companies but their failures and pivots. See, the most exciting part about being a young entrepreneur is that you really don’t know that you’re not supposed to be able to do something. You dream big, try hard, sometimes succeed but often fail. But no matter what happens you always learn and move forward.
This was best articulated by Fabio Berger and his company WealthLift.com. Since its launch, WealthLift has garnered more than 33,000 users – no small feat – but Fabio and his co-founders realized that the company wasn’t generating enough money to sustain its existence. As a result, they’ve decided to learn from their mistakes and explore new ventures that address the problems they themselves ran into as entrepreneurs.
Fabio outlined three learning lessons that I think all technology entrepreneurs – whether students or post-grad – should take to heart.
Users do not equal revenue.
When it comes down to it, acquiring paying customers is hard work. The total number of people using your product or service doesn’t matter at all if none of them are paying you for the privilege. To succeed, you need to find a way to monetize users to create a cash flow positive business that enables you to grow and expand. Otherwise, you’re on a fast-track to a pivot.
Don’t judge an industry by it’s cover. Dig into the business models to find where you can sustain the business.
It’s way too easy to make assumptions about your competitors and market opportunity, especially in early-stage startups. Don’t fall into assuming you biases are correct. Talk to your prospects, customers, competitors. Learn from other people’s mistakes as much as you can. It will make it much to find a sustainable business model.
The 80/20 rule is everywhere.
It might be cliche, but it’s also absolutely true. See, as an entrepreneur you’ll always have significantly more to do (and options in front of you) than you can possibly tackle given your staff and financial resources. However if you focus on the low hanging fruit – that 20% that generates 80% of the value – you’ll find success much more quickly.