FIBARO is the best example of a technological startup that has managed to reach international markets and become a global success story. However, in order to make this happen, FIBARO had to avoid making six key mistakes that could affect its future. It looks the same today when we advice beginner startups planning to grow in this fascinating industry.
– says Joanna Ossowska Rodziewicz, CEO of Fibar Group Intellectual Property Assets Sp. z o.o.
A proper market research to match much wider context
Many technological startups fail because they won’t do a very important homework. To be more specific, it is a question of examining the market and verifying it through perspective of the idea. It is worth carrying out a reliable analysis of consumer needs in the area we are interested in, to get to know the stories of existing brands and those who have already failed. We should ask ourselves: will our solution certainly be widely used, will there be too much competition or if was there already a similar solution on the market?
According to CB Insights recent study, most young companies are failing because they are building a product without a specified market demand. Startups often solve a non-existing problem or just poorly redefine it. That is why it is very important to introduce an MVP – Minimum Viable Product – as soon as possible. To make long story short, it is a viable product, with core features to allow the potential customer to verify whether it is a value for him or not. Developing such a product enables startups to test their market interest at a minimum cost.
On the other hand, there are startups that reactivate the ideas of others at the right time, adapt them to the current conditions and win the market battle.
However, these are relatively rare situations. Let’s remember that many ideas can be verified from the very beginning in the concept phase, but it requires deep research and knowledge of business barriers. This can also be done by external institutions, which have a lot of experience with series of such analyses and are familiar with the methodology of a proper research. It is also important not to close oneself down to a narrow product category, but to look for solutions that are as widespread as possible. There is a risk of accidental ignorance of the key niche which may be missed if we focus too much on one solution.
Fear of failure – don’t look back and try again!
Lack of fear of failure makes people not afraid to make further attempts. This is a general principle that is mostly characteristic of young success people. In developed economies, such as the USA, young entrepreneurs are even encouraged to make further difficult attempts to develop natural behaviours related to acceptance of failure. In Poland, we are raised in a spirit of victory which often causes us excessive frustration in the event of failure and as a result, fear of making further attempts. If someone is serious about starting one’s own business, it is best to forget about idealistic approach that everything will go smooth from the very beginning. Of course, aiming a precise goal is a must, but let’s bare in mind that there are many ways to achieve it. At the beginning, most of the ways are hard to came up with and it’s a matter of time since we will find some of them. Time to make mistakes, however, is one of the necessary parts one should go through.
One of my professors at the MBA, then U.S. Ambassador to Finland, Bruce Oreck, talked about how different the national mentality was in the approach to failure, recalling a picture from a first-class lesson. In the USA, when a teacher asks, for example, “What is Niagara and where is it located? Lots of hands appears and children scream to answer the questions. It doesn’t matter that most of them hear the name for the first time and many confuse it with the name of a hotel or nearby restaurant. These children want to share their ideas, regardless of whether they make a mistake or not. In Poland, however, when the same question is asked, most children look at the ground or suddenly look for a pencil in their backpacks.
Proper management and responsibilities within the team
It is very important to select a team in such a way as to complement each other’s competences. Young startups often break apart at a very early stage, simply because of internal conflicts or incorrectly defined roles. Correct assessment of skills and predispositions, and ultimately separation of tasks turns out to be a hard nut to crack, especially in teams where members have a relatively equal status. That is why it is worth having a partner who will properly assess the situation and advise us in this area, perhaps even selecting the right competences from outside. The simple solution will avoid the risk of a project failure or even a team break-up. Let’s also remember that psychological matching in the team is very important and will have a key impact on the success of the whole project. This analysis should be carried out by an experienced consultant or partner.
Alternatively, it is worth thinking about joining the dynamically operating business Incubator, Technology Park or Alfa Fund, where in addition to financial support, we will receive professional help of their expert. As part of the institution’s activities, they will examine our team and help to select the missing links on the basis of not only substantive knowledge, but also their psychological adaptation to the team. An example of such an organization is e.g. YouNick Mint Venture Capital from Suchy Las near Poznań, of which FIBARO is a substantive partner. YouNick startups benefit from access to specialist knowledge and at the same time receive back office support, which largely affects healthy and stable development of business.
Capital is a secondary asset
Money is important, but focusing too much on it takes away our initial initiative. Let us remember that the market is now full of all kinds of subsidies as well as traditional or commercial financial instruments. So there is something to choose from.
However, it is worth remembering that financing issues should not receive most of our valuable attention. We need to prepare a detailed business plan to know exactly how much capital we will really need. It is also very important to prepare the mines for yourself. 10% of the financial support for unexpected expenses. The lack of this small financial elements drags many interesting projects down.
Secure and professionally manage your intellectual property
What technological startups often forget about is the protection of their interests in the field of intellectual property rights (IPR). IoT industry is an international business that requires a strong entry into foreign markets and then it’s important to get accustomed with local law and how to manage patents and intellectual property. Such activities help to avoid conflicts with potential competitors and secondly, to prevent theft of ideas. There are many cases of small companies which, due to negligence in this area, have deprived themselves of the opportunity to have full control over their business ideas.
Starting its operations in 2010, FIBARO has been implementing sales strategies all over the world from the very beginning. Great emphasis on proper protection of our products translated into instant growth. At the moment, we have over 180 registered industrial designs and trademarks, our solutions are protected by nearly 30 patents in the EU, the US, Asia and China in particular.
The legal form makes a big difference
It is also quite important that we choose the right legal form for our activity, which will allow us to develop in the long run. The form of the company we choose will depend on the relationship we have with other startup members and future potential business partners. Another important fact is that the legal environment defines our status in the context of our activities among international arena, which should also be the subject of consideration. Economic credibility is also an important factor. Legal transparency will make it easier to obtain a potential investor who definitely prefers limited liability companies. Here we have reasonable grounds because choosing the perfect form is difficult when you do not yet have the right experience.
The upcoming article:
GDPR in IoT! – the issue of data processing vs. needs of the Internet of Things industry.