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Don’t Bank On Innovation

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Entrepreneurship, like any other form of business, is essentially about making money. To most if not all, your venture is not successful otherwise.

I have heard no less than 600-650 startup pitches and have interacted with innumerable startups otherwise in my capacity of being responsible for what I say, all the mess at Plan9 and now also PlanX. The argument that judges often get into while selecting startups for a program is will the ‘innovative’ component of a startup make money? The answer often is ‘no, not quite!’.

Many startups are formed when a group of young college students decides to go ahead with a project and introduce it in the market to make a few bucks. That doesn’t always work. Google is an exception! The most common reasons that I have observed for this are:

First, there’s a lack of the much needed “entrepreneurial attitude” among the team; they are all techies who usually tend to forget that they’re selling their products to ‘humans’ after all. What lacks therefore, is that ‘perfect’ mix of a team. I have written about what constitutes the perfect team in my earlier post Living Entrepreneurship.

Second, in the absence of team coherence, not all members are focused towards that ‘one common vision’ that should drive their startup. Therefore, teams disperse as interests & priorities start to differ. And that happens soon. iTrak was a good example of this – brilliant boys from NUST who came to Plan9 with a product that would enable the physically challenged – Amazing product. As they described it, the ‘eye-mouse’ (headset attached to a camera) equipped the user to control the cursor’s movement with his eyes. Their idea was validated multiple times at startup competitions and by industry experts including representatives from Google team based out of Singapore. They had immense potential – technical innovation, idea validation and understanding of the market. What lacked was team coherence and a shared passion for the startup; it is exactly this factor which lead to the startup fizzling out.

Third, what may seem as a perfect senior project only often fits the requirement of the lab. In essence, it remains a project and never transforms into a product. It does not take into account the ‘needs’ of the potential customers or for that matter sometimes even lacks a well thought out competitor analysis.

As I have written elsewhere, for a startup to be successful, your product must be seen as a ‘need’ by the user or as making his or her life easier. Else, your customer base wouldn’t be large enough for you to make money. In business jargon, you wont be able to Scale. Whats the point in being an entrepreneur when you are restraining from risk Whatsapp is today seen as a need – it is being used interchangeably for messaging (exactly how Surf is used for detergents in this part of the world).

An appropriate local example of a successful startup that has an aspect of innovation is Eyedeus Labs. It was part of the first incubation cycle at Plan9. Groopic, its mobile app that lets the photographer be in the picture, is based on computer vision technology and makes use of proprietary photo merging. But there’s more to groopic than the fancy description of the technology behind it. It is the application of the research in a creative and what I would say, ‘sensible’ way that it addresses a common problem faced by people across the globe. It makes life easier for a family during a vacation when it wants to capture memories in a group photo. But will it make money, is what time shall tell in weeks & months to come. I sure hope it does.

Innovation DOES NOT always make money. And it can certainly not be the basis of a startup’s success solely. What enables a startup to make money and thus be successful is the complimentary skill set of its members, a clear collective vision, the ability to be receptive towards feedback (both from mentors and the market) and of course, an unmatched passion to make it work, no matter what.

Let’s innovate not forgetting that you’ve got to be able to sell your product to make money!