9 Common Mistakes Tech Startups Make According to Investors at Arabnet
Some of the region’s top investors, during their panel discussion
at Arabnet Cairo, shared their experiences of the most common
mistakes tech startups make:
- Not thinking through the practicalities of executing an
idea. Giving even a little thought to possible
implementation challenges will save a lot of headaches later
on.
- Thinking of the investment process as money
only. Founders need to discover what value possible
investors will add to the project, as this is at least as important
as a cash injection.
- Overlooking the chemistry of the team.
How the team, including the investment partners, works together is
most important, so make sure visions are shared and everyone
involved is a team-player.
- Having a bad or non-existent employee ownership
scheme. Greedy founders only shoot themselves in the
foot if they’re not willing to share possible future wealth, as
employee ownership is a fundamental motivation tool.
- Not having a business plan. Financial plans
are always wrong, but that’s no reason not to have them.
Writing a financial plan teaches the founders the key financial
concepts they will need to know to make their company
successful.
- Lacking knowledge about revenue and cost
streams. Bad cash flow is the biggest killer of
startups, so founders must always be clear where the money is
coming in and going out.
- Having founders who are not
well-rounded. It’s true that founders’ skill-sets
should complement each other, but each founder should have a
reasonable working knowledge of all of the core facets of running a
business.
- Simply copying an idea that works
abroad. The environments are structurally different,
so something that works well abroad may not work well in this
target market, and vice versa.
- Not thinking big enough. Too often local founders, especially Egyptians, limit their thinking and target market. If a local startup idea works globally, then it must plan to target a global audience at some stage.
The VCs were Ziad Mokhtar,a principal at Ideavelopers; Karim El-Sahy,
founder and CEO of Genius
Ventures; Gideon Simeloff, head of twofour54 Ibtikar; Feroz
Sanaulla, regional director at Intel
Capital; and Ahmed El-Alfi, founder and CEO of Sawari Ventures.