Startup investors at the Echelon Ignite conference in Sydney offered advice on how to attract interest in an idea and grow a successful business.
Here are five tips from the event:
1. Have a clear direction
“You want to see that they’ve got direction and they know where they’re headed,” said Pollenizer CEO, Phil Morle. “There has to be some way of getting revenue pretty quickly.
Having a “proven business model” helps, said angel investor John Tan. If an idea was a success in the US or Europe, it may also do well in Southeast Asia or another market, he said.
2. Investors look at you, not just your business
A big question is “Why you?” according to Anthonny Liem, CEO of Merah Putih Incubator. Startup founders should show why they are best equipped to create the business they have proposed, he said.
The decision on whether to invest “is very much dependant on the founder,” said Tan. “Some people just have the aura of being a success story.”
3. Get customers early
Actually selling to customers is a better way to show demand for an idea than surveys or focus groups, said Right Click Capital partner, Benjamin Chong. “Customer validation is simple: Have you taken a dollar ... off the customer?”
“The worst thing you can do is build a business based on a theory, spend a ton of money, spend a ton of time, spend a ton of heartbreak and find out that actually you might not make it,” said Morle.
4. Spend wisely
“Don’t raise money unless you really have to,” Tan said. “I think there’s something to be said about bootstrapping and growing organically ... Honestly, to me, fundraising is a distraction.”
“If you really need that money ... avoid the temptation of raising more than you need,” Tan said. “When you have not a lot of money you are more disciplined in how you spend the money.”
Avoid raising money if it’s not needed, agreed Morle. However, he said that if it is necessary, “raise as much as you can.” Then, “don’t spend it.”
5. Consider Southeast Asia
Too many Australian startups focus on moving to Silicon Valley and ignore Southeast Asia, said Chong, who joined other speakers at the event pointing to opportunities in the region.
“I think it’s irrational,” he said. “Silicon Valley is one of the toughest, most competitive markets to break in ... It is a shark-infested place.”
Southeast Asia “isn’t a walk in the park,” he said, but “it’s a less competitive environment” and an “easier place to get some traction.”
For a perspective from Australian startups, also check out:
Startup tips: How to win investors
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