Born from radioactive eggs deep beneath the ocean, thunder lizards rise out of the sea and arrive on the scene with an epic attitude to devour everything within their path. Nope, we’re not talking about Godzilla. We’re talking about the kind of startup founders that Ann Miura-Ko, co-founding partner at FLOODGATE, is interested in investing in. Along with her FLOODGATE partner Mike Maples, Miura-Ko seeks to identify entrepreneurs with this unique DNA and ambition. During her recent visit to our Entrepreneurial Thought Leaders seminar, Miura-Ko shared this description and discussed how many of the barriers to starting a company, or testing a product, are lower than just a few years ago.
Go Build a Prototype
A prime example of a lower barrier is the highly reduced costs to actually build a product. Miura-Ko identified a number key technological advances that give entrepreneurs a leg up on their predecessors. These advances include the proliferation of open-source software and commoditized technology hardware. In years past, software and hardware would have been major gating factors to getting an idea up on its feet. Miura-Ko also pointed to the cost benefit of crowd-sourced infrastructure. For example, if you need to analyze a piece of video content, using actual people through crowd-sourcing may be a better financial choice than employing high-powered technology solutions. Mirua-Ko also espoused the elastic and scalable power of cloud computing as an advantage that current-day entrepreneurs should leverage, if they are developing ideas in the technology space.
Don’t Run Out of Product Iterations
Entrepreneurs are often most concerned over funding sources. The drama surrounding this topic can be overwhelming for any founder. However, Miura-Ko believes startups should be far more worried about running out of product iterations than running out of funding. You can replace funding, but when you run out of iterations for a product, that is when hope is lost. Miura-Ko suggests modeling the lean startup concept, championed by Steve Blank and Eric Ries, to smartly manage your money, so you can squeeze as many product iteration cycles as possible out of existing funds. By doing so, founders can avoid raising additional capital, which exposes a startup to greater dilution. This is another important benefit to the use rapid prototyping.
Business Models Beat Business Plans
At the seed funding stage, thoughtful business models are more impressive than long-winded business plans, says Miura-Ko. Business models allow entrepreneurs to thoroughly examine all of the assumptions they have about their business. Miura-Ko suggests evaluation of a number of critical component areas to understand your startup’s position within the business ecosystem. In this clip, Miura-Ko expands on these critical areas for every business model to address.
Watch the entire Ann Miura-Ko seminar at eCorner.