As one of two managing directors of The Startup Factory seed-stage investment program, I get to travel the country speaking on behalf of investors, entrepreneurs and community leaders about the future of entrepreneurship. It’s big. It’s getting bigger. And it may be the salvation for the future business success for your city, state and nation.
But I'd like to focus--for now at least--on the year that just passed. While a look back can't show us what the future holds, it's worth noting that some of the things that happened last year will surely have an affect on 2014.
Here are my top trends from 2013 that will continue to impact the startup world in 2014:
Entrepreneurship is sexier than ever.
The bad news is that the definition of success has gotten clouded: There are too many people "playing entrepreneur" today. Some have even raised seed investments and are out hiring people, getting office space, speaking and writing for their local/regional newspapers, magazines and blogs. These accolades do not define success. They may even become impediments to future success. Many have written that raising investment dollars, though very difficult and a remarkable achievement, has absolutely nothing to do with true company success. It’s an event not a milestone. Instead, building a product or meeting a market need is a milestone that's measurable by others outside your company--namely, your customers.
Better entrepreneurs are arriving.
We see more than 300 early-stage companies and their corresponding 600-750 founders per year. On top of those direct TSF connections, we have spoken to more than 2,500 participants in the startup ecosystem in Charlotte, N.C., Chicago, Cleveland, Washington, D.C and New York through seminars, conferences, meetups and one-on-one meetings. This is exciting as it provides us an unbelievable vantage point. And, the view gets better and better every day. I see more talent showing up and making the leap.
Startup success is a team sport.
I believe that with every fiber in my body. The majority of success stories have a common thread and that is the role that one or more advisors played along the way. These advisors may have been an investor or were operating their own company or simply serve the advisor role in the community. With the sexy entrepreneurship quotient rocketing, so have the number of advisors ready to help you grow your company. Two lessons that possibly run counter to each other: Find an advisor or two and really evaluate what these guys can do for you.
Cash is scarce.
The fuel that powers most startups is cash. No gas = no company. It’s a pretty scary proposition. With the growing sexiness of entrepreneurship, the high bar of what determines success, the increasing skills and talents of your founder peers and the understanding that there are a small handful of qualified advisors who can help propel your company forward, finding any gas (cash) is really hard. Don’t be fooled or find false confidence by reading the stories of founders who have raised serious amounts of investment dollars. Be realistic. If you need an investment then you better figure out how to separate yourself from the thousands of other founders/companies. You don’t just have to be good, but you must be better than them.