The start up

The business start up situation is simple

Ideally the amount of time between Start up and Sell stuff should be as short as possible. There nearly is always a gap. Funding is often required to bridge the gap.

To minimise the gap you should know:

• ·         What the product is
• ·         Who might pay for it
• ·         How to reach the potential customers
• ·         How the product fits into the “value chain”

Tech start up’s often don’t know:

• ·         What the product is
• ·         Who might buy it
• ·         How to reach the potential customers
• ·         How the product fits into the “value chain”

Funding is required while the start up figures these things out. Risky!

It is clear that a business makes stuff for sale: That pre-supposes that:

• ·         The stuff works
• ·         Somebody wants it
• ·         There is a means to distribute it to the customers

In many tech start ups those pre suppositions cannot be made. Even riskier!

In start up cases where being able to sell the stuff is a dead certainty the start up owners simply go to bank and get a loan using their houses or their parents houses as a guarantee.  

If however as is the case in some start ups, the stuff may not work, the customer may not exist yet and the method of reaching the customer is unclear then it is clear that the risk is too big to use your parent’s house as collateral. For example: Twitter. This is where venture capitalists, business angels and other investors come in. Nothing to worry about, it just is what it is!…..