Guest Post: Can You Build A Tech Unicorn From Your Bedroom In Malta?
The tech entrepreneur myth goes that if your idea is good enough, and your talents impressive enough, then you can start a global business from almost nothing, and be spurred onto success because your idea, or your tech, is better than anyone else’s. In the start-up world, this is called ‘building a better mousetrap’.
Bezos did it. Gates did it. Zuckerberg did it.
But guess what – that’s not actually how they did it. And if you want to follow in their footsteps and build a global business from humble beginnings, it would help to know the truth. Big businesses are the result of a recipe of advantages that you must also attain in order to succeed.
So here’s what really happened – Besos had half a million in mum-and-dad money just for starters. Gates was one of like 15 people in the world who grew up with access to a computer by the time he started Microsoft in 1975, and Zuckerberg received hundreds of millions in venture capital in the early years to grow Facebook’s user base.
Remember, successful entrepreneurs don’t want you to think they had any advantages. They love a rags-to-riches story because it amplifies their personal brand and supports the mythology of their business.
The reality is that in the world of start-ups, ‘the idea’ is nowhere close to being the most important factor for success. Ideas are common and, due to parallel thinking, repetitive.
Your great idea is probably being worked on by at least two dozen other teams around the world (and that’s if you’re REALLY innovative).
If you want to succeed, you need to think beyond your idea and relentlessly pursue the advantages that have made nearly all your role models successful in the past.
The things you need are cash, talent, connections, and at least one powerful ally. Without these, your chances of success are marginal, and worse still, investors will know it.
So let’s unpack the list. First of all, cash. Every innovative start-up that wants to scale beyond a medium-sized business will need cash, and plenty of it. Why? To acquire users, develop your tech, hire a sales team, or expand your operations.
Your competitors around the world have access to millions and often hundreds of millions of VC dollars. From homeware brands like Casper Mattresses ($339Mn), to social media upstarts like NextDoor ($717Mn), to delivery brands like Deliveroo ($1.7Bn), every fast-growing business needs a war chest of money to fuel rapid growth and an escalating valuation.
Some companies are worth billions before they ever make a cent in profit, and this is only achievable through several rounds of funding to the tune of millions at least. Organic growth and self-funding are simply incapable of competing at these levels.
Second, talent. Having people on your board or in your team who have an excellent and demonstrable track record will massively enhance your appeal to investors.
After all, the best investors are great at taking mental shortcuts to assess your start-up – and one great shortcut is to ask ‘is it run by great people with a proven track record of success in a similar role?’. If the answer is yes, check box and move on to….
Connections. Cliches are often true, and a depressing amount of the time it’s not ‘what you know’ but ‘who you know’ that counts.
Your idea will not distinguish you, but putting your idea in front of the right people will. For example, if you send a cold email to an investor with your pitch deck, the chances are almost certain that they won’t read it.
If on the other hand you are introduced warmly to an investor in an email from a mutual contact, they will almost certainly give you the time of day. You’ll get the crucial minutes that you need to establish your relevance to them, gaining their interest and support.
In the start-up world, your network is your net worth. Internalise that.
And the last thing you need is a powerful ally. Why? Because this sends a signal – and a strong one – that your business is a force to be reckoned with.
For example, if you can tell investors and potential partners that a well known investor has put cash into your project, that immediately sends a message that smart people have vetted your business and considered it worthy of their money.
And the great thing about powerful allies is you only need one to start with. Get one reputable player on your side, and then leverage that to get a second, and a third. In short, get one, get them all (if you’re smart).
So, if you are starting a business in Malta, you shouldn’t be disheartened. There’s plenty to play for, and you can make it. The barriers to entry into the global markets are dissipating fast, and Malta has a place in the future tech landscape thanks to rising local talents, and greater interest from the state in innovation. But on the other hand, neither should you let yourself be deceived by myths of the ‘self made’ who ‘just produced a better product’.
Seek funding from government grants and investors. Purposefully associate yourself with talented people you can support you, and do not be ashamed to take initiative to make connections with people who can do something for you. Recognise that for your start-up to really scale, you will need more than just hard work and a great idea, you’ll need a competitive edge.
Play the game as it is really played – because it IS a game with rules you can learn and exploit, and if you don’t, others certainly will.
Beppe Coleiro is the co-founder of creative and strategic branding agency Blonde and Giant, specialising in working with startups and venture capital funds to raise investment and develop the world’s most innovative companies. To date Blonde and Giant has facilitated over €1bn in fundraising for startups in Europe and North America.
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