A big local market is a curse. A medium one – such as our Polish one may limit your thinking. Polish startups are all too often guided by conviction that it’s worth implementing solutions only in their domestic market. It will do for scaling. Such startups fall into a trap. Ironically, startups which derived from small markets do better on the global market. Skype from Estonia, Angry Birds from Finland, and Prezi from Hungary are a few examples of global startups whose founders did not count on local markets but knew straight away that they had to scale globally to be successful.
The definition of a startup is straightforward. Steven Blank says that startup is a temporary organization searching for a repeatable, scalable and profitable business. And not a single word is said about limiting oneself to a domestic market. A scalable business model presupposes a global approach. Skype was global from a start as it would not get anywhere on the Estonian market of only a million consumers. Startups are created in the search for a business model which will fulfil three conditions: of being repeatable, scalable and profitable. Contrary to general belief startups do not translate any preconceived business plan into reality. They have no requirement for the model that requires learning from others and applying the so called Sample Theory in its early stages as presented by Mateusz Mach (the founder of Five App) during his public appearance at TEDx Gdynia. It is worth considering how we can show the so called traction to interested investors when you envisage a business model. The traction is nothing more than a level of adoption of the project by the market. The evidence that our project makes sense and that our business philosophy is correct.
However, Polish startup managers’ lack of confidence is less and less astonishing to me. Some time ago young people visiting me offered cooperation in creating communication for a project. The whole idea was to prepare a big startup event in the coming year. Our settlement was based on a success fee, that is: if we win, I will get 10%. I was intrigued and I asked for an e-mail with a high-concept pitch- a set idea which would let me find out if the project is really interesting. And what I heard was that I would get more information on the project once I sign an NDA. Sam Altman says "I operate in business assuming people won't screw me. Occasionally I get really screwed. It’s still worth it." It means he follows the principle of trust; trust which helps in business relations. And he does not run the risk of being a laughing stock.
Consecutive social investigations show that the level of trust in others but family is very low in Poland. This, in turn, results in very low social capital. I mean, how would you do networking, how would you get experience if we are constantly afraid of talking about your ideas as someone may nick them. And how to work on a consumer value if we are so afraid of other people. I understand distrust, I understand commitment to the idea but I truly do not understand a kind of arrogance and conviction that our project is brilliant and unique in the world, that everybody lies in waiting to steal it. Never before has any of foreign startup I cooperated with started their negotiations with an NDA. Moreover, they did not show an obsessive fear of talking about their product. The biggest investors do not sign NDAs. They are weirded out by people and startups weaving confidentiality documents in their face. Well, it is true, there are patented technologies, but they are not worth mentioning in details at the meetings.
Being more humble
When I start training or consulting for customers or startups I say: it will require effort, we will argue, I will challenge your beliefs, I will point out your mistakes. Do not come if you want prise, come to get evaluation of your work. And young people start to understand that more and more frequently. However, it sometimes happens that our consultation turns into a battle on a battlefield. And there would be nothing wrong with that, if not for that fact that the interlocutor understands and gives arguments about reality “through anecdotes”. That’s is, it is so and so as people say my solution is cool. And so I argue otherwise as business is not built on your own conviction and your perception of the world but rather on facts, surveys and observation. Lack of humility and realism as well as a sort of adolescent arrogance do not blight your chances in business. Courage and the tendency to take your chances are good, however, it is worth supporting them with a broader consumer view and seek mentors who will be a “devil’s advocate”. And you should not be afraid of their opinions. Moreover, you should not be afraid of accepting failures as blessings. You should also know when your startup should be exterminated. In Polish reality we can observe people who have been agonising over one idea which is neither distinguishing nor unique and moreover shows no potential to develop. They have been agonising over it as they either obtained the EU funds or they have their careers. In a brutal reality they would be writing a startup post-mortem and moving on to a new idea. Wiser as they have learnt a lesson. Failure is deified in Silicon Valley. As you learn from your mistakes. In our reality failure is perceived as something shameful. What a pity.
Growth mind and anatomy of a failure
It’s worth adapting from foreign startups a culturally embedded attitude to failure as an important part of business education. An American social psychologist Angela Duckworth examined factors determining success in many different areas of human activity. Contrary to general belief, it was not intelligence, social capital did not play the most important role either. It was not about your looks or any particular passion for knowledge. Everybody who was successful showed extreme persistence in their undertakings and holding their ground in when faced with failure. It was an everyday laborious struggle to go ahead with their startup. You must remember that, especially that everybody in Poland likes feeding off misleading case studies. Evaluations such as 16 billion dollars, success stories of startup managers who become overnight stars, great media hullabaloo and parties at which those who were successful seem to shout “I did it, you can do it, too”. Startups, however, are not ctrl C, ctrl V products. The fact that Instagram was taken over by Facebook for 100 billion dollars does not mean that your idea will also cash in for the same money. That is why active and skilful listening and screening is so important. More importantly, what matters is hard work and everyday practice in the so called growth mind.
This is a specific kind of competence that consists in noticing mistakes, avoiding making personal excuses and continuous improvement and learning. Just as in sport. Everyday hard and sound training, come rain, come shine.
When a group of Tri-city mentors recently put a proposal to me to join another mentor program which, this time, was supposed to help those startups which have been struggling to cope for some time, I answered…. „the only way I can help them is to finish them off”. I know it sound very brutal but the startup must know when it needs to stop pursuing the blind alley. And it’s worth learning. You need to peruse and hold you course balancing between doubt and hope, optimism and arrogance or pride and a real assessment of the situation. Especially, if you stumble and realize why you will not make the same mistake again.
Communicate as Americans do
The skills of presenting business ideas, projects and concepts are a disaster in Poland. I realize this may seem like overstating and I will be more than happy to change this opinion, however, it does not look special so far. Even people who speak beautifully and are charismatic speakers usually use empty words and phraseological calques which convey no meaning. Yet, pitching products is something natural in the realm of startups. You need to have a ready high-concept pitch, media pitch, investors pitch, teasery etc. from the very beginning. And communication is often neglected by us. All in all, I know the project, and I will say a word or two about it. Pitch is something natural in Anglo-Saxon culture. The art of communicative talking about your project, products, ideas, the skill of presenting your assumptions and telling stories is present at all educational stages. That’s not the case in Poland. We become imbued with wrong values and patterns; your colleagues are bores at the meetings, so are speakers at conferences and academics whose linguistic voicelessness is seemingly the proof of methodological correctness. And we get stuck down a blind alley. Than we start our 3-minute-pitch in which we have to give as much information as possible …. and we lose our opportunity. After his visit to Poland John Biggs said some harsh truths „Polish startups appear to have some issues with pitching. The lack of pitching skills, which is talking about the product, is the biggest problem of early-stage entrepreneurs. The person who is making a public speech and gives an impression of someone who has little or no faith in his/her idea, will not have the slightest chance to convince potential investors.
I support in pitching more than 200 teams a year. I know that Biggs is sort of right. I, however, believe that we can change the situation if we get a proper attitude and involvement. However, we need to learn getting the message across in a totally different way and a different approach towards the whole communicating process. It must be a well thought-out and scheduled process rather than a square peg in a round hole. And it you obviously need to practice in a foreign language. Biggs says Some Polish founders of startups wish to pitch in Silicon Valley in their mother tongue. Unfortunately, they have no real prospects of persuading investors into their project if they do not speak English during press conferences. Another mistake is lack of product promotional materials in English. As a result nobody will take their interest in such an entrepreneur...
English is a lingua franca of a startup environment. We should not delude ourselves that the whole world will speak Polish. Slovenians, Estonians and Scandinavians I used to work with know it very well. Nobody there would even consider preparing any communication in their mother tongue, no one would want to think about it. Maybe Slovenians are not as good at pitching as some Americans or the Brits or even startup managers from Tel Aviv, but when I saw their Demo Day, organised by ABC Accelerator, I was sure they must have practiced a lot. I even asked and found out that teams spent every Friday to perfect their presentations for almost 8 weeks. I appreciate that working on a project means sleepless nights and if we are lucky enough to have these precious 3 minutes to present it in the best possible way, it is well worthwhile to devote your precious minutes to it. Everything to perform well.
Learning from your mistakes is one thing, learning other markets, consumers’ insights comprise an important part of a startup which aspires to be global. Objective and subjective criteria of individual local markets differ. It is worth creating universal products and examining constantly how individual groups and areas perceive and appreciate them. Skype issued its product in English and later added other language versions based on the country maps showing where it was downloaded most often. Startups should be flexible and open to change. Expansion is not always easy; it proved true to UBER whose legality was challenged by some European countries and who faced legal impediments.
Poles do not differ from other nations in their knowledge, mind or competences. We are not particularly better or worse. We really need to catch up on some things but I believe that conscience and humbleness will make others to learn from us in time. A tangible way. At least I will be helping to achieve that in a tangible way.
- is an architect who does not design, academic teacher who does not fit schemes, communication fanatic addicted to analyses and social psychologist always looking for WHY? He considers himself a modern day Hermes – a researcher who combines different inspirations to come up with new solutions. He collects ideas and merge them into new ones. And he loves to build it all on solid neuroscientific base. As a freelance consultant, Piotr works with companies big and small, local and global, offering them support and a bit of a struggles with communication strategies.