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It’s time to get “good crazy”: Top five tips for start-ups from incoming NICTA new ventures director Andrew Stead
Entrepreneurial dynamo Andrew Stead has been named director of new ventures for information technology research centre National ICT Australia (NICTA) and given StartupSmart his top five tips for start-ups.
Before stepping into the role, Stead was the founder of Australia’s first clean-tech seed incubator and business development director at tech accelerator ATP Innovations.
He also co-founded early stage investment group Sydney Angels.
In the past six years, Stead has worked with 125 technology start-ups, seven of which have sold for a total of $140 million.
Stead told StartupSmart a good start-up cycle takes time to develop, but there are already a lot of industries ripe for disruption.
“I see a strong start-up cycle starting with the alumni of successful technology businesses becoming investors, founders and providing experienced staff that are ready to create and support the next start-ups,” Stead says.
“There is so much opportunity to disrupt older industries, especially those dominated by big slow moving players.”
Be good crazy
Stead says the best ideas are those that are powerfully unique but in an engaging way. While most start-up operators are strong advocates of their brands, he says the ones that don’t listen to feedback or explore other options end up with limited or no success.
“Good crazy founders make you double take, they surprise you. They can be unsettling, unconventional and have an unnatural enjoyment of the start-up challenge, but their hustle and enthusiasm will help win the day,” Stead says.
Don’t walk alone
Stead says teamwork is not only essential to the sustainability of a start-up, it’s also the first validation test.
“The first test of sales ability is convincing others to be involved in a start-up,” Stead says.
“The benefits of having co-founders will always outweigh the risks. You just need to ensure that if a split occurs the shareholders’ agreement makes it straightforward.”
As the ecosystem develops, Stead says there is an increasing number of successful founders, mentors and start-up share scheme specialists available to assist new founders to do this well.
“Use them, they want to be involved. And there is nothing like the validation of an experienced mentor to help get investors over the line,” Stead says.
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Have a telescope in one eye and a microscope in the other
In order to be an exciting opportunity, start-up founders need to nail the big picture vision pitch and know each step down to the tiniest details.
“In Australia, we are often accused of not thinking big enough or not understanding the fundamentals of business. It is possible to do both with a careful balance between selling the dream – the telescope – but understanding the reality – the microscope,” Stead says.
Customers prove everything
Customers are the trump card for concerns about team experience, saleability of your product and concerns about your ability to generate any money from it.
“Customers are the best guides, the best proof, and offer a better alternate to raising capital. You need to do whatever it takes to get a conversation, a relationship, a pilot and a cornerstone customer,” Stead says.
“It is not easy, but finding the sweet spot is what customer development and lean start-up methodologies are all about.”
Hit the accelerator and embrace the community
With several years of experience in coordinating incubator and accelerator programs, Stead is a passionate believer in connecting with the community and making sure you invest in the right training by understanding the differences between incubators and accelerators.
“Start-ups are like marathons with sprints throughout. Accelerator programs are the opening sprint,” Stead says.
“Accelerators are competitive, high pressure and intense places not for the faint-hearted. You have to be open to criticism, learn to tell a great story and get customers. They offer validation, camaraderie, focus and support to excel.”
“Incubators, at their best, are facilitated, multilayered communities,” Stead says.
“At the core are the like-minded founders sharing common experiences and supporting each other. Built around that is connectivity to the outside world of customers, investors, trusted service providers and government. And facilitating the interactions and maximizing the value are the community managers.”