More than 6 weeks have passed since I last wrote to you, and today I come back to you with this 5th blog. I confess, I messed up with this one. The world is driving us up and down. I guess the younger generation, growing in today’s world will easily get used to all these drastic and continuous changes, just like my generation, the millennials, lived the tech and IT development so naturally. I’m not one of those, I’m Mister classic! I don’t like virtual stuff, I prefer In-person interactions, and I LOVE trains!
In the previous blog, I’ve introduced this one as a glossary. I’ve decided (within these 6 weeks), to do better than an ordinary glossary, to take you on a journey in a company lifecycle. At each stop, we will have a look on the station and the new passengers of the Entrepreneur’s journey train and how they can help us.
Before starting, I would like to clear up the misconception that each entrepreneur, can take different ways to go from place A to place B.That each city has its own transportation system. That each passenger you meet can help you differently. That sometimes, you can find and meet a passenger who is not supposed to be in that place and at that moment. What’s coming next is just a sample for the most common stops that can be found in most countries (with a certain focus on the North American and MENA countries), just how like the definition of a “Startup” can be pretty different from one environment to an another:
PS: There is no Newton, Madonna, Bolt or any other celebrities in this journey, they usually don’t take public transportation. ( Or it’s just that I’m growing and getting serious and boring just like all adults!)
In the very first train station, you’re alone. Having an idea of a solution, that is not a sellable product yet, not even an MVP, but just a prototype version (maybe not even that). You are there in a station called THE PRE-SEED….. No money to buy a train ticket…….. and no one around to ask for help ! You ‘’Bootstrap”, using all the coins in your pocket to buy a one-stop train ticket, and you do so in the waiting room of the station (public or/university research laboratories and centers)… You’re a challenger, you do so… you get to that train that is going to an uncertain destination, wishing that you’ll find opportunities there….. Let’s start our trip…
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In this station, you will meet with the 3 F (Family, Friends, and fools), Incubators, and Angels Investors. They will help you for a certain amount of times (either with their money or their knowledge) to do your Market Research and Develop your product, allowing you to get back to the train and continue your trip…
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Second Station, where you’ll be meeting with some people who will propose to you a deal. You give them part of your luggage (They think they will have a big value in the future) in exchange for paying for the next few train tickets! You Accept. They are called the Venture Capitalists, they will own some of your stocks, that will help you to recruit your first employees and invest as well in your R&D…… And What if You didn’t stop in this station…
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Unnamed Station. Crowded of what it looks like very generous people, you don’t know any of them, (they don’t either). They just heard about you and your project coming their way, and they decided to each give you one of the few coins they have for you to continue the trip! This is what we call the Crowdfunding…
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You’re growing bigger and bigger, right now none of the Angels or friends can afford to help you financially, since your needs grew according to your own growth. In this Station, Series B, you’ll be meeting with Venture Capital firms (Venture capital generally comes from well-off investors, investment banks, and any other financial institutions). These VCs will financially contribute to your Market growth …
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At this specific moment, you’re asking yourself what you are still doing on this train. You can now take a plane (you can’t yet afford to buy a private Jet, but you can afford a flight ticket). Starting here, and for all the next stations (Series D to H), you’ll be meeting with Hedge Equity firms, Investment Banks, Private Equity firms. Your today’s project is not building a company anymore but creating new products, getting to new markets, buying other companies… and so on.
But all these passengers that you met, how do they give you money? Why do they give you money? what are they expecting from you ? How can you seduce them enough to get their help ?….
…………………..Answers in the next STOP…………………..
