FROM THE IDEA TO THE SHOCK OF REALITY

At all universities, innovation offices and plans have been created to help establish and strengthen start-ups. Despite all this, there are still few start-ups that really end up succeeding (or even surviving for one, two, or three years – the amount of time necessary to get off the ground and flourish).

There are many obstacles and problems that prevent entrepreneurs from reaching their proposed objectives, from bureaucratic, to staff, to hiring problems. This just goes to show that the path isn’t easy at all. If we analyze the failures in recent years, we can see that there are two main things preventing success: not being able to form the right team, and continuing to propose products based on classic schemes – even if they are innovative ideas.

ON ACADEMIC INBREEDING

The most common thing is for a group of students from the same school to come together. They all have similar concerns and they’re all looking at entrepreneurship as a professional opportunity. So far everything seems normal, but all of them have the same training, so they need to find ways to complement their skills. A group of Physics students with an innovative idea might found a start-up, and they could even get it off the ground, and grow it as a company, but this is not the easiest path.

One might assume that it’s easy to fill in the gaps, providing whatever is missing... one can contract, subcontract, and even invent specific formulas to make up for deficiencies, but this is a start-up we’re talking about. In other words, at a company without capital, without clients, without a finished product, it’s the promise of working together as partners, and of a better future, that keeps it moving forward every day. Certain absurd egos prevent start-ups from realizing that if they got together with other companies that complemented them, they could become something with a much richer set of human resources and solutions, making it easier to find new clients, capital, and investors.

THE TECHNICAL TEAM

Having a good idea in the Tech field may be the first step, but you have to have the right team in order to take it to the market. The technical team is very important at the software and hardware development and design levels. Having said this, no matter how many products are finished, the company will never amount to anything if it doesn’t have any sales.

The “punishment” often imposed on one of the start-up’s partners is to search for investors and clients. Drawing up a marketing plan is a must, but, once again, we typically see teams with great technological training that end up copying any old dossier they find on the Internet, and following that structure without any rhyme or reason.

The last big mistake is not differentiating between accounting management and financial management. Having your accounting in order is not only necessary, but also required by law. But don’t think that just because you’re up to date on your invoices and payments that everything is peachy.

The budgetary part (what we might call managing one’s finances) is what makes companies succeed, even if they don’t have an innovative idea; sometimes they are simply capable of succeeding against competitors that don’t know much about numbers. The trick is to be able to create a budget that is as realistic as possible, to set the hourly price with pinpoint accuracy, and to beat any offer from the competition. Coming together and figuring out how several start-ups can complement each other to form a strong, competitive company may be a great solution in today’s times of crisis.

A BUSINESS MODEL FOR TODAY

The other important key for an innovative company to work is not only having the right idea, but knowing how to adapt to new ways of selling. The leasing/subscription model is not just a fad. Rather, it’s a solution that can be found in the software, services, and hardware fields.

The most recent thing I’ve seen in the United States is a subscription service for glasses. You pay a monthly fee and they give you new frames or glasses every month, which you never own. We’re already paying for subscriptions to watch movies, and television, for our cars, and to use word processing programs and software suites. Thus, proposing a classic solution based on sales may make some sense today, but we have to think about the future and the fact that the subscription model is, eventually, going to take off.

GOVTECH AND NON-OWNERSHIP

At this time there is a new business model within the government based on subscription systems. Until now the government worked through tender processes whose requirements to participate drove start-ups away.

The logic was that the government couldn’t take a risk on a small company that had not yet shown its worth, it being uncertain whether it could carry out the task at hand. The usual workaround to this problem is to team up with a large corporation, have it participate in the tender process, and you serve as its technological partner.

Many start-ups have employed this approach and established themselves at governmental agencies, provincial councils, and town halls as official service providers. A new business model, however, has been created using the terms Government (GOV) and Technology (TECH); a model aiming to introduce technology into the government, but with new subscription-based models.

The term SaaS (Software as a Service) has existed as a business model for management software for some time, but GovTech aims to incorporate all kinds of technologies: robotics, Artificial Intelligence, Big Data, Quantum Computing, the Internet of Things, etc., all without distinguishing between software and hardware.

This game-changing opportunity to be hired by the government opens doors for all kinds of start-ups. We’ve talked about those that are created in the university sphere, or by enterprising people, but there’s also a great opportunity for vocational training. We often talk about vocational training as a direct bridge from studies to work, but we’ve neglected the field of entrepreneurship in this area. What lies between going to the university and doing professional training when you wish to create a strong start-up is a new field to be explored and developed, and the GovTech business model could be a door to innovative technological solutions.