L.O.S.T. = Lessons On Startups Today
1.Millennials and Gen-Z
There are many startup ideas built upon the lifestyle of Millennials’ and Gen-Z’s lifestyles. All the goods and services need to be on-demand or subscription-based, and the user experiences have to be frictionless and hassle-free.
While the ideas might seem cool and sexy, keep in mind that many of them have yet to be proven sustainable and scalable with sound unit economics. Especially after the fallout of WeWork and the poor market performance of Uber after IPO, more and more investors are giving profit models a more serious consideration when evaluating startups.
However, it doesn’t mean that scalability is no longer important. On the contrary, founders need to provide more robust arguments and solid evidence about the size of their addressable market. That’s because investors now are becoming savvier and more rational about such projections.
If founders come with only ca hand-wavy proof, without sufficient data points from 3rd-party research or statistically significant results from proprietary surveys, they will have a harder and harder time justifying it now than ever.
To most entrepreneurs, the San Francisco Bay Area still has a halo that outshines the rest of the world, with ample capital resources from the world’s top VCs, the Stanford and Berkeley communities, and talents from the Facebooks and Googles.
However, the US market may not be the best for your startup ideas. Even as the largest, the most open and the most diverse economy in the world, the US market is also the best-developed, the most complicated, and probably the most entrenched as well. Therefore, it’s highly like that your startup’s unique value proposition has much bigger opportunities in other markets, especially the up-and-coming developing markets such as Southeast Asia, Latin America, or Africa.
While local entrepreneurs in those markets have had quite some successes in the past few years, many entrepreneurs from the US are still reluctant to look beyond the borders. This home market bias is definitely not only seen in the startup world — in fact, it is prevalent in the global financial market as well. When I was a global macro investor, many of my competitors only conduct their research on the Bloomberg screen instead of traveling on the ground to meet with the locals.
It’s definitely not easy to frequently fly more than 10 hours from the US to Southeast Asia, or more to Africa. Even a trip to Brazil or Colombia takes more than 6 hours — that’s longer than your vacation from San Francisco to Hawaii, or from New York to Miami.
But being local is your only chance to gain a competitive advantage over your peers, and go meet the global business communities will definitely give you more inspirations than just thinking and sitting your accelerator or co-working space in San Francisco.