June 1, 2020
Why Startups Fail – Lack of Connections
Startup teams all too often underestimate the importance of building their own network of influential connections. Connections to influential users, influential industry groups, influential analysts, influential media, and influential business alliances. Or they hope to find investors and mentors that provide those connections once they think they are ready. In reality it’s just doesn’t work that way.
Networking is the best possible way to connect with other entrepreneurs and potential hires, along with media and investors. You should start as soon as you begin discussing your idea, not later. You may want to start networking while you’re still working for someone else. Be prepared with an elevator pitch that tells enough about you (what industry, what problem your solution solves) but not enough to give your idea away. That’s NDA (Non-Disclosure Agreement) territory. You may not have to recreate the wheel. There may be someone in the room whose been there, done that and would be happy to introduce you to some of the people they work with.
When connecting with people, invite them out for a coffee. Ask them for advice. Tell them your idea and ask them what they think about it. If they want more detail, ensure you have an NDA with you or tell them that you can’t discuss your intellectual property until an NDA is signed. Some unscrupulous people can steal your idea at this stage and since they have the connections, they can get to market very quickly compared to you.
Let’s say the guy (it’s usually a guy) is interested and can set up a few meetings for you. He may even accompany you, which is ideal. You may not have a pitch ready, but typically that is still okay at this time. What you’re looking for is expertise. An understanding of where the gaps are: in your team, your solution, your funding, your marketing, your sales forecast, how and when to launch, target audiences. You will probably need an advisory board or board of directors at some point. You don’t know how much you don’t know until you start talking to people who do.
Find a few of these types of people through your networking. Invite them for coffee at the event itself if you can. Get business cards and connect with them on Angelist and LinkedIn. Follow up with them regularly. They may not be the funders of your project, but they may know the people who will.
Effective networking is the way to make those connections in business that can create value for your company. They may not be traditional networking events: it may be at the golf course, or the gym. I know someone who pitched his idea to the CEO of a company in the mens toilet.
The price of a cup of coffee can yield immense results with the right connection. Keep doing it until you find the right set of people that helps you take your company to the next level.