June 3, 2017

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Challenges Entrepreneurs Face Taking Disruptive Technologies to Maket

An Entrepreneur is the one who is willing to bear the risk of a new venture, if there is a significant chance for profit. Entrepreneur is a disruptor who markets the disruption. A disruptive technology is an innovation that changes an existing industry and also helps create a new market and value network, displacing an earlier technology or a way of doing business. On that journey an Entrepreneur faces numerous challenges:

1. Acceptance
Change is the only constant in life, yet many resist it. Every time an Entrepreneur embarks on the journey of taking a disruptive technology to market, s/he faces skeptics and negative energy from the industry, competition, and often times people in general. But courage, strength, and determination that are inheritant qualities of an Entrepreneur can help over come the adversity.

2. Legal & Regulation
Playing by the rules and industry compliance is extremely important while running any business, not just with the SEC in general or FDA when it comes to healthcare.  However, often time regulations turn out to be the blessing required for a disruption in an industry. E.g. JOBS Act and Crowdfunding for the Venture Capital industry. With NIN.VC, we now have the best of both worlds. We’re a hybrid between a traditional Venture Capital fund and a Crowdfunding portal.

3. Revenue Model
Ideas are dime a dozen, but how do you make money off of them should be an Entrepreneur’s number one priority, as those returns need to flow back into the business, which is what employees and investors ultimately want. Most businesses suffer because they do not have a strong revenue model.

4. Marketing
An Entrepreneur needs to create awareness when it comes to taking their disruptive technology or product to the masses. While word of mouth is more powerful than any medium out there, advertising and positive press plays an important role in sales. However, reading between the lines is the strategy everyone has adopted (or need to adopt) in this fake news environment.

5. Recruiting
You are what you eat. Similarly, a team is the backbone of any company. It is very important for a startup to find the right people who understand their mission, blend in with the company culture, and follow through on the founder’s vision. The right combination of people / team is the key to success for any business, because ultimately people build companies.

6. Competition & Risk Management
It is important for an entrepreneur to understand the market dynamics; the impact their product has on the industry and among other players or companies. The more disruptive the technology, the higher resistance an Entrepreneur will face from this group as they fight for their survival. The key is to channel the negative energy and use it as a fuel for motivation and indulge in a healthy competition to follow through on your vision.

7. Valuation
Startup valuation is more of an art than science and often times depends on the market momentum or what someone is willing to pay, keeping in mind the public comps and prior private company transactions. As long as the company has certain key ingredients like an amazing team, solid revenue model, good understanding of the competitive landscape, and an execution strategy to take its disruptive technology to market, it has the recipe for success.

8. Funding
The market is flooded with various startup funding options from Angels to VCs to Crowdfunding. So what approach should an Entrepreneur take? Because Angels and VCs have been the around for a while, they naturally have been the favored source when it comes to funding. However, since 2014 the Crowdfunding industry has grown from $16 billion to an estimated $34 billion in 2015 and is doubling or more every year, and according to the World Bank estimates, Crowdfunding will have a global market of $96 billion by 2025 - 1.8 times today’s global Venture Capital industry.

Crowdfunding is the practice of funding a project or venture by raising contributions from a large number of people, typically via the Internet. If you are an Entrepreneur looking for funding (seed / angle) to take your idea / product to market, Crowdfunding is a great option – reward or equity. It acts as a proof of concept for an Entrepreneur before they spend their valuable time or approach a VC. On the other extreme, if you are an experienced or serial Entrepreneur looking for capital, Crowdfunding again is a good alternative as long as they can avoid a messy capital table.

However, if you need someone to add value to your business, NIN.VC and Venture Capital is the way to go. If you take the top few billion dollar startups and average the age of those Entrepreneurs at the founding, its less than 30 years when they embarked on the journey of changing their industries. At that stage, an Entrepreneur needs lot more than just financing, for example, domain expertise, PR & marketing, recruiting, an exit strategy, and NIN.VC or VC’s in general are able to provide them all that with the help of our network of partners; which may not be the case with Crowdfunding platforms.

Venture Capitalists and Entrepreneurs share similar traits - both are required to take off against the wind, the end is unknown, and potential for disaster is evident, but Entrepreneurship requires brave and courageous bunch that are determined to change the way an existing industry functions. Are you a company or a CEO with a disruptive service or product? Visit us at nin.vc to submit a business plan.


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