It all started with the fact that one magazine was asked to write a large article on typical errors in the management of start-up projects. (Start-up is now a fashionable anglicism, which actually means a situation when the idea of a new business is thought out, calculated, the project team is present, some initial progress has been made, and now it’s up to the financing and, in fact, the implementation of this very project).
I started writing something, but the topic is, in fact, endless, as well as the repair of the apartment, which can only be stopped. Yes, and I’m like a Chukchi-I sing what I see, not wanting to systematize (let all sorts of business gurus indulge in this, issuing their maxims in the last instance).
In General, not wanting to portray himself as another “captain Obvious” from the countless army of business consultants, I decided not to send the material to the editor, especially since the Internet is already full of thoughtful fabrications on such topics.
It is noteworthy that graphomaniac would-be consultants even have a kind of fashion to give such opuses typical names, like “10 main mistakes of managers”. Or “15 options for how to break up a business”. And then “20 things you can’t tell the staff.” And so on.
And pay attention to who writes such articles. The focus is always on corporate relationships, conflict management, delegation of responsibilities, time management, and motivational decisions. The specialization of HR specialists and coaches is visible even to the naked eye.
No, well, everything is right and proper. Only “For” – and even all the limbs. I fully support the ideas expressed in each such article. Here’s the problem. We like to try to transfer Western tracing paper to our mentality. And it, as a rule, does not fit directly, and is not driven in with a crowbar.
In addition, such materials are not enough, just sorely lacking, visual situations and analysis of applied examples from the life of domestic business.
However, it is not surprising. With the development of blogs, promotion of articles and SMM technologies, materials on the topic of management appear like mushrooms after the rain. Well, how can a young, ambitious graduate of the village MBA school, who has decided that he is already a business guru, realize himself? It doesn’t matter that the ink on the diploma is still wet, or the milk on the lips. Free presentation of borrowed thoughts from the studied works of professors at Harvard and Stanford universities, highlighting your favorite in blogs gives importance, confidence in the indisputability of your own authority, and even employment opportunities to add the line ” author of numerous publications.”
Actually, the purpose of this book is to convey your own, albeit rather chaotic, but still applied thoughts, horror stories, recommendations from your own more than twenty years of experience, which often consists of mistakes made, but later deliberate. In fact, a kind of “notes on the cuffs” of the project Manager (almost in Bulgakov’s way it turned out). Don’t hurt me.
P.S. Do not make fun of the word “startup” often mentioned in the text. It is clear that resembles the “old man.” But startups – the old fart that I am. And so, the initiators and initiators of projects – mostly young people.P. P. S. did not consciously address marketing Issues in the book. Marketing is a thing in itself. If you have an idea, read more, study more, call more, meet more, talk more. If you feel that the theme will work, do it. But then, in the process of preparing the project, it is extremely necessary to conduct a thorough study. This is either to professional marketers, or to Kotler and his followers. Fortunately, there is enough literature on the topic.
A small digression into terminology
According to Wikipedia, the term “startup” (English. start-up-run) is a company with a short operational history. As a rule, such companies are created recently and are at the stage of development or research of promising markets.
I don’t know which smart guy wrote the start-up description in the wiki, but the text is completely built around high-tech and Internet projects.
Hence the abundance of articles and materials on the web. The Internet (as the highest stage of electricity development) is available to 16-year-old talents who consider Zuckerberg an idol.
Young talents inflate their cheeks and spread their plump fingers.
Young talents naively think that they will get rich by creating all sorts of rubbish like online toys and lotions for androids.
Young talents were babies when dot-coms crashed.
Young talents do not know that this wave of the it market is also waiting for a Grand collapse.
Young talents know how to program but do not know how to build a business. They don’t think they need it.
Young talents have appropriated the terminology of the project (pre-seeds, start-up, etc.) but infinitely far from project management. They clogged Wikipedia and other resources with a narrow understanding of terminology.
The market for investments in it start-up projects is radically different from the off-line sector (where I specialize)
(The rapidly growing IT industry is trending. But the reasons are not so much that the profitability is higher, the payback is shorter, and the risk is lower. The reason is the information noise created by very young people who understand programming and SEO, and believe that only this knowledge will allow them to get rich.
Hence, even a kind of monopolization of the main terminology.
What is the word for the stage of the project state where there is an idea to build a factory or a shopping center, but so far there is only an idea, a business plan and initial agreements on land acquisition? Of course, start-up (well, or pre-seed stage, if nothing is ready except the bare idea).
In General, let’s call such a new project as a startup for simplicity, and its ideological mastermind as a startup. Moreover, these words have been in use for a long time.
Netstarter and neoinvestor (it happens sometimes)
In recent years, there has been a certain revival in the market for investment in start-up projects.
However, “thanks” to our General mentality, political, economic situation, and often banal illiteracy, the overall investment climate is still too damp for the rapid growth of a high population of professionals. Moreover, both among project owners and those who would potentially be interested in entering such projects with their capital.
Apparently, more than one more generation of startups and investors will turn into humus on the way to evolution. Although, however, the General situation is still better than the beginning of the 90’s, when money for business development could only be taken from bandits at crazy interest rates, and reporting on the money spent was obtained by means of a thermorectal cryptanalyst (the same soldering iron that you know where).
We could say a lot of “good” words about our homegrown investors, but we need to deal with the cause, not the effect.
If you visit any of the many free ad sites or business forums, you will find an abundance of ridiculous “investment offers” in the “investor search”section.
Ridiculous-both in the form of submission, the meaning, and the abundance of errors.
Here are typical examples from several message boards collected in 15 minutes of viewing them (spelling, grammar, and vocabulary saved):
I am looking for a business partner to execute a business plan. All details in the correspondence. Who is interested in the offer leave your email addresses.
I am a businessman and entrepreneur. At leisure, he invented a business project and a new transportation system, “line-Network transportation of passengers” according to mooim calculations, the monthly income wakes up from $ 1,000,000. I will sell on the terms of the following employment for work. I suggest you take part in my investment project.
I am looking for an investor in a highly profitable business. I will provide a business plan and detailed financial calculations after a preliminary interview with a potential partner….
I offer a recipe for the preparation of the “elixir of youth” – know-how in the field of slowing down the aging process, as well as stimulating the activity of vital mechanisms and organs of the body. Looking for investors. Complete studies and trials of the drug (in mammals) are required.
My name is Gerasim Izmailov. I have 800 inventions. Give me $ 5,000,000 to build working prototypes.
The same or similar offers are sent to my email address by the dozens every day. Few people look at the fact that I am not an investor or a banker, and I do not engage in investment mediation in principle. If you see the word “investment” in the context, then you should send it.
There are, of course, competent offers, but they are lost against the background of hundreds of others that are immediately sent to the basket.
Having worked in the investment market for a long time, and regularly encountering such figures, there are already common types of inadequate startups.
Half-crazed inventors of something with a prototype made of wood, a doorbell and a battery attached to it, falling asleep to investors with the idea of a breakthrough in nanotechnology. Option – a piece of paper on which some scheme is drawn by hand, in which they clearly see a super-idea for getting a billion dollars.
Narcissistic Amateurs (I have a cool project-give me money, I’ll tell you the details).
Yesterday’s and today’s teenagers with micro-projects, the same fast-food education and no experience.
Creators are dreamers who do not recognize plans, budgets, reporting, accounting, administrative and managerial functions. They Are Creators. And you’re just an investor. Here and mess around, wiping their snot.
Losers, idlers, misfits with ideas – either stolen, or unprocessed, or unviable, or naively calculated to sell them to the investor and escape with the money.
Like normal projects in the form of a working business, where the owner is interested in attracting a strategic investor for further development. After lengthy negotiations and a comprehensive audit, it turns out that there are huge accounts payable, real estate assets on the balance sheet were put into operation illegally, the term of the contract for the land plot is coming to an end and is not subject to renewal, and there is an insoluble conflict of interest with other co-founders.
We must admit that there are also real startups with a good team of specialists, deep pre-project research and high growth potential. Unfortunately, they are, at best, no more than 5% of the total mass.
About ” wolves”
The network has the same huge number of pseudo-investors. Pseudo – for the simple reason that the investors they have the same attitude as Zhigulevskoe beer to the car “the Zhiguli”.
There is such a classification:
Small shopkeepers who are trying to prove to themselves that everything is so great that it’s time to diversify their business, and puffing up their cheeks, consider other people’s investment offers. In fact, they never had any money, and they never will. To amuse their egos, they will ask seemingly meaningful petty questions for a long time. After multiple meetings and negotiations, everyone approves first, then delays the decision as much as possible, and when their phone finally answers, they say that they are not interested in the project because they are closer to the shop business.
Winners of the dad’s award and citizens who successfully sold an extra apartment or 2ha of land that was inherited from raspaevaniya. These are the great managers of all times and peoples. They suffer from overestimating their capabilities and believe that if they invest in someone’s start-up, the cost of which does not actually exceed the cost of a three-bedroom apartment, it gives them an absolute carte Blanche on the property and on the project and its team. As a rule, their money is random, they do not know what to do with it, and such projects fail, even before they reach the break-even point. Moreover, they fall not because of the startup, but because of the idiotic initiatives of such would – be investors.
Idea thieves. This species of Homo sapiens is all right. Owners of established companies with a genre crisis in terms of their ability to generate ideas. Yes, they have experience and financial resources. But there is also a pathological greed, coupled with a sense of self-importance. As a result, the more information they get from the startup, the easier it will be for them to implement this idea on their own.
Scammers and scammers. As a rule, they are represented by investment brokers, consultants, and intermediaries. They are required to pay for any pre-project services (study of the existing business plan or investment Memorandum, legal services, notarization, due diligence, unclear certification of unknown things, risk insurance, payment for the arrival of a hypothetical investor, etc.). You should know a simple thing. Any pre-payment terms that are set up are a divorce.
Forums “business angels”. The main condition is the payment for the opportunity to present your project to an audience consisting of people whose business cards the startup will never see, and names will not know. If the conversation continues, it is more likely that the “investors” will be the characters described above.
The entire investment market is 95% a huge crowd of charlatans and losers who have one goal, something to sell one another. At the same time, both adequate investors and normal startups spit in disgust at the sight of this sandbox and become even more cautious in choosing strategic partners.
How it actually happens.
There are more than enough competent and well-reputed investors on the market who have successfully implemented more than one project.
They usually have clear proven legal schemes for interaction with project owners, in which both parties are equally protected. Another issue is that they rarely post on the boards and forums sentences like “the developer is offering financing”.
Occasionally, their ads and direct contacts pop up on the Internet.
But it is much more efficient to get information about potential investors from other sources. These are news sites, press releases, analytical materials, use of social networks (Facebook, Linkedin), and off-line contacts.
How do normal large investment companies generally work?
First of all, only carefully designed projects that have at least some material basis are considered.
Accordingly, there is a procedure for cutting off projects at early stages (before making a request for payment for consulting, engineering, audit and evaluation work). As a rule, projects are cut off when they are clearly not required by the market, the applicant’s obligations and burdens, violations of the legal purity of asset ownership, and sometimes-the inadequacy of the project initiators.
Of course, certain costs are required at the stage of the independent verification procedure (due diligence).
However, complex technological, financial, and legal expertise is performed only after making a strategic decision on financing.
At the same time, the investor does not have a goal to “hack” the project at the verification stage, since even before it begins, he begins to invest his money in the work (analysts, financiers, lawyers, etc.). The main goal of verification is to optimize the project.
Accordingly, the startup has time to check the potential investor for their history, completed projects, assets, and other things.
The contract for such work, which is concluded between the applicant and the investor, contains certain mutual obligations.
On the part of the applicant, there are no hidden factors that were not announced at the early stages of studying the investment offer.
Investment and project company BFM Group Ukraine