Startup competition (again)

This could be just a confirmation bias. Most startup folks around me know I am not a big fan of startup competitions and I have previously posted on similar topics. However, after acting as a ‘judge’ for another startup competition today, I can’t help but continue to reinforce this belief/illusion. Perhaps the reason why I am so upset is that I have witnessed the startups have generally become much more mature and sophisticated, yet startup judges remain the same.

Startup judges remain to be carried out by senior corporate executives, typically big company names but the person has little to do with startups; or wannabe/fake investors who are usually senior corporate executives that are in between jobs; or mostly people who have never started any business nor invested in any startups. I know it is hard to find the right people to do this job (it is boring and it’s often basically free labour) but we have to do better. Startups deserve better.

Alright, here are the problems and I have categorised them as follows:

Type 1: people who will never invest in Whatsapp

Generally, most startups attending startup competitions are early-stage startups. Of course, there are ones who have been running as a ‘startups’ for 6-7 years (their real business model is to continue as a startup and get government grants/competition prizes) or established startups who somehow (usually being invited to) join these competitions, but these are the exceptions.

So I have a problem when these judges ask, “what is your business model?”

Really? You want to know their business model when they don’t even have a MVP, or they haven’t even managed to obtain any meaningful validation from the market? Is that all you can muster?

This is stupid. First, there are only so many ‘business models’ out there and there is really no rocket science or magic to it. When there is traffic, there is a business model. When people like it enough and there are enough people liking it, there is a business model. Most important, business models are built by entrepreneurs, not imagined by irrelevant punters. Business models are built based on constant market valuations/testings or using a large amount of money. It’s really that simple. Second, most startups pivot in their first few years. If their operating model is not even established, why are you asking, and more sadly, judge them by their, or lack of, business model? Why is this even relevant?

Therefore, for those smart judges out there, please explain to me, what is the business model for Whatsapp? Not now or what Facebook is planning to do (after getting all the juicy data), but when Whatsapp was in its first few years? If you know the answers, fine, go ahead and ask these startups.

Type 2: people who will never invest in Uber

I have heard startup judges who said proudly, “I only invest in businesses which makes money, and your startups take too long to break even”. Fine, everyone has their own investment strategy. But one has to appreciate we have many tech startups these day who don’t make money that quickly. Yes, I think some of them are complete scam (you don’t need to build out such a big operations like WeWork; all you need is to tell your customers that if they pay you 1000, you will pay them 1005, give and take the operational costs involved, you will have billions of revenues and millions of loss even more impressive than WeWork). [Bonus question: anyone wonders why Uber loses money but AirBnB makes money?] But to simply ignore the fact that not all startups are created equal is plain stupid. Every startups have their own initial funding needs, their own business model, their expected growth, and of course their own expected return on investment (taking timing into account). So asking any questions in relation to money at this stage is not going to and should not help in evaluating startups for the purpose of any competition, because they are all different!!

Type 3: people who will never invest in any startups

The saddest ones are the judges who make comments along the lines that “they” don’t like or won’t use the startup service. Seriously? You really think everything in the world is just made for you? What makes you think you are the TA? Even if you are the TA, not all TAs are supposed to be the eventual customers. Is this really that hard to comprehend? I don’t like handbags but my wife is crazy about them. That’s why there are millions of different products and services out there. It’s not just about you, baby.

Also, there is this little something called innovation. Before iPad came out, there were many critics who laughed at Apple (or Steven Jobs). They said all Steve Jobs can think of now is a very big iPhone. If we are not curious and allow, within reasons, creativity and possibilities, then why the hell are you sitting here as the startup judge? If you really think you have figured out everything in life, including well into the future, then you are more qualified to work in the heaven than being a startup judge.

Advices for startup judges

Here are my list of advice to people who, willingly or not, will act as startup competition judges:

  1. Be kind and supportive. Don’t judge. Give encouragement. Unless you intend to be their investors or customers, leave your little two cents in your own piggy bank. Say something that will help the startups move forward, not backward.
  2. Don’t ask questions or make comment to soothe your ego (there are other ways). I know usually the scoring criteria is stupid too but you can do better. Ask yourself who really needs to ‘win’ this competition. Who will get the most out of it by winning the prizes? Ask questions that differentiate teams from these perspectives.
  3. If you can’t hold yourself but have to ask questions, try these. Ask what are the biggest challenges that they have faced. Ask what are the learning that they have made during a specific phase of their development. Ask what specific data drive their key decisions. Ask what get them motivated and excited. Ask what is their ‘delta’, between now and x months ago.

Let’s all be better.

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