1. Startups

Tips from VCs for those who want and are running a startup

Jeffrey Joe of Alpha JWC Ventures shares his views and advice for founders at #TuesdayStartup.

For those who have an entrepreneurial mentality, establishing a digital startup is an interesting way to try. Especially when internet penetration and the digital economy in this country is progressing quite fast.

However, setting up and running a startup is not an easy matter. Choosing the right vertical, forming a strong vision, determining a business model that fits the target market, to raising funding are stages that they must go through carefully in order to achieve success.

In the eyes of Jeffrey Joe as Co-founder & Managing Partner Alpha JWC Ventures, the figure of the startup founder is one of the most important factors in the startup business. He assesses the task founder a startup is very heavy. Jeffrey understands the difficulty of the role founder so he never recommended setting up a startup for a living.

In #TuesdayStartup this time, Jeffrey shared his views and suggestions from an investor's perspective so that investors founder startups can get ready to run their business.

No guarantee

Jeffrey admitted that there is an assumption that venture capitalists have a bias towards educational background. The former COO of Groupon explained that important educational factors can be used to measure a person founder can create and lead a great company. But he refuses education background founder will be the main reason a startup is ogled by VCs.

Overall the factors of education, network, track record and reputation are the combination that most investors look at. Jeffrey said there will always be founder who get a capital injection when they don't even have a product yet.

"Founder technically good, no guarantee of success. Founder good school, no guarantee of success. Have you ever made a startup, no guarantee of success. All that combined is not guaranteed either. That's why it's not easy, but at least the more boxes are checked, the more likely it is," said Jefrey.

Dilema growth vs profit

There is a kind of choice that is quite a dilemma that startup founders need to face before starting their journey: choose an already large market or enter a unique business model? Without hesitation Jeffrey said he would choose the former.

Jeffrey gave an example of the Zoom teleconferencing application, which has become increasingly popular since the pandemic hit the world. The company was able to make its technology a market choice after competing with many companies in similar verticals. The pandemic situation which automatically increased the number of users of the entire teleconferencing application they managed to take advantage of so that its users continued to grow over time.

That's why he thinks choosing a vertical with a large market is more important than a unique business model. "That's why it's important market the big ones first, because with that you can give bigger opportunities so that the company becomes big too," he added.

However, if drawn further between the priority of pursuing business growth first or pursuing a quick profit, Jeffrey did not choose both. Finding the right economics unit according to him is more important.

Jeffrey suggests that a startup doesn't need to pursue big growth first if it doesn't already exist economic units, and still a long time to make a profit, because it would be very risky.

"There is another scenario, maybe with the first business model, you won't be able to make money, but if you have a lot of users, we can monetize from the second business model onwards. We have to understand why we have to grow while burning money," said Jefrey.

Open communication

In this difficult situation there are many difficult decisions to be made founder. Jeffrey as part of VC is also aware of their situation. That's why he felt founder can be more active in embracing investors for discussion.

Jeffrey admitted that his team at Alpha JWC Ventures is always open to help find solutions to the problems they face founder. He assessed that investors are not just parties who give money and demand reports only. "We are very welcome founders who proactively invites us to discuss to find a solution."

Die quickly

More Coverage:

Startups are thorny businesses. No wonder the startup failure rate reaches 90%. Therefore, failing to run startup is not something that is rare.

Jeffrey also agrees with that. He assessed that a failed startup is not the worst case scenario. But failure that occurs in a long and slow time is a nightmare for founder anywhere.

According to Jeffrey, a business dies quickly and when the scale of the business is not too large, it is far from bad. From there one founder instead, you can learn faster and move forward with pivots or even by creating a new startup.

"It doesn't matter if it fails, but it's a true failure," he concluded.

Are you sure to continue this transaction?
Yes
No
processing your transactions....
Transaction Failed
try Again

Sign up for our
newsletter

Subscribe Newsletter
Are you sure to continue this transaction?
Yes
No
processing your transactions....
Transaction Failed
try Again