Not so long ago a friend of my wife contacted us to help them writing a business plan. While discussing with them it was clear, again, that the startup scene is very immature. They told me they send a word doc to several investors and that they were interested. I gave them as advice not to contact too many. Scarcity increases demand. And all investors are connected with each other and they don’t like to hear that the competition is in the same bath. They prefer their own little shower. The business plan will hopefully be ready in the coming days and then the game is on. Who is the best liar? The longest nose wins the game. Let me be clear, lying in the context of the startup scene is not wrong. What is wrong is that we accept the lie. All of us. Of course we have all these fancy words to disguise the real deal and books to refer to and success stories to point at.
I guess the biggest liars are the investors and the crowd close to it like incubators, accelerators etc. They created a format in which the startups needs to fit in his demands. Looking at the big successes of today, these founders were entrepreneurs, stubborn and not afraid to show the middle finger to all this structure. Too bad for the investors who missed so many great deals. They also claim that mentors are crucial in the success of a startup. They often claim to have a long list of the most influential ones available. Too many investor even claim to be good mentors themselves. A joke of course. They are not, they are just protecting their money. 500 Startups and Y Combinator claim a good mentor is the success of a startup. I follow their thoughts. But why then is it seen as normal that a mentor, in creating great real value, is supposed to mentor for free? For once we agree all that mentorship is important but no way that we will pay them. Leaves me speechless.
Looking at incubators and accelerators I see the same strange strategy. I am a big defender of in-house mentors combined with a program based on lean startup. Here again everybody will say: Great! Especially in Turkiye we need this approach as the startup scene is too young, too inexperienced. But the investors that are on board are not ready to pay for the managing team. No, they only invest in startups. The teams in the incubators and accelerators need to find money from government programs, maybe a small percentage of the invested capital or, why not, do it for free as they should be happy to be among all these great people.
Leaves me to conclude that those who create real value are honored with close to nothing. Those who create no value but provide cash are the kings of the game surfing on the lies from the players. They even are happy with the fact that the success rate is so low, to almost nothing. And they do not question it. They blame the bad startups. The government or the universities.
Time to change the game I would suggest. If a startup presents too much risk to invest in, the investor says no thanks. Maybe they should use the same reasoning for their own business. Maybe they should download the business canvas and do the exercise for themselves. And of course there are exceptions. But as I advise my mentees again and again, exceptions are not the rule. I love the startups and those who are there with the right heart and intention. Otherwise I had started a restaurant in Urla, Turkiye :-)