Participating in Startup Weekend Hong Kong in April earlier this year was an invigorating experience, one we heartily recommend to every member of the startup world. We had the honor to be mentors and can sincerely say that there is nothing quite like being in a room full of like minded people all chewing on the same meta problem, that of how to launch a business. It is exciting to watch and interact with the development process in fast forward motion, with passionate teams of smart, dedicated people tackling the main elements of the startup dilemma- problem, product, and profit- in just a single weekend.
Hong Kong is a hub of different cultures and world class centre of business and industry, and as such, SWHK teams are able to work on truly unique and interesting problems- always a big plus for startup entrepreneurs. On the other hand, one of the tougher challenges startups face here is how to address scalability. In many ways, Hong Kong can be looked at as two different cities with a majority local population who is preferential to being serviced in Cantonese and a far smaller expat population within which English is the lingua franca. Focusing exclusively on the expat market seems to have serious limitations.The best SWHK team are addressing issues faced by the greater Chinese market, the Asia region or, if truly ambitious from the get-go, ones with global reach.
One of the most engaging and inventive parts of the SWHK process in our humble view is the product creation phase. The energy from the teams is palpable as they brainstorm together and argue ardently in a sea of colored post-it notes and busy white boards. Whilst we found that many teams had potentially great products, few were in the ‘blue ocean’ vein. Creating a new product that must instantly compete to survive is time consuming, expensive, and difficult. Teams that look to create a product with no direct competitors- true disrupters- end up actually creating their own demand. They are able to use their resources to focus on execution instead of out-marketing the competition. When kicking ideas around, it’s important to ask yourself: Has this been done before? Can I do it significantly better?
Once the product is agreed upon, the teams need to work out how their ideas can make money. This part is quite possibly the most challenging. There are growth entrepreneurs. There are product entrepreneurs. There are customer entrepreneurs. Our aim is to be the profit entrepreneur. We live by the extremely wise tenet: Be profitable, not sexy. Building the next Facebook sounds like a great idea. So does creating the next World of Warcraft. But will you make any money? It’s easy to forget about the numbers. Us tech news geeks get our heads filled with stories of multi billion dollar valuation for companies without a revenue stream. Those stories are like Hollywood actors. Sure the lucky ones make it big, huge even. But 99% fail miserably and work at your local diner serving you coffee for the rest of their lives. We all want to work on the next Google, but the reality is many web platforms have shaky revenue models. Great startups have solid revenue streams and are able to convert their idea into actual sales. There is only so much advertising revenue you can generate without actual product/service sales. To make decent money from online advertising, you need around a million monthly page views- truly a Herculean task. Understanding your profit drivers is the most difficult part of business. If you can put together a plan to solve a a problem AND generate cash flow– well, you just might change the world and make money doing so.
Given the many pitfalls of entrepreneurship and the juggling act that is starting your own businesses, SWHK is a great place to work out some of these kinks before launching for real and we highly recommend the experience to any budding entrepreneurs around.
Sonalie on Twitter: https://twitter.com/greenqueenhk
Tracy on Crunchbase: http://www.crunchbase.com/person/tracy-turo