The general thought is that if you’ve got a good idea – and no one has done it just yet, or not in the way you’ve conceived it, being first to market means live or die. Here at F3FundIt we think this approach is pretty much wrong.

There are clear benefits to first mover advantage, but there are also a number of other factors that have to be taken into consideration. The first and foremost of these is strategy.

And by strategy we mean launch strategy, short, medium, and long term. One of the biggest problems that we find wrong with start ups, is that they plan ahead for 6 months to one year, and then wing it. However, after those initial six months when the business is already operational, will the management of the company really have the time to create a thorough scenario analysis for the next six months, year, three? The short answer is no, however, they will waste valuable time doing just that when they could instead be spending that time readjusting the business model to best fit the pre-launch misjudgements.

Take for example the case of Lycos, Infoseek, and WebCrawler that all launched in 1995. Then Google comes in three years later, and the rest is history.

Those first search engines had a three year start on Google, but why did they get relegated into the annals of net history while Google took the undisputed heavyweight search crown. It all comes down to strategy.

The code behind Google has already existed prior to its launch, but they decided to hold off a bit. Why? Well in 1998 the internet was just starting to reach its critical mass, the 56k modem came standard with home PC’s and overall connectivity was cheap, $19.95 per month.

In 1995, the facts were a bit different, the equipment was too expensive and and connection speeds too slow for anyone to really use the net outside of institutions.

So the question you should ask yourselves is, is it the right time, are we ready, do we need to be the first, and prepare, prepare, prepare.

And to close, I will quote David Masó who recently told me during a chat “The good entrepreneur is he that resists and pursues their dreams in a smart way”.

Once we had the pleasure of listening to a successful entrepreneur give a talk about how he made it, and how some of his friends who also started companies were faring. Long story short we got to talking about two good friends of his who had started companies years ago. One was now a very successful energy mogul, whereas the other one was still trying to get the idea he had all those years back off the ground, kept on funneling resources into it, he was undeniably unforgiving to his idea. How could his idea not work, after all he had thrown so much time money heart passion and soul into it? Simple answer, it just didn’t.

And when your entrepreneurial idea doesn’t work, the only thing to do is kill it, bury it and move onto the next one. If it doesn’t work, no big deal, the next one will, and if not that one, the one after that, and if not that one…. well… eventually something should hit. But people – they get overly attached to their ideas, they think that the one idea they have and devote resources to will change the world or something here, something there.

Most wont, and the best thing to do is to test it, launch it, if it doesn’t take off. Kill it. Your time is more valuable than the resources you’ll invest into bringing something inherently broken to market.

But how can you identify if your idea is a good idea other than that your friends, and family tell you it is? Follow these simple rules.

1. Does it satisfy a market need?
2. Is it scalable?
3. Who is my market?
4. What are my competitive competencies? Where do I excel?
6. Is my idea really that amazing? If not, it’s no big – more money gets thrown at mediocre ideas with great people than vice versa.

So before jumping into the fire, ask yourselves those few simple questions.

More often than not you will see features and ideas developed and implemented int0 products that serve no purpose whatsoever, they may be nifty little things such as a fingerprint scan to bypass the password on your mobile app, of they may be a peripheral port on an some electronics that serves absolutely no purpose other than being there. Why do we put them in? To make the product cooler? To make it future ready? For 5 years down the line? Most of the time, all these extra features are useless, and here’s why.

Let’s look at it this way.

1. What real purpose do these extra features serve? And

1. How do your customers, or how will your customers engage your product and/or service.

Often times when designing your product or service you’ll want to add in additional “doo-babs” because they’re cool, or will make your product stand out from the competition, or will allow for the eventual possibility of expansion five years down the line. But in reality, will any of this provide an added benefit or is it just some kitsch that cost you time and money to develop? And how do you know if a feature is necessary, well this second part comes down to knowing your customer.

Who is your customer, how does your customer engage the product or service – what is the value that your product or service offers your customer.

Let’s look at the mobile fingerprint concept which recently came up in conversation at an entrepreneurship meeting that I attended here in Barcelona. Sure, it’s a nifty little feature that substitutes the login/password combo of a mobile application, but what does it add in terms of functionality. Not much. But what does it take away in terms of time & resources?

Implementing a traditional login/password combo takes about 5 minutes worth of work, fingerprint recognition, in all likelihood a bit more – in fact probably a lot more.

The time that it took the programmer to develop the fingerprint recognition would have been better spent working on a core function of the software or making sure that the software is bug free, and if that had already been completed then time to market would have been decreased. Lower time to market, the quicker your company starts earning ducats.

Just because a feature may seem “cool”, it’s not necessarily a key component. Will something like a fingerprint password scan make the customer use your product over your competitions? Personal privacy issues aside, probably not.

What will make them use it over the other is the value it offers. Software developers often go beyond themselves and develop really cool but really useless technologies – i.e. aforementioned fingerprint login. But logins and fingerprints aside, they’ll often develop feature heavy applications where the end user will simply want a stripper down version. Meaning, the end user will typically not engage a phone for more than 15 seconds – aside from a flight, a bus ride, or a few hops on the metro. They want their info, they get their info, and they exit the application.Wham, bam, thank you ma’am. A good example of a stripped down version of a software is 37 signals – all they provide are the basics, and leave the hoopla out of it.

By developing 50,000 features into that application that are for the most part an unnecessary expenditure, you’re wasting money, resources, and time, but more importantly you’re not thinking how the customer will use your product.

At the end of the day successful design is not about “cool” but about “functionality” and that applies to anything from mobile applications, to chairs, and cars – and once that functionality is in there, well then you can add in the cool.

Y Combinator’s new 8.25 million USD fund shows that it’s funding model is definitely successful, but the question is can it transfer to other industries?

While Y Combinator may be focused on the web (and by we include mobile as the lines are ever more blurry), this new 8.25M fund shows that Y Combinator’s new approach to investment shows merit. The question however is, can those similar practices be transferable to other industries?

Typically an investment of up to $20k ($5,000 + $5,000 per founder) isn’t exactly big bucks and typically won’t provide sufficient capital to hire a team, program whatever, and devise a strong media campaign. What it does is give the founders of said startup enough cash to live for three months and develop the idea while having their hands held by the incubator.

Specialized business training on the go, or more likely during the building stages? Absolutely, look at the successful entrants, all programmers with little to no business experience, but now with successful companies, Reddit, ClickPass, Zenter.

However, this is the web, where businesses are easily and quickly scalable, but how about if we were to apply the same model to clean tech, could a micro investment also work?

Aside from what is undoubtedly the higher cost of a prototype, the model should be transferrable. Why? Because the recipe is the same.

Inexperienced Engineer in Business + Good Scalable Idea + Capable Mentoring = Higher probability of success

The only difference then is, how much money will a non-web company need, and what is the exit?

First off, we are definitely looking at larger figures of 50-100k+ per clean tech project total seed investment – longer lead times, longer, development times, and longer to market times. Not to mention of course that sales and profit generating activities typically will require more effort but should those same hand holding techniques be applied to a different tech sector we could very well see a paradigm shift in the way we go from prototype to market, and more so how early stage non web companies get financed.

Would be interesting to see if anyone will pick up on such a model in the coming 3 years.

It’s no great secret that your and your business partners’ professional networks will undeniably aid you in aiding your company expand, enter new markets and gain new clients. But the question is, if you don’t have an access to a strong professional network – how can you build it? And more importantly how can you actualize it?

1. University Alumni - University alumni networks are a great place to start building your network. You and the others have one fairly strong thing in common, which is your school, most if not all universities have alumni networks and encourage their alumni to work together.

If you have access to an online database – even better, but when contacting people you effectively don’t know, it’s important not to come off as if you’re selling something. Be inquisitive ask questions, and see if you can have a sit down over some coffee. Basically, get to know the person before you ask them for a favor.

2. Local Group Meetings – Cities will typically have interest based clubs / meetings which focus on any given subject or topic – a good place to find these groups is meetup.com – and while typically you won’t find the crème de la crème of your industry, it’s a good way in nonetheless.

3. Family – Talk to moms, dads, uncles, aunts and other family members. You never know whom someone may know, and that someone they may know may be the person that you need to speak to. Family can oftentimes be a great starting point for your network.

4. Online Networks – LinkedIn and Xing are a great way to expand your network as well. If you haven’t joined any groups that are of interest to you, do so, and more importantly, start conversations and topic on those groups that are of interest to you.

5. Conferences – Conferences are a great place to meet people, and more importantly people in your industry, though before heading to any conference do some research on it, see what others have said, and if it’s worth going.

6. Private Clubs – There is an array of clubs around the world that can help foster networking, be they Alumni Clubs such as the Cornell Club in New York, or the Royal Automobile Club in London, one thing is certain, your membership will have clear benefits.

7. Personality – Some people have it easier than others. For some who are extroverts meeting other people is as simple as turning on the kettle, for introverted individuals meeting new people can be quite difficult.

While being bothered about someone’s mafia farm chicken may be a bit bothersome, it’s also indicative of a much bigger and more important change that facebook is currently undergoing, and underpins a larger trend in web based technology as a whole.

Given we’ve heard a lot about cloud computing services such as MobileMe, Amazon’s EC2, and Microsoft’s Azure Platform which will be a pivotal part of the next MS Office release, but these services are all trivial in comparison to what’s happening on facebook.

What is this? Effectively facebook games, as well as other applications are creating a market for a new type of web based operating system, and software delivery medium. This being facebook.

Simply speaking, a device will only to connect to the net in order to utilize those facebook applications that the user wants, and no actual data will need to be installed on the user owned device itself.

Clearly we are now seeing the infancy of this system as facebook applications in all are very simplistic in design and functionality, but their success has proven that there is not only a market but also a large one for value added services via facebook.

A similar trend is Google Apps & Marketplace. Google currently sells online business service competing with the likes of MS Exhange and IBM Lotus notes, it’s developer marketplace is likewise targeted at the business community and allows for independent developers to distribute add-ons for its suite of online business products.

Whether facebook will see the development of business type applications or keep to the current entertainment type applications that we’re seeing is still up in the air, though I would wager that – online collaboration tools will undoubtedly appear on facebook within the next 2-5 years.

Aside from allowing for new revenue streams for developers, facebook has a brilliant opportunity to capitalize on its platform by employing the Apple iTunes store model. Meaning that the new project management software running on facebook could cost the end user $50 per annual license, and facebook would then receive a % of sales. Plain as day, the platform is clearly scalable and the array of applications that it can offer the end user can be immense.

Then why doesn’t it do it? Why is facebook focusing on revenue generation through adverts that next to no one clicks on? For that you’ll have to ask the kid from Ardsley, but the strengthened focus on facebook’s developer community clearly shows a change in strategy for the social networking giant. Everyone sees that there is a huge market opportunity there, the question is – what will traditional players such as Microsoft, Apple, and the like do about it? And what about Google? Clearly both FB and Google are headed in the same direction, Google focusing more on business and facebook on entertainment, but will their paths cross? Will this be the next great showdown? Only time will tell.

What do you think?

Something to the effect of 80% of Angel invested businesses go under, and when looking at angel investor activity from those individuals who have been actively investing in the industry the rate drops to approximately 60%. meaning, 2/3 investments will fail even under the guidance of experienced investors, and 4/5 as a whole. Quite the number.

Every single investment requires the following three things to be in place, if any of these are missing chances are that the investment will fail. These three things are.

1. A great business idea
2. A great management team
3. A great mentor

If any of these three factors is lacking, chances are that the business is unlikely to succeed, and an established angel investor would be wise to keep their money in their pocket until the sartuppers manage to make any one of the weakened factors rock solid.

Mind you this type of feedback will only come from good angels, as they will have the ample experience necessary to critique and analyze the idea. A new Business Angel may become influenced by the energy of a new entrepreneur who wholeheartedly believes in his / her idea, and like others in the general vicinity of the BA too becomes enamored with the idea.

As an entrepreneur yourself, you have to look at the BA’s you’re pitching too and working with, and seeing if they see you and your business objectively or if they’re just another member of the crowd jumping on the bandwagon. Mind you as an entrepreneur this is a very difficult task, as you’re probably thinking your primary goal is securing capital to help in delivering your business to the next level, and while in part that’s true, the greater picture is that as an entrepreneur, you should be more concerned with ensuring the success of your enterprise – rather than running after the first buck.

Oftentimes, BA’s will also say that that they would rather back a good team rather than a good idea, this is preposterous – any good team will only go so far with a mediocre idea and never provide the 30x returns that any BA should be looking for, these are not the risk takes that will back the next big thing, and if you’re idea is truly cutting edge, you’re chances with these folks are slim.

The good and successful BA, will remain cool, and over a period of weeks maybe a month to three decide if the proposal is right, it’s the right business idea, the right management team, and has the right mentors to see it grow, the business angel, will also know the market and understand the current business environment.

Ensuring your BA holds all these characteristics chances are you’ll wind up in the 44% of well thought out investments that actually make it, and when dealing with BA’s, it’s like anyone else, a give and take relationship.

Believe it. Google has more recently than not launched a new service allowing for next to anyone to buy ad airtime on TV, and it’s part of AdWords. Google TV Ads works very similarly to the current AdWords, you log in with your existing Google account, upload an ad 15, 30 second, etc… name your price, place it in a network and time slot, and boom there you go. Your home made ad is now on TV.

Of course getting your advertisement during a top rated show such as the Simpsons, South Park, or similar is going to cost you a heavy penny as you’ll be competing for airtime with large advertising companies, multinationals brands, etc… and in all as a startup, it’s probably not the most effective manner in which you can spend you ad dollars, but nonetheless, an ad during off peak may be just what you’re looking for.

Though we can’t really vouch for the effectiveness of the service, in the video that we’ve included from from SlateV on using the new service, they explain that from the one million people who saw the advert only about 1000+ actually typed in the address, making a click through of 0.1%, and for the $1300 they spent on the ad campaign, that makes a potential customer acquisition cost of $1.30. Worth it? Perhaps not for SalteV, but all the same it was just a test ad, and I’m sure that if a company were to offer a service that the TV viewer could use there and then i.e. price promotions, etc… the customer retention would in fact be higher.

Do note though, that “Google TV Ads are available only to advertisers located in the United States who pay in U.S. dollars. We can’t take advertisers from outside the U.S. just yet, and we can’t offer direct debit or prepay as payment options. In addition, advertisers must set up billing prior to initiating a TV Campaign. – Google“

At the end of the day it doesn’t matter if you’re a Mac or a PC, the truth is that Steve Jobs is a visionary and widely recognized innovator, and in this edition of the Video Series, we present you with the 2005 Stanford University commencement speech by Steve Jobs.

But aside from just the CEO of Apple talking about OS X, or the iPhone, he talks about his life, and what made him the entrepreneur and innovator he is today.

Suzana Moreira is the founder of moWoza, a social enterprise adopting mobile phone technologies to aid food distribution in Africa.  Suzana has travelled extensively across Africa, and has developed significant insights into sustainability at the Bottom of the Pyramid.  It is from conversations with grass-root communities across Africa that moWoza was born.  Food security, nutrition, literacy, female empowerment and climate change are issues that Suzana is addressing through her work in social enterprise and community development.  Suzana regularly contributes research and articles to academia, NGOs and business institutions on the topics of innovations leapfrogging in emerging markets, social enterprise and sustainability.  Prior to setting up moWoza, Suzana worked on several large infrastructure development programmes in Europe and in the manufacturing industry in South Africa.  Suzana holds a MBA from the Imperial College London Business School.

BY SUZANA MOREIRA

On March 14th, the NY Times reported that the Washington Post was not using Twitter, YouTube or Foursquare to map road blockages and resource availability during the disruptive snow storm, but rather Ushahidi, an IT platform built in Kenya.  Because Ushahidi originated in crisis from a bedroom, no one tried to patent and monopolize it.  Because Kenya is poor, with computer systems out of the reach for many, Ushahidi made its system work on cellphones.  Because Ushahidi had no venture-capital backing, it used open-source software and was thus free to let others remix its tool for new projects.”  Ushahidi today is used all around the world in crisis and crowd situations.

Ushahidi, is an African start-up that has attracted the world’s attention, likewise, M-Pesa, African inspired Kiva and Integr8 are world renowned business models that were conceived in Africa and have overcome the usual African challenges of poverty, corruption and inadequate policies.  Each of these challenges should be viewed as creative catalysts in the knowledge that the resulting model will be at least innovative and at most disruptive.  It is the processes and systems that are adopted to overcome these challenges that turn the African start-up into the success stories we hear about in the developed world.

Africa is becoming a business destination and many start-ups are positioning themselves to become part of this growing business trend.  As Vijay Mahajan points out in ‘Africa Rising’, 300 million of the 900 million consumers are tirelessly working their way out of extreme poverty to become lower middle class citizens. The World Bank says the percentage of Africans living on $1.25 a day or less dropped from 59% to 51% from 1996 to 2005 and has decreased further since.  The Development Policy Forum (DPF) estimates that by mid-century, the greatest population concentration will be in neither China nor India but in sub-Saharan Africa. The region is expected to gain a billion inhabitants – from 900 million today to 1.8 billion in 2050. The urban population alone will triple from 300 million to over a billion in 2050.  Africa offers huge business potential in the upcoming years.

The principles of doing business in Africa are the same as doing business in any developed country in the world.  Emphasis however lies on conducting extensive due diligence, understanding that decisions take time and that access to capital is best sought internationally.  Depending on the scale and nature of the business, corruption can be an issue to be offset but as most Africans will attest to – there are options and an entrepreneur can proceed without being involved in these somewhat complicated and thwarting business practices.

Although Africa is not as connected offering the hi-tech wizardry of the developed world, Africans are overcoming electricity shortages and lack of internet connections by applying unique mobile phone technologies that deliver services which range from connecting farmers to agricultural cooperatives to mobile phone education aimed at youth, and, interestingly corporate companies are rolling out mobile phone training programmes for their staff.  As with any start-up, on the ground market research will expose countless opportunities.

Success in many African countries is in engaging and developing relationships with village elders or with church and health leaders in particular communities.  These are the people who can endorse the offering that you are taking to market.  This is familiar to the business ways of the developed world, where business success is associated with brand leaders and strong sponsors.  Village and community leaders are also useful in negotiating premises, recommending resources and providing the bridge between a start-up and the local authorities.

Perhaps most challenging in Africa, depending on the industry, is infrastructure capacity.  Whereby e-commerce and sophisticated distribution models are taken for granted in the developed world, logistics and distribution can turn the viability of a great start-up concept into a failure.  Start-ups need to carefully analyse supply chain complexities and the constraints of accessing marketplaces.

Many innovative start-ups are piloting there innovative technologies in Africa.  moWoza is a social endeavour that is emblematic of a new generation of African start-ups that have recognised the pressing need for transformation and empowerment amongst the people of Africa.   Initially operating between South Africa and Mozambique, moWoza, is servicing the low income economic migrant who regularly remits goods back to their dependants in the home country.

Most African migrant workers are extremely price sensitive and prefer to shop in South Africa where there exists a larger competitively priced product selection than in their home countries.  However, sending these goods across borders is costly and by relying on informal distributors to transport the goods across the South African borders to their home countries they are risking confiscation at the border crossing, extremely late deliveries and the dependant receiving damaged goods.

moWoza provides a unique mobile phone powered cash-to-goods, end –to-end service that guarantees the migrant worker that the dependant will receive the goods in the dispatched condition on a confirmed date. By committing the time and resources to conduct extensive market research across various African countries, forming focus groups and understanding what situations migrant workers faced, moWoza was able to develop a value proposition that delivers a superior offering to its target market.

Illiteracy and malnutrition are high on moWoza’s agenda.  The World Bank has set targets to reduce illiteracy and relapse into illiteracy – this has spurred moWoza, whose low-income migrant target market are predominantly illiterate, to design and deliver literacy programmes through its agent network.   In addition, most Mozambican migrants in South Africa originate from rural areas where malnutrition amongst children is acute.  By offering food packages that conform to the World Health Organisation basic food basket standards, moWoza is ensuring that its economic migrant workers’ dependants are consuming nutritional food.

There are many possibilities and with a good service offering, it is only a matter time before moWoza will pursue secondary revenue streams. Community leaders are opening doors and suggesting other services that can be commercialised.  This is Africa.  A new era has begun, and for start-ups that are willing to commit themselves to the development of Africa there are endless opportunities.