This week we had what I will term as the most thought provoking session for me. KP Reddy, and amazing serial entrepreneur was invited by Duncan, one of the faculty to give a presentation on startups. He started his first business at age 19 and by 27 he had grown his startup to a publicly listed company. At this point, he handed over the reigns and took off 3 years. In this time, he was growing his own food and doing yoga everyday (Yes, seriously)
Currently, the techie turned investor and speaker is highly sought after due to his candid counsel to both startups and Fortune 1000 companies alike, he has been requested by organizations such as IBM, Coca-Cola, UPS, Cox Communications and Autodesk. K.P. has spoken at universities all over the U.S. including: Harvard, Georgia Institute of Technology, Vanderbilt, Stanford, Emory, San Jose State, University of South Carolina, and Cleveland State.
Innovative and witty, K.P. speaks to leaders with intriguing topics such as: Your Culture Sucks Because You Suck, Why Big Companies Can’t Innovate, Disruption Is Not A Marketing Campaign, Why You’re Not a CEO, Yet… and Why Every Recent Grad Should Work at a Startup.
In 2012, K.P. published BIM for Building Owners and Developers, a book on the adoption of advanced technology in the infrastructure space employed by leading companies and universities.
K.P. is also startup Catalyst, helping organizations accelerate through coaching and programs such as: Startup Weekend, Customer Discovery Classes, Accelerators and Hackathons. These can range from one day to six week cohorts, depending on your needs and timeline.
From this session, I was able to see clearly what I’m doing right but most importantly , what I’m doing wrong and how I can start to correct it. I wished that my co-founders and all the startup founders from my eco-system were there. There were so many take-aways and here’s a few of the gold nuggets that K.P shared ;
1.Be an expert in a field of study. Find something that you are really good at and become king at it. Whether it is a particular form of technology, marketing or finance subject. For example, you should be able to say something like, “I’m among the top 5 experts in cryptocurrency transfer services among the unbanked in sub-Saharan Africa.” For you to achieve this, it means you have to dedicate an insane amount of time to reading and research. You should achieve top of mind status for your field.
2.Don’t rush and quit the day job; Learn new skills first to de-risk yourself. Secondly, learn about the market you want to enter to de-risk the business. You have to be realistic based on the experience you have, because this is what drives results. DO NOT QUIT UNTIL YOU HAVE A PLAN.
3.Build your equity; Ideas are a dime a dozen, they do not matter. You cannot base your equity on an idea. What matters is deliverables. What have you done with your idea? Have you documented your work? Before you go out hunting for investors, have you done your own due diligence? If any mistakes are to be made, make these on your own dime. Realize that some ‘founder’ have unfair advantage, be it a degree (and hence connections) from Stanford or celebrity status. Find a unique way to compete.
4.Capital; Capital is not to be used for founder salaries or exploration of business models. Capital is essentially meant to be used to build production platforms and to scale sales teams that a utilizing a proven methodology. Do not raise capital to a “dead end.” You must always know how much total capital is needed to execute on your plan. Your gross margin must be able to support your cost of capital. For early stage investment, you need to have revenue to validate the customer need. Think of capital as a highly structured supply chain.
5.Start with the exit in mind. This was my biggest takeaway. I am essentially building a business to handover to my children and all this talk of exits that is trending has had me worried for a while. I do not want to sweat blood and tears all for some guy in a suit to come and slap a value to my work and walk away with it.I expressed this to Reddy and he allayed my fears. An exit doesn’t always mean selling your company off to some huge corporate investor. An exit strategy can be handing over to the next generation. Do not build a company around yourself. It should be able to exist successfully in your absence. This for me was key because most successful businesses in Uganda collapse soon after the death of the founder. And it is because of this very reason, not having the end in mind so there is no business continuity plan set up. I am glad that he emphasized that we should always be cognizant of this fact.
I got such deep insight for my startup and I can’t wait to get back home and start implementing what I learnt.