Hi Stephen,
Thanks for your questions. If I may, I'll try to answer as many of them as
succinctly as possible.
Please note many of your questions can be entrepreneurship-related, but
not exclusively, touching also on education, HR, general human relations,
etc.
*1. What mechanisms exist for someone with an idea to find the right people
to be co-founders?*
- To be co-founders, individuals must usually know each other before
starting the project. Many co-founders meet through similar interest
groups, social circles, etc. It is not usually recommended to "hire" a
co-founder because of the equity implications.
*2. Is it easy for a technical founder to find a co-founder who has
complementing skills e.g. a technical founder connecting with someone who
has business expertise. *
- Founders may choose to "hire" co-founders in particular cases, but
generally speaking, it is more advisable to "hire" a CEO (who does not have
to be co-founder) who can have more business expertise or a CTO (who also
does not have to be a co-founder) to strengthen the project's overall
technical background.
- To answer whether this is easy or not, many factors can come into play,
such as the local ecosystem, education system, personality fit, etc. Just
like hiring in general :)
*3. How do/should startups go about hiring technical talent?*
- Just like you'd hire any other kind of talent! Through recruitment
channels, universities, trade fairs, social circles, etc.
*4. If I need to hire security or UX experts, is that talent available? If
not, are graduates able to 'level up' their skills quickly? *
- I've put both these questions together. For the first one, it seems to
refer to education - are there trained individuals in the field? (You can
answer this yourself :) Are there existing programs at the local
institutions? For the second one, it seems to refer to personality (which
you can screen for in interviews processes) - are the individuals
self-motivated? Are YOU willing to mentor these individuals to help them
level up and do you have the skills to do so and capacity yourself?
*5. Are there schemes for startups to quickly employ foreign talent if
local talent is unavailable?*
- As of this month, the Board of Investment has expressed interest in
changing its restrictive policy towards foreign talent for start-ups. The
way it currently stands is that foreigners must be offered a valid work
contract from a local employer (who has a quota for hiring foreigners) and
apply for an Occupational Permit that is delivered from the Immigration
authorities. This can take anywhere between 1 week and 6 months.
*6. What path is there for those people to connect and to advise?*
- There are currently lots of opportunities for mentors and external
experts. Through social networks (such as this one if we can consider it as
such!), groups such as Linux users, Makers, through the different
incubators, etc. Just reach out :)
*7. How can startups acquire funding and what percentage of equity would a
startup be approximately expected to give up at the seed stage? *
- Funding can come from many places. Let me emphasize this - the first
place funding has to come from is the entrepreneur!!! It definitely builds
confidence with any kind of investor if the entrepreneur has committed to
the project in financial way over and above the rest. Personal savings are
most common. The second place start-ups usually find funding is from the 3
"F"s: friends, family and fools! If your family, your friends and the fools
around you can't contribute, that's one thing - but if they don't WANT to
contribute, that's sometimes a red flag for the entrepreneur's character
(*these are general contexts, always different for each person*). Then,
once you've gotten something to show for, banks/loans + business
angels/equity + vc funds/equity are some of the different options. Kindly
note that all these options ARE available in Mauritius.
*8. Do I need a prototype or must the company be profitable?*
- It's not even a matter of being profitable - by the way, how are you
going to be profitable if you're not selling something? To sell, you're
generally past the prototype phase... The prototype is key to securing
serious investment. Only very novice business angels and vc funds will
invest in a project that does not have a prototype - and you probably want
more experienced investors to back you. As for banks, as it is known, there
are even harder to convince so a prototype is probably helpful :)
*9. How important is the business plan (it sometimes seems to me to be as
accurate as plucking numbers out of the sky)?*
- A business plan shows you've done research and that you have at least
some understanding of your product/service, your market and the
opportunities. Sure, the numbers might turn out completely different when
you actually move forward, but the business plan stands as a strong basis
for your project. This may be - actually it is - a silly comparison, but
imagine you want to prove to someone you want to a bake a cake: if you can
put together a relatively logical list of ingredients and describe the
different steps in a seemingly logical way, that person is probably more
likely to buy the ingredients for you. They'd probably be even more
convinced if you could have them taste a cake you've already baked! Sure,
going forward, you can tweak the recipe and change some ingredients, but
the first ingredient list you put together was important to convince them
you knew what you were doing. Same goes for a business plan in some way...
*10. The less glamourous side of startups can be fights over the
shareholder agreements (equity, restrictive covenants, etc) and the
direction of the company. How should Mauritian founders address these
issues without destroying their relationships? *
- Shareholder agreements are important *because* they might prevent
founders from destroying their relationships going forward. If you can't
agree on basics from the start, it's a pretty good sign of how things might
pan out later once the business might have might lots of profit! It's
always best to be honest, transparent and open when negotiating a
shareholder agreement between founders. It might save your relationship
going forward when things become more complicated.
- As for new shareholders along the way, see it as building new
relationships - they have to go both ways - there is a part of give and
take. Is bringing in a new shareholder/investor bringing in new networks,
potential clients, expertise, services to your business? Are all those
benefits worth the value of the shares they are receiving in return? This
is tricky to answer, because it always depends on both parties. Some
investors want a piece of the pie that is just too big compared to what
they can bring to help grow the entire pie. On the other hand, some
entrepreneurs want to keep the whole pie and eat it too. Start-ups should
always feel they get something more than just money, otherwise they can
look elsewhere or wait a little longer. But that's just advice, and it
always comes down to gut feeling.
*BONUS QUESTION!!!*
*Given the culture, is a different approach needed to those used elsewhere?*
- Every culture is different - even between individuals in the same
ecosystem! There is no magic trick for this. The one thing that does
normally help is this: if you have something to show, you have more
bargaining power. If you've got nothing to show, you're more likely to end
up with nothing...
Voilà! Hope this helps a least a little :)
Elizabeth
On Fri, Feb 26, 2016 at 12:57 AM, Stephen Naicken <stephennaicken_at_gmail.com>
wrote:
> Hello Vincent,
>
> On 25 February 2016 at 15:37, vincent pollet <vincent_at_pongosoft.com>
> wrote:
>
>> Hi SM
>>
>> After thinking twice, I think I would like to be a panelist instead of
>> organizer.
>>
>> I have a lot to say about startups ecosystem :)
>>
>
> Sounds good. I'm looking forward to seeing how things progress over the
> next few months.
>
> I have a few questions about starting a startup in Mauritius that I would
> like to throw out there. I'm not expecting answers from you or anyone
> else, but maybe it will help in some way. Perhaps for future events or
> perhaps for those who might be thinking of becoming a founder.
>
> What mechanisms exist for someone with an idea to find the right people to
> be co-founders? Is it easy for a technical founder to find a co-founder who
> has complementing skills e.g. a technical founder connecting with someone
> who has business expertise.
>
> How do/should startups go about hiring technical talent? If I need to hire
> security or UX experts, is that talent available? If not, are graduates
> able to 'level up' their skills quickly? Are there schemes for startups to
> quickly employ foreign talent if local talent is unavailable?
>
> Lots of people don't want to start a startup, but I think some of them
> could act as mentors to founders, especially with the incentive of being
> given equity. What path is there for those people to connect and to advise?
>
> I've read many different things about funding, some of it contradictory.
> How can startups acquire funding and what percentage of equity would a
> startup be approximately expected to give up at the seed stage? Do I need a
> prototype or must the company be profitable? How important is the business
> plan (it sometimes seems to me to be as accurate as plucking numbers out of
> the sky)?
>
> The less glamourous side of startups can be fights over the shareholder
> agreements (equity, restrictive covenants, etc) and the direction of the
> company. How should Mauritian founders address these issues without
> destroying their relationships? Given the culture, is a different approach
> needed to those used elsewhere?
>
> These are just some of the issues I've mulled over and I hope they can be
> of use to others.
>
--
<http://www.turbine.mu>
Received on Fri Feb 26 2016 - 07:12:38 PST