Still thinking about the UK Nigeria Tech Hub’s COVID-19 survey, and the difference between what investors said and what startups said is funny and instructive.
When asked what their startups needed to survive COVID-19’s effects, here’s what founders said:
- Markets 20%
- Partnership 18%
- Talent 12%
- Networking Opportunities 11%
- Improved Business Model 10%
And when investors were asked what startups needed to work on to survive, here’s what they said:
- Business Model 28%
- Product/Service 20%
- Tech, Systems & Process, Customer Experience 20%.
So, none of the 4 most-wished-for things by founders registered with investors as a need right now. And only 10% of founders thought they needed to work on their business model, the thing that investors singled out more than any other.
This got me thinking. Founders often talk about the difficulty winning over investors. I wonder how much of this problem is down to founders believing their businesses work better than investors think, and are therefore not making the changes that would attract them. I say “changes” because business model adjustment isn’t the only thing both groups aren’t seeing eye-to-eye on, according to the survey. Investors also want to see startups improve Product/service (28%), Technology (20%), Systems/Process (20%). and Customer Experience (20%). No founder listed ANY of those areas as a challenge for them.
It could be argued from the survey that the Community needs more introspection. All the big solutions the responding founders wanted are external, not things within their internal control. A better market, instead of a better product and customer experience for the existing one. Access to new partners, networks, and “better” hires, instead of improving tech and the way the company works.
I guess it comes down to what people think when they hear “product-market fit”. The founder hopes the market will bend to fit her product, in which she has invested so much effort and faith. The investor, on the other hand, is playing a numbers game. She’s looking at dozens or hundreds of products, to find the one which best fits the market. She wants a founder who is ready to bend. Or, as they say in the tech world, pivot. Perhaps that’s why, according to the survey, startups with Angel Investor and Private Equity Money are more likely to be pivoting right now than startups funded by the founder or friends and family.
So I think a big takeaway from this survey for founders should be, how willing am I to bend? How much of my internal processes, product, and business model am I ready to change to get the funding I need?