Considering the fact that over 90 percent of startups worldwide fail to take off, an expert advises founders to cut their losses early in the game in order to avoid more costly expenses in the future and to learn from their mistakes.
“Do not wait to gather more losses later. Know when to quit early so as to save on resources,” said ‘Azra ‘I Shu’ib, general manager of the Incubation and Technopreneurs Development Technology Park in Malaysia. “Do not prolong and expect for results. It is much better and cheaper to cut fast.”
This was a grim piece of advice the speaker gave in his keynote address during the first Technology and Business Summit Incubator Summit held recently at the Cebu Parklane International Hotel.
Startups birthed by customers
In order to avoid the dismal trend, Shu’ib urged the startups to first validate the problem, product, and technology in order to come up with a thorough and complete approach to the market and proceed with more preparation and information on hand.
This entails more homework and research on the market needs – not just embark on a random idea – that the entrepreneurs believe will capture their customer base immediately and become the next Bill Gates.
“Remember that startups come from customers. Startups do not originate from the entrepreneurs. The entrepreneurs should do their research properly in order to answer the real needs of the market. The entrepreneurs should not solely depend on their own ideas and dreams,” the speaker continued.
Countless startups have failed almost as soon as they launched due to poor research and product know-how by the ill-equipped entrepreneurs who embark on their venture with scant resources.
However, Shu’ib praised the Philippine stakeholders’ efforts in upgrading the startups and organizing them into certain sectors in order to classify and identify their strengths to prepare them for further growth.
In Cebu, this fact is supported by the consortium of industry, academe, government, and NGOs into the Cebu Education Development Foundation-IT (CEDFIT) that seek to increase the quantity and improve the quality of professionals in the IT and Information and Communications Technology (ICT)-enabled services companies within the city and province last March 2001.
From five companies and 1,200 employees, the organization has since grown to 300 IT companies, 140,000 employees with an annual income of over PhP27 billion. The body has also served as a model of IT councils nationwide as other cities and provinces have opted to follow the Cebu model.
Last year, the CEFIT has since evolved into the Cebu Information Technology Business Process Management wherein voice operations have been elevated into higher valued services such as IT sourcing, health information management, shared services, engineering services, banking and financial services, software development, research and development, among others.
By RICHARD RAMOS