A Founder’s Naïvety by Szymon Janiak

The post was originally published in Polish on Szymon’s LinkedIn profile. Szymon kindly agreed to republish what we think is of great value to our readers.

CEOs of young companies are too naïve. They think that:

1. Their idea alone is worth millions;
2. They have to find an investor because to show them how to grow a big business;
3. They need as much capital as possible from the start to guarantee success.

Meanwhile, in practice:

1. The idea itself is worthless, there are thousands of them – what counts is the execution;
2. The investor is usually only a donor of capital, and the non-material contribution to the business is marginal;
3. The only thing that companies need at the start are customers. Without investment capital, it is very much possible to build a great company.

Build businesses from scratch, make mistakes, sell, grow, and achieve success. Don’t be fooled that a guy who has spent half of his life in Excel and has never run a company in his life will know better than you how to develop your company. Have courage!

The comment section begs to differ:

This is probably a gross exaggeration… Without starting capital, even a greengrocer will not open, let alone innovation. Even the NBFR is a BS for someone who starts because 20% of their contribution – and actually much more is necessary to launch – is unattainable and threatens with very serious consequences. Because of such attitudes of VCs and investors, Poland is at the tail of innovation, not to mention the tail of business on a global scale. You can’t have customers without a product, you can’t have a product without investment. And it is impossible to enter the US market (as Polish VCs want) without capital, which gives a chance to compete with companies that acquire Pre-Seed (and subsequent rounds) in the US. Even if it were possible, it’s a miracle of luck, not planning. 

It is because of such an attitude that Uber, AirBnB, not to mention SpaceX or other companies that won thanks to financing without the lack of initial successes would not have been created in Poland. It is the faith of investors that drives innovation and execution. It is the investors who give the fuel, without it no machine will start and show its potential.

– Piotr Nawrocki, Business Development Consultant in Automotive Solutions

I disagree with the statement that an idea is worthless. Developing a company without an idea is pushing yourself into the Red Sea, and this is not a recipe for high profits and rapid development. A good idea and good execution are equally important.

– Rafal Pietraszek, Freelance SEO Expert

Many startups fail because they think that there will be revenues that will be enough to cover all costs. Capital is needed for a lean start.

– Andrzej Bogun, Managing Partner at AIB Consulting

Not all ideas are equal. An idea like: ‘I know! I’ll make a watch that turns into a drone for doing selfies!’ and a refined concept of creating a new market or market segment, supported by research, pre-verified and the first feedback from potential customers, is another story.

We’ve bootstrapped ourselves for a few years, but when you’re building a new market or a new market segment, you have a cultural barrier to overcome – ideas diverge in culture with some dynamics. We are not dealing with a situation like: ‘Hmmm, an innovative tool for reading VAT invoices? Well, yes, we have something similar, but Wacek is not satisfied with the accounting – call him, he will be happy to see.’ In some situations, the product does not yet have its category, there is no accounting Wacek to refer you to, there is no budget for your tool, and in general, it is not very clear who in the organization would take care of you. In such a situation, it is much more difficult to find customers, which should not affect the assessment of the concept and the valuation of the startup.

– Robert Szczepanek, Founder at Ultima Ratio

I have gone through a similar path that has been presented, but it all depends on the industry in which we operate, what the target group is, because different standards will be in the medtech sector – for which it is important to meet medical requirements, without which you cannot register a medical product and there is no point in talking about sales, in the aerospace sector – where’s it’s also necessary to meet all safety standards, and completely different requirements, e.g. for a startup that creates a dedicated CRM/ERP system that does has nothing to do with human health.

– Andrzej Zakręcki, Product Manager at Alpha Powders

What amuses me the most is the belief that the best company is a big company, the pursuit of a pipe dream. Meanwhile, small companies with a product, customers, and great results get disregarded because they don’t have a valuation like a unicorn.

– Przemyslaw Nowakowski, 5G Technology Expert at Lodz Special Economic Zone