The previous article described some methods to create and validate a business idea as an entrepreneur at the start of your road. You have already seen that you must take care of all the details to increase your chances of success. But that doesn't mean you have to "do everything." The team you build around you is critical. In the following lines, I will give you some suggestions on how to build it. A study conducted by professors at universities in Oklahoma, Texas and Oregon shows a simple and, at the same time, surprising result: 60% of startups fail due to poor team management. The ideas we talked about in the last article are essential. But putting them into practice is just as important - and here, the team is what matters, with its multidisciplinary skills. Having this in mind, you should consider several things.

Did you cover all the skills?

You probably have a clear vision about your core business, most likely with a powerful technological component. For example, you already know you need, let's say, more developers - and what type of developers. But you will be less inclined to identify the so-called "support" skills that are indispensable for a company at the start of the road. You probably won't have any problems buying your toner or paper, so there's no point in hiring someone for it. But for starters, don't forget the following: • Your business cannot work without an accountant. It is one of the mandatory legal requirements for any professional management you would like to do. • Human resources, cleaning, logistics? In the beginning, you'll probably need to handle things without specific departments. I say this from my own experience: if you have a university education, at first it will seem a little crazy to cover all these needs, especially after you had a well-paid job in a large company. But you will quickly learn. • Law: seems less important but is just as crucial as other departments. I know business people who experienced plenty of problems because the contract models they used were copied from the internet and had problematic clauses, especially in the last part, referring, for example, to the courtrooms where disputes are settled. If your business has an online component, you will need to make sure that you meet the legal requirements related to data protection and cookies. You will realize that this can be solved by a timely consultation with legal specialists and compliance. • Marketing: this should be on your agenda even if you do not directly interface with individual consumers. An essential component for startups is the "corporate affairs" field implemented for big companies, which includes everything related to the company's image and communication with other firms - or with potential investors. It is natural that your revolutionary product only exists as a sketch or in the proof-of-concept stage. However, your startup needs to sell through branding. Concerning all the above, it is best to divide the skills you need into "internal" and "external" because some specific activities can be outsourced, such as the online environment. This will help the internal organization chart become a lot clearer.

Part-time, volunteering, internship, friends

If you start with a financing that covers salary costs for a year or more, this kind of resource is not for you. However, in the real world, most startups have limited funds in the beginning. Therefore, you will need to identify all the resources you can use for free - or almost for free. • Friends: You can ask them to take you to meetings, assuming you don't have a car, or carrying your belongings, as long as they are not excessively large or bulky. If I were to speak from my own experience, I don't know how I would have managed in the beginning without friends and family. When I say this, I am not referring primarily to material support or encouragement, but real help. • Volunteering/internship: Simple tasks can be solved by senior students or recent graduates who are very much interested in internships. It is good to know that there is a law on volunteering, according to which volunteers are required to have a job description, to avoid past situations of "jack-of-all-trades" sent to buy coffee. But, on the other hand, according to the same law, the experience of volunteering in your startup will count not only on their CVs but also towards seniority - so you do have something to offer. • Part-time: At first, it is difficult to understand the number of working hours required for a specific task. One suggestion I can give you is to get an estimate from the candidates who will often give honest answers. Part-time is also an option if you need a person with superior programming, business skills or others. If he possesses these skills, that person probably has a well-paid position in a larger company. But it is likely for him to have the availability or desire to invest some time in your startup as a second job.

How do you recruit?

Assuming that the initial organization chart is crystal clear to you, you must start identifying promising candidates. Consider the following things: • Various job sites and LinkedIn will help you for free or at low costs for hard skills. I use LinkedIn successfully by receiving funding requests from entrepreneurs. I have thus made some promising investments. • The CV is essential, but what should you focus on? It might be better to pay less attention to professional experience if your startup operates in a new, disruptive market. In a food company, the Sales Director must be highly connected with the big retail chains, with a significant experience. But most likely, studies and certifications are more important to you, so you need to have the know-how to check and validate them. • Pay attention to the psychological profile of the candidates. Those who dare to join a startup will be attracted by the novelty and the possibility of developing professionally. But what you offer is neither a high salary nor stability. From a motivational point of view, it is worth looking carefully at the letters of intent of the candidates. They are called "letters de motivation" for a reason. If there are too many "challenges" in those letters, the author probably does not need many challenges.

Pay attention to brainstorming, the roles of others and your role

Any startup needs to be creative, so you need to ensure that the brainstorming process works for your company. Brainstorming ("mental storm") has strict rules that you can easily find online. One of the essential premises of the concept is related to a critical psychological theory from recent decades. An elite team delivers good results if it relies on role distribution, apart from each member's hard skills or professional background. One of them may be the primary creator of ideas. A second one may very well be a good critic of ideas, not in the sense of rejecting them but by refining and adjusting them. A third one could translate everything very well into figures, financial or technical data. A fourth may distinguish himself through synthesizing the problem and solutions through personal insights. And so on. This theory will make you think about your role. As a company founder, you will be tempted to oversee all your startup details, and it is excellent if you manage to do that. But disruptive innovations are the prerogative of highly skilled creative people. They will be less willing to comply with rigid hierarchies, rules and mandatory provisions. Today, a good manager uses employee motivation and the power of their example rather than authoritarian tools. A characteristic of new businesses is that no manager can exceed, in terms of competence, the knowledge of any member of the team, taken separately. Although the startup I founded three years ago, Key Way Group, has hundreds of employees now, I still apply these rules. But it is about the young people, with many different skills, who contribute to the growth of the business through their motivations and the pleasant climate that we managed to provide for them. I think these are essential elements of my success story. You can follow me on Twitter and LinkedIn!

I am an entrepreneur and investor. For years I have been learning how to start, grow and capitalize on a business from books and especially from experience. Therefore, I will introduce you to a series of articles that examine the problem of startups from different angles. Much of the considerations I will formulate are based on my own experience, although I will often mention things from the published literature, which I continue to consult. And to start the discussion about startups, I can only begin with the basic ideas. In today's dynamic world of entrepreneurs, every business starts from an idea. Suppose in certain parts of the globe or certain economic areas some people receive "exclusive properties" from employers, parents, or more or less occult structures. In that case, productive businesses can only be born by identifying a market need to apply an effective solution.

How to find a lucrative idea

  Ideas seem somewhat spontaneous. And so they are, to a large extent, but different creativity techniques favour their appearance: • Look for the solution to a problem. The entire fintech market, in which I work through the CAPEX.com brand, responds, for example, to the need of the Millennial generation to trade the most diverse assets from anywhere, at any time of the day or night. Thomas Alva Edison was very successful with the invention of the light bulb for a straightforward reason: the world needed a brighter source of light than gas lamps. Such needs or problems are encountered everywhere, in everyday life. Sterling Seizert, an American investor, recommends keeping a journal of issues and looking for the best one for your business. • Is it a personal problem? Good. Suppose you are horrified by the overcrowded city, and you prefer to travel by a different means than your car. The tiny vehicles move much faster than taxis or Ubers. You guessed it, we're thinking about electric scooters or scooters. Travis VanderZanden founded Bird, one of the most successful e-scooter startups, after noticing that his girls are not excited about the bikes they received for Christmas and return to the scooters they already had. This made him think, "Why not a scooter for adults?" • Is there such a thing as bad ideas? Most certainly, yes. Paul Graham, the co-founder of the Y-Combinator business incubator, gives us an example of a social network for pet owners. The potential users of such a network are numerous. But such a network has a big problem: it does not respond to a need and does not solve a specific problem. An idea should be refined to be successful. A platform that connects pet owners with veterinarians? Pet exchange? Beauty contest for dogs? Only now can we start talking about viable startup ideas. • How many types of ideas are there? "Forbes" mentions three. Spontaneous ideas, of which we have already talked about, are the ones that come out of a sudden, at the strangest of times. They can be valuable, even if they can be stimulated. There are also insider ideas, which are born from experience in a specific business. Returning to the example of VanderZanden, it is worth mentioning that the founder was successful working for Uber and Lyft in a domain of expertise close to the startup he launched, Bird. And finally, we can talk about deliberate ideas, which start from the desire to launch a startup. To give you a personal example, after several years of activity in the fintech industry, I was curious what a market with a lower yield but more constant in evolution looked like. Real estate was an obvious option, but I realized that you must behave differently than speculatively anyway to be successful in this market. In the first decade of the 2000s, the real estate craze and the sub-prime crisis were history when I decided to invest. You could not simply buy to sell for a profit the next day. We stress out the concept of added value because real estate acquisitions do not make sense if they are not followed by arrangements, related services and the creation of a portfolio of quality tenants. We have invested a lot in financial resources and working hours to get even more benefits. Without doing so, I would certainly have lost.

Test your idea - the business plan

  Everyone talks about the business plan and agrees that it is indispensable. I will not insist on the chapters because there are countless online and offline resources that you can consult. In the case of startups, a business plan is even more critical than when it comes to developing a profit centre or new product for an existing company.   The business plan has an essential role: it turns the idea into numbers. For the usefulness of this discussion, I will put myself in the place of an entrepreneur at the start of his career. Suppose you've already found the famous idea. If you fall in love with it, that's perfect: it must mean you have the makings of an entrepreneur. Passion and energy are essential. But be careful because love can exceed certain limits. Try to split your expectations into two key areas: customers and financial projections: • The former is usually defined through market research, which helps to shape the so-called target market, the desired or targeted market. However, start-up entrepreneurs do not have the resources for a dedicated market study. There is no reason to stop here: there is a whole series of free resources that can approximate to some degree the behaviour of potential consumers, from the National Institute of Statistics (in the case of Romania), to Google AdSense or Facebook simulations, after which you can form an idea about the demographic interests of consumers, without spending a lion or euro. These will undoubtedly be useful as arguments in conversations and presentations for investors and even for others. • From a financial projections point of view, things might look confusing at the start of the road. But any kind of estimate, even a naive one, is preferable to the lack of data. From this point of view, the advice attributed to Warren Buffett, the great American investor, works well: "keep an eye on costs". There will be rows of Excel that you didn't think of. But you may also have pleasant surprises: for example, the fact that the monthly online presence (email addresses, and possibly a simple site) costs at Google as much as a meal in Bucharest, which you can afford without problems. Something similar happened to me when I realized that for the fintech business I founded, Key Way, I can easily afford headquarters at City Gate, in the Romexpo area – Casa Presei, with Microsoft, Alcatel and T-Mobile. We have considered the easy-to-reach destination for our 100+ employees that our group has in Romania. There are also notoriety benefits, but not as meaningful.

Conclusions

  If you have come this far with reading this piece, you likely have the determination and the passion needed to become a successful entrepreneur. At the same time, all the steps and methods suggested above - and many more recommended by successful entrepreneurs - might not seem very useful for you at first glance. However, to become a successful entrepreneur, you must consider them, even if you don’t follow them by the book. If I can say one thing from my own experience, business success depends on your passion every day in your dream business. There is no recipe for such a passion. But it is not just about financial gains, but rather about the desire to change the world - or at least to consolidate Romania on the global business map. And this is certainly possible. You can follow me on Twitter and LinkedIn!

The fintech group that I founded and manage, Key Way Group, currently has operations in several major European markets and the Middle East. However, I kept a good part of my operations in Romania, not only because it seems perfectly normal to me to pay taxes in the country where I grew up and where I received my education, but also because Romania offers essential advantages for entrepreneurs. Here are some of them:

1.  Low taxes

  For startups, the most crucial tax is the profit tax. In Romania, its value is set at 16%, well below that of developed European economies, such as France, where the same tax reaches 32%. The European average is 21%. Romania also offers an excellent facility for startups: the revenue tax, set between 1-3% and applicable to micro-enterprises. In other words, it applies to companies with a turnover of fewer than one million euros and a maximum of nine employees, a category in which most of our startups fall into.  

2.  Human Resources

                      On several other occasions, I've mentioned the tremendous professional abilities of Romanian Millennials (people under 40). In many cases, they took advantage of multinational giants' experience and organizational culture that also operate in Romania. I would only mention two soft skills these people possess: fluency in multiple foreign languages and solid digital literacy (computer use), but there are many others.  

3.  Economy

  Romania's economy is also under constant pressure from COVID, but to a lesser degree than other stronger economies. The hopes of a speedy recovery can surely benefit from prudent budgetary measures taken by the last two governments. Also, Romania is said to benefit from substantial funding from the European Union Resilience Fund, amounting to almost 80 billion euros. This money will be used for infrastructure projects and digitalization and "green" projects, future-proof industries in which startups are well represented.  

4.  The E.U Context

  We, Romanians, stopped noticing the implicit advantages of having an EU company. But for an investor outside the European Union, an EU-registered company can bring numerous tax and customs benefits, together with other advantages. Moreover, in recent years, Romania has had a clear pro-European route, including the trend towards digitalization, fiscal stability, and a transparent business environment. Even if our country does not fit perfectly in some of these trends, for now, the trend for the coming years is evident.  

5.  Connectivity

  It is a well-known fact that Romania is at the top of broadband connection speeds, but it also leads to more subtle indicators such as latency or Internet stability. Mobile Internet is ubiquitous, with major providers in Romania offering 5G services, unlike their Western countries' counterparts. These benefits become crucial in the context of remote work imposed by the pandemic. And remote work is self-evident for most technology-oriented startups with global ambitions.  

6.  Bureaucracy

                    The bureaucracy is an old problem in Romania, but things appear to have improved. Strangely, it seems that bureaucracy was also one of the first victims of COVID. For example, the Trade Register discovered to its amazement that it could function excellent online, as well as other institutions with which companies and entrepreneurs interact. In the private sector, banks, which in any case had already started to eliminate their physical presence, have increased the pace of diversifying and updating their online platforms. The same thing is taking place in countless other public and private segments.  

7.  Hospitality

  Bucharest, Timisoara or Cluj was among the top cities in the world where expats can live well. Rents are moderate compared to the big European capitals, the services are acceptable, and the odds of meeting someone who knows at least a few words in English are very high. Before the pandemic, the major Romanian cities also offered attractive and not very expensive nightlife. The former halls of communist factories were turning into business incubators/coworking spaces at an increased rate. Subsequently, the isolation forced on us by the pandemic tended to nullify these benefits but was quickly sweetened by more prompt delivery companies than in other European capitals. Romania's high COVID vaccination rate also means safer business over the next months, during which possible entrepreneurship plans in Romania could become a reality. Within such a period, a significant part of the population will be immunized, turning Romania into a far more interesting country than others in terms of health risks.  

Conclusions

  Sure, not everything is perfect in Romania. I also mentioned on another occasion that startups would find it more difficult to find local financing sources because investors with high financial resources come from more conservative areas than those specific to startups, such as real estate. But nothing will stop an ambitious entrepreneur from seeking funding - remotely or even by physical travel - especially from a European capital relatively close to where they are located. I have been doing this since the time I was working to grow other people's businesses, and the success I achieved was primarily based on this easy-to-implement strategy. You can follow me on Twitter and LinkedIn!

If you’re a startup or scale up founder, or if you are working up to launching your idea, events can be useful to see how others do or dit it. It’s useful to see what worked and what didn’t for successful entrepreneurs, how they think, their approach to business.

It can take a  lot of time and energy to attend business events, and the gains aren’t always immediate, but success doesn’t happen in isolation – entrepreneurs need a certain vibe and energy to keep going, they need networks, need to be connected to their markets, their competitors and  their peers.

I go to a few events every year, and I choose those where I am likely to see new ideas put into action,  meet smart people and explore different sectors. I do focus on my key areas (property, fintech and medtech), but I keep my eyes open for what’s going on outside of there areas too. So here is what’s on my list currently.

1. Central European Startup Awards – happening this week in Bucharest!

Conflicting agendas mean that unfortunately I’m not going, but I’ll follow it with interest.

This is a regional program run by the Global Startup Awards. In Romania they’ve partnered with Impact Hub, one of the biggest co-working spaces and entrepreneur networking platforms. Annually, they select and award startups in tech / web industries. After the national phase of Central European Startup Awards competition, the winners of each of the 10 countries (Austria, Poland, Czech Republic, Slovakia, Romania, Bulgaria, Serbia, Croatia, Slovenia and Hungary) participate in a  regional competition, whose winners are announced on November 21st in Bucharest.

2. Disrupt Berlin – 11-12 December, Berlin, Germany

Organised by TechCrunch, Disrupt Berlin showcases emerging trends in the business of technology and is a great place to meet or find information about game-changing founders, startups and technologies.
There are a multitude of conferences, workshops, networking opportunities and companies from all aspects of tech, but focused in on several category tracks. I'm looking this year at Artificial Intelligence/Machine Learning, BioTech/HealthTech, Blockchain and FinTech, but there are a few others.

3. Bucharest Tech Week – May 2020, Bucharest, Romania

5 days of conferences hosting international & local speakers, and a B2C gadgets and tech expo. Conferences are focused on innovation (seems to be an umbrella theme, which can fit anything these days though), HR, some coding conferences but also Fintech.

4. Wearable Europe - 13 - 14 May 2020, Berlin, Germany

Conference and exhibition focusing on wearable technologies, applications, and their commercialisation progress. The conference is part of the IDTechEx Show, a series of synergistic events on Printed Electronics, wearable, sensors, IoT, graphene & 2D materials, energy storage, electric vehicles.

5. EU-Startups Summit – 28-29 May, Barcelona, Spain

Some of Europe’s hottest startups and successful European entrepreneurs - over 1,500 founders, startup enthusiasts, corporates, angel investors, VCs, and media from across Europe. The two-day event is a great opportunity for networking, and a meeting point for aspiring entrepreneurs and investors who are aiming to build international tech companies.

6. London Tech Week - 8-12 June 2020, London, UK

A 5 day technology and innovation marathon, with events on connecting global markets, cybersecurity, digital transformation and innovation, for startups and scaleups.

7. Webit Festival Europe - 17-20 June 2020, Valencia, Spain

A huge event, Webit is a B2B and B2C festival and tech fiesta: 15.000 delegates, 450 speakers, 1,500 selected startups, 500 investors, international media.

With specialised summits for many verticals, I particularly am interested in the summits for health, fintech and blockchain. Other summits focus on cybersecurity, mobility, growth, future of food, or digital entertainment & media.

8. Techsylvania – 20-23 June 2020, Cluj, Romania

One of the biggest tech events in CEE, Techsylvania has tens of events, workshops, keynote speakers and panels. It can be very informative and great for networking and for benchmarking ideas, because it has almost 4.000 attendees - engineers, founders, investors, executives and CEOs of IT & digital companies, banks and startups.

There is a startup competition at Techsylvania too, Startup Avalanche, for early-stage startups, which get to meet international VCs and investors as they compete for the Grand Prize – €100,000 investment.

According to a report by McKinsey, globally, over 12,000 Fintech startups are competing with banks for up to $1 trillion in profits of which up to 60% are at risk, in the following five retail businesses: consumer finance, mortgages, small-business lending, retail payments, and wealth management. As an investor, I’m focused on tech, fintech and real estate startups. These areas have seen a huge wave of disruption, transformation, and evolution, and the tide is still high. My own home country, Romania, is a hotspot for tech and fintech innovation, and I keep a close eye on what’s going on in this market. Though it’s still in an early stage compared to nearby countries such as Poland, the Czech Republic or Hungary, the Romanian fintech industry is poised to take off as demand for fintech solutions and digital banking increases. Here are a few exciting startups that caught my eye recently. Some of them are in startup accelerators, some of them have already gone through various rounds of investment, but all of them have one thing in common: they provide innovative, agile solutions for needs and issues that traditional companies have ignored for too long.

1. Fintech OS - B2B services and TaaS enabling automation for financial services. The fact that this is a Romanian company that has achieved such rapid growth proves that (to paraphrase) geography is not destiny. Their experience is inspiring.
2. Fagura - P2P Lending. Although Fagura is actually coming from Moldova, they are present in Romania. This is a friendly peer-to-peer platform, modelled on UK similar companies. I think it has good potential for success.
3. Smart dreamers – a platform for recruitment marketing automation, they’re already in the UK, the US, and Singapore, with enterprise-ready software that helps companies reach and engage with potential candidates online.
4. Medjobs – this is a platform for recruitment and jobs in the healthcare sector. I like their focus and the fact that they’ve honed in on this very specific opportunity, as it is a very dynamic niche and was generally very fragmented.
5. Typing DNA – such an original idea! They’ve developed an app for typing biometrics authentication – recognizing people from the way they type, this is an AI-based solution for risk-based authentication and fraud prevention.
6. Competitors.app – a very useful and comprehensive app for monitoring competitors’ marketing activity across online channels.
7. Finqware – this was badly needed in Romania, since most companies and people have several bank accounts and they need a centralized dashboard for their finances.
8. Keez – A user-friendly alternative to accounting, payroll, and ERP software.
9. Teleport HQ - An AI powered platform and suite of open source tools which simplifies UI building and adds realtime optimisations by analysing user's intentions.
10. Cyscale - a Multi-Cloud Platform, for all major providers like Amazon, Google and Microsoft, which handles Cloud Native Security, Threat management and Secure Cloud Design.

Do you know of any other Romanian Startups that are worth mentioning here? Leave a comment - or, if you are an entrepreneur launching your startup, you can always contact me and let's see if there's an opportunity of working together!  

According to several studies, the average American has an attention span of 8 seconds, and that probably applies to you, too. This fact has proven highly problematic for some industries, but as an entrepreneur, things are not so grim. (more…)