An entrepreneur who has not failed has not made bold decisions
One of the maxims often tossed around in entrepreneur circles is that founders should wear failure like a badge of honour. Consider this: building a startup is often about creating novel solutions to existing problems with little resources; it may take many attempts and pivots before a viable product emerges.
In that sense, the mark of a capable founder is their ability to withstand failure, learn from their mistakes, then rebuild until their vision is achieved. No entrepreneur worth their salt can say they have never faced down defeat at least once.
For Joel Ko, a Managing Partner of Marvelstone Group and CEO of its VC firm Marvelstone Ventures, failure is an essential criterion by which he evaluates founders.
“If a founder never experiences a failure before, it is a warning sign for us,” says Ko, in a freewheeling chat with e27.
“If [their] career has been successful up till now — with no failures, I will avoid personally as an investor. Because if they fail, we can see whether they have learn a lot things from the failure,” he adds.
And Ko isn’t reiterating platitudes taken from an investor handbook; as a serial entrepreneur, he has had first hand encounters with failure many times.
Ko, a South Korean who founded his first startup, a software company in his home country at the age 23, went on to build more than 10 startups. 70 per cent of these businesses, however, folded up.
These setbacks, he says, helped him to develop important business characteristics such as patience and ability to adapt to new opportunities.
“If founders do not fail, it means that they have not tried something bold. Being serial entrepreneurs also mean being serial failures, sometimes,” he says.
Besides evaluating founders, Ko’s Marvelstone Ventures, which targets fintech, IoT and AI startups, also look at the scalability of their products.
“It’s important that the technology they are building is in line with major trends, such as AI and IoT. They should have a clear and scalable expansion plan, especially in Singapore where the domestic market is very small,” says Ko.
“Finally, they should have a very clear, well-defined understanding of who their customer is to generate revenue streams. Sometimes engineers lack this business mindset.”
The entrepreneurial hunger
According to Ko, there are two kinds of entrepreneurial hunger. The first is the “unavoidable hunger” resulting from a challenging or negative environment. Some entrepreneurs are driven to build companies to solve real-world problems that affect them personally. For example, an entrepreneur may seek to create low cost air purification systems because of the smog in his city.
The other type of hunger is created out of opportunism, rather than difficult circumstances.
“Chinese entrepreneurs are a good example, many of whom have been tremendously successful. They don’t want to miss the daily opportunities that come their way…and are fully motivated to build their own businesses in order to achieve and succeed faster,” says Ko.
Ko, who moved to Singapore in his early 30s, observed that Singapore entrepreneurs’ hunger fall in the middle of the two aforementioned categories.
“Singapore entrepreneurs enjoy a fantastic position in terms of macro and micro environmental factors, excluding the relatively small domestic market size in which they usually have to launch and develop new businesses,” says Ko.
“However, they sometimes hesitate to explore new opportunities and maximise their strong positions. It’s important that Singapore’s entrepreneurs learn to motivate their own hunger — and don’t get too comfortable with a super economy built on the back of the hard work and ‘unavoidable hunger’ of previous generations.”
Ko adds that while Singapore entrepreneurs have tremendous advantages operating in a developed market, with access to global networks, they lack the “street-smart” of those who operate in emerging markets.
They “lack of market intelligence in cases where their products are being targeted at emerging market consumers…as a result, they sometimes miss important [and bigger] business opportunities,” he says.
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