Dimitris Polychronopoulos of the Founder Institute — the world’s largest pre-seed startup accelerator — says vision, problem, solution and customer validation are vital components for success.
In this podcast episode, Dimitris shares his insights into the world of language startups and warns of pitfalls you should avoid.
What you’ll learn in this interview:
A successful business solves a problem
Validating your idea
Why you need a vision
What makes a good team?
Do you need finance to scale?
The anatomy of a successful pitch
Dimitris’ tips for Langpreneurs
Dimitris has always loved languages, travel, innovation and business.
After university, he combined travel and language learning by conducting tours all around the world. Eventually, Dimitris landed in Oslo. After his module in Innovation and Entrepreneurship during my MBA, he began to get involved in the startup ecosystem in Oslo and decided to introduce the Founder Institute to Oslo.
Now that they’ve moved online it seems the perfect time to introduce a special Language Business section into the Founder mix. Being online makes it accessible to language startups all over the world.
Be warned – this is not a programme for the fainthearted. Dimitris says that two-thirds of their candidates fall by the wayside in the boot-camp-style course. But those who make the grade are well on the way to business success.
Successful businesses solve problems
“If you’re a start-up you should be trying to solve a problem. You should be the right person to solve it and have the right people on your team.”
Customers come because they have a pain point and can’t solve it on their own. They’re fed up; willing to pay and eager to find that perfect result.
So, if step one is the problem and step two is a brilliant solution, your next step is to check that your product is in tune with the market. This is called validating your idea, and it’s so essential that Dimitris labels non-validation as the number one mistake made by failed startups.
Validate your ideas
“You could spend a lot of time and money and effort on product development and have a really beautiful thing and it might work perfectly, but if nobody’s going to use it what’s the point?”
To validate, you need to talk to actual — and potential — customers. Go where they hang out, both in-person and online, and start conversations.
Ask questions, really listen to the answers and analyse the information. Review your questions – could different questions elicit even more useful data?
If your business is B2C (selling directly to consumers), Dimitris recommends using Google ads, social media and surveys. Other possibilities are emails, phone calls, and even getting on a video call with your early adopters.
However, if you’re more of a B2B model consider using LinkedIn to build rapport and create a network. In-person events are another excellent option once they’re allowed again.
Research done now can save you frustration, time and money later on. You can identify your ideal customer avatar, what they want and how much they’re willing to pay.
Build a great team
You might begin on your own, but a business needs a balanced team to keep it going.
There’s a lot of psychology that goes into the make-up of a perfect team, and ideally, everyone brings different strengths to the table.
The Diversity IcebreakerⓇ tool, for example, uses red, blue and green to highlight the essential needs in a team. Red stands for social, blue for logical and green is the grand-scheme, high-level thinking.
If you, as the entrepreneur, lean heavily towards the green, you’ll want to include some red and blue people on your team.
Why you need to have a vision
With problem, solution, validation and team in place, one crucial piece of the startup puzzle remains.
You need to have a clear vision for the future — where could your business go? What is it’s prime purpose? Who is it serving, and how well could it scale?
Are you looking at a global market or working on a smaller scale? How fast will you grow? Will you need investors, or can you finance it alone
Do you need finance to scale?
Not every language business needs to raise finance, but you’ll probably need investors if you want to scale to a global market.
Language exchange app Tandem, for example, raised capital to grow. But LinqQ and Innovative Learning are both examples of slower, organic growth.
One place you can begin to raise money is Kickstarter, and another is Indiegogo. Some startups raise their seed money on Kickstarter and then move to Indiegogo for more.
Pitching to venture capitalists is an even bigger option, and if you want to go down that route, Dimitris recommends these ingredients for a perfect pitch.
The anatomy of an excellent investor pitch
Make the problem and its magnitude clear. ‘
Give a clear example.
Explain your solution and how it solves the problem
Include a value proposition and tie it into your brand.
Explain your business model – how will you make money?
Define your target market
Describe your team – and the secret sauce that makes them perfect for this business.
Say what you need to add. Another team member? Your next steps? What and why do you want investment?
Give an analysis of the competition and show how you’re different.
Include your contact information – use a QR code too.
Send investors an email in advance with appendices with more info to back up your figures.
And, when the time comes to present your pitch assume that everything will go wrong with the technology and have a back-up plan. Have a hardcopy for every potential investor there. Be prepared!
Dimitris’ tips for Langpreneurs
“There is never a right time (to start) so just get moving with it.”
Ask open questions not leading ones where the answers validate your presuppositions. Try “tell me more”; “tell me some examples”; “please elaborate”; and “what else is on your mind?”
Don’t be afraid of silence. Wait to hear more – answers after silence often contain deeper insights.
Don’t skip the validation.
Language Business Possibilities
In the language market, Dimitris sees some exciting work happening in the AI and Virtual Reality fields. But he says there’s also considerable potential to create intercultural solutions.
Immigrants and expats face many obstacles while settling into their new countries, from translation difficulties to understanding new cultural norms.
Workplaces are becoming ever more multicultural too, which brings its own set of communication and understanding issues.
These are areas that Dimitris sees as ripe for language-based entrepreneurs to make a real difference in the world.