At the core of many new ventures is a great idea, a concept that progresses a service or industry into its next phase, or even navigates the choppy waters of a blue ocean strategy to build a market all of its own.
The idea is often in response to a problem start-up founders have observed in the world, and understanding and dissecting the problem is one of many issues entrepreneurs face when they bring their idea to the marketplace.
When brothers Seokhoon and James Jun immigrated to Canada from South Korea in 2001, they faced many of the challenges common to new immigrants. Acclimatizing to alien surroundings, adapting to foreign customs and being forced to make new friends can be a hardship that many aren’t equipped to handle at an early age and can have a lasting impact on an individual’s mental health.
The brothers found soccer as an outlet to alleviate that stress and help facilitate the transition into their new home. It was through that connection to sport that Stadium, a non-profit start-up incubated at Ryerson’s Social Venture Zone (SVZ) that increases the availability of community pick-up games, was born.
The Juns, along with Nigel Atkinson, launched Stadium in late 2016 to provide children and newcomers with an opportunity to play free pick-up games and build connections around the Greater Toronto Area. The venture’s rapid growth resulted in Stadium being featured at WE Day in September.
While an initial idea is the first step of a venture’s journey, the path to success is often fraught with unexpected challenges. Statistic Brain estimates that 50 per cent of start-ups fail in their first four years, while Fortune puts the overall failure rate for venture-backed start-ups at above 60 per cent, meaning the difference between success and failure is, at best, a coin flip. To break through and achieve sustainability, start-ups need to be adaptive and go well beyond their initial concept.
“The biggest thing that’s helped us, and it sounds really simple, was not to think too hard, or think too much, but really focus on the small actions that put you one step forward,” says James Jun. “It’s a common topic in start-ups as well, understanding that your product will never be perfect. Take the action.”
Taking action is just one piece of the complex start-up puzzle, and for many of the incubated companies at Ryerson’s DMZ, the next phase involves approaching clients and investors. For FormHero, a platform from the DMZ-BMO Fintech Accelerator program that helps companies revamp their data collection, seeking client input couldn’t happen early enough in the process.
“I come from the marketing space and you can spend eight months perfecting a campaign, or a piece of content, but the real work doesn’t begin until you put it in front of other people for comment,” says Art Harrison, co-founder and vice president of business development at FormHero. “The sooner you get [your concept] in front of other people and give them an opportunity to respond to it the better. They are going to tell you what they do or don’t like about it, and that’s when you are really going to start making the changes that will make your idea great.”
The pressure for a start-up to grow at a specific rate in order to satisfy investors can often lead to management making decisions that impact the long-term viability of the business. Nick Corneil, who self-funded Trainer+, a fitness history and planning tool that is attempting to bridge the gap between fitness and health care, isn’t convinced that sprinting to raise capital is a prescription for success.
“Everyone thinks there is a formula to building a tech start-up, that there is a playbook, and there really isn’t. Having money and raising money too early can accelerate a company to death,” says Corneil, who was a member of the DMZ in 2016-17. “I would strongly advise entrepreneurs to find their customers, find their market and build their business before worrying too much about raising money, and then to be smart about how and why you raise money the way you do.”
Beyond understanding the idea, the target market, the minimal viable product, the financing and business model of a new venture, there are a number of daily activities required to operate a business. Anne Pringle, who co-founded Local Buttons and serves as a coordinator with the DMZ, stresses learning the basics of management as a core competency.
“Understanding what you don’t know is really important as an entrepreneur,” says Pringle. “You might not be the accountant for your company, but it’s in your best interest to have a basic understanding of accounting so that if something goes wrong you can track and understand what happened.”
The path to launching a new venture can appear daunting, but taking advantage of the resources available at Ryerson like the DMZ, SVZ, or Startup School, could be the difference between becoming another start-up casualty or achieving long-term sustainability.