In Sri Lanka’s evolving startup space, collective success is predicated on realizing this market rewards novelty, action & differentiation.
For eager tech entrepreneurs, investors and supporting institutions in Sri Lanka’s fast evolving startup space, collective success is predicated upon the realization that this is a market that rewards novelty, action and differentiation. Not only are consumers both discerning and savvy, but they also have very low switching costs. As the window to win grows ever shorter, entrepreneurs need more shots at goal just as much as they need a safety net to experiment.
In the startup scene, we often resort to the popular aphorism ‘fail fast, fail cheap’, which speaks to the need for companies to build a tolerance for failure — arguably, the one guaranteed event in the life of any entrepreneur. It may seem counterintuitive at first glance, but the greatest need of the moment is to create a culture that is unfazed by failure. By this is not meant the kind of monumental, ‘lose the shirt off your back’ type of failure. Rather, it is about building the necessary margin in our thinking and ultimately, social fabric, to allow for incremental failures to take place such that individuals are free to explore what works without being afraid to confront what does not — treating the latter as an opportunity to correct course. A budding techie might enter the startup scene with several pre-conceived notions about everything from prototyping to marketing but they must be prepared to rigorously test their hypotheses and allow for the small failures that signal a need to switch tracks. In this sense, ‘fail fast, fail cheap’ is the antidote to failing big.
What does this mean for aspiring entrepreneurs? For starters, it means leveraging existing resources to validate, refine and secure buy-in for what seems like a promising idea. Local techies have easy access to tools like Google Forms for quick surveys to tap into their target market and app mock-up platforms to showcase designs. There is every opportunity at an early stage to either prime one’s startup for success or make mistakes with spare time to adjust course. A quick picture of success for a tech entrepreneur may look something like this: Validate an idea and its target market by using free survey tools in lieu of drawn-out legwork. Test popularity and inspire investor confidence by securing pre-release beta sign-ups via platforms like Facebook. These actions must be embedded in a willingness to ‘fail’ at an initial idea that does not prove as popular as expected or a target market that has already encountered a competing product — provided this exercise places entrepreneurs on the path to further improvement and differentiation.
The idea of leveraging existing tools is linked to being resourceful with time and money. ‘Fail fast, fail cheap’ necessitates that startups increasingly push towards the Pareto Principle or the 80/20 rule in their thinking and actions. As the rule goes, 80% of our results stem from only 20% of our efforts. What entrepreneurs need to do is hone in on that 20%. If companies want to fail fast and reorient in a rapidly evolving space like tech, individuals need to consider what kinds of tradeoffs they are willing to make in order to facilitate that. For example, a startup’s founders may estimate that it would take 3 months of round-the-clock effort to pull together a functional prototype of their idea and attract the requisite buzz but they risk being outpaced by competitors in that time. The big question is whether there is a smaller subset of efforts or actions that will achieve comparable results in say, 3 weeks. If the 3-week run produces noteworthy results, it serves as a new benchmark for what is possible. If not, there is room to ‘fail fast’, change the work plan and push ahead with another 3-week run.
The Pareto Principle also lends itself well to cost-side considerations — 80% of revenues are said to stem from 20% of customers. If this is proven true, what might be the best use of a startup’s limited pool of funds? An early-stage venture that restricts its sales focus to high-potential customers is better poised to ‘fail cheap’ — should the occasion demand it — than one that has doled out on an in-house marketing consultant.
From an institutional vantage point, there needs to be a grassroots change in terms of incorporating IT entrepreneurship in educational curricula and inculcating at an early age, the culture of experimentation and incremental failure that makes for strong tech startups. However, the most immediate need for assistance is on the cost-side. Recently, SLASSCOM’s Startup Sri Lanka survey canvassed the most pressing needs of ~225 entrepreneurs, 23 government/industry bodies, and 16 investors — only to discover that ~57% of respondents considered the lack of affordable work space a key obstacle to the growth of a startup. The concept of shared workspaces is not unique. The first round of results from the 2015–16 Global Coworking Surveyestimates the number of coworking spaces worldwide at around 7,800; with current spaces serving 46% members than they did just 2 years ago. In addition to helping startups channel funds away from rent and overheads towards the 20% of efforts that entail actual development, co-working spaces lend a sense of legitimacy to startups, and contribute a platform for networking, trading and sharing skills. Sri Lanka’s tech ecosystem needs government actors to have a mechanism for selecting the best start-ups and providing them with shared spaces in which they have up to a year to incubate.
Ultimately, it is this much-needed dovetailing of efforts by entrepreneurs and the government that will propel Sri Lanka’s startup ecosystem forward.