How to build a successful startup

When it comes to venture capital, Keet van Zyl is as savvy as they come. He’s worked for companies such as Procter & Gamble, Investec Bank and HBD Venture Capital, and helped set up private equity funds in the Southern African region for a US-based investor. He also co-founded fund manager, Knife Capital as well as the business Angel investment group, AngelHub, which invests in startups with high-growth potential.

Based on his experience as a partner and board member of various investments, van Zyl shared some of his thoughts on what it takes to build a successful startup.

His findings were presented at IBM’s first SmartCamp in South Africa

Build a business, not a product

“Some companies come to us with an app or a game saying it’s going to be the new Angry Birds. Our reply to that is: ‘what’s in the pipeline?’,” said van Zyl. Rovio for example, produce new game titles or variations of those titles according to a schedule, ensuring a sustainable business.

Establish a fast, agile, adaptable business

The business should be able to move with the times.

It’s all about the execution, not the idea.

“I can’t underline the word ‘execution’ enough. A lof people have the same ideas, and it’s about who can execute better than the next guy,” said van Zyl. This is where funding comes in handy. In order to execute on an ambitious land grab strategy, venture capital is often sought to accelerate expansion.

Clearly define your revenue streams

In order to “stay alive”, startups should clearly define where their revenue will come from. Especially in the beginning stages of a business, when various revenue paths can be pursued, startups should be able to say no and stay focused.

Have a customer-focused growth strategy

“Build it and they will come” only works for Apple. Fledgling ventures should pay attention to what customers want and to move with that: “avoid being arrogant, listen to the customer,” said van Zyl.

Network and build relationships with key stakeholders

“Networking is what it’s all about. Network and skills. Yes, money too, but basically it all comes down to the relationships you build,” said van Zyl.

Find the right funding partner

“For example, if we invest in a company that doesn’t want to fasten its seatbelt and grow internationally, we’re going to mess that company up. That’s my agenda as a funding partner and that doesn’t fit all businesses,” said van Zyl.

Seek objective advice from people you can trust

Regarding mentorship, “follow your gut”, and be cautious of listening to everyone. Startups should “put themselves out there” and tell their stories. “Listen to the feedback, dismiss the crap, and incorporate the good stuff,” said van Zyl. Don’t be afraid to seek advice from successful businesses or entrepreneurs. There’s a good chance that they will share their knowledge with you.

Go to market

The lean startup idea. Don’t wait until you have perfected everything. Just go out and do it.

Show traction

This doesn’t mean showing a lot of profit, but it is important for the company to show progress. Being recognised through awards, adding respected shareholders, working with significant clients, are all ways of showing traction. “Every, little incremental bit of traction adds to the overall story,” concluded van Zyl.