Ideas are great- they can be fun, creative and garner a lot of attention. And you know what else ideas are? As my entrepreneurship teacher liked to put it, they are a dime a dozen. As harsh as it may seem, if your idea doesn’t deliver value to people or solve their problems, then no matter how colorful your idea is, it won’t matter. And this could not be more true for founders and startups in Nepal, who given their limited resources, cannot afford to chase after baseless and glittered-up ideas.
Now I would like to make it clear that I am not trying to denounce the importance of ideas in sparking creation and instigating innovation; these moments of brilliance can do wonders for shaping the trajectory of a startup. But at the end of it all, that is what ideas are- moments in someone‘s consciousness and it could be lethal for entrepreneurs to base their startups and business models on ideas without refining or validating them.
My position as a Program Development Associate at one of Nepal’s first startup accelerators, NEXT Launchpad, places me at an unique nexus of Nepal’s budding startup ecosystem and I find that Nepali entrepreneurs and founders are still working on idea-driven startups rather than value-driven ones.
Ideas are still considered the be-all-end-all for startups when it should really be considered as only a starting point. Many entrepreneurs in Nepal don’t see the importance of validating ideas, and even if they do, are oblivious on how to do it. Many don’t want to pivot their startups to new (and better) models or opportunities because it is too different from their original ideas. All this reflects a deep-rooted misunderstanding of many (not all) working and aspiring Nepali entrepreneurs that startups succeed because of their ideas, but the reality is that they succeed through the values they provide and how much easier they make the lives of their customers.
The success of Sasto Deals lies not in the products they provide, but in the solutions they provide and how easily they provide it. The success of UG Cakes lies not in the cakes that they provide, but in the celebrations they facilitate through their cakes and the personal touches they add. That is why any up-shoot e-commerce site may provide the same products or cakes, but not the same values.
And given the uncertainty that surrounds startup investment in Nepal, idea-driven startups can be even more risky for investors. Take the example Flooz.com and Beenz in America which were companies who had attractive ideas but failed to evaluate if those ideas delivered any real value to their customers. Both Flooz and Beenz individually tried to create a new digital currency during the early tech boom of the late 90’s and early 2000’s. But the relatively new and small base of internet users just didn’t see the value of using such digital currencies. There were security and trust concerns with the system and online credit card transactions offered more reliable means of online payment. However the idea was attractive enough to raise $35 million for Flooz and $80 million for Beenz in venture capitals. But all investment was lost because the companies were pitching attractive ideas but not delivering worthy values.
Entrepreneurs and startups in Nepal should learn from this cautionary tale of Flooz and Beenz and should instead try focusing on what troubles people and what excites them. The real opportunity lies here because generally people don’t spend too much time digging deep into their woes and joys- you need to do it for them. How many startups are out there providing truly Nepali solutions? Not many. So spend time observing, learning and hypothesizing. Don’t come up with ideas and then try to validate them. Try to uncover what values people consciously or subconsciously want and then try to come up with ideas that will deliver them.