Diary of an Economic Crisis Survivor

Life, Death and Miracles of a Startup, in the Italy of the Economic Crisis

Tag: incubatori

5. Business Model in a time of crisis

MARCH 5, 2014, h.14:13

DAY 18

Yesterday was a good day. For me. For others,  I don’t know.

BUSINESS MODEL

In Eastern Europe the situation doesn’t seem to be good. How is it possible to risk this kind of escalation, in 2014? Wouldn’t it have been more appropriate to sit down and discuss it?

On the one hand, Russia is right, because there are the inhabitants of the Crimea claiming a different country(and according to Wikipedia, since 1992 they have been actually been an autonomous republic within Ukraine); on the other hand , there are disproportionate economic interests. On February 19, 1954, Crimea was given by the Soviet leader Khrushchev to the Ukraine, but only since 1989, Russia (URSS no longer) could no longer benefit from the powerful harbour on the Black Sea. Consequently Russia is looking for a way to resume earning from that region.

Strange but true my startup has the same goal: to figure out how to earn.

In a few words, set the business model to implement the business idea: we’re talking about a myriad of variables to bind together with consistency, from the procurement of customers, purchasing real product / service , through the use of forms of sponsorship or B2B . Without this step, any startup is doomed.

We don’t want to work for glory nor charity.

In my short career as a consultant, I’ve heard of entrepreneurs with great business ideas but who are dying from the lack of an effective business model.

To create our model D, our designer, bought a board, one of those with n-sheets.

Since yesterday the magic board is in Nerd per Caso’s home(now it’s not a house anymore, because it has become our startup’s office), and so yesterday we started to design our business model to understand how we can monetize. Simply be able to explain with a drawing, a diagram or a table model, gave us the opportunity to reflect . It’ssomething that I highly recommend to aspiring startuppers like us.

For now, we still see a little darkness, most likely we will try to differentiate the forms of income(although it can be a risky move), but definitely a source of income will be made by Pay Per Click (CLUE No.2).

The point is that:

  • Italy is not Silicon Valley, the home of the successful startup, where the business model works (probably it’s also a matter of entrepreneurial culture and openness to change);
  • Silicon Valley has apparently found a way to fight and defeat the Great C, Italy on the other hand is still in the process of evaluating how to survive the Great C;

 

By the way, the need to monetize it is among the top reasons why you create a startup, so it is an important step that we face; infact only in this way we can continue to have big dreams with our startup( in spite of the Great C).

4. Angels don’t come here (neither do Investors)

February 28, 2014, h.18:51

DAY 13

diary of a crisis survivor team angels crisis

Friday night .

Finished work, but I’m still here .

I look forward to a routine call “confirmation ” to close everything .

I’ll have to deal with the traffic & the consequent boredom.

Then home and shower.

Relax?

No Relax . I’ll eat pasta, then we’ll have the chance, after afortnight , of meeting, all 8 members of our startup. The problem, that we are trying to solve , is not a small problem whatsoever.

We are thinking about where to find the money. I don’t like call it money, I prefer calling it the funds: all the resources you need to cover start-up costs and the implementation of the first evolutions.

Today was another day by Survivor, while the unemployment rate rose to 12.9 % (they say it’s the highest, but I have not figured out whether since 1990 or since 1977 ), and people still complain. Surely in Italy the Great C is one of those variables that helps to increase the difficulty of raising funds with a too high taxation too high and with a government that in recent years has done nothing. And for these reasons and others, Investors don’t come here. I understand them. But we need them: foreign investors.

 

Let’s step back . Essentially, in the research of funds, the first thing to do is to “see what funds you can get your hands on.

You, your team, your parents and the parents of the members of your team, and even friends, yours and your team’s.

Usually, as in our case, you can’t hardly ever raise the money required.

Because we have to face a series of tasks that increases more and more : the constitution of the company, advertising and marketing, taxes , servers & domains, production of the product. In our case (CLUE No. 1) do not have to face costs of physical production of the products, nor rent rooms(we use the house of “I Nerd per caso”), because our startup is linked to the web.

Consequently, if you find yourself in our situation, fortunately, there are still many doors to knock on.

During a crazy brainstorming, 15 days ago, we named among others:

– Incubators;

– Find someone foolish ( and hungry ) , with lots of money , who is willing to invest in us ;

– Venture Capitalists;

Angels.

Another big problem , which comes from the previous consideration is, “are you willing to give up some of your shares in the company to give them to someone definitely bigger and more powerful?” Some of our team say that this is a bit like selling out, or sell off the idea, however, I believe that it is at least a solution to evaluate.

 

Finally came the phone call. I can leave this place .

Here in Italy, an ordinary person can’t think about new projects, future ideas or new business developments in the markets. They think only about the present, to survive the Great C in this present. For this reason, we are trying to come into contact with foreign investors: Venture Capitalist, Foolish or Angels, it’s the same thing.

 

Then I remember one thing.

Angels don’t come here.

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