Entrepreneurs behind the most attractive startups are much more collaborative
The most collaborative entrepreneurs are those most likely to grow. They are open to work even with those who would be seen as mere competitors.
100 Open Startups was born based on two theories: open innovation (created by the American professor Henry Chesbrough, which preaches a decentralized innovation model focused on collaboration and knowledge dissemination, including to external agents of the company) and effectuation (Developed by the Indian teacher Saras Sarasvathy on the method that teaches anyone can undertake by starting with what they have and inviting others to participate in a co-creation process).
At the very beginning of the project in 2015, we were challenging 100 Open Startups to address the relevance and importance of collaborating with the innovation process. This feeling of helping, collaborating with something that will benefit you, others and society was a major barrier. Startups did not easily open their projects to interact with the market, for example, but today is already a standard, there is no more this discussion. They already know that the benefits of exposure and collaboration outweigh any disadvantages of a lacking confidence environment. This is the big evolution, the big change. If we take the top ten entrepreneurs in our program five years ago and the top ten in the 100 Open Startups Ranking 2019, what fundamentally changes the profile of entrepreneurs is collaborativity,
From there, we created a method for finding startups that have more social capital in the ecosystem. That is, more people wanting to support them. This method resulted in Ranking 100 Open Startups, one of the most attractive startups in the market. The startups that evolve in the program and reach the Top 100 are the ones that most close contracts and partnerships with the corporate market. This is measured by the actual support, contract or investment in the new entrants. The 50 largest open companies are also awarded scoring based on the engagement, collaboration, hiring and investment that these companies make with startups. The main result is undoubtedly that we can demonstrate with data the relationship between increased support and better performance. Yellow effect is boosting bike and scooter sales(Opens in a new browser tab)
It is not enough for the startup to have a good idea. There is a myth about the idea, a certain overvaluation. Some years ago it was argued that, besides the good idea, it needs good execution. This is the management view, which is valid. But in addition to the good entrepreneur, those skills or abilities that are already well defined in the literature, such as resilience, flexibility, quick learning, boldness, thinking big, we add the ability to collaborate today. And behind the most attractive startups for the market are people with these characteristics in common. We realize that we highlight the most collaborative entrepreneurs, those who support even other entrepreneurs and who are often open to work even with those who would only be seen as competitors.
Recently, the timing issue has also been reinforced. And what we have added is appeal. There was talk of funding and the ability of startups to raise financial capital for their projects. We expanded the concept of resources for startups’ social capital. That is, how open market leaders are to new entrants.
Startups are the business model Street Fighters: they have less legacy, more flexibility, and perhaps more energy and dedication to testing new business models. We then went on to look for the big companies that were friendlier to ideas coming from outside.
And what have we seen happen most recently? Leading leading companies becoming a platform for innovation, making room and market for startups massively as part of their strategy.
This is the other big change in the innovation landscape, which has made the biggest impact on startups. And to keep up with the movement, we created the concept of Open Corps on the platform , highlighting the largest companies that are more open and prepared for the relationship with the innovation ecosystem.
In a first phase of open innovation, large companies stopped focusing only on their ability to generate innovation from internal investments and opened the innovation process in their research and development function. Open Corps now serves as a business model platform for startups, making available to the ecosystem previously unthinkable assets for a large company to open to third parties.
One of the moves we are making with 100 Open Startups is in front of investments. We created 100 Open Angels and are working to combat what we have identified as a great dilution of startups. One of the most worrisome mistakes of the Brazilian entrepreneur, still very worrying, is that belief that “the reality here is not that” and, therefore, he accepts any investment offer. This makes it difficult for investors to convince and so the accelerators, angels and even funds put less money and want to bite more.
Startups that sell out long before the time, do not realize their potential and good projects end up dying on the beach due to poor financial structure. To try to combat this, the proposal is for investor groups to co-invest . By using part of our method, which we call it ecosystem management, it is actually possible to generate that effect we call smart money .
The process of co-investing means fitting in bigger rounds, having more people betting, believing, converging on that group of startups. Angel and investor networks start collaborating in a more structured way, making their contribution potential and connections available to the startup — without harm such as bringing too much information, extracting too much from the entrepreneur or overcrowding the startup with possibly inefficient exposure, because that will be moderated by the network itself.
Confirming the importance of this trend, today there are seven unicorns in Brazil (companies valued at US $ 1 billion) and we will continue to produce others. Today it is easy to see this, even by the volume of investment, by the attraction of large funds that are beginning to look at Brazil. At first there was a phenomenon of microinvestments, small checks for many people. This, in a way, has already matured. Now there is the phenomenon of superchecks, over $ 50 million, reaching $ 100 million.
If Brazil has produced three unicorns a year in the last two years, from the next two to three years we will produce 10 to 15 unicorns a year. In the line of quasi-unicorns there are at least 30 candidates. We have seen this phenomenon worldwide and Brazil is on the radar, going through the same process. The result will also be similar even though the country was late in the unicorn wave. Argentina produced some unicorns before Brazil, for example.
We still have few unicorns and little venture capital or venture capital investment, angel investment and seed money funds for market potential. The scenario is starting to settle now, with the inflow of large funds and a movement of various sectors and large companies themselves also structuring investment areas for startup.
In this scenario innovation plays a key role. And through the methodology developed by 100 Open Startups, we demonstrate that we already have entrepreneurs, companies and funds that are quickly learning to collaborate and apply this value- openstartups.net