Posted by & filed under Accelerator, Corporations, Fintech, Startups.

We have done 19 accelerators mainly for global companies. 1-3 locations at the time. Being inside the corporations’ offices with startups. It’s a must. That’s the best way to deliver co-developed innovations for banks and bank customers. Corporations also buy learning from us. Learning to become like startups. They also want to learn how to cooperate with startups. And it only happens when they work with startups… (well, that’s self-evident =)).

Corporations really value the hands-on way how we run accelerators, but even with us, they face a real problem: how can they attract the best startups?

Solution to Banks: collaboration

Banks need to support each other to attract the best fintech startups. Globally. Best parts of a global and local accelerator. Each bank will have their own local accelerator and after the accelerator, each bank will participate in workshops/boot camps with the startups they see useful for them. And the startups are more bank compliant. That means, they’re easier to collaborate with.

Nestholma Global Fintech Accelerator attracts a large number of startups

Startups will join because they will have a fast track to all participating banks. During the accelerator, each startup cooperates with the bank they are located in. And when the program is done they will have a fast track to all participating banks.

So, we give startups our accelerator support and access to many banks. And that’s a promise they want to hear. And then we get more applications from the best fintech startups. A clear win-win. Yes to global. Yes to local.

Let’s talk!

I would like to have a discussion with all parties about this. Why is this the winning model? Why not? What should we have more/less? Let’s discuss!

Read more about the Global Fintech Accelerator here:

www.nestholma.com/fintech

 

Posted by & filed under Corporations, innovating.

Big corporations are clusters of amazingly smart people. They have resources, vast experience and deep knowledge of the industry. Be it banking, technology or pretty much any industry, the corporations are the rulers of the industry. At least till now.

Now startups with their amazing innovation power are taking over. Consumers are demanding better and better solutions, and big corporations can either learn how to really innovate again, collaborate with the startups or be left in the dust. To understand how you must first understand why. In this post, I am going to explain why exactly corporations are so bad at innovating.

Working together, but not really together

Big organizations do have plenty of smart people working together, but the problem is that they are not really working together. With big organizational size comes the need for structure, units, departments and all kinds of sections. There are departments for marketing, sales, legal and so on. The problem with it is that the employees don’t venture much outside their departments. They work with the same people all the time, and often with similar people. Marketing people with marketing people, sales with sales and so on.

To innovate, you need to have people with different knowledge bases and experiences working together, cross organizational boundaries. Even if people from different departments happen to work together, it is often just for a short time and for a specific mission. Innovations usually require time to just freely bounce around ideas. But with a focus on efficiency and the mission and hand, that is often just not possible.

To innovate different kinds of people have to work together. But in corporations that rarely really happens.  Tweet about it!

Quartile focus & the quest for efficiency

Corporations focus on making the next quartile better than the last. Innovations, on the other hand, require time. And that is exactly what such short-time focus does not provide. At the same time corporations look for efficiency. The same (or even more!) tasks are expected to be done with fewer and fewer employees. That leaves the employees no extra time for free thinking; creating new & innovative ideas. And even if they could squeeze in a bit of innovative thinking, why would they? Their performance score is based on how well they handle the tasks in their job descriptions, and that’s it! Such systems punish for trying to be innovative; ‘wasting time’. Even if the employees are told to innovate, fresh ideas rarely come on command.

Innovations require time. When you just focus on making the next quartile better, there isn’t enough of it. Tweet about it!

short-term focus quartile

Knowing their field too well

Another problem big corporations have is that they are the masters of their field. It obviously has a lot of benefits, but at the same time, they know their field too well. When you are so deeply inside, it is difficult to see possibilities for change. And often times the innovations that do come from within are fairly small. That is why big innovations come from the outside, from people who have a much less clouded view.

Resistance to change

Some corporations get cocky. They don’t realize that what has worked for the past 20 years, might not work at all now. They fail to recognize that with time also their customers, market etc. change and they need to change with them, preferably even lead the change.

Sometimes the organizations understand in principle that to stay on top of the game, they need to innovate and essentially: change. But to truly do that, you need to have the whole organization in it. But instead many big changes are faced with attitudes like: ”We have never done it this way” or ”We already tried this 30 years ago”. When you have lived too long in the same bubble it can be hard to recognize how much e.g. technology has changed over time. What was impossible before is often very much possible now.

You need to realize that what has worked for 20 years, might not work at all now. Stay current. Tweet about it!

Failing to fail enough

Being innovative requires tolerating failure. Like Ilkka Paananen from Supercell has said: most of their games fail, but they keep doing that to find the game that’s going to be on top. For big corporations, failure can seem daunting. Unlike the failures of smaller companies that often go unnoticed, everything big corporations do is scrutinized. They have a reputation to keep and they need to be careful of bad press and its influence on their brand, stocks and so on. But failures are a crucial part of being innovative.

Being innovative requires failures and the courage to fail. Tweet about it!

Failure failing success

Innovations don’t always seem so attractive

There are also negative sides to innovations, which can make them seem unattractive to corporations and especially their employees. New innovations often mean things can be done more efficiently and with lesser costs. And that often means the corporations have an excess of employees. They need to downsize, let go of people, and that is what no one wants to do. It is horrible for the employees; both for the ones leaving and staying, and very bad for the company’s public image.

Another obstacle is all the legacy systems big organizations usually have. Over the years corporations have invested a great sum of money into IT, machines and real-estate among many other things, and letting go of them often feels like just too big of a waste.

When you look at all these issues, getting corporations to innovate may seem like an impossible task. But it doesn’t have to be. There is definitely hope, but organizations need to take action now. What can they do then? One solution is (surprise surprise) to learn from the innovation masters: startups. In a future post, we will talk more about the different ways big corporations can innovate.

 

Start renewing your business today

Let’s talk how Nestholma can help to renew your entire company and find new businesses with startups and beyond.

I want to hear more

 

Related post: 7 differences between startups and corporations

 

Posted by & filed under Accelerator, Investing.

…or equally bad. When the head of Y-combinator had invested into 720 startups, he said that he can’t predict which of his investments will be successful. We can’t either. Because these are already the best ones and they all should succeed.

Out of 100 startups I have invested in, 3 are bankrupted and some are receiving XX millions of funding. And I was not able to predict that. The fact is that none of us can predict all of the investments right. So now I am trying to learn from our team’s decision making. I am also making a prediction. Let’s see if I’ll be right with it.

But seriously, we have not yet done single unicorns so Y-combinator is clearly ahead of us. But we try harder =).

We invested in all startups on Nordea Fintech Accelerator and today’s pick is Collectly.co

Their promise: increase effect 3-4 fold and do it 90% cheaper. Not a bad promise for a debt collection company. To do that they use AI and profile the debtor. They do profiling by using many sources and automating it all. Then they approach the debtor with the message and channel most effective for this kind of profile. All this automated. The system also keeps on learning to increase the efficiency. Simple stuff and strong value add.

 

They had relevant experience from the field. They had the tech skills as well as an ability to make people listen. They worked well together. I did not find any red flags. But one. I was wondering will they have the attitude “I’ve been there and done that, don’t tell me what to do”. Because the best teams are strong and skilled, yet able to listen and learn. Almost an impossible combination =). But that fear did not materialize. The opposite happened. They were cooperative and also brilliant in using us. And they still do. They make me talk with investors to share our experiences. And because they deliver, it’s easy to talk about them.

The best teams are strong and skilled, yet able to listen and learn.Tweet about it!

So how do we at Nestholma make investment decisions?

We look for great teams with simple, understandable big value add. So, one should always remember to ask the following questions from himself: are the benefits to customers big enough and will they understand it easily? Can the team deliver it? It’s as simple as that.

Ask: are the benefits to customers big enough and will they understand it easily? Can the team deliver it? Tweet about it! 

And my prediction: we’ll hear from the guys at Collectly. A lot.

Click here for Collectly’s pitch.

Posted by & filed under Marketing, Product development, Social Media, Startups.

Social media is often recommended as THE thing to do for startups. But they usually forget to say why. Non-social media people often see the different social media channels just as places where people share silly things about their lives and random cat videos. And with that, they fail to understand what an amazing tool social media can be. That’s why I’m going to share with you 7 reasons social media is a must for startups.

One of the harsh truths of being a startup entrepreneur is that no matter how cool your idea is, that alone isn’t enough. Some entrepreneurs believe that as long as their solution is good the customers will just somehow appear. But that’s just not how it works (shocking, I know). It is not just once or twice when the much worse solution has taken over the market (take for example the case of VHS). You need to get your startup in the minds of the buyers, how else would they know that your product/service even exists? And as a startup, you have to do that without having the budget of a commercial giant. That is where social media comes in. But it is not only that! The benefits of social media start even much before you have even launched. Read on to find out how.

Just having a cool startup isn’t enough. Customers won’t just magically appear: you need to let them know you even exist! Tweet about it!

1. Reach the right people

For getting your startups into the eyes and hearts of people, social media is one of the best ways. That is because most social media channels have amazing targeting tools. That means you can get the content you want in front of the people that are most likely to be interested in it. That means you are not wasting your time and effort on people who have zero potential of being your customers.

The reason social media targeting so great is that it goes way beyond just age, gender and other basic things like that. Every now and then there are articles about how social media channels know everything about their users. And I mean everything. That is usually told as a gruesome horror story, but for marketers: that means paradise. The more you know about your customers and potential customers, the more precisely you are able to target them. Be it their interests, the languages they speak, where to go on a holiday and so on and so forth. And the best part is: you can do it all for a very low cost!

 

2. Get most bang for your buck

Social media gives you the most bang for your buck. In fact, you might not even have to spend a dime and can still get amazing results! Though usually, you have to put a little bit of money in, especially at the beginning. What is a little bit of money? Often people think that means thousands of euros, but that’s not true. You can get a lot done with couple hundred or even just tens of euros. Sounds too good to be true, huh?

Almost all social media channels make money on ads. But at the same time, ads are exactly what the users don’t want to see. At least if the ads are not relevant to them. Relevant posts and ads, on the other hand, usually bring value to the user. And happy users makes the social media channels happy and they want to encourage the advertisers to keep making their users happy. In short: the better you target your ads, the cheaper it is going to be. So, in the end it’s not about how much money you have, but how you use it. And thus social media levels the playing field with big corporations with endless marketing budgets.

Social media levels marketing for startups – no need for a big corporation’s marketing budget to reach amazing results. Tweet about it!

3. Differentiate and show how cool you really are

The competition is getting more and more heated pretty much no matter what industry you are in. Social media is a great way to differentiate yourself from your competitors. Show who you truly are. What are your values. And why you’re so cool in general. No matter how much we try to think we make our decisions rationally, it is still emotions that play a big role in it. People like to buy from companies that have authentic personalities, companies that just feel good. Social media is an excellent tool to show them exactly that.

Doing social media is also a great way to get positive news about you to the internet, so you don’t have to really on others’ posts (which by the way, might never come). Not only does it help your startup to get know, but when people actually search for you, there is already something good out there.

4. Bypass people’s mental adblockers

Over time we learn to be more and more suspicious about the information we see in ads. ”Of course they would say so, it’s their product. It just can’t be that good in reality”, we think. But in social media, your ads & other posts can look just like the posts your customers’ friends & the people they follow have posted. That again means their mental adblockers are off, and they are much more receptive to your awesomeness.

Another thing is that people go to social media to have fun. They are looking for something to entertain them, something to help them pass a bit of time. And if you do your social media stuff well, that something can easily be the posts (and even ads!) you make. That means your marketing and sales efforts are not seeing as a nuisance, but something they get value from. And that’s a huge difference to traditional advertising!

5. Provide A++ customer service & increase customer loyalty

Social media is a great way to provide A+ customer service. For example, Twitter & Facebook have become THE way to interact and get help quickly from companies (read this post for inspiration). By interacting with your customers and being social you are shedding the image of a faceless corporation and giving them a good feeling about you. And again: it’s all about the feel. When someone has gotten a good feeling about your company through for example talking with you on Facebook, they are much more likely to choose your product over your competitors.

It also pays off long term. Brands that are active on social media will have more loyal customers. Good feeling about you -> they are much more likely to keep buying from you.

Being active on social media – recipe for customer loyalty! Tweet about it!

Here is another kicker: social media can be an amazing help for you way before you even launch your startup!

6. Get people excited about you before you even launch

Most of the startups I have been working with assume they should start doing social media after they have launched their product/service. But that is completely not true! The best possible problem is having people get excited and ready to buy your product/service before its launch. Take for example Dropbox, who had hundreds of thousands of people on the waiting list (read more here), and thus much smoother start when they finally did launch. So, you should definitely start acing your social media game as soon as you can.

Another bonus is that you learn what works and what doesn’t for your startup and its customers. Especially if you are new in using social media for businesses, starting early gives you time to learn before its too late. Also, the same things don’t necessarily work for all businesses, so you should try and test what are the best ways to use the channels for you.

7. Understand your market better & adjust accordingly

When you engage with your potential customers on social media, you start to understand their needs better. You will see if your idea is really worth pursuing or if you should adjust it a bit, pivot, or just scrap it all together. As people talk about their lives and their interests quite freely on social media, you will also get to see a rare glimpse into their lives. And that again helps see how your solution would fit in there. You can do also a lot of great spy work on your competitors! ;)

 

Any important benefits I missed? There definitely are plenty more! Share in the comments or tweet @TiinaHaapanen or @nestholma. In my next post, I will go more in depth about how to actually rule in social media. See you there! :)

 

Posted by & filed under Entrepreneurship, Funding, Startups.

It’s the beginning of a new year, and time to start working on those new year’s resolutions (if you stumbled upon this post later in the year, even more reasons to get to work NOW! :)). This post won’t help you lose weight but take care one other important resolution: having your precious startup finances in check. Here I will give you 7 tips on how to master one building blocks of startup finances: cash flow management.

In my previous post, I talked about the reasons 4 out of 10 startups fail (spoiler: it’s also related to cash-flow management). In this post, I will give 7 tips to master your cash flow and NOT be one of the 4. Some of the tips sound very simple & obvious, which they are, but they are still forgotten way too often. 

  1. Make it a habit to stop for a couple of minutes once every two weeks, and check the money coming in and going out – cash flow. Preferably do it with an outsider to get an unbiased view. And remember to do it properly! You don’t want to go bankrupt because of a silly calculation error. Tweet about it!
  2. Understand when the incoming money will really be in your account. If you sign a deal today, it doesn’t mean the money will be in your account tomorrow. It could come next month, next year or even later if that is what you agreed! So, understand when you will get the money, and make sure you won’t be out of cash before that. Tweet about it!
  3. Remember that not everyone pays their bills in time. There also might be other problems delaying the payment like dealing with reclamations. So, don’t count on that one payment too much! Tweet about it!
  4. It usually takes 2-3 years before your company is cash-flow positive. Most first-time entrepreneurs believe they can do it less than 6 months. And that obviously means trouble. So, a bit of pessimism will be a good aid in your journey. It is better to be pleasantly surprised than the opposite, especially if it means you will be out of money and business. Tweet about it!
  5. Pivot fast. Startups usually pivot, i.e. change from plan A to plan B or even D 3-5 times at the beginning. And every time you pivot, your revenues will be further and further in the future. So, the faster you pivot the faster you will get money coming in. Tweet about it!
  6. Multiply your estimated need for funding & time frames by 3 (or π/pi if you want to get precise), and you will get much closer to reality. Why three? You just read the reason for it: pivoting. That makes even the best estimates unrealistic. Based on our experience, multiplying the estimates by three gets startups closest to the reality more often than not. So, if you estimate that your product will be ready in 3 months, it usually takes 9 months in reality and so on. Tweet about it!
  7. Understand what you are selling, to whom and for what price. Before you yourself understand what you are doing, it will be hard to convince others to buy. It doesn’t mean your product/business has to be perfect, but no one is going to buy it if it is only almost ready. Tweet about it!

And that’s it! All in all, it usually takes longer and costs more to get your startups going than you’d think. It all might sound pessimistic, but think of it this way: the better you are prepared, the more likely you are going to be one of the success stories!

 

Related post: Why 4/10 startups fail: the realities of cash-flow management