Between Facts and Promises

You cannot expect from a child to be financially sustainable. Yet the next generation is a society’s biggest asset. Societies have early been mature enough to realize this and shape forms and structures (from families to student loans) to help children grow up and get educated, enabling them and the society at large to reach their true potential.

Take this to startups. You cannot expect from a young company to become sustainable from day one. Yet startups might mature to serve as an economy’s biggest bet and the foundation of its economic future. Have both societies and economic players realized these, are they helping young companies to have a shot at changing the game, for evolution instead of folding to happen?

Eventually, are we helping children based on the promises of what they might achieve, but judging start-ups based on the facts of what they have already delivered? My take is that -in immature ecosystems like the current one in my region- the answer is a disturbing yes. Yet, unfortunately, it can’t work like this, and one can see the results (or the lack thereof) everywhere around her.

A startup’s life, just like a child’s one, is a path from expectations and promises to actions and results. And it’s a fact that, no matter how greatly efficient you are, the process of moving on to the next step and maturation takes time and the right amount of support. Imagine the opposite scenario, what would you expect to happen if you leave a child alone in the forest? Say that you get back and you find her alive six months later, would you judge her on the improvement of her algebra skills or how much money has she made?

In mature entrepreneurial ecosystems, facts-based judgments of a startup’s activities get postponed pretty much until the IPO. I’m not saying that venture capital rounds blindly take place under lack of revenues, traction or early data suggesting great future prospects. But I’m saying just that, required inputs and plans serve as suggestions and hints that a great team is on track to deliver a disruptive product in a growing market that will eventually make economic sense, opposed to already available solid data that will make a financial analyst suggest a company’s stock.

I have met with a number of local people on an investor’s end who indeed have the greatest of intentions but have yet to realize this very fact. Start-up investments cannot but be promise-based and promise-driven, with facts supporting but not fully “reasoning” -in a traditional sense- such a decision. It may sound a skin-deep, irrational or even unprofessional approach; I assure you it is exactly the opposite.

With the Openfund, we have made what we consider to be a serious attempt on breaking this vicious cycle and operating with a different, promise-based mentality within an ecosystem that does not. It is true that it is far from easy to be the only player in the local market doing so, especially when you are strictly limited to the very seed side of things. That said, we are comfortable that change is bound to happen, and we are devoted in continue playing a growing role towards it.

  • Stefanos Kofopoulos

    “A startup’s life, just like a child’s one, is a path from expectations and promises to actions and results” vs “A startup is a human institution designed to deliver a new product or service under conditions of extreme uncertainty”.

    A child's life is covered and fulfilled with certainty for years to come, mayve 1/5 of his life. Startups may die tomorrow.

  • George Tziralis

    That's the point I'm trying to make :)