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HP Executive: Market size, timing and competitive advantage is key for startups

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Corporates and startups are increasingly reliant on each other. Here is how HP engage with innovation and one of its senior executives' advice to entrepreneurs.

1. Raising funding is about market size, timing and unique advantage

When fundraising, the first thing that you’re trying to do is sell your idea.

That’s true for big companies like HP, but also small companies.

I believe there are 3 key questions you need to be able to answer for yourself as well as for prospective investors.

The first question is “why is this market interesting?”

Most people want to immediately see an enormous market size that the company is targeting, or near-term potential for the company to be in the billion dollar range.

How are you defining the market size? Are you defining the problem in a way that is large enough, and in a way that investors are going to think is a big enough market size?

The second question you need to answer is “why now?” You should be able to articulate why your company or idea can be successful today versus something that requires an evolution of a marketplace for success in the future.

And the last question is “why are you uniquely positioned in the marketplace to take advantage of it?”

If you can answer those 3 questions, you will have a better chance of raising funding.

You need to be able to show that the market size you are targeting is huge, the money is being spent right now to try to solve a real problem, and you and your team are extraordinarily positioned in a way to win in the space.

2. Ship your product early and iterate

This is where people often miss the mark.

You really have to focus on shipping something, even if the product isn’t perfect. I see a lot of companies and organizations in this phase spend, spend, and spend to try to create a flawless product, and they never get around to shipping anything.

Until you ship something, you can’t sell it.

When you have something tangible that potential investors can put their hands on, visualize, or even complain about, you’ll be in a much better position to prove that immediate revenue is attainable (or already coming in) and user adoption is well underway.

Don’t wait for perfection.

It’s all about moving forward. Baby steps count.

If you ship something, get feedback, and quickly ship the next version, investors will see this and then trust that you can execute and deliver.

3. Hire smart and fire fast

The last thing, which is true whether you’re a big company or a small company, is really all about the people. It’s important to hire people with the right skill set and that fit with your company’s culture.

If I look back and think about the big mistakes I’ve made, I always regret not moving faster on a bad fit, rather than moving too fast.

I never look back and say, “I wish I wouldn’t have let that person go. We should have kept that person longer.”

However, I definitely look back and say, “Wow, I should have let that person go 6 months ago” or “Where would we be if I wouldn’t have let that play out?”

It’s hard because you want to believe that a person is going to adapt or step up, and in very rare occasions you do see that turnaround.

But unfortunately, it’s pretty rare. And in the start-up world, waiting can kill you.