7.5 startup mistakes. Mistake number 2: My startup is UBER for ... or why I cannot describe my startup with one phrase?

We continue the series of publications 7.5 startup mistakes about ambitious expectations and great disappointment of entrepreneurs. Today, Daniel Kozlov, director of business development for GVA LaunchGurus, talks about the second mistake of startups.


Daniel Kozlov:

On July 28, Rambler & Co holding announced the purchase of AgentOn real estate exchange in order to create its own service for selling and renting housing. A new platform in the company positioned as "Uber for the real estate market."
The CPU published a selection of startups this summer with the “Uber for ...” positioning: there we saw Uber for alcohol, Uber for walking dogs, Uber for massage, Uber for marijuana, Uber for repairing iPhones, Uber for gay meetings, Uber for Tinder and others.
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“My startup is UBER / AirB & B for _________.” I hear this phrase at least once every two weeks.

The reason is clear. The temptation to quickly and (seemingly) understand the essence of a startup and still make a hint that a startup can be as great as a major American technology company is really great.

But no! Not! Your startup is not UBER, not AirB & B, and not the What's app for something or someone. And this phrase most likely does not correspond to reality, especially considering that most startups are very poorly versed in the internal kitchen of well-known start-up brands and in their business model.

But let's open the topic further, as usually from an expert or a potential partner talking to a startup, there should be a fair question: why is the company Uber / AirB & B in / for (substitute, whatever). Almost no one is waiting for this question. Here begins a series of very confusing explanations, as a search service, for example, housekeepers do the same thing as AirB & B only with housekeepers (yes, the case is real). Here there is a slight surprise. But what about the fact that business models are radically different: AirB & B is Peer2Peer renting premises, and the housekeeper service is a paid recruiting service to search for professionals of a certain specialization.

And if you tell a similar story to an investor, and if this investor is active, then with a very high degree of probability you have just lost an investor, as he hears such language regularly. In this situation, nothing more than boredom, such a comparison usually does not cause.

If a comparison with another company is necessary, first sort it out. As an example, I will give one startup that we have been accelerating with the juicer project. Juicer collected all the cake in consumable plastic bags, which can then be thrown away. Meaning - a new way to get a fresh drink and not to clean the machine. Business model - monetization through the sale of consumables. Where else have we seen a similar model? That's right - Nespresso! Therefore, in this case, you can safely say that this business is almost like Nespresso, but for juice.

There is another option, an attempt to make the name of a scientific thesis at the same time the name of a startup and a description of what he does. Why this is done is not clear. Business is not a fundamental science. We need names in 1-2 words, vivid, memorable and simple explanations of the essence of the business in an accessible language.

If you tell an unenlightened person that your startup is “The change in elastic springing during a two-corner bending with a rubber stamp” (yes, a real case), this may have the most unexpected effect on his unprepared psyche and significantly complicate your further interaction. If the marketing creative does not visit you, then in extreme cases, use abbreviations or a few numbers.

Your startup, this is your startup - a separate company, the essence of which you should be able to explain even to your grandmother! Heard about grandmother Volozh's test? Check out, very useful for conceptualization.