No doubt the “villain” in my story is the bank system.
Banks don’t understand the concept of “virtual enterprise” (and wants to be backed by tangible assets, which software is not…). They are not ready to grant a no risk credit for what they feel as “terra incognita”. In my case, I had a public institution guarantee and for the rest (less than 15 000€ !) I had someone with significant assets standing for security.
2. What kind of people or organizations helped you on your journey? How? The hero of the story. Mentors, Incubators
I was helped by a very well organized process set up by the French government (NACRE: "nouvel accompagnement pour la creation et la reprise d’entreprises", i.e. new coaching for creating and buying out businesses). There was an interesting and useful “elevator pitch” exercise with a group of entrepreneurs (who agree or not to support the project through personal loans and guarantees for bank loans).
The advisors were quite competent. However, they did not help me to manage the relationships with the bank, even though they officially supported my project. There was also a "credit mediator" (besides the NACRE process) but it was inefficient at least in my case of a “very small business”. It was not able to help me while the banks did not fulfill their commitments, nor follow very clear regulations.
It is a no-hero story. The only effective and reliable help came from family and friends.
3. What about technology, did you find a particular technology helpful? Like a helpful software or online platform
The business model is based on externalization of support functions (to focus on the core business and to lower the breakeven point).
The providers had good products (web site, back office, logistics, and payment system) but the level of services and the capacity to fit what is, in a certain way, a prototype of the main provider was a problem. This was a significant difficulty in the start up phase.
4. At what point did you feel good? Confident, Motivated
I was confident in the market analysis and in the business model. Once this was done, I felt I had a good chance to succeed.
5. At what point did you feel low? Isolated, Powerless
On paper, there was a very efficient process: NACRE and credit mediator. However, after the coaching part, I was left alone for the implementation and the advisors were not involved, and possibly had no power to help.
This became particularly difficult when I encountered unexpected difficulties with banks. It was impossible to forecast these difficulties for the banks attitude is out of any rational behavior (no risk credit!). Moreover the staff is very unskilled and it is impossible to meet any so-called decision maker.
6. What surprised you most about starting a company? It's not quite what you think
I think that the project was correctly prepared but the lack of true coaching and support, and the resistance of the banks surprised me.
Yet, I was positively surprised, as I had no major problems regarding tax services, incorporation and registration although it was all-online.
7. If there were a start-up genie in a bottle, what three wishes would you have? Go ahead, be wild!
1. Advisors and supporters! Coaching organizations a skilled and involved staff that understands what business is.
2. Banks with a skilled and responsible staff. For the time being banks are business killers and predators as well.
3. To reduce reports, speeches, mediators and commitments but to enforce the present commitments and regulations.
8. Tell us a story: what was the issue you were facing and how did you overcome it? Any anecdote
I felt it was a day-to-day journey of survival, or an assault course.
To someone who wants to start a business, I would recommend to never be surprised and be ready for the worst. Yet, on the positive side, I was able to get started and I did meet a few nice people on the way.
My take-aways from his experience:
- Great structures and processes on paper but not necessarily a true support and maybe a lack of entrepreneurial spirit. A huge gap between the theory and the practice. How can we make these structures more efficient? Maybe by involving entrepreneurs, and not only bureaucrats?
- Funding is a big issue: the banks are risk-adverse, even for small amounts, and they don't understand web businesses. The advising structures do not support the young entrepreneurs in the funding process which is crucial for implementation. Two things here: how to create a true support structure that goes further in the implementation? How to provide ways of funding projects via banks or other structures (a few inspirations touched upon the second point)
- Family and friends, personal networks matter: but not everyone has them! How can we recreate these? through communities and networks of entrepreneurs? through story telling?
- Difficult to prototype in the start-up phase
- How to take risk when nothing is supporting it? We kept hearing about the need for people to be entrepreneurial, take risks and not worry (too much) about failing. Yet, how do all of this when the whole system seems to be designed to prevent risk and failure?