New Zealand startups need to think global from day one
Marvin Liao has worked with and invested in startups across the globe, including Kiwi firm Melodics.
Liao is a partner at 500 Startups, a seed venture capital firm and startup accelerator based in Silicon Valley.
He invests in digital media, enterprise SaaS, marketplace, fintech, adtech, digital health, Internet of Things, and mobile startups across the globe.
Prior to his role with 500 Startups, he spent more than 10 years with Yahoo in business development, sales, ad operations and marketing roles. He is also a mentor for several startup accelerator programmes in Europe, Asia, Israel and the US.
In this Q and A with Callaghan Innovation, Liao shares lessons on scaling up, and how to avoid the most common mistake startups make.
When you are deciding whether to invest in a startup, what are the two main things you look for?
At the risk of sounding like all the other VCs from Silicon Valley, I'm looking for mission-oriented, ambitious founders working on big problems – which usually equate to big markets – with a very unique perspective and angle to win the market. I look for curious, decisive and really passionate founders who just want to win and think big.
If an entrepreneur was able to grab just a minute of your time to talk about their startup business, what should they tell you in that minute?
I'd want to know more about who their customer is and what specific problem they are trying to solve. And any data points they have to show that it’s working.
Startup founders spend too much time building a product without validation of whether there is market or whether customers even want what they have
What is the one piece of advice that you think all startups should keep in mind when they are establishing their business?
I think the biggest advice I would give to new and old founders is that they should over-index on spending time with potential users or customers to really have a deep understanding of who they are trying to serve and what their biggest problems are – and then how you can help solve those problems through your product.
Is there any specific advice that you think our NZ startups need to take on board?
I think startups from New Zealand need to think global from day one, so I would encourage founders here to be more ambitious and think bigger right from the start.
Kiwi software company Melodics is one of your portfolio companies – what attracted you to them and what’s been your advice to them?
Sam Gribben [Melodics founder] had deep industry knowledge and they had some very good initial engagement numbers and a business model that made sense. My team and I spent a lot of time helping them becoming much more metrics and experiment focused and they have used this methodology to grow fast and sustainably.
How long do you think a startup can consider themselves a startup? Are there milestones they need to hit by the end of the two-year mark?
Honestly, this really depends on the type of startup but, in general, it takes a long time to get to product-market fit. I've never seen it happen sooner than two years, at the earliest, and usually this takes up to four years. In general, it’s better to have smaller groups of super engaged fanatical customers, than a lot of mildly interested customers.
What is the most common mistake you see startups making – and how can they avoid it?
I think the most common problem for founders is that they spend too much time building a product without validation of whether there is market or whether customers even want what they have. ‘Customer Discovery’ or lack thereof is the most common issue.
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