Samer Karam is an angel investor and startup advisor, and founder of StartUp Megaphone, an organization tasked by Banque du Liban to manage the international image of Lebanon’s startup ecosystem.
Prior to founding StartUp Megaphone, Karam founded Seeqnce, which started off as a founder collective providing advisory events and organizational workshops. However, due to its immense success, in 2012 Seeqnce opened its accelerator programme and is now the advisor to the Central Bank of Lebanon’s $400m sovereign startup fund.
Samer’s own investments span the globe with 10 in the Middle East, 3 in the US, 1 in Scandinavia and 1 in Asia.
2 big reasons why startups fail
1. Not having the right founding team
What is one key thing which great startups like Facebook, Twitter, Apple and Oracle share? The answer is multiple founders.
The importance of having multiple founders cannot be overstated. Creating and running a startup is one of the hardest, most emotionally and physically draining jobs anyone can do. Without the support of a strong co-founder - someone who can brainstorm, encourage and take some of the weight off their back - the pressure is likely to get to the founder.
If a business is run by a single founder this may suggest that that person either could not convince a friend or contact to join them on their entrepreneurial journey, or that they are perhaps somewhat arrogant and believe they do not need help.
Being unable to persuade others to join could also be a sign that even those closest to the entrepreneur do not believe in the product or that they don’t have faith in the entrepreneur. This matters because if friends and colleagues aren’t convinced, the entrepreneur is going to struggle to persuade consumers.
The importance of having multiple founders cannot be overstated. Creating and running a startup is one of the hardest, most emotionally and physically draining jobs anyone can do.
As an investor, there are exceptions early on where backing a single founder team can pay dividends. In these cases, you as an investor need to ensure you are able to help the founder build a strong team around them so that they have the best chance of succeeding.
2. Location, Location, Location
However much I hate to say it, even if a company has assembled the perfect team there is one big factor that can derail any startup, and that is location.
A supportive environment with access to suppliers, distributors, potential employees, investors, and even competition is paramount to a startup's success.
Companies need motivation, challenge, and others who can help them build the business into something great. And the good news is that these environments are springing up in many places. No longer is this restricted to Silicon Valley but there are key tech hubs in London, Boston, Berlin, Tel Aviv, and many other places are blossoming.
This is not to say that great business ideas, and investments for that matter, have not been made into businesses outside of these environments but, if you’ve found a great business that’s ready to grow and the environment they are working in is not supportive to what they are doing or what they want to achieve, it may be worth asking them if they would consider moving before you make your investment.
Do you agree with Samer? Share your thoughts in the comments below.