Covid had an unexpected effect: business initiatives grew because entrepreneurs believed it was time to turn their lives around, according to University of Maryland economist John Haltiwanger in a recently published study. He speaks of “overwhelming evidence that the pandemic and its aftermath were characterized by a boom in business creation.” Many of these arise from new or old ideas pushed aside by the inertia of everyday life or by the uncertainty of any beginning. But many of them fail. Arthur Manukyan, director of Prelaunch.comestimates that “up to 70%.” However, he believes that this figure can be reversed.
No one is spared from the fiasco, not even the new entrepreneurs. nor giants like Amazonwhich had to stop selling its first smartphone (Fire Phone) just 15 months after its launch. To reduce the high failure rate, Manukyan’s company, headquartered in the United States but international in scope, is part of a conglomerate of entities called The Crowdfunding Formula (TCF)where specialists in attracting resources, idea development, creation of electronic commerce and advertising and public relations are grouped. The model is aimed at new entrepreneurs. “We invest in risk and equipment. There are no fees, only commissions. If the idea prospers, so do we,” summarizes Manukyan.
One of the keys to TCF is the incorporation of the consumer in all phases of the project. Potential users who show interest in a product make up a specific group that participates in the design, in determining prices or in possible improvements or modifications. “There is no equal methodology. It is based on real data. In other models, the client participates for money and their position is biased. Our system is to find who wants what product and make it for them,” explains Mariam Hambardzumyan, co-founder of Prelaunch.com.
The network of TCF entities, without public financing, assumes all the risk and guides the entrepreneur in all steps. “A good idea has to find its way because it is our business,” says the board. In this way, the failure rate is reduced because the ability to face contingencies, modify the strategy or reverse a bad initial approach is collective.
Benoit Macq, an engineer at the University of Leuven and outside of TCF, agrees with the approach of including the end user in the process: “When you have a technology, you need people to want it and use it.” Macq met with TCF directors in Yerevan (Armenia), where he participated in the double international meeting World Congress on Innovation and Technology (WCIT) y Digitecto which EL PAÍS has been invited along with a dozen international media.
Harvard University professor and researcher Cass Sunstain, who was an advisor to former United States President Barak Obama, adds one more element to take into account for the development of the initiatives. He calls it sludge (mud) and defines it as a “curse that prevents taking advantage of technological advances intentionally or unintentionally.” “It is a barrier that prevents any access,” he explains during the WCIT before adding that it is not only bureaucratic, but also psychological or economic or resource-based.
Education also participates in this framework, as highlighted Artavazd Minasyanphysicist and mathematician member of the Digitec organization and technology entrepreneur while showing Armatha public and private initiative to introduce children between 10 and 18 years old to science, technology, engineering and mathematics through extracurricular activities. “50% of the participants in the program direct their careers towards these areas,” he highlights.
Initiatives such as Cifora, a platform for decision-making in emergency cases, or Titan, an application that unites 11,000 clients with providers of the services they demand, have emerged from this network. Fast Shift, specialized in digital developments in all areas, is another of the proposals that were born here. Or Krisp, which uses artificial intelligence to convert any accent into one that is most understandable for the interlocutor. Or Sada, provider of business cloud solutions.
Carlota Galván, director at HBX Group and unrelated to the international meeting held in Yerevan, details that several factors intervene in the failure of an idea, such as the lack of a clear vision, fit into the general plans, firm direction, resources or adaptation to the needs of the market. “Projects have to be very agile and flexible, capable of adapting to constant changes in the market and users. Otherwise, they quickly become obsolete,” he says.
The head of the business group highlights the importance of testing the product, evaluating risks and opportunities, establishing strategic alliances, involving all members and continuously monitoring the project. “You have to be very clear about why and why,” he summarizes.
HBX, a company in the sector Travel tech (use of technology in the travel sector), has applied these criteria to develop, in collaboration with rural communities in Mexico, tourist micro-destinations. “We started with a small pilot, working with seven cooperatives. This allowed us to adjust the approach based on the results and the particularities of each community. The success of this pilot has given us the confidence to expand the project to other countries in the near future,” says Galván.
