Magnitt founder Philip Bahoshy reveals what it takes to get ventures off the ground
The building blocks for a successful start-up
How do you define what a start-up is?
A start-up is a company that a VC would be interested in investing in to make monetary returns in the long run. Why? Because if you are seeking funding from angel investors or VCs, they are expecting a return on the exit from the company in the long run. That is very different to an SME business that grows on return on income, salary and dividends and therefore you need to understand the needs of VCs to understand how you should position yourself as a start-up.
What elements does a start-up need to be successful?
1. You need to have a good founding team - core people that can support you in the good times and the bad.
2. You need to have a product that is scaleable above and beyond any specific city or region
3. It must be monetisable; that does not need to be immediate but you need to be able to show that you will get there.
4. It must solve an actual problem as a company
5. Do your due diligence and checks with regards to incorporation to minimise costs. There are excellent accelerators and incubators that can help support you with that growth.
6. Test your product to see if there is interest before putting money in. You can do this cheaply without having to invest your money.
7. Really work out if this is something you are really passionate about and ready to give up five to eight years of your life towards. The Mark Zuckerbergs of this world are few and far between and they don’t happen overnight.
What do you hope to be doing in five years time?
I’d like to think Magnitt is successful enough to grow into emerging markets and into additional markets.
If you could have any wish to help start-ups attain success, what would that be?
A major challenge is having 19 countries in the Mena region each with very different demographic, cultural and regulatory environments. If there was a magic wand, it would be amazing to help start-ups reach into those countries without the hurdles of the travel, visa, set up and regulatory challenges that are involved. Another wish would be reducing the cost of incorporation and regulatory burden for companies that are looking to grow here whether it’s licensing, visa or real estate costs because they act as huge impediments for growth.
What news skills have you learnt since being an entrepreneur?
To hustle. I’ve learnt a lot of soft skills – patience, determination and the ability to hustle and persevere.
What helped you on your journey?
I’m not an advocate for saying that MBA’s make good entrepreneurs but the MBA gave me the basis of many skills I didn’t have that only came to fruition when I started doing Magnitt. So as a sole founder that has spent two years doing this on my own, I didn’t know much about accounting or marketing and positioning of brand or about term sheets and corporate finance. Many of those skills that were just theoretical in class have really come to fruition now.