Growing up in Ireland being called a tool was a bad thing.
But now being a tool is very smart… especially when it comes to increasing your chances of startup success in the tech industry.
As a long-time fan of analogies, I like to summarise my thesis along the lines of ‘It’s easier to get rich selling shovels in a gold rush than hoping to strike gold’. As the volume of new startups explodes, so does their need for smarter ‘shovels’ to help them get to market faster.
While you cannot build a long-term sustainable business from startups (churn will be high as most startups fail), you can leverage this early cohort of fast-moving, risk friendly, early adopters to secure a critical beachhead of early revenues, testimonials and (very) honest product feedback.
This early momentum is pure gold when it comes to securing initial investment and attracting bigger customers. Therefore, selling ‘shovels’ as an initial route to market, is very smart combined with a focused B-2-D (Business to Developer) business model.
Like gold rushes, new ‘Startup Hubs’ are emerging. As an example, look at the startups that are leading the growth in the Irish Tech Industry right now;
Learnosity – A toolkit for educational assessment.[bootstrapped]
Logentries – A tool to analyse log events. [Raised $10M]
Intercom – A tool to better communicate with users. [Raised $30M]
Trustev – A tool to reduce e-commerce fraud. [Raised $3.5M Seed]
Swrve – A tool for in-app messaging and A/B testing. [Raised $11M]
Stripe – (..and while not exactly Irish) A tool for developers to take payments online. [Raised $120M]
As Matthew v5.5 famously said;
‘Blessed are the Tools, for they shall inherit the earth’.