Startup Junkies Reaction Paper free essay sample

Earth Class Mail An inherent fundamental risk of any startup is that when revenue is not positive, everything put into the company becomes an expense, which is no different for any other company operating in the red. A startup has to avoid spending money that it does not have until it secures adequate capital. As this episode states, nine out of every ten startups fail, and some of the biggest factors are poor product/service selection, poor market selection, and/or an inability to raise proper capital. My initial reaction to this episode is that Earth Class Mail, and their idea of the digitization of traditional mail to an electronic form, is phenomenal. It is synonymous with other forms of pervasive and ubiquitous universal communication such as cellular communication, voicemail, or email, and is a phenomenal business concept. However, the amount of risk, and how it played out in this episode, is equally phenomenal. We will write a custom essay sample on Startup Junkies Reaction Paper or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page The liquidation of assets, such as 401Ks, IRAs, and planes, in an effort to secure capital, is a huge gamble. Every other primary form of communication has gone digital other than traditional mail, which makes this a huge, unexplored market opportunity for any new startup. Taking on the United State Postal Service’s communication model and delivery method to change the way individuals receive and handle their everyday mail is both incredibly ambitious, and incredibly lucrative to a company that is successful. This service has the potential to be a success in the short run as an added-value service to the current system, or as a game changing market solution in the long run. To be able to scan, sort, and deliver mail electronically, primarily to smart phones, so that traditional mail follows individuals wherever they go, is a game-changer. The analogy that Earth Class Mail’s CEO uses to describe the addition of the company’s service to traditional mail to that of adding cellular capabilities to traditional landlines is very apropos. I agree with the statement in this episode that team leadership and the evidence of team leadership are the most important trait for successful startups, as investors are often to be as likely to invest in the quality of the management team, as they are the quality of the business concept. I have never been a part of a startup. However, as a long-time IT professional, both as an IT director and as a systems engineer, I can relate to the angst in the technology issues encumbered in this episode. Failure to deal with DNS issues (or other significant technology issues), particularly with the startup or renaming of a website, simply cannot happen. Technology, and especially web presence, has become too important for any successful organization to fail at today. The scene with the VP of Engineering’s issues and his concerns about hardware and software in advance of the initial launch due to funding problems is another illustration of this issue. If a startup wants to create a buzz to create capital and create a market for its product, then the technology cannot be underfunded, imperfect, and not properly responsive, as the likelihood that it will be successful decreases. This episode underpinned how poor my prior understanding of the funding â€Å"recruitment† process and stages is in starting up a corporation from scratch, and the inherent risks involved. From the recruitment of initial â€Å"angel† investors to securing venture capitalist groups to fund the development and growth of the startup during its non-earning years, it is an incredibly risky proposition. The episode shows all too well that while Earth Class Mail has an exceptional management team, loaded with experience, and an exceptional business concept, that there always are pitfalls at every turn for new startup. One week, a startup is turning investors away due to potential over-subscription, and the next they are scrambling for the next stage’s funding due to the loss of a major venture capitalist. Such is the danger of entrepreneurship.