Dr Doron Myersdorf is the Founder and CEO of StoreDot, the leading 5-minute extreme fast charging batteries for electric vehicles.
We entered into the 2020s with an abundance of exciting technologies at our fingertips — from AI and AR to clean energy and industry 4.0 solutions, to name just a few. Arguably, there has never been a better time for entrepreneurs to start their own businesses. According to some estimates, there are 305 million startups created annually, over one million of those related to technology. However, only 90% of startups are predicted to succeed, with about half failing by their third year.
Even with a great proposition, problems can arise when a company tries to scale up its operations and make the leap from the lab into the real world. Common factors include lack of funding, loss of focus, changing market needs and being overtaken by competitors. However, with so many promising startups failing to launch, what are some of the steps they can take to improve their chances of being one of the exclusive 10%?
Build a strong ecosystem.
The most important foundation for any startup is to establish a strong ecosystem of strategic partners and investors. This should be as holistic as possible and include stakeholders from every part of the industry. With technology developers, in particular, there can be a tendency to adopt a silo mentality, focusing all their time and effort into developing the best version of their product, only to find out later that it does not meet the needs of the end user or is not compatible with the wider market. The more feedback loops a startup has, the more likely they are to avoid this pitfall.
Prove you mean business.
Of course, it takes time to build a good network of partners, and this step is reliant upon a startup’s ability to convince potential partners that theirs is the right technology to align with. This can be hard to do, especially in the early stages when the startup is not ready to produce full product samples.
When my company first started out, there were many people who did not believe five-minute charging of electric vehicles would ever be possible. To overcome this, we set about developing the first in a series of demonstrations to prove the validity of our technology. At that time, we were still a couple of years away from being able to charge an EV in five minutes, so we decided to prove the technology worked in a small way, by charging a mobile phone in one minute. This not only provided definitive proof that XFC (extreme fast charging) was possible, but it also helped us to overcome another major challenge that many startups face: securing a manufacturing partner.
Find your manufacturing match.
Finding a manufacturing partner who shares their vision and is willing to invest the necessary resources to take it from the lab to mass market is a crucial yet daunting challenge for any startup. After all, we are talking about asking a company to take away time and resources from its already successful business to focus on a new venture, which, based on the figures I shared above, only has a 10% chance of succeeding.
Just how big a challenge this will be depends on the industry. The semiconductor industry, for example, has created a whole manufacturing model — the foundry model — to provide a fast route to market for new technologies. However, this is the exception rather than the rule. Certainly, there was nothing like this in the battery technology market when we were looking to develop the first pilot lines of our extreme fast-charging (XFC) technology.
We were introduced to our manufacturing partner — of several years now — by one of our strategic investors. Their CEO shared our belief that XFC was crucial to unlocking the full potential of EVs by overcoming range and charging anxiety, and with the evidence provided by our mobile phone demonstration, he was convinced that ours was the best technology to invest in.
In partnership with EVE, we have since launched several iterations of our technology, each time finding innovative ways to demonstrate both the viability and end-user benefits of our solution. This brings me rather neatly to my next point.
Lower the cost of entry.
For any company, finding ways to manufacture its products as cost-efficiently as possible is important, but for a startup, it can mean the difference between success and failure. Think about it — as a potential investor or manufacturing partner, would you be more likely to invest in a startup that required you to invest hundreds of thousands of dollars in bespoke equipment, or one that could be produced on existing production lines with only minor modifications?
For some startups, adopting this mindset may mean rewinding the R&D process back several stages, but assuming they have the right talent within their business, it is totally achievable. What is more, in doing so, they will not only make themselves more attractive to potential partners but will also considerably improve their profitability in the future.
Build your supply chain.
Finally, another attribute that can mark out a startup as an attractive partner is establishing robust supply chains. This is especially important for those operating in high-tech industries that rely on components that are in limited supply. After all, a startup could have the best product in the world and a manufacturing partner that is ready to hit “go,” but that will be of little use if they lack the raw materials needed to move to mass production. So, while it may be tempting for startups to pour their resources into R&D in the early days of their journey, it is also critical to start building those all-important supply chains from day one.