Mitigating Risk

BlueChilli's model reduces the five main risk areas of startups: Team, Technology, Traction, Timing and Tender

Mitigate the risks and control the supply chain

BlueChilli has built a model for the development of early stage ventures designed to reduce risk in a repeatable way. Through a layered approach each of the key risk areas are addressed through process, structure and education, mitigating 90% of the top 10 reasons why startups fail.  Complementing this approach is that we provide all the skills and services within the complete supply chain from education to exit.

True innovation occurs when entrepreneurs can stand on a strong foundation.

Why startups fail

Startups mainly fail due to a bad founding team (23%) the wrong technology and poor traction (42%) or they run out of cash (tender) (29%).

The five key risks of why startups fail are Team, Technology, Traction, Timing and Tender (cash).

Team

BlueChilli addresses the team risk by having a structured program to train each founder through the 156 steps required to go from idea through to series A.  We also work with non-tech founders and provide them with a full product team.  When the startup has reached a certain point we use our internal recruiting team to find, train and integrate the team into the startup.  And our reach of professional executives provides mentors, advisors and board members to our later stage startups.

Technology

Building technology for the first time is expensive and 29% of startup failure is due to running out of cash while still trying to commercialize their technology.  Despite technology getting cheaper, competition has lead to startup seed rounds getting bigger to a median of $1.4m increasing by 114% since 2011, effectively pushing Series A to later stage.

We know that technology is hard and expensive, that agencies can get carried away with their invoicing and that tech co-founders aren’t always perfect. In exchange for a small amount of equity, we help startups by reducing the cost and time for development and providing a world class team who are totally aligned with the founder’s vision.  Additionally we build all our startups on our proven commercial ready development platform called ChilliSource™.

Traction

The tech founder may be strong at building tech but they are usually weak at selling and marketing. There’s a propensity to focus too much effort on building technology which looks for a customer or problem to solve.

We reduce the risk on traction by having a strong customer centric approach to startup development and we amplify this with our corporate partnerships which provide instant market reach.

Timing

Speed is critical to startup success.  With the right founding team, BlueChilli can launch a prototype in weeks, not months, and a commercially viable product in months, not years.  This means that we can strike when the market is ready and reduce the risk of timing.

Tender

One of the hardest things startups have to do is raise capital.  BlueChilli reduces this risk by having an integrated venture capital arm which invests alongside investors, subject to certain criteria – including satisfactory completion of the 156 program.


 

BlueChilli’s focus on the science behind the minimum viable product (MVP) approach saves a lot of time and money.
Sydney Morning Herald.

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