Moaffak Ahmed is a serial entrepreneur and hands-on early stage investor. He has over 20 years of marketing and business development experience from all over the world. We wanted to ask him, how does a successful investor tell a good idea from a bad one? What is important when trying to get an idea afloat, from an investor’s point of view? How do investors see combining a social mission to making a profit?
By Heli Nissinen, Sitra
You’ve been a major investor in many successful startups. When looking for businesses to invest in, what do you look for?
It’s a cliche, but really the team matters the most. Ideas as such are not so valuable if there’s not a capable team crafting and executing a plan. And most plans become obsolete very soon. Therefore, you need preferably at least a somewhat diverse group of people with complementary skillsets. They need a combination of determination and will to succeed, but also humility, willingness to learn and ability to adapt to rapid changes.
What is the best way to get your ideas afloat as a startup? What makes a successful startup?
You need a lot of trial and error to find the product-market fit and path to scalability. To succeed in this, you need a team that can work well together, observe the market and its needs, and translate them into winning products and services.
There’s a lot of evidence to suggest that diverse teams perform better. By limiting your recruiting to people from similar backgrounds and experiences, there’s a risk that you don’t find the best people for each role. Moreover, diverse teams can often find more innovative “outside of the box” solutions.
Sitra is organising a challenge prize competition, and we’re hoping that the startup scene is also represented. In your opinion, what could a startup gain from a competition like this?
Visibility, networking opportunities, and a great learning experience.
If you could give teams applying for the competition one tip, what would that be?
Talk to as many (relevant) people as possible about your idea. And not just to people who will tell what you want to hear. That’s the best way to develop your idea in the early stages.
What do you think about combining profit making and a social cause? Is that attractive to an investor?
It’s definitely a good thing if they can be combined. It makes it easier to attract investors from both spheres, impact and for-profit investors. However, not all ventures need to be about profits in the first place. Assuming that you’re creating a solution for agriculture to save massive amounts of water. Or finding a cure for malaria. These could be quite profitable as well, especially in the longer run, but even if they weren’t, the social and societal impacts could be enormous with significant spillover effects.
Currently, are startups solving the right type of issues or problems? Who should be solving social, environmental or economic sustainability challenges?
This is a tough one. Creating better advertising solutions or games can deliver a lot of value and be great investments, but I’d like to see even more smart people working on the big social, environmental and sustainability challenges.
The Finnish Innovation Fund Sitra has launched a challenge prize to tackle challenges related to the recognition of competences and their better utilisation.
Ratkaisu 100 Challenge’s call for applications is now open.
Come up with a good idea, put your team together and apply by February 13.