“I have been coaching start-ups for almost 20 years, and I have noticed that very few entrepreneurs really know their clients,” says Mr Blumenthal. “They often have a hypothesis on what clients want and build a complete business on this conviction without ever having validated it with potential customers. If they are wrong, the whole enterprise can easily become a failure.” The number one task of the Fit 4 Start coaches is therefore to challenge the ideas of the participants and encourage them to start their most important journey ever: that of customer discovery.
The first step for Fit 4 Start participants is thus to meet with potential clients and try to understand their ambitions, difficulties and dreams. “The challenge is that very often, people are not able to express their needs. You have to push your analysis very far to be able to deduct what would be of real value to them,” says Mr Blumenthal. “I always like to use the example of Henry Ford: when he asked people what they needed in terms of mobility, they answered ‘faster horses’. If he had been satisfied with that answer, he would have become a horse breeder! But by asking more questions and prodding further, he realised that what they really needed was a fast and reliable way of transporting people and goods from one place to another. His radical conclusion was that horses were not even needed, and he started to produce cars.”
Once the entrepreneurs have spotted the real needs, they need to package their offer in a way that is attractive enough for the clients to be willing to pay for it. “The business idea and the associated value – in other words, the price – also have to be validated,” underlines Mr Blumenthal. When that is done, it is time to develop the business model through which the company will bring this value to the clients. This will provide the necessary elements for setting up a financial plan and evaluating whether the business is viable, how long it will take before it can make a profit and how much funds are needed to launch the company. The start-ups are then ready to prepare a pitch for investors and trying to obtain the funds needed.
“I think the main take away for Fit 4 Start participants it this systematic methodology for building a solid foundation for business success, rather than just going ahead with a bright idea and assuming that it will work. This process can be reused later for any new business venture or development of new activities in their companies,” Mr Blumenthal claims.
He is currently doing his second edition as a Fit 4 Start coach, having been invited to join the team by Luxinnovation in autumn 2017. Between 2017 and 2018 the programme doubled its number of participants from 5 to 10 start-ups, which was a challenge for the coaches who aim to get to know each start-up team very well and provide individualised support. “With more participants we have had to organise ourselves differently. Now, each coach is in charge of following two start-ups continuously from the beginning to the end of the programme, and provides additional support to four others. This means that the start-ups have one coach who knows them really well and follow their progress. They can also regularly benefit from the skills and experience of two other coaches.”
An extraordinary investment
A Belgian national, Mr Blumenthal created his own start-up in 2001 with support from an incubator in Belgium. Shortly after that, the manager of the incubator asked him to provide support with coaching start-ups, which he has been doing ever since. “When the entrepreneurs I work with do a good job with validating their business plan, I also help them get in touch with potential investors and advise them on the fund raising process,” he explains. “In a few cases, I have even acted as a business angel myself and invested in their ideas.”
During this career, Mr Blumenthal has seen many programmes similar to Fit 4 Start and he is impressed by the Luxembourg set-up: “Fit 4 Start is the most ambitious and best structured start-up accelerator programme that I know. The seed funding offered is also very attractive,” he points out and underlines that many of the participants come from abroad to set up their company in Luxembourg and be part of the programme. “Luxembourg is doing an extraordinary investment into this programme, and I think it has a very positive impact on the start-up community. I’m impressed and really keen to help these start-ups get the best possible start of their way towards success.”
Fit 4 Start offer Luxembourg-based start-ups four months of coaching and pre-seed funding that can go as high as €150,000. The autumn 2018 edition will offer places to 10 ICT start-ups and 5 start-ups specialising in health technologies. Learn more and apply to Fit 4 Start before 27 August.
Luxinnovation contributes to the economic development of Luxembourg by fostering innovation, fuelling international growth and attracting foreign direct investment and is supported by: Ministry of the Economy, Ministry for Higher Education and Research, Luxembourg Chamber of Commerce, Luxembourg Chamber of Skilled Crafts and FEDIL – The Voice of Luxembourg’s Industry.