How can startups best prepare in the current environment? What are their frequent mistakes? The Startup Club conducted an interview with Arthur Bessieres, Ventures Associate at Plug and Play, to answer all these questions and more!
The Startup Club: Could you tell us more about yourself?
Arthur Bessieres: I am a Ventures Associate at Plug and Play. One of the world’s most active early-stage investors. My background is in strategy and finance, I did my masters in France, UK and Germany. Worked for a Digital Asset Management startup in the US and in Asia. Then did a bit of consulting before spending the last few years in a Bank in Singapore.
The Startup Club: What do you usually want to see in a startup before you decide to look into it further?
Arthur Bessieres: Early-stage investing is all about people. We are always looking for an exceptional founding team with a long-term vision and complementary skills. We look for teams that complement each other and have expertise in technology and their target industry. Teams that understand the problem they are solving and the value they can bring to the industry. Finally, we expect founders to be fully committed and dedicated to their project.
The Startup Club: Based on your experience what are some of the frequent mistakes that startups make in their first steps?
Arthur Bessieres: Most entrepreneurs start businesses with the idea of building something they think people will want. In fact, many startups fail because they don't meet a market need. Ideas should be backed by market research. Founders should always test their idea with their network, their target audience and be agile, accept feedback, comments and adapt their idea, product, solution to the real needs of the industry. Intuition is not always right. Founders need to make sure that their decisions about their startup are driven by the needs of their future customers and not by their own beliefs that may not be representative of the market.
The Startup Club: What is the most interesting aspect of your job?
Arthur Bessieres: The most interesting thing is definitely talking to the founders, understanding their stories and visions. Especially at an early stage of their companies' development, they always come with such drive, passion, and the ambition to reshape their industry. These founders are truly creating new horizons that make innovation and disruption the new reality. I spoke with hundreds of founders and I am still always amazed every time by how refreshing and inspiring their ideas are.
The Startup Club: Which industry do you find more successful to operate in based on the current landscape?
Arthur Bessieres: I am currently focusing quite heavily on Insurtech. I looked at different topics in the insurance industry, mainly around new products, product builders, inclusivity and gender equality, sustainability and of course the metaverse implication for insurance. There is still a lot of opportunity in InsurTech, not everything has been done yet. The entire insurance value chain needs to catch up in terms of innovation and speed of innovation. Insurtech startups have a key role to play in this regard. Overall, we can say that just as new technologies have reshaped fintechs, they are now reshaping the insurance industry. Around the world, we still see large underinsured markets: for example, more than 40% of the existing car fleet in Latin America is still uninsured, and only 9% of the population in a country like Mexico has private health insurance.
The Startup Club: How can a startup best prepare itself to succeed in the present?
Arthur Bessieres: Startups should focus on creating a great user experience, attracting and retaining customers, and reducing their least necessary operating costs. In the current state of the market, all non-essential costs must be avoided for startups to extend their run away. Companies must focus on fine-tuning their unit economics. Given the macroeconomic uncertainty of inflation and interest rates, investors are looking for companies that can provide short-term certainty.
The Startup Club: What are the top 3 traits that startups should have to be more appealing to investors?
Arthur Bessieres: With the current market uncertainty, capital has become expensive and public markets are showing warning signs. As investors, we are increasingly looking for:
● Sound business models, not just growth at any cost,
● Low capital consumption and low operating margin companies.
● Long-term stickiness and high defensibility of their solution.