Tag: Startups

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General Thinking

Should Startups Worry or Should Reliance?

Reliance

Reliance has raised more capital in the 2 months than all of the startup eco-system did in 2019. Indian startups raised a “record-breaking” USD 14.5 Billion in 2019!

Many investors and founders across many industries are worried about what might be possible with that kind of capital in their war chest. I think it is Reliance that should be worried now.

When working with startups we often say – once you raise money, the real pressure begins. You can’t be slow and deliberate anymore, investors want returns. Till such time that you raise capital, you are only answerable to yourself, not after. Also, with deep-pocketed investors, if you falter and your valuations fall, they can easily buy you out and throw you out of the company.

Building Products

I have worked with a fairly large number of startups and seen how tough it can be to get a product right and get users to adopt it. It takes several iterations before you can declare that a product has the right ingredients to grow. The best thought out business plans require a fair amount of revision. Growing a product is not just about getting the product right but also constant engagement with the users. 

Often several assumptions are made and they are subsequently tested in the field. This is part of the reason slavishly copying another product rarely results in success. You have concluded without understanding the reason for arriving at that conclusion. Name one company that has been a runaway success consequence of a slavish copy. (Without giving it away free)

Have you heard of this app called ‘Hike’ which is owned by a company that has 100’s of millions of high paying users? Instead, an app developed by an 18 member team called ‘WhatsApp’ rules the world.

Reliance and Products

Reliance is not a product company. Reliance is a ‘license’ company. Right from the outset, their success has hinged on being able to extract licenses and political favours which have put them in the front. License for oil, license for telecom and license for retail (in the form of FDI limitation). 

Which was the last Reliance product you loved? (Not because it was just cheap)

Winning on products is a whole different ball game. It is not just about getting access which others do not have. It is about excellence. You have to be able to compete in an open market and succeed at that. No license is going to make it impossible for the other company to do business. Reliance is doing its level best to irritate e-commerce competitors. The leverage is always the law. Not the ability to compete and win. While that may be, it is not possible to turn every industry into a policy nightmare.

Product and Customer

Deploying a product successfully is about making a lot of cheap mistakes to arrive at the right formula to be able to put all the wood behind that arrow. If you are armed with USD 20 Billion, you are probably going to make huge mistakes and mistakes from which you may not be able to recover. Companies that get funded heavily before they hit the market often flame out. Reason – expensive experiments.

The reason for the expensive experiments if something called the base effect. If I have 100 dollars in capital and I need to deliver 100% growth, I need to make a 100 more – easy. If I have 20 Billion and investors have come in assuming I will double it in 5 years. Well…

Somethings money can’t buy.

Google is the latest company to invest in Jio Platforms. Google was once seen as invincible at anything Internet and then Facebook came along. Google launched a competitor Google Plus. It was a monumental disaster. Nothing Google could throw at it, including listing it on the home page of “Google.com” could save it. The reason – Network Effect. People go to Facebook because their friends are on Facebook. Google Plus, by comparison, was a ghost town. It is the same reason Hike failed. The same reason Jio Meet is not Zoom. It does not enjoy a network effect. 

So when it comes to the Indian 5G network, Reliance will have an upper hand in the highly regulated license driven space. But that will certainly not translate into successes in the area of Education, Healthcare, VR etc. 

Also, you know what happens to all-star teams?

Customer and Products

I mentioned earlier that it is important to make a lot of cheap mistakes with products. When you develop a product you are often trying to find a product-market fit. In other words, the right customer for your product.

Jio Platforms is busy launching a bevvy of products which is completely divorced from its customer base. Jio has an ARPU of hundred something rupees. A very small number of its existing customers are going to be able to afford a Jio Glass or the numerous other products that have been debuting. 

Finally

Reliance needed the fundraise desperately because they had piled on a lot of debt building Jio. The dominoes began to fall once Facebook stepped in and made a huge purchase. Everyone who had a few Billion in cash sitting around invested.

Having rid themselves of the debt, Reliance now has to undertake a metamorphosis to become a Product company. This is easier said than done. I think it is Reliance that has more to be worried than the startups that its businesses are going to threaten. 

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Entrepreneurship

Turning a Startup into an Organisation

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I have been working with startups for a fairly long time now. The fun part of working with startups is that there is absolutely no way to anticipate what would come next. You have to be fast and nimble, constantly adjusting to the changes that are happening around you.

This is precisely what makes building a startup really challenging as well. There are those who thrive under these circumstances and then, there are those who don’t. The trouble is that as one proceeds through the life cycle of a startup, the things that are an asset at the beginning turn out to be a liability later on. Founders need to constantly adapt and change to the changing realities of their business.

Working with startups, I have come across three distinct phases of building a business. I am going to focus on product businesses since most other businesses cannot be deemed startups according to me, simply due to the challenges posed in scaling such businesses rapidly.

 

Building a Product

The first phase of embarking on a startups is to build a product. But even before you build a product you need to verify that the problem you are looking to solve is real and that the customer you are going after feels it.

 

Every business is built on the basis of a keen insight into human behaviour, businesses exploit the behaviour to make a profit.

 

The need to test the behaviour hypothesis and ensuring that it is correct is extremely important to ensure that the product does not fail once it has been developed. We have worked with startups that have used all kind of tools including whatsapp, Facebook page and groups, Pinterest, etc. to build the quick and dirty manifestations of what the product is likely to do. In certain cases, we have had startups run the product like a service before taking a dive towards developing it. Running it like a service tends to be people heavy and hence cousins, friends, siblings, etc are exploited to pitch in from time to time. Once the same can be tested with small groups of 100 to 200 people, the proof of the behaviour is surely in place.

In the case of hardware related products, prototyping the product is crucial. Thanks to the advent of crowdfunding, it is possible to gauge the demand for a product in the market fairly quickly, sometime even before the prototype is ready.

At this stage it makes sense to take the time and invest the resources necessary to build the product. If you have a founding team that is solid on the tech side, it is possible to build out versions of the product that are extremely simple and addresses 2 or 3 of the most critical features that the end product will have. Trying to get all of the features or functionality of the product into the first version is difficult and dangerous.

Apart from establishing the hypothesis, the advantage of doing the quick and dirty product is pure insight.

I tend to compare most things to mathematical equations and if you were to look at a business as a mathematical equation, there are several variables that you may know but several that you cannot even foresee when starting out. This process gives you an insight into many of the variables that you would have normally missed out on.

Building a product is hard – You need to take all of these insights and turn it into a workflow that would be well suited to the use case that you are building for. The product has to be able to accommodate all of the exceptional requirements that would arise and function intuitively.

 

Building a Business

Now that the product is done, one needs to build a business around the product.

People only spend money on something when they believe that the value that they get would be greater that the cost they must incur

Value is a belief – This is exactly the reason why some people would go and spend 1,00,000 rupees to buy a trouser at Prada and others would stand around haggling for a 1000 rupee trouser at the local market.

Building a business involves instilling the ‘belief’ that the product that you are selling is worth a lot more than the cost that they would be incurring.

 

Steve Jobs was neither a hardware guy, nor a software guy. What did he bring to the business?

Well, he brought this thing called belief.

 

Making money is all about making the other person believe that there is value in what you are looking to offer them. This comes down to two things.

Firstly, how well has the pain been understood. If you understand that pain felt by the customer well enough, you would have a clear understanding of how willing or unwilling the customer is going to be to get rid of it. The bigger the problem, the easier it is to perceive value. Secondly, how well is the solution being projected. Most luxury businesses are just projection alone.

I had written another post on the art of selling here.

Turning the product that you built into a torrent of money is challenging because this is where being fast and nimble has a huge role to play. As an entrepreneur you need to get constant feedback from the customer fine tune your product repeatedly and iteratively in order to reach the state of perfection investors like to call the ‘Product-Market Fit’.

According to me, you reach product-market fit when you have clarity of what the market requires. Most often the consequence of this understanding reflects in being able to tell the returns one can expect from investment in marketing.

‘If I spend $10 Million in marketing, we should be able to triple our user base over the next 18 months and gather a 5% share in the category that we are targeting.’ When you have ‘Product-Market Fit’, you can essentially express scaling-up in the form of an equation.

 

Building an Organisation

The final stage is to move towards organisation building. If you thought building a product and the business was hard, this is far and away the hardest.

 

A successful business is one which has a high degree of predictability of Income.

 

In a startup things tend to be rather impromptu, most of the decisions are taken in response to the market. Strategies can flip in a matter of months.

Once the company has established a market position and a certain degree of predictability has set into the business, the focus of strategy has to shift away from exploring many pint sized markets to addressing fewer barrel sized market. This involves building an organisation that can take care of certain repetitive functions. You must first of all define these functions, these revenue units, these business vertical and hand them over to appropriately talented individuals.

In my experience it is important to think about organisation building, when you pass the product stage. Thoughts on organisation building has to begin simultaneously with the process of developing the business.

What would a 100 people organisation look like?

What roles are people going to play?

What are the kinds of skill sets may be required?

Recruitment is a long and arduous process, especially in today’s world. If you find someone who is talented, make a mental note of what role you would want them to play in your business and where you would see them fitting in. Its like a game of chess where you are setting up your pieces for the right time to come along.

Some founders have a latent network available to them which is quite powerful. Some have to go out and build them. Preferably bring in people who have equally strong networks in their area.

At the end of the day any organisation is only as good as the people who are a part of it. Bringing together people who are consistently better than yourself, and nurturing them, is the best way to build an organisation.

The best organisations are ones where the job of the leadership is only to provide direction.

Categories
General Thinking

Why are food delivery businesses so troubled?

Most delivery related startups in the food space have been having trouble over the past year and by the looks of it, we seem to be ushering in the new year with news of more firings. Why is it that all the guys in the food delivery business seem to be experiencing problems?

 

The cause of their troubles is to do with a more fundamental questions; what is a startup?

 

According to me;

Startups are businesses that have an asymmetry between manpower needed per unit of additional income. 

 

If you run an agency engaged in building websites, there are only so many websites that you can build simultaneously with a team of 10 developers. In order to increase your income, you need to be able to do more which means bringing in more people. There is hence a symmetry between the human resources needed to grow income. Of course, you will find efficiencies as you scale, but those will be to the tune of 10%-20%; not 70%.

 

Unless, some part of it can be automated.

 

Time Vs Cost

 

The current trouble with the delivery business is that they do not possess this asymmetry at all. They run much like the website developer where one needs to recruit more people to take on more deliveries. This fact coupled with the challenges  of recruiting and retaining manpower has resulted in ballooning salaries.

 

Currently, the delivery boys are getting paid to the tune of Rs. 25,000 per month (base+incentive). This implies Rs. 1,000 per day being paid to delivery boys (assuming 5 days off). Let us suppose a 10% delivery charge on the products that these boys deliver; implies, they need to be delivering goods worth Rs. 10,000/day. If an average parcel is priced at Rs. 1000, they need to make 10 deliveries a day. In all that I have heard, on an average they do about 8.

 

To make matters worse, the average price of the parcel is rarely Rs. 1000. Invariably the average price is in the range of Rs. 150 – 300. This implies that the financial model is stacked firmly against the business. They need to pick up 4 or 5 parcels at the same time to make it work. The reason they cannot pick up as many distinct parcels is because, they need to meet the 30 minute delivery deadline.

 

When you have to deliver food, you are not just taking a package from point to point, you are in fact on a timer to fill an empty tummy. The longer the tummy stays empty, the angrier it gets.

 

Cluster Vs Cost

 

The only way to make hyperlocal business work to the advantage of the service provider is to undertake the business in an extremely clustered manner. Much like the postman, if a delivery boy can cover hundreds of addresses in a small area, and the pick-up locations are also in the very same area; the cost of logistics would come down dramatically and also the time taken to deliver. This will in turn cause an increase in the capacity that one can carry, since the time taken to pick up multiple order will be much lower.

 

Now this requires a company to have almost a monopoly position in the market to have such a large user base.

 

A company can focus on building a monopoly or DRONES.

 

Going back to the beginning of the article, we spoke about asymmetry between manpower needed and income. Drones can create this asymmetry by automating the delivery part of the business. A drone can fly from point to point on auto-pilot. Software can take care of pick-up, destination, and flight as well. They use electricity and hence are far more cheaper and hopefully, drone traffic will be lower than road traffic.

 

There is certainly an initial capital expenditure in terms of acquisition of equipments but thereafter the cost of operations are significantly reduced. The cost of manpower is almost completely eliminated. Also the nature of manpower required will change. Instead of skilled individuals who are riding bikes, the company would have engineers who program drones.

 

Scaling the business to multiple cities and gaining a monopoly position would become much easier since the only factors holding back growth would be capital and scalable software architecture.

 

It may seems like science fiction but autonomous drones are the way of the future. The sooner its realised, the sooner these company can start burning their cash on the right things.

 

Categories
General Thinking

Secrets about Sales

In the startup journey one of the hardest and by far the most critical things is to get sales for the company.  Sales is what finally drives the engine and brings the income that is required to prove that the business being pursued, is worth being pursued.

When a startup embarks on sales, it is important to be focused on how they go about the process. They need to be able to describe their dream customers who would not have any hesitation in purchasing the product or service that they are looking to sell. Once this ideal customer is defined, it is very important to go ‘Narrow’ and ‘Deep’. Addressing a specific customer is easier than addressing a mass market with a wide variety of customers who have a variety of needs to be addressed.

The temptation at the beginning is to start selling the product or service to the entire market. There is no surer way of failing. I wrote a post about this earlier here.

A startup thrives on building relationships. Early customers of the company not only patronise the startup but also provide a great deal of feedback to improve the product to better meet customer requirements. These individuals also play the part of marketers on behalf of the startups. It is hence extremely important to cultivate a great relationship with these customers.

When you feel personally invested in something, you want to see it succeed. You want your customer to be in this position. This is precisely the reason you need a very specific customer with whom you can have one shared interest – your business.

Going narrow allows the startup to focus on the individuals who best suite the dream customer profile and makes sure that the conversion can be quickly achieved. Going deep allows for a lot of feedback to filter through as well as enables strong relationships which the business can depend on. Such customers would not abandon the startup to move to another (let us say a competitor) very easily.

All of this put together makes it possible to truly delight your customers.

Marketing is broad and shallow, it tries to address the mass. As a consequence it does not enable relationship building, which is very critical for a startup. Also, the cost of marketing tends to be much higher and the returns on the same much lower than selling directly to a specific customer.

Sales is about relationships and even if you are a larger entity, the relationships need to be nurtured and grown. A larger entity needs to look at sales like a long distance relationship. You might not be able to meet or spend as much time, as regularly. Nevertheless, you can always keep the channels of communication open and communicate regularly.

When engaging in sales, it is also very important to look at the product or service from the perspective of the customer who is being sold to.  Most often one of the biggest mistake that most entrepreneurs make is to try and enforce their perspective on the customer rather than, get around to seeing the customer’s perspective.

If you look at the image above; at first sight, it seems like the image is one, of an old man. But a closer look makes it clear that there are two different people, one old man and a woman. Similarly what your customer sees or what you see might not be the same. Hence it is important to look at the frame of reference of the other person in order to convince them. This is easy, again, if a narrow and deep approach is taken.

Fundamentally, sales is a reflection of how well you understand the customer you are targeting. By going after a narrow subset of customers, startups can ensure that they know their customers well. When you know your customer well, your ability to see their perspective deepens and you are well positioned to close the sale.

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Entrepreneurship

Why drop-outs succeed in business

Our entire existence in this world hinges on survival. As we survive, we learn.

We pass on what we have learned, in the form of education.

Our education system is structured in a manner where we need to pass tests to prove our proficiency. Unfortunately, it is fairly simple to game the system. In a test all you need is for the examiner to believe that you have learnt.

Since we use examples to teach, we use examples to test. It is rather easy to learn up the examples and ace the test. You do not need to be a genius. (I am not saying that the same questions are used, but the same structures are used)

Coming from the background of having gamed tests, it is only obvious to seek to game the business as well. Take the best example that fits what you seek to do and solve the puzzle in much the same manner. We feel that if we are able to looking at sufficient examples, we would find a solution that fits. In the real world, this does not work.

When your maths teacher puts together the problems, he/she limits the number of variables that you need to deal with. The real world unfortunately has far more variables; some visible and some invisible. When one tries to study another business as an example they figure out the visible variables but for obvious reasons miss out the invisible variable.

This is what they mean when they say – “Don’t look at the success of another person; their story is different from yours”.

Customers seek value for their money. It is far and away the ONLY thing that the customer is seeking. That value may be delivered in the form of a better product, service, packing, feeling, etc. This is where the story of each startup differs from that of the other and gaming the system becomes extremely hard. It is the hardest test to pass.

A customer will not consistently put money in your hands unless he/she feels value delivery is actually taking place. The variables which lead to the perception of value are very complex to understand. Hence, it is dangerous to look at someone else’s success and use that as a template for your own.

There is no gaming the customer here. No examples. No shortcut. No optimum solution (which is part of the reason disruption occurs).

As Paul Graham puts it – The customer is like a shark, there is either meat or there isn’t.

The only gauge is to see, if the customer is happy after having paid for the product or service. That should be the only focus at the initial stages. Do people love using what my business offers? What do they love? What don’t they love? How to improve?

Drop-outs are usually not burdened with the baggage of learning how to ace the test. They respond to the movement of the market, they are more flexible and look to solve problems in their own way. They do not seek to do the things that others did to be successful, they just do their own thing. They do not know how to study examples, they only know how to respond to a given situation.

They trust their intuition, spend a lot of time understanding their customers and do the best that they can; which is the best way to run any business.

Categories
General Thinking

What I learnt from Beats

beats_by_dre_logo

Beats, the company that is famous for their headphones and who also have a fledgling music business recently got acquired by Apple. I have been absorbing all of the commentary surrounding this right from the time that the deal was still a rumour. I really do not know if this acquisition is a good thing for Apple or not. But I do have a few thought about Beats which might be useful for most people to keep in mind.

These thoughts came to me while I was having a recent conversation about career planning and job-hunting, but the same applies for any startup that is looking to develop themselves.

 

Be Focussed – First and foremost; the eventual goal that you wish to achieve through what you are doing is extremely important.  Our performance is extremely dependent on the degree of focus that we maintain on the goal that we seek to achieve. If you are focussed on achieving a goal, all of your efforts, all of the connections that you make are towards ensuring the goal is achieved. Find the one goal that you wish to achieve and chase it.

Persevere – Success does not come easy to all. Also, you never know when success arrives at your door. If you believe in something and have the passion to pursue it, you need to persevere. It is important not to give up the moment challenges seem insurmountable. If you lack the knowledge, learn; if you lack the ability, prepare; keep cracking at the problem.

Keep seeking opportunity – While you focus and persevere, keep looking for opportunities. Keep seeking ways by which you can get in the track you want to drive on. If you wis to get into a particular industry or if you are seeking out a particular kind of partner, keep your eyes open at all times. Keep meeting people, keep asking for opinions, keep seeking.

Don’t stop doing what you are good at – While doing all this, it is very easy to think; ‘Let me finish learning and them I will get to work on this’. When it comes to focus, perseverance or seeking opportunity; there is no finish line. It is a life long job of an entrepreneurs to do these things. If you have a skill or a passion, pursue it even though you may be learning, preparing or seeking out opportunities. There is never a better time to do what you love, that time is now!

 

Categories
Entrepreneurship

Blablacar – Thoughts to ponder about India (Updated)

Blablacar is a French startup that recently scored a USD 100 Million in funding to expand beyond Europe. One of the countries that the company is considering entering is India. India is a large market and has a huge number of cars on its roads. Blablacar is a company that allows for car-pooled rides over long distances (100 Kms to 500 Kms). Let us say I am driving down from Bangalore to Mangalore alone, I could put out an invite asking others who might like to join me at a cost. I get to subsidise my ride and those who are looking to travel, would be able to hitch a ride. The ride might cost as much as the bus but would be more comfortable and faster.

The idea seems very slick at the outset but deploying it in India is nevertheless going to be fraught with challenges and the need to overcome certain fundamental issues.

It is easy to assume that a company of this nature would find a huge market in India, since India had about 21 Million cars on road as on 31st March 2012. We can easily add another 12 -15% to arrive at the current figure. With so many cars, there are bound to be people who are not driving their vehicles filled to capacity. Blablacars offers an interesting way to monetise these empty seats while at the same time doing a little, in terms of helping the environment and reducing fuel burn.

Yes. But they are not going to have it easy in India.

In India, cars represent a status symbol. They are not just a means of transportation, because the best means of transportation for Indian roads are the two-wheeler, given the congestion and poor state of the roads; not to mention the huge gap in terms of mileage. Indians do not like to share their cars, They buy it to show off and that they do by waiting for hours at the traffic lights. I know several families who have cars but use a two-wheeler for most of their moving about. This has been part of the reason intra-city car-pooling has not taken off in any meaningful manner in India.

Coming from Europe, you might be very tempted to say; “Yes, but you cannot undertake a long distance travel in a two-wheeler”. True that, you cannot.

But.. 

India is not a country of highway loving people. Highways are seen as unsafe and it is assumed that you need some kind of training (which only taxi drivers have) to be able to drive on the highway. Yes we might travel on the highway once in a while, but we won’t put our own cars on the highway and much less drive them there. Highways are fundamentally badly built (barring a few segments/routes) and considered rather unsafe. Unlike in Europe not a lot of people take to the roads during vacations, and even if they do, they hire a cab. Most of them prefer bus and train.

Watch this Canadian driver get a load of Indian road.

There are certain segments which tend to travel by road. But the only reason for doing that is for the purpose of flexibility. When you travel by road by yourself, you get to stop where you like, take the trip at your pace, fast/slow as you may like and also the trip can be more impromptu. Most importantly, you need not follow somebody else’s time table. 

There are four segments of people who take to the highway: 
Business people who want the flexibility.
Students who do it for the thrill of a road trip. (18 to 25 years of age)
Vacationers who are used to driving on road. (Very small segment)
People who work in a city very close to their native place. (Bangalore to Chitradurga over the weekend)

When you look at it like this, the market shrinks very rapidly. 

It not all bad.

If Blablacar has to successfully enter India, it has to do it very strategically with focus on very targeted segments instead of going to the entire market. You would start by making a list of highways that are most well suited for drives. Highways which have some of the best roads in India and get frequented often, such as Delhi-Agra, Delhi-Chandigarh, Bangalore-Chennai, Mumbai-Goa, etc. These highways are a pleasure to drive and increasing numbers of people are beginning to use these roads. Focusing on these markets help define the segment that you most wish to cater to and also increases the possibility of closing greater number of transaction.

Like buses, in India there are a large number of taxis which serve a certain route. You would mostly find these taxis parked near Interstate bus terminals (ISBTs). When I used to study in Agra, I would often take these taxis, which were often Tata Sumos which would load up 9 others and drive from Delhi to Agra. They were invariably quicker than the buses would not stop as often and cost slightly more than the bus.This segment is completely disorganised, it would take someone with a keen eye and with experience to even spot these guys outside bus stops. Blablacars can do for them; what Redbus was able to do for bus operators. 

Over the years, roads have been improving in India and that will continue and probably convince more Indians to take to the roads. At such a time, Blablacar might be well poised to take advantage of the growing market.

I feel currently, this route would be best way to enter India for Blablacar. What they do, how they do, if they enter India at all, remains to be seen.

As the french say, “Nous verrons”.

—

Update:

I drive a lot on the highway. So during my recent trips I have been noticing another things. I have finding the many individuals who rent a car from Zoom and driving by themselves on the highway. The simplest explanation for this is since they charge by the day, it works out cheaper to rent the car and drive it by yourself rather than to take cab. Since this segment of crowd would be cost conscious and by default are not using owned cars, would be much more willing to share their ride to drink the cost down further. Should be a sweet market for Blablacar.

Categories
General Thinking

Things to remember before heading down the path of Entrepreneurship

Last week, we hosted the Startups Club meetup at Chennai. We were fortunate to be joined by Mr. J Krishnan for the meeting who shared some of the wisdom that had been shared with him by the likes of Kanwal Rekhi. I just made a note of them and put them together in this blog.

 

You are alone in this journey. During some the hardest times faced by an entrepreneur, there is invariably nobody around to fall back upon. In fact many problems are such, that even if others wished to help you, there would not be much that they would be able to do. An entrepreneur should be able to cope with the emotional needs by himself.

The only thing certain is uncertainty. One of the entrepreneurs said “Morning I am up and upbeat and evening down in the dumps”. Your promotion will not be pulled back next evening unless you do something rather questionable. Client can refuse to sign up for no apparent reason whatsoever. You should have a heart that is strong in order to be a entrepreneur.

Failure is not bad. Failure is to your credit. Just as any job experience contributes to the experience that you have gained in the period, a failed venture or a failed pitch is just contributing to your experience. Don’t make decisions with the fear of failure in mind. It is important to leave the fear aside at all times.

Execution is more important than all else. You might have the greatest idea at hand, but unless you realise what you are dreaming up, it will remain just that, an idea. It is important to make sure that you execute and do that to perfection. Getting too bogged down with vision setting and activities of the sort at the initial stages, is not going to take you far. Your product may flip 7 times before it hits the market. Have a goal in mind and execute tirelessly to reach that.

You get early insight on customer needs if you start meeting customers before your product is even finished. Customers are the best people who can help guide your product or service into a shape that they want. Gets your validation. In the process you may find your first customer.

Entrepreneur is at all points of time a salesman. You have a story which you have to be constantly telling at all times. You have to live the business that you are looking to build each moment. You are the biggest asset that your company has got and the work that you put in initially is what is going to reflect in terms of value when you go in to raise money.

Belief is needed in order to get converts. Three beliefs that are essential for an entrepreneur. Belief in yourself, belief in your company and belief in the product or service which you are building.

Categories
General Thinking

Setting Goals

When you are looking to achieve anything in life, it is extremely important to set goals in place. The question that often comes up is why is it important set things in stone, why can’t goals evolve in the same manner in which the business plan of a company does?

This was the question which was posed to me by a company which I am mentoring. So I explained it like this

Imagine you are standing at one end of the football field and you were just told that you are to take the ball to the other end of the football field. You have to keep going straight and reach the other end. Since there is a lack of clarity in terms of where you must reach, you must just keep going straight. You have no opportunity to take advantage of any other player for the fear of going off the course. It is more like climbing a pole!

Whereas when you have a very clearly defined goal in place, it is possible to strategically plan to reach that end. In such a scenario, the player can pass the ball all over the field with the single minded target of reaching the goal that is set. They can take advantage of synergies and develop their strategies. The entire activity becomes more like climbing a ladder. You are clear when you are making progress and how close you are to reaching the goal.

Therefore it is absolutely important to have a goal set!

Categories
Entrepreneurship

Secrets of a successful Bootstrapper

Use the resources that are at your disposal – Often we do not even realise all of the resources that are available to us. If you dig down hard, you would find that there are plenty of things that are available for free or at a cost that is almost close to nothing. If you are enterprising enough and constantly on a look out, you would definitely find it.

There area a variety of examples depending on the nature of business that you are looking to setup. Like your aunt’s garage that is not used at all. Your cousin’s soldering iron that he no longer uses. A vehicle in the family that is not used during the day or during the night. It is not the most convenient way to do things but it saves much needed capital in the early stages.

Use your home as office as long as possible – Any space of any sort will always come with some sort of obligation/cost along with it. It is important to make sure that you do not get enveloped in obligations initially. In India, especially, parents never charge their children for the house and the best solution is to use the house as the work base as long as possible. Teams are generally small, and they can fit into one room.

Try to reduce expenses on anything and everything – If you can get some favours out of certain people or get certain things sponsored, do so shamelessly. The favours can start from something as simple as a cup of coffee to hitching a ride to some place, to staying are someone’s house when travelling to a city for work. Initially these expenses can drain you slowly and steadily, it might seem unimportant but every rupee saved is a rupee more that you have to invest on yourself.

Don’t try too hard to get the perfect people – Once you start the development of a product or service, try to get as many good people as possible to work with you without blowing up too much cash. Ideally get people who are young and hungry to work and excel. If you wait to long seeking the perfect candidate, you might loose your window of opportunity. If you are making money the perfect candidates will seek you out, even if they don’t, it would be a lot easier to recruit them.

Don’t wait to perfect your product, good enough would do – A lot of the times teams spend just too much time trying to perfect the product before they send it out into the market. No matter how much you perfect a product there is always going to be something that would kick up. That is why companies launch beta versions. Once the product/ service is good enough ship it! You can go about doing the fine tuning as you progress.

Make sure that cash flow begins – If you are bootstrapping, there is no points for making the most popular product or service, which does not generate any cash. Figure out your revenue model and get the money rolling in. That does not mean that you are profitable, it just means that you have your cash flows to bank on and not all of the operational costs has to poured into the business.

Focus on forecasting the smaller part – Figure out the lowest common denominator of your revenue model. Who is going to pay you, how much and for what? One of the biggest mistakes that most startups make is looking at the size of the industry and trying to project 1% of it and so on. It rarely adds up like that. Go bottom up.