Yet another beginners’ guide to startup
No two startup founders’ journey will be the same. Even among co-founders of the same company, there will be widely differing perspectives on entrepreneurship. This is a highly generalized take, based on the lessons I have learned so far. [Day 21 of my “One Day One Blog”
When you have traversed a long way in a particular direction, towards a particular destination, you start taking the basics for granted. Sometimes it is good to take a step back and take a look at where it all started and how it progressed from there
I also write this as a guide to the nextGen entrepreneurs. Reading this will not make you one, but if you are curious as to what happens in the life-cycle of one, please read on
1. The Starting Point — Decision
We often hear people say that the idea is the Genesys of a startup. I personally believe that a startup is born one step before that. It is the point where you make the decision to take the plunge.
It is not an easy decision to make. More often that not, people flirt with the idea of striking out on their own one day.
“One Day” — that is the part to pay attention to. As long as you are in the “one day” mode, you are just day dreaming.
The conversion of “one day” to “Today” is the starting point of this journey
What goes into making these decisions?
For the Younger lot it could be weighing the options of working and saving money vs giving it a go straight from college. There will be pressures to take the safer option. Advises which run along the lines of , “ Work for a few years and gain experience before you start out on your own” OR completing higher studies, and so on.
If you have been working for “x” number of years and then decided on this journey, there will be additional pressure of family commitments. Is your spouse completely on board with you? What about the financial security needed by your children?
I am often asked if I would recommend between two routes. Honestly, I cannot do that. Because only you know what works for you.
Having said that, I do believe that starting early is usually good. Because it pushes up your risk appetite. If you fail, which you will, you can try again and again. It is definitely easier on the younger person.
2. The Idea
When I look back at my twenties, I can see that I truly believed that I should have one awesome, earth shattering idea before I can become an entrepreneur. The kind of idea that no one has ever thought of.
That foolproof idea that will propel me into the same realm as Steve Jobs, Zuckerberg and the like.
But this is what one needs to appreciate — Jobs was not the 1st person to invent a personal computer. What he did was to improve on the idea to deliver something that was better in quality and far more cost effective.
Zuckerberg did not “discover” social network . I would earlier quote Orkut as a predecessor to facebook. Till I realized that there was something called sixdegrees.com which was created in 1997. Why is facebook so omnipresent today while the others have died out? It is because they came out with a far more innovative product which is constantly evolving.
So, that’s the deal with “Ideas” — you don’t have to wait for that one killer idea which has never crossed the minds of human race till date. If you have an idea which will improve on an existing product and service, then proceed to the next stage.
What do you do when you are very keen to start out on your own but lacking in the idea department?
Look around you. There are problems all around you that need a solution. Let’s take the example of garbage disposal. With the number of flats and appartments increasing in the cities, our existing machinery for waste management is crumbling. Is there an innovative solution you can provide for the same?
3. The Market Fit
When people have an idea, they hesitate to talk about it for fear of competition. While I agree that a certain amount of discretion is good, you should not carry it to the extend of not talking to anyone about your idea. Especially to people who are your potential customers.
When you consult with the industry within which you intent to operate, you will come back with 10 more ideas on how to improve your product/service. This is incredibly valuable and there is no replacement for this step.
You may worry that others will “steal” your idea. But please know this — people often have great ideas. But what makes an entrepreneur different is that he or she acts on that idea while the others just ponder over it. You can be rest assured that your idea is safe
4. The Business Plan
Just because Bill Gates and Steve Jobs dropped out of college and went onto become successful entrepreneurs, it does not necessarily follow that you have to be a drop-out to be successful. If this is the 1st ridiculous notion propagated in the startup world, a close second would be people rubbishing Business Plans.
When a mentor or potential investor asks you for the business plan, it is to get a feel of how far you have thought through the idea. It helps you to pluck out random ideas floating in your head on topics such as “who is the primary customer?”, “what are the revenue points?”,” Do I have alternate sources of revenue?”
One thing that both the founders and investors know is that the business will often deviate from what you put down in your business plan in the initial days. And it should. But not having a plan to start off with, you will not even know where to change directions from.
5. The Prototype
Creating a prototype can happen in parallel to any of the steps mentioned above. At Fourth Ambit, when we started talking to colleges about a platform which will bring together all your alumni and a location for life-long relationship building, they could not fully envisage what the product would look like. We had to create a prototype and help the decision makers get a feel of this. It also created the trust that we were not shooting in the dark.
6. The First sale
Getting that first check signed by a customer is one of the greatest “Highs” of any startups’ life. The 100th and the 1000th client check OR even the 1st investor’s check does not bring in that kind of joy. It is the ultimate validation of your dream.
But before the 1st paid customer comes on board, be prepared to acquire a few customers by giving them the product for free.
When we launched, we gave away the web subscription free for the first 12 months for our 1st five customers. With the mobile APP, we limited the free usage to 6 months.
Don’t ever give it free for life. They will not value your product and due to lack of usage, you will end up getting a bad name.
No matter at what stage your company is in, you should always be talking to your customers for their feedback. I recollect the early days when we launched what could be called the alpha version of the platform. I was like a new parent protecting a child. I would get so defensive!
Jikku had to once drag me away from getting into an altercation with a user who said something very negative about us. While we all prepare for constructive criticism, there will be a significant number who will rubbish away your efforts without a second glance. I have now come to accept the fact that I can learn something even from such people that will add value to our product.
8. Some other stuff
- Startup life is tough. Very tough. You must jump into it only if it sets your heart racing.
- If the persistent “nag” to startup bothers you, then you should definitely take the plunge
- It is a good idea to have co-founders. But they must be people whom you would trust with your life
- Have a mentor to guide you. But don’t take on just about anybody as your mentor
- Reduce cash transactions as much as possible. Register your company and ensure that all payments are done via bank. Same goes for all payments received too.
- Run your company ethically.
- When you need to grow your team, recruit people who fit your culture.
- Startups will go through rough patches — be transparent in your communication to your employees; you will earn their loyalty.
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Friends, this is the Day 21 of my odyssey to write one blog EVERY DAY for the month of May 2017. “One Day, One Blog”
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