How not to kill your start-upStartingyourownbusinessispureexcitement.Youareincommand,youdreamofchangingthemarketandrakingin
There is a chance that in the initial
exuberance you lose sight of market
sentiments. As a business you have
to keep a close watch on the market.
Keep looking at not just what is working
but also at the failures. A lot of times
investors make investment decisions
based on the market sentiment. So you
plans to raise money, plans to expand
investor sentiment vis-a-vis the market.
Keep a strategic outlook and pace your
It is easy to close yourself to the idea of change. Don't get
carried away by the initial success of an idea. You have to
keep validating your ideas against the plan. You must be
open to change, you must be ready to tweak or make a strate-
gic shift, if the market demands that you do it. You might find
must have done a study or researched the market before
launch and drawn the business plan accordingly. If things
don't go according to plan, be ready for change —it is possible
you are trying to move a needle which is not the right needle
to start with. Be open to listening to the investor, listen to the
other point of view, look at other geographies to see what
works or what doesn't in your market. You have to anticipate
changes in the market behaviour and move in that direction;
otherwise someone else will.
Don't let mediocrity set in. You must understand that the
final output depends on the team. And the truth is the
team's enthusiasm is not enough— they have to aim high.
So the first thing you have to do is create a culture of account-
ability, make it clear that mediocre work will not be accepted.
You might be so busy building a product or a service
that you end up ignoring corporate culture. All the
things I have mentioned before ultimately tie in with
the culture you have inculcated in the organisation. So
establish a distinct culture right from the beginning. Make
sure everyone you hire and take along imbibe that culture,
subscribe to it. It becomes difficult to move the whole organ-
isation in one direction if there is a clash of cultures.
Organisation should have frugal mindset. There has to be a
reason and someone should be accountable for every pen-
ny that gets spent in the organisation.
To figure out the reason for customer
reticence, the team often ends up
neglecting customer needs: After the
initial high from having discovered a
product or service related to an unful-
filled need of the customer comes the
product is not shared by the customer. It
is important that every time the team
faces failure or a lack of customer inter-
est, it turns its focus on customer needs
suit the needs. Don't focus on the cus-
tomer reticence. You can't change the
be constantly reminded about this absolute truth.
You might start small but you have to quickly start think-
ing big: The users today are used to super-fast Google
services, a super smooth WhatsApp and a lightning fast
Twitter. Users expect a similar performance from every tech-
nology product or service — matching that kind of user expe-
rience is difficult as the tech biggies are backed by billions of
you start is to keep the initial offering to a minimum, not try
features. This will enable the start-up to allocate scarce
resources to key features and provide a great user experience.
You might lose faith in your offering and grass on the oth-
er side might start looking greener: As you struggle to
show the proof of traction, there will be individuals, large
the product or features. It is important to remember that any
change will require allocation of time, money and human
resource, the team will begin to slack off and wait for the new
killer feature or tweak. It is important to keep listening to the
customers and keep the product or service evolving.
You might accord more importance to investor require-
ments under pressure: Focus on your needs not investor
requirements. The media is agog with start-up stories,
huge numbers are being thrown around, success stories
are hyped. In the age of hyperbole, it is easy to be
deluded into thinking that if your start-up doesn't need a few
million dollars your idea is not big enough. It is important
to believe that your big idea may need small investment, you
need only customer validation, investor interest is a byprod-
uct not the goal.
Founder & CEO,
Finances can go haywire: Cash flow
management is critical to the survival
avoid putting your own family money in
forward cash flow is critical to scaling up
VC/PE is key as little or no money in the
weak. Also live frugal and build an envi-
ronment of frugality till business can
afford certain basics. Once a frugal cul-
ture is developed, everyone understands
the essence of money.
is a very tricky matter. If you are a venture funded compa-
ny, then there are clearly defined rules of the game in the
are reasonable people but ensure such clauses are worded
able terms should not be difficult. But you must read the SHA
or the shareholder agreement, very carefully.
Good investors may not be easy to impress: This is a very
detailed topic. It varies from business model to entrepre-
view point of how they are looking at the landscape. Typically,
angel or Series A funding has no real rules of the game. First
able pain that you are trying to solve (market opportunity),
are raising Series A or angel round. Believe in yourself and
negotiate hard. Better negotiation also communicates your
a mature played out business model, valuation becomes more
scientific with some tools like DCF or discounted cash flow
an investment banker. Do not send your presentation to all
are a highly desired/scarce asset, then only you will get value
else you will get poor grade investors.
CEO & founder,
Make sure money does not dry up: As
a growing business spending happens
fast, and money inflow, whether as sales
revenue or new business or new invest-
ment, happens slowly. Also even if com-
pany is making profits, there may not be
much idle cash because in the growth
phase you would be investing most of it
increasing operational cost and unpre-
dictable expenses make smart cash flow
management imperative and if it is not taken up as priority it
would put a start-up in a self-invited perilous situation.
Don’t get overwhelmed by changes in the industry: The
whole online world is changing rapidly and so is the con-
will make things more challenging and will require one to
is capable of identifying the changing trends as early as pos-
sible. That capability would give a start-up more time to react
and develop better solutions.
Don’t give talent a short shrift: Like every business of
every size, getting the right talent at the right time, and
then retaining them, is the biggest challenge for start-
ups. It is very important for a start-up to not only ensure the
right ecosystem for talent acquisition in place, but to see to it
that they grow as professionals in their career. The workforce
today is young and ambitious and it will be difficult to retain
sonal goals or between their own goals and the organisation-
al goal. Drawing a career path for employees is a good way to
tation from the job. If they are looking for a change in the job
profile, you should be ready to cross-deploy them.
While focusing on investors, don’t overlook the contri-
bution of the mentor: A start-up deals with a lot of
unpredictability regularly. One way to insulate your
people for the vagaries of the market is to get the right men-
tor. The investor will show the right direction and help
remove roadblocks. A mentor, on the other hand, will help
understand work ethics. His/her guidance help establish
the right value system, the right attitude. A right mentor
gives unbiased valuable inputs to the company and be harsh
at times to show the reality before it’s too late.
Founder & CEO,
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