Archive for February, 2010
If you do understand Hindi youd be able to co-relate this to a startup experience – its all dreams of creating a better tommorow, of creating the next value generating business model and we slog on that dream for years. The faint smell of success keeps us walking
Truly startups live the dream – with open eyes!
Now that 2 years have passed since I got my MBA degree (and the founding of my current startup), I think I can make fun of it a bit.
[Note: Only a moderate amount of harm was inflicted on MBAs — (and investment bankers in particular), in the making of this article
1. No amount of strategic planning will ever substitute for managing your cash flow. Financial statements are great. The most important one is your bank account statement.
2. There are always more things to do than there is time to do them. Startups are a continuous exercise in deciding what not to do. You can sometimes win by just not doing things faster than your competition.
3. Sleep is that time you’re working on startup problems with your eyes closed.
4. It helps not to call people “human resources”. They’re people. And, as it turns out, people like to be treated like people. Go figure.
5. No amount of academic theories on efficient pricing will prepare you completely for what people will actuallydo. Finding the “optimal” price is really hard. In the meantime, remember that a sub-optimal price is a lot better than no price at all.
6. Price discrimination (in an economic sense) is a wonderful thing. Except that it often ignores the real costs in terms of organizational complexity. Every time you add a new product or product option a small part of your company dies.
7. There are an infinite number of ways to spend money on marketing. You have no idea what’s actually going to work. The idea is to experiment broadly and learn lessons cheaply. On a related note, no amount of MBA marketing classes will prepare you for the day that you have to produce leads in order to close sales. As it turns out, marketing is about more than product feature matrices and the right shade of blue for your logo.
8. To recruit the best people, fair compensation and equity are only a start. Company culture and a demonstrated passion for your vision is hugely important. (Oh, and your vision should be on the larger path to truth, justice and overall goodness). Your vision should not involve harming kittens. They’re adorable.
9. There’s a lot of value to being likable. Good things happen when people like you. When people like you, bad things have less of a chance of being fatal. I advise being likable. That’s why I advise against being an investment banker after getting an MBA. (I also advise against being an investment banker before getting an MBA).
10. Advanced game theory is exceptionally useful. Basic game theory is dangerous — because it assumes that you’re dealing with a bunch of rational “players”. It’s like trying to design a real car that’s going to be driven on a theoretically frictionless surface, with no air resistance and no idiots on the road.
What are your top startup lessons learned that even the top MBA schools don’t teach?
While am lost putting together the pieces of my latest startup on discount retailing and bootstrapping it over the last few months, an interesting comment by another budding entrepreneur got me thinking – “If Marwari’s/Gujarati’s in India have bootstrapped since ages traditionally and built cash positive businesses why this hue and cry over today’s startups not having access to seed funding in India?
Now this is a debatable topic and highly subjective on multitude of factors including startup’s competitive environment, business model and ambitions - and there has been enough instances like above when the whole idea of getting investors onboard have been scoffed at and integrity/objectives of these investors questioned
To begin understanding this we first need to go back to pre-industrialization era when business in India was highly unorganised, family controlled and license raj dominated – there were big gaps in basic services available in the market and competitive landscape was negligible – one could start small, grow over the next few decades and build a value creating business without external funding.Copying international models and replicating them in India would work perfectly as consumers too didnt have much of a choice and room for experimentation and failure was high. Back to era 2010 – India is booming, more aam admi is taking to entrepreneurship (not just the marwari’s), the competitive landscape is cruelly guts crunching and business models have a short shelf life – its mostly do or die for today’s startups.
You may be the first one to do it, but if you cannot capitalize on it quickly, scale-up fast and build strong entry barriers – there would be hordes of others coming in and beating you at your own game – and you would risk running out of steam at your peak! As one of my startup friend Hemant from Bricks Realty (real estate franchisee startup) comments – ” My business doesnt require funding as such – its cash positive – but to expand to 20 more cities it requires considerable funding and professional mentorship”
As Mahesh from Pinstorm/Seedfund rightly points out in a beautifully expressed article – the objective of investor and the entrepreneur are very different – “its best to avoid us investors altogether”. However he also goes ahead to say if your business model does require funding to build value -then understand how we tick. Change your slideshows accordingly and build a case that looks good to us and our investment committees. It’s different positioning.Every good entrepreneur has to be a good marketer first. And investors are a key target audience. And every good marketer knows that your story has to change from one audience to another.Shape your pitch to suit us.
A way out which i believe in would be – bootstrap and build self sustainable business models, if at all you cant avoid investors – build your beta version, get few customers/clients onboard and have a proven business model/product to show to investors – and then go after the fund raising bit – that helps you retain your say in the investor game and avoid being exploited just because you were desperate and ended up killing the chicken before it lay the golden egg!
Change the game of investment – make a workable model and approach the investors saying hey ”we dont need just your funds, we need an “active investor” who works with us to scale the model,adds value to the business and “provides mentorship” not just funds” – let the investor’s pitch to you “Why you should take their funds’ and not from somone else, what they bring to the table apart from the funds !
I have always been in awe of highly successful people in any field of life and have always wondered what is that differentiates these people from the others who remain average throughout their life.
Is it just about being at the right place at the right time?is it all inborn?what is it that makes such people turn every adversity into an opportunity. i have been lucky to have closely observe my own brother who is a grad from FMS and i have tried to observe what is that the 2 years have taught him.I was amazed as to much changes there were in him. well i haven’t read the 7 habits of highly effective people book as i don’t believe in them.But i am sure life teaches us more than books and if we can consciously inculcate even a fraction of its learnings into our day-day life-we can never fail.
I would start with what i have observed:
Passion which drives u to achieve heights in your field and hence is absolutely most most most necessary
A very clear Vision-know what u wanna do in life-the bigger picture
Very strong common sense and understanding of people and situations-and when to react how.
Core beliefs,principles and Values – u live by
Smart Hard work-nothing comes without it-there is no shortcut
A Lender and not a borrower-never give ur problems to others – do something for others if u can rather.
Commitment to excellence-whatever u do-do it like there is no tomorrow
Humility – A man is like a fraction whose numerator is what he is and denominator is what he thinks he is-the higher the denominator the lower the fraction
Positive attitude-down but never out – impossible is nothing Face problems head on— if one faces problems and address them-it will be easier in the long run.
Self Honesty and Respect for each and every thing in life.
Balanced life-health money spirit mind
Gentlemen – We are in Hell right now, believe me!…..and we can stay here and get the shit kicked out of us OR we can fight our way back – into the “Light”
watch this fav video of mine about startup teams - this was what co-founder of Tyroo and my ex-boss Aditya Khanna once shared with me as his startup philosophy - i think its the most valuable lesson and summaries how i look at my team/partners!
Some of the most important people in my life would be shocked to learn that they were role models. They weren’t celebrities, or even particularly accomplished. But they had some quality that I admired, that made me want to be like them.”
As Deap from Burrp writes in his blog , every entrepreneur needs a “Wall” to be able to sustain this cruelest journey of their lifetime.What is a wall? simply put, our wall is that one pillar of strength in our lives. a lot of what entrepreneurs need during the course of a startup is a strong stomach and a lot of positive motivation. during these usually incredibly trying and testing times, nothing is more important than having the support and full understanding of your wall.
I had no role model as such till i was a teenager…i was too occupied with myself. but as i grew up i started admiring people around me and tried to imbibe their qualities. i was on search of excellence
My biggest role model is no celebrity – its my own elder brother. He has been such an inspiration , and even if i can be 10% of what he is , id be a satisfied man.
My latest crush are the entrepreneurs i have worked with – Mr Manish Vijj & Aditya Khanna. i can relate to them , i am a maverick by nature like them and i dream big with open eyes too.
However i believe its circumstances which make/break a man, and i am certainly waiting for my day ! and yes i will make it happen soon !
“A journey of a thousand miles must begin with a single step”
So here i am, after spending years in the “Digital” marketing industry – am perhaps a late mover to the pro blogging space – perhaps am outdated by now with all the twitter, FB and social media guru bloggers around . All these years people used to ping me – hey do you blog? – and the answer was “not really” and what followed was a look of disbelief and sometimes a tone filled with sarcasm – oh so you dont even blog!
Well i was never attracted to the concept of blogging for two reasons – 1) i didn’t have a strong opinion or thought process to blog about – i am a people’s guy – im okie with most things in life and there was never a black/white for me. 2) i never got the time!
The last few years spent in the industry with startups have given me considerable exposure to what entrepreneurship is all about specifically the “Dotcom Heroes”. I have worked with most industry startups as a vendor/client and seen them bootstrap to blowing away millions of marketing dollars to getting funded to going broke – and now that i am on the path of entrepreneurship myself – i think im ready to share my thoughts and blog it!
Cheers to the “Entrepreneur”!