10 things entrepreneurs should do right in first 365 days
Initial hardships can lead your way to success, but those hardships could be bitterer during the first 365 days of an entrepreneur’s start-up journey.
Running a start-up, in the first 365 days, can certainly be more challenging than one could imagine in the current era of funding from large number of investors – both from India and abroad. They have done a disservice to start-ups by prompting them for bigger valuations, while snatching their freedom of perfecting the business in their own way.
“Entrepreneurs have to think over whether investors want to invest in you, or in the space or just want to grow his portfolio. If he wants to invest in you then he/she is the person you have to work with,” explains Aseem Khare, Founder, Taskbob, a Mumbai-based mobile-only hyperlocal home services marketplace.
Noticeably, the leading start-up entrepreneurs in the country, who have been growing from leaps and bounds to make it big in this land of entrepreneurship, hold the view that opting for funding seems to be the only habit the new generation of start-up entrepreneurs in the country is largely following.
“Not having cash is the golden period of your start up because you get to try a lot, you get to perfect your product, you ensure that you speak to a lot of people, you are actually out there and doing work in a much better way, and that is the time you really build your business. Once an investor ventures in, then it’s just to run your vehicle. It is better to elongate that process and ensure that you are perfecting the product and then reach out to the investors and take money,” Khare adds further.
Say ‘No’ to Pitching
During the first year of start-up, an average entrepreneur spends around 90 per cent of his time in giving host of presentations and pitching to investors about his business ideas, which becomes a regular task before he/she succeeds in convincing a positive investor after huge time consumption. In contrast, a true investor doesn’t spend much time on listening to presentations; they simply focus on identifying unique ideas.
It’s Time to Bootstrap
Entrepreneurs should rely more on bootstrapping, which make them the boss of their own rather than being accountable to third party investors, who are busy increasing their portfolios by funding in a series of start-ups around and acquiring stakes, while eyeing a profitable exit.
In the first year of commencing the business, the entrepreneurs are often faced with the situation of drying up of finances while being responsible to the management and the employees. Hence, lack of fund with the lack of investors’ trust in the first year also weakens the confidence of entrepreneurs, who think that if his/her start-up is not fundable that means it is not sustainable, which is not the case.
“You don’t have to let your money get dry in the first year of business. There’s no benefit if you don’t have the money in your hand, so you have to make sure you that you bootstrap for at least two to three years,” opines Shreekant Pawar, Founder, Diabeto, an app-based Diabetes management device, which transmits data wirelessly into smartphone. The start-up has its headquarters in both US and Mumbai.
Discuss Openly With Your Mate
Recalling his experience of interacting with investors, Pawar further shares, “If you are talking to the investors then you have to discuss the same openly with your co-founders, and remain firm with whatever decision you take. Entrepreneurs will play games with you by saying something to you and some other thing to your co-founder. Thus, barriers have to be broken right from the beginning, and you have to first understand whether the person knows you well or not.”
Focus On Building Product
In the case of start-ups, with the availability of funds, excessive amount is being spent on promotion and marketing activities. They neglect the fact that word-of-mouth publicity popularises the venture faster than advertising.
“If you have more money then you tend to spend more on marketing and hiring. With less money in hand, you tend to utilise it in the most optimal way. Hence entrepreneurs shouldn't heavily capitalise on promotion and marketing activities rather they should focus on product and services development,” says Sameer Parwani, Founder, Coupon Duniya, a coupon website offering a comprehensive listing of coupons, offers, deals and discounts across sectors.
In the first 365 days, it is most important for start-ups to get their product out as soon as possible. Apart from investment, finding a right partner who can understand your business idea, hiring right talent and right channel partners is among the biggest challenges that entrepreneurs come across.
“It’s much important that you should have co-founder to develop large network and deal with low confidence issues. Along with this the most frustrating thing initially is hiring, for which developing a strong network is very important. Therefore hiring first few employees is extremely important as it is very difficult to find right talent viz-a-viz getting the first follower,” shares Parwani.
“In the early days, working out of our house, the first employee we wanted was an Operations Executive. So we decided to hire a female for customer service experience,” says Khare.
Accelerate Your Business
Further, accelerating with the business is what Indian entrepreneurs observe to be lacking in this current age of large number of start-ups entering the market and shutting down with the similar pace.
In the process, entrepreneurs lose out with the core job of product and service development under the investor’s pressure to heighten the valuation and rush to become profitable in the first three to five years of operation, which largely becomes difficult for an entrepreneur to cope up with.
Regarding accelerating business, Khare follows the advice of Kunal Shah of Freecharge, who says that entrepreneurs should be extremely data focused; if your data tells you that this problem should be solved, then solve it. Entrepreneurs should actually talk to people of what is the problem that they want to solve. Finally, real life experiences from ex-entrepreneurs helps a lot more than what is written out there in books. This helps in creating a lot of wisdom.
Here are top 10 tips for start-ups from successful entrepreneurs:
1. Start-ups should not approach investors first.
2. Entrepreneurs should bootstrap finances.
3. Entrepreneurs should have at least 3 years of bootstrap finance back-up
4. Don’t heavily capitalise on promotion and marketing activities, rather focus on product and services development
5. Use Word-of-Mouth publicity largely for marketing and publicity
6. Find a right partner who can understand your business idea closely
7. Attract right talent and identify the right channel partners
8. Besides execution, focus on accelerating the business
9. Take start-up experience before running your own business
10. Don't think of increasing valuations instead focus on building the business