The Startup Curve: An Entrepreneurial Life
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Jumping Lanes - Often investors fund companies to evolve new technology-driven business models that can scale, are profitable and can generate significant return on investment. This means business model innovation is the key.
When we innovate, it could go either way. Either we could go down the path of burning a lot of money and shut-shop or the new model could hit the right spot and the company soars. What I realized is that while choosing a certain path, it is important to keep an eye on an alternate and perhaps a contrary path and be comfortable to adopt it, if necessary — basically, an ability to quickly jump lanes.
A well-conceived strategy is not working out? Then quickly discard and move on to the adjacent or the contrary — doesn’t matter. While the transition was difficult, it helped us jump lanes from B2B to B2C.
Frills and Features - A business model never works only on frills and features. Adoption of technology comes with value add. Customers and suppliers need to see benefits. It could be convenience, cost reduction, a business opportunity, a strong emotional connect or a powerful network and what have you.
But the core of what you offer has to be compelling and really simple. Especially, when you choose a large networked-market, it is important to segment the opportunity and offer simple and specific solutions else it is easy to get lost. There never really are big wins. All wins are usually incremental. Failures, too, are not usually monumental.
They are a series of mis-judgments, misalignments and missed calls. Always one customer refers the next. Market share is not about how much percentage of business we have garnered, but how many customers are referring you and choosing your services over the others.
This is How it is Done - When you enter a space, say internet business space, could be e-commerce or cab hailing or food or logistics or healthcare - some startups have already grown into behemoths with multi-round funding.
They created pitch-perfect businesses and have been in the media so much that they have have created an mindset for an eco-system of customers, suppliers, people, partners, investors and so on that ‘this is how business is done’. Over the years, these companies defined their business models and became successful.
While we can borrow best practices from companies like Alibaba, Amazon, Flipkart, Ola, Uber, Practo etc., we simply cannot ape them. Because if we do, we will shut shop. So every start-up has to follow what it makes sense to its customers and suppliers given the context of the product it is developing and services it is offering. There is no point in force-fitting solutions and technologies. One shoe size doesn’t fit all. This thinking helped us discard existing models and focus on a combination of enterprise, financial and commerce features for our customers and suppliers.
What Not to Do? In a start-up, during the initial years, strategy is a moving target because tweaks and experimentations to the business model is a way of life. So priorities keep changing fast and the tasks keep getting added.
To-do list swells easily from say a ten to a hundred. Then we reprioritise again, we look for important, urgent grids and such tools but end up doing too many things. The more ticks we achieve on the to-do list, the more satisfaction we derive. It gives an adrenaline rush.
But what I soon realised is that the focus should not be on to-do lists, but ‘what not-to-do?’ lists. The bigger this list is, the smaller the ‘to-do’ list is. Business growth has nothing to do with ticking of a hundred things done. It is ticking off those few which will make an impact. it helped us define the marketplace model.
Maturity and Flexibility - A start-up is about how one changes the market. Creating new business models isn’t easy. Technologies change. Processes do changes. Methods are flipped. Ambiguity is high. Money is scarce. Road map is often unclear. Stress is high.
It is a balancing act. So, not all people are cut for a start-up. In my view, people who need a lot of structure and continual direction could possibly struggle.
People driven by a sense of accountability and self-starters could potentially thrive. Maturity to deal with ambiguous situations and changing priorities comes handy. Importantly, a start-up sucks time and stretches mental faculties. People end up working endless hours and that is a given. It is not part-time, in fact, it is more than full-time.
Emotional commitment is the key to make it successful. Family support and understanding is critical. While it is important to rejuvenate from time to time, ideally start-ups may not be for those who have a significant life outside of work. People might struggle with priorities if pursuing important life goals outside of work that needs their significant time and attention. Especially at senior levels, where time, effort and mind-share is fully consumed, the demands are even more. Hence, one has to understand life priorities before jumping into a start-up.
While I have highlighted a few important learning, we really have a long way to go....