10 Things to Remember When Starting Up Not to miss these.
Opinions expressed by Entrepreneur contributors are their own.
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
Two weeks back we concluded the Startup Club Demo Day in Bangalore and we had a host of great speakers come in and grace the event. They shared some truly insightful thoughts with our members and the engagement was off the chart.
I am sharing the insights that I was able to glean from one of the talks which was delivered by Mr. Ganesh Laxminarayanan. He spoke about the 10 things that you should keep in mind when you are doing your startup.
No relatives - Doing business with relatives is the best way to create untenable situations. Invariably the personal and professional boundaries begin to blur and it becomes extremely difficult to balance and manage the situation as an entrepreneur.
Also, if an investor was to come into such a venture they would constantly have to guess what discussions are happening inside the house and this puts the investor in a very uncomfortable position.
No HR – In a startup work is relentless. Your team will have to spend a considerable amount of time, with whoever is recruited. Its extremely important that the entire team is at comfort with the people who are being brought in.
Let the people within the organisation bring new people in. Let them undertake the process of recruitment. There is no point of having a person who is managing HR. Unless there are policy related aspects that would require an entire month's work, don't recruit an HR person.
No CFO - The needs of a startup is to figure out how to get the money flowing into the business. It requires business acumen. A finance person typically is concerned with keeping the numbers neat and making sure that the taxes are saved and proper structuring of accounts is done for the same.
Such skills are useless at a time when survival is under question. This is just going to act as an unnecessary drag; avoid it.
No value from board - Do not expect the board to deliver any value to the business. They are a part of the board because of the investment that they have made. A typical investor is a part of at least 10 boards simultaneously. He/She is not sitting around thinking about ways by which they can further your business.
It takes a tremendous amount of effort to undertake investment activities along with overlooking 10 boards. Go to the board with a specific ask if you have one, but do not expect them to be actively thinking about your business and figuring out the doors that they would open.
Have lots of advisors - Get a lot of advisors for yourself. At any given point of time, there will be a set of thoughts and strategies that you would need to bounce off people to test the veracity of the thought. Connect with a lot of experienced people who you can reach out to at any given point of time.
B2B is only about sales - There is nothing called B2B marketing. It is an utter and complete a waste of money that large companies engage in because they do not know what else to do.
All sales in the B2B domain is completed through sales activity. In order to get this done, all you need is a good pair of shoes and a lot of meetings to be setup. You may undertake activities to generate leads, but the eventual conversion is going to happen due to a salesperson's pitch. B2B is only about sales.
B2C is about customer - Knowing the customer, and their problem well is critical to being successful in consumer business. The product is the most important thing because that is what is facing the consumer. If you are building a consumer product company it is important to understand that the product is the operation.
Saying that you take care of operations has absolutely no meaning. Put the Product guy into the operations. Make the product guy take the calls from the customers one day a week. This will help them understand the customer better and building the product that the customer requires instead of the product that they have in mind. Customer is the center of all operations.
Jugaad means we throw more people at the problem – Invariably, Jugaad is undertaken to find a solution that would be more of a band-aid than a permanent fix. When you opt for such ad-hoc solutions, you are often put in a situation where you need to bring in more people because a standardised and automated solution does not exist.
As we all know from experience, no two people are the same and more people only mean more variance. With each additional person brought in, the marginal returns of the solution starts to become lower and lower. Avoid jugged as much as possible. This will keep the variance low and returns high.
Unit Economics - It is far and away the most important thing to focus on. If you are not able to make a profit at a per unit level, there is no point in doing the business because it will never become profitable. I had written a very detailed blog on this.
Do not listen to any of the advice given - As an entrepreneur you best know your constraints and circumstances. Every decision is situation dependent and hence nothing can be applied blindly to all situations. So, if you feel your case is special go ahead and do what you want. Disregard all of these advice and do as the situation may dictate.
These were few of the insights that members were able to take away at the Bangalore event. We will have many more such insights to share with you at our Chennai Demo Day this month.