How to Build a Successful Business Model from Scratch
When you want to expand, it is important to stick to the core category
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I discovered the entrepreneur in me, quite accidentally. But I leveraged every opportunity that life presented to me.
When I got laid off during the dotcom burst in 2000, instead of getting another job I returned to Chennai to set up my own office and launch matrimonial services portal full time.
There Were Quite a Few Challenges at the Start
Firstly, the concept of online matrimony was new to the traditional audience. Added to it was the dotcom burst of 2000, I had to rebuild confidence of people before starting another online brand. And thirdly, I had limitiations in terms of resources and funds which is needed to start a company. In 1999, when I presented my idea to the investors all of them rejected it. An online matrimony portal was considered a non-viable project at that point in time. But, from there on I launched few initiatives, rolled back a few to make it a successful journey.
Some Lessons I Learnt, on the Way
First of all, when you want to expand, it is important to stick to the core category. When we started, we diversified into too many non-core verticals but the slow down made me focus. Fortunately, I took positive decisions at the right time. We hived off our business in non-related areas such as jobs (Click Jobs), listing service (India List) and automobile (India Automobile) to focus on core areas. In 2007, we had launched franchised outlets and expanded very quickly to about 100 outlets. However, we later realised that we did not know the art of managing franchisees.
We shut down most of the outlets by 2009. In 2010, we relaunched, but as company-owned retail outlets and that became successful. Cash flow management is critical to build a successful business model and as tech-entrepreneurs we mostly ignore the importance of this, at least in the early stages. Initially, our funds were not managed well. We did not prioritise application of the funds raised from investors.
In less than a year, we used up all the funds meant to be utilised for more than two years. I tried to streamline that in the coming years and worked towards making the company profitable, as soon as possible. Then in 2000, when Bharat Matrimony was scaling up, online mode of payment was fairly new and most customers were sceptical about it. In due course of time, we persisted and overcame this by pioneering Cash on Delivery (COD) in India.
5 Tips for Entrepreneurs:
1. See Every Challenge as an Opportunity:
We are in the customer-oriented business and hence we look at challenges not as a problem but look at providing the best solution to our members. When the dotcom burst came, I lost my consulting job in the US. I could have easily taken up another consulting assignment but I utilised this opportunity to return to India and start my own company.
2. Keep Innovating in Every Possible Way:
The most important aspect of entrepreneurship is innovation. Sometimes you may not have the perfect idea to begin, but you don't know where to start. Keep exploring till you find your passion.
3. Never Lose Faith if Things Don't Work Out:
There could be something that you can learn from the wrong move. Something more interesting could come up soon. All ventures take commitment and multiple experiments before discovering something that will work.
4. The Idea and the Team Around You is Important:
Work on your idea till you succeed, but be prepared for course corrections along the way. Take time to research and understand the market. And get a great team to execute it.
5. You Must be Willing to Let Go of Anything that is not Working:
Long ago there was a time when I gave a long rope to non-performers. Then I stepped back and asked am I doing justice to the role and decided that I must not be attached to people and let them go. We've also let go of some of our unrelated online businesses.
(This article was first published in the September 2017 issue of Entrepreneur Magazine. To subscribe, click here)