How Can Entrepreneurs Manage Resources During Testing Times
Managing resources and at the same time expediting growth is one of the most challenging tasks for entrepreneurs, especially at an early stage.
Discussing this aspect at World Startup Expo in Bangalore last week were Denny Kurien, President & CEO, Keiretsu Forum, Karthik Prabhakar, Director of Fund Raising at IDG Ventures India, Ruchira Shukla, Regional Lead, South Asia, Venture Capital at IFC - International Finance Corp, World Bank Group and Archana Priyadarshini, Venture Partner at Unicorn India Ventures. The panel was moderated by Entrepreneur Media journalist Sneha Banerjee.
It's often considered interference when an investor goes too deep into the working of a startup. IDG's Karthik said that going as investor into a startup and orchestrating discipline in resource management is one of the most difficult things to do for a VC and at the same time not dictating in terms of operations. "Many times in the early days of the company, it's all about getting the business to start running, hence there is very little focus on getting systems in place."
Managing resources during tough times
Many entrepreneurs feel the pinch of resource management during times of funding slowdown. IFC's Ruchira added that the judicious use of resources and the mindfulness should be set up in the very beginning for the startup. "It's important for a team to remain nimble and not overspend on marketing when there is a lot of money coming in," she added.
When an entrepreneur realizes that he does not have sufficient capital left, he should focus strictly on the company's customers, Unicorn Ventures' Archana said. "They should try to focus on the differentiators that they are building, instead of merely spending on marketing for growth," she added.
Adding to that Ruchira said that it's also important for entrepreneurs to understand their real customer base and product mix – both during good and bad times. "Unit economics is very important and especially when you realize there is a cash crunch," she adds.
My advice to entrepreneurs would be not to hire the first few members of your team just because they are your friends or relatives. It's more important to connect with them at the idea level, Archana said.
Keiretsu Forum's Denny Kurien said that it's important for entrepreneurs to not only get their immediate team right but also get the right mentors onboard and it's here where the VCs and angels comes in handy.
Adding to that Karthik said that it's very important to select people with the right attitude in the early days of your startup. "If you get the best people in the first set, they will then get the next set of best people. If you get average people, they will only end up getting another set of average people," he adds.
Ruchira also added that there is no wrong if an entrepreneur chooses to recruit a co-founder who shares the same passion and possesses complimentary skills.
How should SMEs incorporate technology into their businesses
Ruchira said that a lot of SMEs are relatively behind in adopting technology in their businesses compared to large enterprises. "A part of it is due to the lack of capital and also at times they just didn't need it because a lot of their business processes were done offline. But times are changing and today technology can help to cut down supply chain costs," she said.
Ruchira further added that she sees this evolve and most SMEs will be partly online and partly offline in future as the new generation steps in.
The World Startup Expo was a two day event conducted by Dubai-based venture capital firm Cocoon Ventures.