From Bootstrapped Startup to More than $1 Million in Annual Revenue Stop making excuses for why your venture won't work.
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How many times do we hear the millions of excuses for why we, or the people around us, are incapable of realizing our dreams? An Indian start-up decided to trade in those millions of excuses for a design platform now worth millions of dollars.
If you think that funding is the only reason you can't get from A to B, then you need to pay attention to the takeaways in this article. You'll see that with some grit, determination and networking, anything is possible.
The true value of a cup of coffee.
It's not every day that a cup of coffee does more than just fuel my morning. Okay, and afternoon, and sometimes evening. Hey, caffeine-inspired entrepreneurship is what built this country. And yes, I do complain to my doctor that I have trouble falling asleep. Why do you ask?
But seriously, my coffee break last week was eye-opening. I had the chance to meet with Rahul Aggarwal, the founder of Designhill, over a cup of joe. I learned to jump at opportunities to expand my network and learn from the successes -- and more importantly, the failures -- of others.
A twenty-minute conversation with a knowledgeable person can provide insights that impact the rest of your life.
VC capital is still a difficult proposition for most Indian start-ups.
Aggarwal shared with me that one of their biggest challenges as an Indian start-up was securing venture funding. After our conversation, I did a little digging to better understand why.
While the availability of VC funding in India has experienced mind-blowing growth in recent years, funding is still highly concentrated to the upper-rungs of Indian society. Nearly $4 billion may sound like a lot of funding available for a single country, but consider that India has a population of more than 1.2 billion people. Some back of the napkin calculations would reveal that there is approximately $3.30 of VC funding available per capita.
This figure pales in comparison to the United States. We have more than $58 billion of VC funding available to a population of 318.9 million people. Flip the napkin over, and you'll find that's roughly $181 per U.S. citizen, or 54 times more VC funding than India.
First off, holy figures batman. I know, that was a lot of math. And I am not claiming that this is an apple to apple comparison. There are a huge number of variables involved in a start-up receiving a capital injection. But, for the sake of fairness, I think the point needed to be made clear. Indian startups are at a disadvantage.
India is a brutal tech start-up environment. Successful Indian tech ventures produce comparatively meager returns for their investors. With a lack of funding, how did Aggarwal's team manage to overcome the odds?
A grassroots network of talented people.
In the early years, Aggarwal's team primarily traded their talent and time for equity in Designhill. He never asked his partners to shoulder a workload that he wouldn't do himself. In fact, during our conversation, Aggarwal spent more time talking about his incredible team than himself.
An effective leader finds ways to inspire talented people to achieve amazing things together. In the early days, he realized that this philosophy goes well beyond the boardroom. Designhill's entire platform brings graphic designers together with companies that need their services. His hope is that their system will eliminate the need for small and medium-sized firms to hire expensive, in-house graphic designers.
Related: How to Build a Great Startup Culture
Apply a fresh perspective to empower the disenfranchised.
There are many platforms or companies that claim to provide quality freelance graphic design. The unique strategy that allowed Designhill to stand out from the pack was its bidding process. Companies post a request for a design, along with a cash deposit. Instead of proposals, designers send in completed work. The client and the designers competing for the cash prize communicate on the platform. Most designs go through a few revisions. Then, a final winner is selected by the client, and that designer receives the bounty.
The client only pays for the designs that they love and want to use. Designers from around the world gain the opportunity to showcase their work to real clients in more lucrative markets. Instead of prestige and reputation, the only thing that matters is the final product.
This is a huge win for struggling designers in emerging economies. The average graphic designer in Afghanistan, Kenya or India would likely not have access to the same opportunities as a designer in San Francisco.
For Aggarwal, crowdsourcing talent allowed him to solve an economic challenge and improve opportunities for struggling designers around the globe. By coupling his business venture with a humanitarian goal, he could more easily generate outside support.
Develop industry partnerships and support non-profit initiatives.
Human capital and the relationships that can be produced can outweigh financial shortcomings. Find opportunities to grow quality relationships built on trust and mutual interest.
Aggarwal developed partnerships with many companies such as 1&1, MOO, Shopify, Kabbage, My Corporation, Tax Jar, Startup Nation, Capital Factory, Name.com and Host Papa. He found ways to affiliate with other successful ventures, generating new revenue for both parties without additional expense.
He also looked to non-profit initiatives, which are always looking for free help from the private sector. Find a cause you believe in, and donate your skills in return for some free visibility. Aggarwal's team currently partners with the ERezeki initiative of the Malaysian Government, a crowdsourcing initiative to assist low-income households to connect with digital initiatives. Their goals are perfectly in-sync with what his platform has managed to do.
From zero to $1 million in 14 months
I first learned about Designhill from a magazine article. When I learned that Aggarwal and I had a mutual friend, I couldn't pass up the opportunity to glean knowledge from his team's unique experiences. Through tenacious, low-cost marketing, Designhill is experiencing real success. Or, as Aggarwal put it, "The only way to describe our start-up budget was bootstrap, but 14 months later we have 36,805 designers from 52 countries using our platform to generate a living. As we scaled, we put everything back into the business. Our current net-burn is $0, operationally breaking even. ...We directed our early marketing efforts at the U.S., Australia, UK, and Canada."
India may be a very tough start-up climate, but Aggarwal turned his geographic location into a competitive advantage. He digitally courted first-world customers while operating in a very low-cost environment. Profits went into the infrastructure, marketing and operating expenses of his fledgling start-up.Every entrepreneur, regardless of start-up capital, can learn something from Aggarwal's journey. Work hard, avoid taking money out of the start-up, and leverage every opportunity to help others and gain visibility. With enough time and concentrated effort, your probability of success will greatly improve.