The Plan B/C/D/E/F, a survival hack for Indian Startups

Plan A, You have a great idea, you built this awesome Android app and Arduino device, you think that you will change the world in a year, You form a great team, you go to one investor, he goes crazy with the idea, he immidiately puts $500k into your business, you turned the idea into a product, raise 2M Series A in 8 months, have 1 million users and you are set to become next Google of the planet.

However, if you are a young Indian entrepreneur, then trust me that plan never works, especially if you are a super innovation driven company. Not only that the plan A doesn't work, you will very soon have entire world telling you how crap is your idea and how many people have done it before and how you are on your way to failure.

If you are one of those who are in Plan A, or those who are end of it and are ready to quit than this might work as a "guide book" or "handbook".

1) Understand your Advantage: If you are young, energetic, love to meet people, love to hussle, then you have an advantage that the Apples and Googles don't have. It's "Jugad". A young Indian entrepreneur can pull out a solution (even enterprise) with unimaginably low cost and time. So the cost for failure will be extremely low in comparision to big corporates or some well funded "Senior startups". So do understand that you are entering into the game not as an underdog, but as a player with higher probability to win.Our ability to find people, tool and solutions quickly and more time and cost effectively puts us way ahead of several other peers. I will come back on this later and explain you how to use this Jugad skill to really put your opposition in backfoot.

2) Early Investment is poison: We live in a world where all the business and startup media values a company by not what their market reach, potential or solution depth is but how much have they been able to raise! So obviously, many young entrepreneurs feel that getting that first investment is the milestone.

Now, let me put it in this way. When you meet an Investor and explain him what problem you are solving and why you are doing, and how the investor can turn his 10 lakh to 10 crore in 3 months time, how he will have sweet and dream exit, if he says "yes" too early (you are free to define what is too early for you) then you have a problem with your business. Why on earth would you want to be in a business which looks convincing to people and they see a value. If investor X sees a value in Problem A and Team B, then there are every possibility of another investor Y seeing a higher value in same problem A and Team C and is ready to put more value into the project.

"If a problem is convincing enough to be solvable by you, then either the problem is too vague or it is too small for a future Google".

Frankly I enjoy the word "impossible", "many have done in past and failed", "sounds interesting but let us see if your business model works" kinds. The more you hear "yes" the more it must convince you that your problem is not worth solving because people think it is easy to solve. More no, and negative response essentially means that the problem looks tough by normal human mind and that any other team on and around the globe trying the solution for same problem will have a high probability of pivoting too early because they will be told it is impossible.

So, if you are on the verge of the end of plan A and have been told enough impossible words, your business has a value. Trust me on this.

"If you have two 6 year old kids in front of you, one says I can solve single digit addition and the other says I can solve a complex trigonometric problem, then whom would you trust more and who would be special kid to you?"

Let me reiterate, I have no problem with early investment, but I feel a "Yes" too soon is a big turn off. And for me 12 months period is a "too soon" (you are free to chose yours).

Having said so, you must never stop seeking investment or speaking to investors, it will give you tremendeous knowledge of common objections, delights, possible business model, possible reasons for failure. Easy learning you see.

2) Bootstraping guide: Asuming that your company is special and no sane human being thinks it is possible, then in all liklihood you should be ready to have no investment into your company soon. So, how to manage the funds?

a) Job and startup will not go hand in hand. If you think that till you get any momentum you can very well be in your day job, you can not. Startup world is tough, challenging, demanding and unforgiving. So it will need complete 24 hours of yours. So, never keep this even as the last option if you are serious of creating a business.

b) Before you enter the world, have at least 6-9 months runrate. You can do so by curtailing all your expanses, with savings. If you are a college kid, you will see your entrepreneual ambitions much earlier than setting up the company. So start saving every penny you can save. May be take up an evening job in NIITs or in a local institute. Earn some money. Provide some services in your college for money. Before you enter into the full startup circle, you have to have a number of how much you need in a month and must have some financial reserves for 6-9 months before considering an entrance. So a startup journey must start well before it actually start. If you are already in job and are too frustrated with it, want to entetr the startup world, it is little tough, but thumbrule is the same, save as much as you can and plan for a 9 month unpaid holiday.

c) Start attending Hackathons: Our company arranged well over $45k usd by winning several hackathons which acted as seed capital. Just build something and pitch in hackathons. Mod your solution a little, try to find similar areas and build and pitch. If you attend 5, you can pull out 1. Hackerearth and Devpost are two great places for you to start. Hackathon win serves two purposes: It validates what you are doing and pays non diluted amount to keep doing what you are doing. But don't deviate too much, else you will end up unfocussed. Modding your product to suit a hackathon comes very easy for the startup founders who are obviously smarter than the rest.

d) Workshops: Indian technical education is suffering a slow death. Professors hardly are updated and on track with latest technologies. Students are looking for workshops and hands on support to technology. If you have quit your comfortable life to be in startup world, you are a notch higher than the rest in both technology and business. Start writing emails to colleges for week end workshops on and around the technology you are building. Students are ready to pay 500/- to 1000/- for a one day solid hands on workshop. we have generated over 5 Lakh working capital through workshops in last six months. Workshops not only gives you some cool week end money, it gives you few young talents whom you will find are interested to work in your project. So you also have an opportunity to pull out some fresh talents from there. It also has another big benifit. Many professors in these colleges are doing PhDs. They find it really hard to spend significant time in coding ( not all, but majority). If someone has a similar problem domain, you can also attract some cool bucks to solve some coding problems for them, or help them with few modules that are closer to your problem defination.

e) Speakership: Just like workshops, there are now many incubators and startup funnels. They obviously lack real mentors who are affordable and who can take seminars and deliver talks. These are often little different from technical workshops. Speaking in events will be more in the business and management perspective. Management schools and startup incubators will be good place for you to dig.

f) Grants: Grants are equity free. Government ( And many prive players) allocates funds for researches. They don't require you to dilute. Always look out for these grants. UGC, AICTE and "Research Grant" google keyword searches will be very helpful for you. Often when you are applying for a grant, dont just submit the application and sit at home. You will never get a grant in that way. Meet key people, talk to them, let them know your problem and solution and face even before you apply. You are smart enough to take it forward from there :)

It is absolutely important for your business that you find some avanues very early ( before a month) which can periodically generate some fund for you.

It is the most important survival advise that I after bootstrapping my company for last 18 months can give you.

3) Big brands and corporates must be last in your agenda: Ok, we know brands help. IBMs, Intels, Microsofts of the world attracts! So you may soon find out that the company whose technology you are working shows a lot of interest in you, they give you a platform and highlight you. You will bound to be happy. In your PPT you will put then brand logo as "partner" and nobody will complain.

Now, if the deal is limited to that, then be it, but anything beyond (which you will realize in hard ways) will be an absolute waste of your time, money and energy.

Let me reiterate. "Innovation" is a fashion even in corporate world. Management is no more happy with only your "bottom line" but the stake holders wants to see how much innovation is the company churning out and how much attractive is the company for the startup world. All these corporates will have some form of innovation centers, incubators, accelerators. And they want to showcase you.

Understand this, for gaining some comfort from it's senior management, from it's stakeholders few resources in the company will highlight you. Not because they want to see you progress, but because they can highlight you as "their discovery" and it helps their "resume". When a key resource in these corporates is helping you, make no mistakes he is trying to be seen as worth mentor and one who pushes innovation within the company and spreading the ecosystem outside. The corporates have no will power or ability to support a startup.

Hwoever, you get to speak in many of their events, it gives exposure, networking opportunities. Use the corporate name for whatever little millage you can pull out, feel good in whatver little you can feel good with. But do not even in your dream believe that a big corporate will lead you to success. If you believe in 'we will do "XYZ" 'then, well you are being taken for a free ride.

Understand this, the person that you are dealing with in the corporate is salaried employee, leading a comfortable risk free life, where showcasing you gets him appriciation. How such a risk free individual can help a high risk venture? By definition, this is not possible. Because if a corporate says "we will highlight your solution and get you the clients", take these promises with a pinch of salt. Thay can't and they won't because a "failure is seen as a crime in corporate world", if any solution of a startup screws the "brand name" of the company then this salaried employee will have lot of answers to give.

So, remeber "Do not waste your time on the corporates in any other forms other than getting free PR and networking opportunities. Any promises from them must be put in the place they deserve to be put. In the trash." And that the corporate needs you to look and feel good to the world.

So balance your time, spend as little as you can on your "partner" and try to get as many speaking and networking opportunities. Even there you will realize, the moment you are mesmerizing the crowd with your energy, and your knowledge, these salaried risk free individuals will feel threatened and will feel least significant :)

4) A Business is of the client, for the client, by the client : Please repeat this matra every day in your startup life. Nothin, I repeat nothing in business should matter to you more than your client. If you are making a solution, obviously you are doing it for a group of people. Reach to them early. You see, in India we are so used to a suboptimal life, that you have no idea of what even your prototype can mean to people if you can really bring a value with it. After speaking with several clients and customers, you will get rejection, but you will also get early adoptation. There will be people who will say "let us try this out". And then they will say "can it do this or that?". For an early business one customer who use your product daily has 1000 X more value than 1000 customers who will never use your product. You will be really surprised to know that when you really solve someone problem, people don't see the form factor.

You will be amazed to know that we sold some 50 odd ECG devices with Arduino prototype. Because we knew the value we were creating and could explain our clients in the same. When you have such early adopters, you are no more into a hypothetical mode. You are developing the product as per your client's preference. This will lead to better product design and delivery.

Don't listen to people who says "your product is not market ready, looks ugly, needs improvement and blah blah" if they are not your end user. Never ever take a product advise from even Peter Thei or Jack Ma, if they are not your end user. Period.

If you have not find that one user, hussle, pitch, reach out and do whatver it takes to get him. Nothing else matters. When you are creating a value in the life of one person, by human nature we want to share. So he/she introduce you to another person whom he thinks can benifit from you and this repeats. We call this organic growth. If you are attending too many growth hacking workshops, then well God save you.

5) Identify and Avoid "mentors": Well, this world is extremely cruel. As you meet people, you will come across ex CEO of XYZ, ex CFO of ABC who wants to be associated with you and mentor you against certain small equity for the leads he will generate for you. Typically this mentorship includes an advisory position, 2-5% of equity. There is another type of mentor. Professional mentors. The package includes 25k-50k monthly fees, 2-5% on the monitory deal that they bring to you against

a) Creating a killer business plan

b) Talking and introducing you to investors

c) "mentoring" you on your business.

Give me a break here guys. If a startup founder who has sacrified his nice life, struggling and fighting against the enire universe to make his business stand out needs to learn his business plan from a part time mentor, then he better be that risk free saried employee. Let me tell you, no one understands your business more than you do. No one has put bigger stakes into the business then you have. No one will loose anything if the business fails then you. So if you think that a so called mentor can help you make a business, then both you and your mentor is living in a fool's paradise. Human being never performs well when nothing is at stake. Business is not run by beutiful PPTs they are run by your intent, your heart and soul.

Tell an employee "I am going to give you salary no matter what for next 20 years, you will get good parks if company does well, you loose nothing if the company is screwed."

Well theoritically you will feel that the employee will do his best as he has nothing to loose. But that will never happen, because soon he will realize "if there are others in the company why should I even bother to work. Let me put some occasional, vocational things to try and increase some value. If it increases value well, even if not what I loose".

No one, ever must be welcomed in your venture without their skin in the game. That skin may be money, full time into the venture with non competitive agreement for at least five years.

Human live thives on need, you need customers, your mentors need you to make cool money. Decision is left to you if you want to get to people though the reference of someone who is using your solution or through a mentor who is neither using your solution or has anything to loose if your venture fails.

When you find that one customer, he will be your mentor. Because he would want you to survive, because you are his need and he will get you connected to others selflessly. And you must value that single customer.

If your mentor was so great, he would have spawned the company himself and run the business rather than advises. I would rather have a paying advisor than paid advisor. Because when you actually need an advise, there are always cost effective ways of getting that advise.

Equity is very valuable. Preserve it like your life. You must remember this in your heart and mind, do not even dilute .0000001% of your company to someone whose skin is not in the game. NEVER. Make this into your companys bylaws.

Having said that you would need professional assistance and support from people with knowledge. Pay them money rather than equity to start with. If they become integral part of your system, you will automatically be inclined to have them with you for longer and with equity.

Anyone who gets into equity discussion too early, too fast, you have an alert trigger.

However, there will always be people who will help you selflessly, guide you, show you the rights and wrongs. They are your true mentors. Chose your mentors, get nurturerd.

Some of the common mistakes people will lead you to make:

6) Making a beutiful UI for a product that no one wants: Let me tell you one of the biggest reasons I see startup fail is not because they had an ugly product, but they had the most beutifuly designed product which no one wanted! Even being a techie, I say it with no less conviction.

"The easiest part of a business is to create the tech, the hardest part is to make a businessout of it"

You can create a great business without cool tech, but the reverse is not universial truth. So rather than focussing on UI and experience, focus on customer and their need and build your UI to meet their need.

7) Amazingly designed hardware: Let's talk about the domain you are in. An ECG. There are probably 1000 odd ECG companies around the world, 5000 odd brands? How many you see at the home. Let's say we pay a designer 50k USD, PCB iteration another 50K USD, take one your to build the solution, hardware, and software with another 100k towards development cost. So you have 1.5 Crore loss to start the business with. Do the maths. How much devices would we need to sell and at what price over what period of time to account for this initial "loss". Add to that the marketing cost, tooling and production cost and many other costs like certification. You would know that you are already out of competition even before you have started competing. The way we succeeded is by doing 5 iterations of our product in 4 months time flat with clinical trial, all for less than 5 lakh money. Because if you are bootstrap, you can bring your Indian jugad into the game and make things in really cost effective ways. We have a "not so great designed product", but huge preorders, infact more than we will be able to supply over next six months. Every circuit component is RHOS complaint, with complete history tracing of each component from factory production outlet to our circuit. Signal processing, AI all with highest accuracy. We are able to manufacture and sell our devices at 60% margin even being the lowest cost product in the market. A mere 1000 unit sell ( which is much below the preorders that we have at hand now) will take our profit well past the "loss" that some of our competitors have started with. Now do the maths.

We can now afford to improve the design, with the profit and by the time the design and the product of V6 is ready, we already have customers who are ready, trained with our product without spending much and are willing to pay premium price.

I don't have a problem if you are spending a fortune on design and development if you have 2X return guranteed the day production is out. I don't have a problem if your first batch takes care of your development cost. But if you are talking about a 2 year horizon to average out product development cost, then the maths is at 3% PM value deprication, after 2 years your initial value will be inflated by 184% and if you add the operation cost of annual 30% on your primary development cost, then you have inflated the cost to about 300%. So a 1.5 Cr product in 2 years horizon is 4.5Cr, a 10 Cr product is 30 cr, a 50 cr product is actually 150 cr. Compare the cost that BPL and Wipro spend for their ECG products and the sell they achieve and have a look at our order book and margins, and numbers, you would know what I really mean :)

For products like Satellite Propulsion, or a new Ultrasound device or a new rocket fuel or a new drug for HIV will certainly need 10x more than the last number I quoted and over 5 years of time horizon. But if you are not into any such extremely expenssive tech, simple exponential function of mathematics will slowly but surely take down your business.

In US, people can invest a Billion on products like WhatsApp which has huge user base but not so profound business model because business model can be put at a later stage, but in India, this rule will not work, can't work because in US, a Million customer is worth 10 billion due to their buying power. But here, even a billion non paying customer is not worth 10k because the day you churn out the business model, they will be happily shifted to another platform which doesn't need them to buy anything or where they get better reward. This is how India works and will work, whether you like or dislike.

So for any business to survive in India, get to profit as early as possible with as little go to market cost as possible is the most optimal strategy.

Once you reach there, you can always grow bigger, expand faster, take 100 Million and turn it into 10 Billion. Spread across the globe. In India if you are starting with 50 Million loss a year and expect to reach a billion in profit in 5 years time, then best of luck with your understanding of India, it's customers and it's business eco system. I will really be interested in such a great story.

8) Not having enough products to pivot: Well how oftne have you heard the business punters telling you "focus on a single product, make it happen and then look for other products. Facebook only focussed on social network, Google only focussed on search engine, Apple only focussed on Computer, Microsoft only focussed on operating system" at the beginning.

You must be really neive to believe this theory. Let me put it this way, Google had a search engine, but they run it on Googleware and GFS. Google had a great crawler to start with. If search wouldn't work, they could license Googleware, if that had not worked, they could use the information coming from crawler to build an encyclopedia or yellow pages. Facebook had an imaging algorithm to start with, they had a personal verification system, they had a content sharing system. If Facebook had not become a social network, they could very well become Intra campus messaging system, or an Authentication company or the greatest blogging platform. Apple made custom motherboards, power units and displays followed by mouse. They made an OS, they made "Apps" and not the only computer.

If you carefully drill down the product of some of the great companies you will see that invariably they worked on multiple innovations simultaneously to solve a larger piece of puzzle. So for the business to survive, the single worst suggestion you can take from anyone is "do not focus on multiple product lines".

Every "impossible" looking problem will have multiple sub-problems attached to them, both tech wise, as well as business wise. As a startup you have the advantage of attacking each of these problems with assigned priority, and time and irrespective of what one says, success of your startup will depend on how many of these problems you are able to solve with smallest possible delta time and money. Each of these solutions in itself can become a business model in itself.

On a day when the company seems to be closing down tomorrow, will close down tomorrow because it will not have the hope for one more day with more more products of it's to make it for the company. Have the PoCs ready across the problems associated with the larger problem and you will know the value of it when your company looks to close down.

No war has ever been won in this planet without winning smaller battles. If you want to win the war, identify and attack the battles, win it at a time with the focus and aim at the war.

Hypothesize what all other areas your product can be used, even the most bizarre ones, you never know if you have not tried it enough!

9) Never chase a crow without checking out your ear: Interestingly in your journey you will meet several people. Everyone will have an opinion, it can be positive or negative, can be encouraging or devastating. Let's say you are making an agro product and someone of significance you meet who says "well no farmer in India pays, so you can try out your IoT product for gardens". You got a new keyword "Garden". Add it in your hypothesis but, do not drop farming as your major keyword. You can start a small product or solution that won't take much effort for gardening to validate it quicker, but your keyword will be still farming.

Startup and business is all about heart and conviction. If someone can displace your conviction, no matter who he is, then your business will never ever survive a decade. Never.

If you are not convinced that you will be successful, why would the others be? However, when such advises comes, do liten to reasons very carefull and make a note. Those are the side problems you should look at solving :)

10) Not asking: Money is not the only ask in a business world. Millenium old "give and take" works great in business. When you meet people, there will be someone whose need you may be fulfilling. Ask for a favour against a favour. For instance the guy who designed our PCB, did it for 25% of what they charge others because we gave them 500% more business in a month through referrals. If you can earn 10/- for someone, you will always get at least 1/- in return. This is business thumb rule. So when you are meeting an angel, who has a great past sales history, you can ask for an access through sales channel. If a deal happens, he will be more than happy to invest in your company. Offer yourself to be proved. Find people who has a problem on and around the larger problem you are trying to solve. Offer them a help. They will help you in return. If have a complex coding algo to crack, go through Open source community profile and offer some guys some cool bucks and they will do it for you for much lesser amount then you might have to churn out otherwise.

Value people's skills, network and expertise as much their money. Money is not the only ask, ask for non monetory favours like contact of a person whom he knows who can print your cards for less amount. You have no idea, how much actual money you can make by saving that money with these "non monitory asks".

11) Not protecting IP: You do not want to end up paying for your innovation. Right? Most often in the quest for solving a problem, startups forget the basic hygine. If you are developing something cool, arrange and get a provisional patent. PTC is probably the best option. The good thing about India is, there are great individual and firms who can help you in filing an IP in an unimaginable price points. Not protecting your IP would be single biggest blunder you can do to yourself and your business.

12) Not talking about your idea/product/service/solution: Once you do your IP, you must go all out and talking to every who you think can be of any help or who can use your service or who can be of any help. Remember an idea is only as powerful as it's implementation. Having a great idea means you are a thinker and you can have hypothesis. However, that doesn't mean that you are a doer. Doing takes a lot more than thinking. It needs passion, energy, immense planning and a sustained effort over significantly long period of time. If just be listening to your idea, one can your business then, either your idea is not big enough, or you are not skilled enough to implement it in better ways than whom you are talking to. But that doesn't mean that you should keep revealing the algorithms. There will certainly always be an element of secracy over your operations, but not speaking to too many people, you will do greater harm.

The difference that you have to understand is that, for others, your idea is just an opportunity but for you the opportunity to pursue your idea is your life.

Conclusion and Disclaimer:

I can go on for hours, writing and sharing my experiences and giving "Gyan" because hey gyan is easy, risk free, makes you feel good about yourself, few likes here and few shares there, few comments will make me feel really not lesser than may be Mr. Ratan Tata. You may well presume that we are a billion dollar company going for a trillion dollar business with a million customers and that I am writing this looooooooong boring peice from my private ship where I am crusing in a holiday after displacing Mr. Bill Gates as the richest man living!

But the spoiler is, I am still a founder of a struggling startup, creating a business and solving some tough problems. The reason I wrote this piece was because I thought for a founder "hope" is a big word. And that by reading this long, boring article, you may well feel that you are not alone, and there are others.

I also wrote this because I see there are too many wrong people doing too much wrong to the asset of this country, that is our young, energetic, ever smiling entrepreneurs.

Don't break down, don't give up, don't stop trying, because you are that one day away from changing the world and if you give up, the world will not be as beutiful for your children as it would be with your intellect, passion, energy and sacrifices.

I am building our product for past 12 years, and have not given up, so you have no reason to give up in a year. Cheers!