STARTUP KA KEEDA

"INTIMATE NOTES FOR THE NEXT PASSIONATE ENTREPRENEUR"

Yesterday one of my friends asked me if I can spare sometime to meet a few passionate would be entrepreneurs and share with them our leanings. This send me into a retro toss and i started getting my author cravings too :), so here I am, sharing my 5 cents on The Do’s and Don’ts for the next passionate entrepreneur. Hopefully it will be helpful to you Mr Entrepreneeeeeeeeeurrrrrrrrrrrrrr :)

DON'TS........................

1 ME TOO A START-UP:

It always starts after reading a story about the bansals and the bahls of the start-up world. you read about their wealth, the new homes they bought, their listing on Forbes new Billionaires club and all the other fancy items. Then You get into the me too a start-up syndrome, identify a so called hot sector and suddenly feel that a divine passion always existed in you to make a dent in the universe :)

You actually start believing that you were always passionate about this hot sector (shitcommerce, foodgators, driverdirectory etc etc :)), this is followed by the next step of picking up a model which is already a unicorn in US of A and no one in India has done it yet. There you go your bure din (bad days) just got started :(........

Don't Copycat 99 of the 100 copycats will actually fail and one might get acquired

2 THE INHERENT RISK

well one thing you have to understand loud and clear as a co-founder you will stay poor for a very very long time and there is bare minimum financial support ecosystem in India for your start-up, there are hardly any banks which will loan you (Mallaya already ran with all their money :) ) and other financial institutions simply don’t exist for a start-up.

Angel funding is the next option but for Angel funding and VC money “the winter has already arrived and its mostly white walkers which will be around”.

You have to understand that 99.99% bootstrapped start-ups without any revenues don't make it to their third year and there is a great chance that the co-founders will wear a topi(loss) of at least 3-4 crores. If you are mentally strong you will sail thru but a lot among us “middle class first time entrepreneurs” might have a life long setback and I have already seen dozens of deeply depressed co-founders in my own connections.

Never do a start-up based on funding prospects or if something is hotttttt 

3 TEAM

3.1 Co-founder

For god’s sake avoid street smart, unethical, so called practical guys and never have lots of part-time co-founders.  Who should be a co-founder in my DO’s section…

3.2 Development team:

Avoid grizzly bears at all costs, there is a detailed page in Subroto Bagchi book the elephant catchers about the “life of grizzly bears”.  With all regards to Bagchi here is the original text and hope you get the lesson, “The grizzly is a very powerful creature but a very lazy hunter and one of his favorite foods is salmon. By one of nature’s innumerable miracles grizzly bears know instinctively the spawning season of migrating salmons, during which the fish, in large and sumptuous schools (and by yet another of nature’s marvels) arduously travel upstream to the very same point where they once spawned. Along the way come shallow waterfalls and rapids, and the fish must jump out of the water and literally scale rocks to resume their onward journey. The Grizzly, hungry after months of hibernation, simply positions itself along the river at a vantage point and waits for the fish to appear in mid-air on their climb. It makes absolutely no effort to go after the hurtling fish. At the appropriate moment, all the grizzly needs to do is to open its mouth” you get the lesson right, beware of such grizzlies all the time and specially during the beginning of your journey.

3.3 Investor:

Take funding only if you are absolutely stuck and it is actually becoming an impediment to your start-up growth. Always take in your angel investor as the next Co-founder, he should compliment your skill pool and fill in the gaps. For example: in my start-up we always say that "we have our Steve jobs and Steve Wozniak what we need is our Mike marakulla".

Do you know that Steve jobs called the founder of Atari 151 times in a single day for seeking funding, the founder of atari in turn connected him to others and finally mike markkula visited jobs garage. It was Mike Markkula who took apple to new heights in terms of sales, connections and venture capital. Take your angel investor as the next co-founder and BTW our search for our mike markkula is over :)

4 DON'T SPEND IN MARKETING AT ALL

For the first 3 years we will let our product and our customers do the talking, we spare the trouble spending millions of $$$ in hypothetical customer acquisition campaigns.

  5 RESPECT THE CAPITAL

Now if you get funded it should not kick start a party time of several rounds of useless hiring, Picking in several IIT+IIM plus a combo when you don't need any, unlimited round of boozes, gadgets and useless infrastructure upgrades. First of all your investor should not motivate you but if he has different plans(aka to fatten you up and pass on the topi to the hedge guy :) ), Do not get lured because once your have burned his money its you who will be left with the liability of paying all those fancy bills.

 Think Big, stay small and Stay focused.

DO'S.................

1 WHY THE HECK YOU WANT TO DO IT?

You have to be a bipolar, delusional, or a person with some kind of a mental deformity to do a start-up (the same species which Steve jobs used to call as the crazy ones). In my case as a professional I was doing great with my corporate mama :), I used to travel places, had the best boss, was very well known internally and was saving decently. Then I went crazy and took the plunge :), still the three things were crystal clear on why we are doing it :

we wanted to start a very innovative, all geek, no nonsense kind of set-up

we wanted to do it in the analytics/Data sciences space as we have been doing it all along our lives. 

we wanted to make a world class software product with the highest value and we wanted to do it from India (we were sick of hearing india cannot create the SAP's, Oracle's or the Palantiar's of the world)

You should ask this question several time before starting and once you get the most honest answer from inside, then only take the plunge as Things will go absolute crazy along the way and its only your passion which will keep you going.

2 PREP UP ALONG WITH YOUR DAY JOBS:

we did it partially but then there were these wonderful start-ups who planned out each and every item of their journey for example Uber, Data Robot and then there were a few who even got their mvps sold to customers as products before even incorporating their start-ups.

Do as much as you can when you still have your corporate mama to take care of you

3 TEAM

3.1 Co-founder: Your peer co-founder might be average in talent but rely on his traits of loyalty, consistency and the co-founding team’s natural chemistry. In your collective capacity you should be able to handle the two key components of Sales and Product development among the co-founders. Then you should also have a “Mr Everything” too, “Mr Everything” might not deep dive into all the executions but should have the mental and job skills to guide the team, find the solutions when required, this person is also required to do the heavy lifting in all tough scenario’s :). Though the real lifespan of these “Mr Everything” is always short and the board needs to make it sure that he is forced for a break and also substituted in case of any possible health issues….

3.2 DEVELOPMENT TEAM

Passion should be the key ingredient while you are selecting your first coder, try to stay away as much as possible from the white elephants specially the honeymooners or grizzly bears of the start-up world(these people arrive exactly when you get funded and leave at the first sign of a trouble). You should hire people who really get meditative when they are executing their tasks, these are those crazy ones who actually are instrumental in creating those next iphones and ipads of the world.......

4 SUPER COMPETITIVE BUSINESS MODEL:

I belong to a small place called Jabalpur and near to Jabalpur there is another smaller place called Katni :). Katni has this locality called USA (Ulhasnagar sindhi association) which is also the duplicity capital of India.  I want to share this funny incident with one of my top distributor friends (let's skip the name and call him Mr D), this incidence was as follows: “Mr D was the sole regional distributor of madhya pradesh for a mid size mustard oil brand and he was still struggling to generate sufficient profits which can justify his dealership costs, a city distributor from Katni suggested that there are some small retailers in USA who are actually selling mustard oil in loose quantities and still making profits. Mr D visited this small retailer and what he found out was absolutely innovative, the small retailer used to sell the leftover empty mustard tins in scrap for Rs 20, Out of which he used to subsidize the mustard oil MRP by RS 10 and spread that per litre even after subsidizing the Mustard oil he was still left with Rs 10 as his net profit and was doing the best sales in Katni :) on a massive scale.

Now beat this business model Mr Entrepreneur :), luckily we stay away from doing any local business in India but If you have to do business and do it in India you need to have an absolute rocking business model. Did you see reliance launch Jiyo recently :), the ambanis and that local marwari businessman know this for years ……

Finally, All the very best I sincerely pray for your success as this is a All or none game and i just don't have the heart to see another depressed entrepreneur :(.