A startup becoming a success story is not all that common. Probably every 99 out of 100 attempts fail but still that 1 triumph inspires another 100 teams to startup! What goes into that one startup that makes it a success? Why is it that the 99 others are not able to create the same magic? Is there a set of rules that ensure success of a start-up?
Though there are so many small & big things that help a startup get closer to tasting success or at least ensure that they stay on the right path, there is nothing much that can ensure a sure shot success. But if there are things that can increase your chances, there is no reason why you shouldn’t follow them.
Startups across the world face almost the same set of challenges but being in India & not having experience running a startup anywhere else, i think my limited knowledge only allows me to comment about the scene here. But call it my ignorance or give credit to the bigger number of odds against you out here, if you have what it takes to make it a success in India, probably you can do better in almost any other part of the world! Having said that, the things I list below are completely my personal opinions & don’t blame me if you follow all this & still screw up!
I’ve read a zillion articles that guarantees a better success rate for a startup & have agreed (to a lot) or disagreed (to an equal number) to the various points in them. I’m sure you have read even more number of articles & might feel my GYAN session to be extremely boring, but just in case a few of you think there has been some small little thing that you could take away from this page, I’m more than happy. I look forward to adding more items to this space or edit the existing ones, as & when i get the revelation! So here we go >>
The most important ingredient for a good startup is undoubtedly the right team. Ideas can change, business models can evolve, everything you do can alter directions but if you don’t have a good team with you, your chances of making it big are close to zero. And by ‘good’ team, I mean a balanced team with the right skill sets. You need a core team that is collectively good at ideation, execution, marketing, sales, finance & the ability to think ahead of time.
I strongly recommend a team size of atleast 2 and is not pro a one-man-show system, because of reasons more than one.
a) A single person won’t have all the skills essential to lead/run a startup.
b) It’s really good to think in more than one perspective on everything.
c) You need someone with you who will stand by you when you screw up stuff.
d) The joy is more when you have people around you to share success.
Everyone thinks different. You need someone to think about the cons when you are so much into the pros. I really admire those iron-men who have built empires from scratch all alone, but who knows, maybe they would have made even bigger a business or have saved a lot of time, if they had the right partner.
There are so many things that you can do to attract publicity & make people say good things about you. I’m not saying don’t do all that, in fact its really good to do all that. But, at the end of the day, you are running a business to make money & everything else are just by-products. A simple thing that many people fail to understand is that profit = income - expense, which essentially means that to increase your profit there are only 2 things you can do. One is to increase income & two is to make sure you are spending the least possible. And to have income in the first place, you need a good revenue model. A startup’s success is not when it makes a multi million dollar exit (though that is a good thing to happen) but when it makes sustainable & growing profits. If your intention is to make a company that fits the “hot, loss making, free service with mega valuations” tag, you are in the wrong game. It does happen once in a million companies, but definitely a model you cannot bet on.
Flow of information
You need strong systems & processes in place to ensure good flow of information within the organization. Everything from tracking expenses to daily revenues to business development initiatives to what your clients think about your product/service, progress towards the next milestone, these are all pieces of information that you would want to make available to the core team on a near real time basis. The more the delay in flow of info, the more likely that things go out of hand. The core team has to be constantly updated among each other on all the stuff happening within the company & the rest of the team should be trained to continuously communicate the info upwards in comprehensive packages. The results of good flow of information is good turn-around times, happy clients, better margins, more business and above all, the ability to take informed decisions at the right time.
Everyone needs some kind of motivation to put in their maximum. It need not always be monetary in nature but there definitely has to be incentives for achievement. It makes a person put in that extra bit that could make all the difference. It gives everyone the scope to grow at a pace they are eligible to, instead of being capped by other external factors. So put systems in place to reward every achievement. You might not be able to give incentives to every single person in the organization from day one, but make sure you make an effort to moving towards such a situation.
To-Do lists, Reporting & Reviews
Each person in the team has to be accountable for the work entrusted. There has to be a daily track of who does what. EOD’s (short for End-Of-Day reports) are something one can’t afford to miss no matter how big or small a part that particular person plays in the organization. EOD’s make you more accountable, it helps you track progress, lets you plan ahead better, makes you prepare to-do lists that makes you better organized. Irrespective of the team member being on tech side or marketing, there has to be a strong reporting system. Even in case you don’t understand the benefits initially, don’t be lazy, stick to this & you will soon realize the importance of the same. Trust me, the entire productivity of the team goes up considerably higher if everyone writes EOD’s & maintain daily to-do lists.
Over and above this, you need to have EOW’s that track progress of a business unit over a week & then EOM’s that tracks the same over a month. It’s not incremental work creating all these reports, EOD’s help you make EOW’s & EOW’s compile into EOM’s etc. The core team should also make sure the progress is reviewed periodically.
I like this statement Infosys founder Narayanamurthy made >> “It took me 25 years to become an over-night wonder”. You can’t expect to become a Bill Gates or a Steve Jobs in a couple of years. Be realistic. Be patient. Just ensure that you are on the right path and everything else will follow. There are things which you can’t speed up beyond a certain point. Don’t overdo things. Keep your cool. Don’t be frustrated. At the same time patience doesn’t mean that you sit locked in a room waiting for someone to come & deliver stuff to you.
It’s good to be written about. It’s good to showcase your product in public. It’s good to have a fan following. Every start-up should learn the trick of getting free publicity. Apart from the print & visual media, nowadays the social media is also becoming of increased importance. Leverage all that you can. Find out your USP’s. Get them across to public through whatever means. But be careful too. a) Any publicity is not good publicity. Things can put you in a bad light too. b) Don’t get too proud reading what is written about you. Only you know the real picture & if you start believing that all those media attention is gonna get you somewhere, you are really wrong.
You will need a lot of this to tide through the tough times. An entrepreneur has to be extremely optimistic about things. Positve thinking gives you positive energy that empowers you to do seemingly impossible stuff. Everyone around you may try to pull you down or atleast try to make you believe that you have set out to achieve something impossible, but that’s the whole point. You are out there to do stuff that normally people can’t & that’s why you are an entrepreneur and others are not! You are not the giving-up-types, no matter what. And go ahead and believe that you are a bit lucky too!
It’s an art. Unless & until you learn this, you will keep doing the same stuff everyday & you are most likely to waste all your time which could otherwise have been used for new/better things. Human beings are prone to getting bored if they repeatedly do the same thing for more than a particular period of time, regardless of how good the thing is. In the case of an entrepreneur, the period of time we are talking about is considerably lower. Delegating work is not a bad thing to do. Every kind of work has to percolate down the team so that you get more bandwidth to think & do new things. This is essentially how you need to grow your team. Always have it in mind that you are capable of doing bigger, better things every day & your primary job is to show your team how best to do something, put systems & processes in place and then move on. It also ensures continuity of work & makes things less person dependant.
Always good to have a right set of mentors. People whom you can trust totally. “Been there, done that” kind of people who can give you real good insights & help you find the way when you hit roadblocks. Be cautious, there are so many people out there who just do the talking and is not worth a penny. If the mentor is not passionate about the team & the work you do, there is no point wasting time. And if the reason why a mentor is associating with you is money/equity more than enything else, you are probably better off without this guy! The right mentor will be able to connect with your thought processes, he can relate to you & your situations & can share with you lessons he learnt in his journey. Do not give out any equity/money for mentorship based on future deliverables & verbal guarantees. If they are expecting something, they need to deliver first & you need to get convinced only seeing results. Finally, no matter what mentors tell you, the decision to be made is yours.
There are only a certain number of things which your brain can process at a time. There are only 24 hours in any given day. Any startup guy is likely to run out of bandwidth in his struggle to do so many things in the minimum possible time. While there is no problem in that part, what needs to be done is to prioritize things & the delegation part which has already been discussed. When you step a bit sideways and think, you will realize that a lot of things you do can be deferred as it is not of immediate importance, another set of things aren’t worth the pain in the long term and probably a third set of things which you just realized that it might do more harm than good. By prioritize, i mean figure out what has to be done on urgent basis, what is to deferred & what is to be skipped & this exercise can make sure you never run out of bandwidth for long stretches.
Save Money, Spend Less!
Don’t be ashamed. Spend as less as possible. People who tease you for being a miser won’t give you money to run your company. Save money wherever & whenever you can. Travel cheap, stay at friend’s places when on business trips, buy stuff on EMI, bargain & do whatever you can to save money. But at the same time, don’t refrain from the optimum spending on business development. Don’t refrain from spending if the time you spend bargaining is not worth it. So it’s basically a trade off between time & money which you have to master. And you also need to understand that without investing, there is no likely gain. Manage your CAPEX & OPEX well and keep track of them separately. Every company needs money, albeit in different proportions, for scaling up at various stages of the journey. If you wait for profits to be generated and then to re-invest, you will probably lose the opportunity in today’s cut throat competition. Identify funds, be it seed, angel, VC or PE, so that you can cash in when you are convinced about the opportunity.
Entertain Ideas, be open to Change!
Be open to ideas especially from within the team. If you try to resist change, you will be outdated in no time. Like they say, the only thing that doesn’t change is change itself. So learn to adapt to the changes around you. The biggest advatages of a startup needs to be leveraged to the maximum, like minimum turn-around times, quick decision making, out-of-the-box thinking & zero aversion to innovate. Always encourage everyone to come up with ideas, cos that retains the spirit, and then debate over it actively before taking a final call.
Work hard, party harder!
There is no replacement to hardwork. You literally work your ass out 24×7 to get things rolling. Sleepless nights & no-time-to-eat-food days are so common in every startup. Having no short-cut, just make sure that you don’t burn-out too much. Take a break once in a while, cos mind & body needs rest and rejuvenation.
Like APJ Abdul Kalam rightly says, “Dream, dream, dream! Dreams transform into thoughts, thoughts lead to action”. There is no harm in dreaming big. Infact, it gives you vision.