Every business in the world was a start-up once. GE was not a conglomerate at its inception, it grew to become one over time. However, ever since the internet has become a way of life for us, the word start-up has created such a buzz that an entire tread of management has been dedicated to it.TV channels are making money out of shows based on young aspiring entrepreneurs (seen TVF Pitchers yet?) and so are movie makers. The business environment in Silicon Valleyhas in fact changed the way people view starting their own businesses. The threshold of apprehension and fear has visibly gone down and increasing number of people are eager to join the bandwagon of tech entrepreneurs. Starting a business had never been this easy.
The prime 4 requirements to start a business have been land, labour, capital & resources. In today’s start-up era, it has been effectively replaced by idea and internet connection. It is not like the traditional factors have lost all their importance. Capital is still a vital requirement but you neither need huge brick and mortar spaces nor a substantial labour force to start a worthwhile business. I, me, myself along with a good idea can very well lay the foundation of a business. As the CEO of a major tech company remarked awhile back, “Any kid with a computer working from a garage on a brilliant idea can put me out of business”. Butthis is simply the greener side of the meadow. To get there one has to cross an alligator infested pond and that is no cake walk. While we come across the amazing success stories of Facebook, Google, Amazon, Uber, Instagram, Mu Sigma and the likes of it, we are not spared of the disheartening stories of thousands of other ventures that did not pan out as expected.But what is it that makes more than 90% of the start-ups go down the drain while the remaining 10% emerge victorious? Each start-up owner has his or her own theory of success and failure. While the theories of those who succeeded are passed down as the essential mantra, the mistakes of those who failed are passed down as cautionary tales. Some basic thumb rules drawn from those are as follows:
- Make sure whatever product or service you are offering is actually serving some kind of unmet need because people do not opt for services they don’t see value in , even if they are offered to them for free
- Try to give your business your complete undivided attention. For instance, one may not be very good at accounts but that does not mean you ignore it and leave it to others entirely. It is your start-up, your brainchild and therefore it is only rational to try and seal all leakage points identifiable. Don’t work IN your business rather work FOR it
This might seem akin to some kind of pep talk being delivered to newrecruits in a company so as to motivate them but aspiring and existing entrepreneurs can never undermine the importance of motivation when it comes to starting and sustaining a business. It is this motivation that pushes them to put great efforts when things around them are not even close to good.Now that the psychological drivers propelling start-ups are in place, the very first step in the strategy for a successful start-up is complete. The entrepreneur is in the right frame of mind now and hence the steps to follow henceforth will not really be burdensome.
- Do a thorough market study to find out whether the idea you have in mind is able to solve or address any significant problem that a substantial number of people face
- Clearly define what do you aim to achieve as a company and why are you better than your immediate and far competitors for the purpose
- Build your company around your own value system. Once you zero on in what matters the most to you, it will be significantly easier to develop a plan and see to it that it is implemented aptly
- Keep your business plan simple. That way it will be more manageable and easier to understand. A simple yet concrete business plan will reflect the brilliance of your idea and thought process when trying to secure capital from prospective investors. Remember that they have many lining up before them for investment, so if they don’t get what you are saying the first time, they will straight away dismiss it altogether
- Always be open to advice. Do not take all of it but understand that each one has been delivered from a different view point and noting them carefully can open up avenues that you may not have considered before
- Strengthen your network. This is something one has to do perpetually as an entrepreneur, even after making it big. Develop it as a habit
- Monitor not only how much cash you are burning but also the time you are burning. The dot com business industry is highly dynamic and improper utilisation of time can very well result in a second mover coming in and sweeping the market through your original idea by simply making it a bit better that you couldn’t do because you were busy being inattentive!
- Hire talented and highly motivated people. If forced to choose between the two, choose the latter because you can always train an average person to make them better at their job but you can never make a talented but uninterested employee perform or even stay with you. They don’t share your vision and hence will never put in extra work that is quite often essential during the early years of the start-up
- Never miss a single opportunity to communicate your idea to the relevant people. Do it directly or do it subtly, but do it! This doesn’t mean rub it on their faces but smartly let them know that something new is on the block that would make their lives a little more convenient than it already is
The above list may not be exhaustive but given that entrepreneurship as of now is more of an art than a science, it is quite okay to go with one’s instincts when in dilemma. This doesn’t guarantee success but then again it is the best available choice when there are no other reliable sources of guidance for the decision making process. Do remember what Harry Gordon Selfridge so aptly pointed out:
“There are no hard times for good ideas”