Avinash is mechanical engineer from IIT Bombay. After completing his graduation, he opted out of placements and started his own web-analytics firm with an initial capital of INR 10 Lacs. Though he started his enterprise solution with great vigour, he failed to attract any significant client. Ten months later, he decided to close his business. He is presently undecided about his future.
Start-ups are formed when an individual or group conceives an idea and decides to implement it against all odds. It is the “action” – that distinguishes an idea from a start-up. The start-up becomes like a baby for this individual; he or she does not mind spending the entire day working on it without making any monetary gains at times. The same individual might often crib about working 10 hours a day in the office. But then why do individuals like Avinash fail in the first place ?
In my opinion, there are ten main reasons for this:
1.I have the idea!
Most entrepreneurs love to believe that they are the only ones with an unique idea. Well, getting realistic is a good start. There are more than six billion people in this planet and someone else might actually be having a better idea than the one they have conceived. Being original is great, but it is the execution that matters. For instance, the Zee Group backed Indian Cricket League had a head-start over its billion dollar rival BCCI backed Indian Premier League-but ICL failed. So, focus on execution.
2.Know your finances!
Businesses don’t thrive on idea- they thrive on money. Two key things most entrepreneurs tend to miss: How to get funding and how to make money! Both are equally important. Furthermore it is important to always have funds more than you need in order to create a reserve when things turn bad (which they inevitably do).
3.Money should not be the reason
Money should always be just the result and never the reason. If you love doing something, you will grow and continue to excel, eventually ending up making money out of it. Patience and ability to look long term will make or break an entrepreneur.
4.You have wolves around (and angels too!)
Build your team carefully- Not everyone who works for you will share either the same ethics or objectives. Hire people not just smarter, but those who love the idea and want to build it with you. When you help others in your team, they in turn will help in building the company. Having a mentor to guide you is like a blessing- so be sure to find one!
5.Do you know your customer?
Most entrepreneurs do not really know their customer. Sounds surprising? Let me explain: Baby powder has the end user as the baby, but the customer is the parent. Focus your product on the customer – they are the ones making the purchase!
6.People buy, you don’t…
…Sell. I do not think you buy any product because the salesman recommended it. You buy it because you needed it. Focus your energies on building such a product. If your product is good, it will sell itself. If it is not, marketing will only increase your costs. For example, consider the case of Apple Computers- it still doesn’t have a fanpage or a twitter account, but people still desire it.
7.Don’t put all your eggs in one basket
Perhaps the most difficult step. Have a plan A,B and C in case your idea does not work. Be open to changes in your original idea. Once you build a prototype, you will discover many scenarios that you have not considered earlier- make sure to incorporate the changes and also have backup plans in place. Go slow, build a test market and then scale your idea.
8.Learn from mistakes
It is OK to fail as long as you don’t repeat the same mistake! Analyse your failures, perform peer to peer benchmarking and be humble enough to learn from them. In fact, it is best if your first business does not succeed, the learning you get is more than what you get from five years in a corporate career.
9.Have a clear strategy and a thick skin
Most of the people who start-up want to win immediately- this does not happen. Have a definite clear plan with milestones for each stage. Build a strong foundation from which to launch your product.
10. ACT
It’s one thing having a strategy, quite another to follow it. So start acting and don’t quit!
