Posts Tagged ‘entrepreneur’
The Right To Passage.
Posted on: March 6, 2009
I remember listening to a very wise man once utter the words that … “Every Civilization that ever survived and flourished, all had a culture of Right to Passages”. I am not sure if I heard much of what was said after that. My mind had already raced to a truth that I’d known innately. We must earn our right to passage, if we are to get anymore as a nation, civilization and as a species.
There is a troubling trend though. There is much talk about Entrepreneurship becoming a lifestyle – I still disagree with the notion (You are either built and wired to think like an entrepreneur or not). But there something very slithery scammy about entire groups of people and organizations working to make life for an entrepreneur “easier”. Support is another thing all together.
There was an incident at the Delhi Edition of Proto.in, where Sanjay Anandaram raised the simple question to the audience as to what all they expect from an Investor – and what should be the right metrics. The answers went all the way from “Should help hiring potential partners” to the obvious funding, to getting clients, to providing strategic direction. I must get a clip of that conversation, but when I did jot them all down, they were just about every element of a startup mapped. Nothing left. Sanjay did take the shot and ask the question “So what the hell does the entrepreneur do?” And he was bang on.
In my definition, entrepreneurs are risk-takers. They create wealth faster than anyone else because they are legitimate con-artists who’ve figured out a flaw in the system and they know that they can make money off of it – or by fixing it. They are also people with this innate capability to look at everything they got and can make a rocket out of it and be there before NASA can even fathom a trip. They are the junkyard Gurus, and they are great in survival tactics. They just need to fix things, and without that they’d ruin the world – so its better that they have something to fix. That’s my entrepreneur. And in order to make such elite ones – and rightly so – stand out, we need to go through our rights of passages. Without it, we are just recruiting lazy bums to the army and giving our entire freedom in the hands of those who wouldn’t know what to do with it.
And handing out entrepreneurship in a spoon, ah, such a thing doesn’t exist. Entrepreneurship will never be a lifestyle. It’s who you are.
What Do Startups Need?
Posted on: September 9, 2008
- In: Business | Entrepreneurship | India | Technology
- 2 Comments
"What do Startups need" is the Question asked these days.
Seems like that’s the kind of question a lot of companies which are looking to support, nurture and grow alongside Startups are asking themselves these days.
I’m invited to be part of a fairly small panel that is to discuss on this very topic tomorrow in Bangalore in a short meetup that Sun Microsystems is putting together.
The more I think about it, I think the sheer number of pages where business opportunities, support systems, efficiencies can be made all seem to just go on and on and on.
I think the key element that it comes down to is not “selling”, but “enabling”. Really, if you think about it and put all the power law distribution to a graph of economy (financial status and revenues) versus size of the company, it’d be quite easy to see the bigger corporates easily contributing to 80% of the economic wealth that is being garnered. That’s almost a no brainer.
I think the insight is this: An average startup entrepreneur is young, imaginative and full of ambitions and dreams. The key is to enable them. Not sell to them, but help them achieve their dreams. Its going to be pretty much the same way that you would want to support artists to come out with more creativity.
Someone wise once said that the role of a supporting organization to a startup should help startups make truck loads of money and make a small slice out of it. We need to tie in our success with that of the startup. Everyone wins in the end.
So now, most organizations are not gonna want this headache. Go after all the small companies, give them that additional support and handholding, just for 20% of the revenue. But isnt 20% quite a lot? I dont think it would ever make sense for a company to focus on just this 20%, but if they were already saturated with the market share in the corporate world, a 20% extra market share will give these companies a lot of footing, wouldnt it?
Now obviously, the number of companies very much increases. The queue of companies to support would almost be as long as the infinitely long tail itself. Thats when shared resources make a lot of sense. Technology helps to scale. Thats what it does beautifully. And if a technology company says that it cannot cater to this group,.. they woe.. something is truly terribly wrong.
Related Posts from Before:
- In: Ask Vijay | Entrepreneurship | India | Technology | tips
- 4 Comments
Startup Entrepreneurs are oodles of Fun to work with. Perhaps its that drive within them to change things, and the paranoia of taking on a bigger industry which adds to all that. As hectic as it could be, its nothing short of exhilarating – I seem to be gasping for breathe during the slow times for sure.
So the point is speed. Its a crucial element. I think its the first criteria anyone looks at to evaluate and measure the strength of an entrepreneur. “Fire in the belly” “passion”, are all just variables of the same thing being described, I’d say.
I think the second most crucial aspect when it comes to that is the accuracy – The quality of implementation so to speak.
I wanted to briefly write about this, for a couple of reasons. There are quite a bit of early stage ventures out there – almost 2000 of them at any given point in time, and the truth of the matter is that less than 10% of them survive the first two years. That’s a lot of enterprises dying out. And if you really look at it, what stands as foremost in the list of reasons is the lack of guidance in terms of implementation and execution that counts towards it.
There are this couple of folks who are in the back of my mind (Who are part of the incubator) while I am writing this, and I am wondering if they would survive out there in the world, if not for day to day guidance. Probably not is what i’d say.
In a recent discussion with some investors, the enlightening moment was when someone made the statement that ‘investment is pretty much rocket fuel. It’ll help you go faster, dont know where though”. And I think there is more than an ounce of truth in that matter. Investments, especially money will accelerate the direction that you are aiming for – and God help you if you are aimed at the wrong direction looking at the wall, because the thud will just be that much louder. And as much as everyone claims that they will provide support, guidance and all that, ping me whenever that really does happen.
The truth of the matter is that early stage ventures require almost a weekly review meet. That’s essentially the time period when the company is accelerating and the strategy starts to fall in place. In three months (between board meetings), the company would have gone so off the tracks that it would take years before you can bring it back on track – and dont complain if that window of opportunity you were chasing, isnt there.
So if you are an early stage venture and someone promises you guidance, demand that the minimum guidance you require is one where he/she is available to you any time of the day, and will meet with you for atleast an hour once in a week or fortnight. Its crucial to be accurate when you are racing like a cheetah to take down the elephants.
If you are an advisor, I would suggest sitting with the team in the beginning and doing a brainstorm of all the possibilities in terms of directions, products, market trends and potential exits (its good to think of that distant tunnels). If a company has no scope of going IPO on its own, but will just create a whirlwind of an opportunity and spin to be part of another company, I dont think there is anything wrong with that – and having that clarity will make a lot of difference, because you start focusing on strategic partnerships much more intently.
So coming back to the advisor. Do one elaborate meeting – which you can continue to hold during every three months, and in the meantime meet every two weeks or so and talk about everything that goes towards that. Revenues, Morale, productivity, Team, partners – everything. Jot down all the questions, and start working out possible solutions. The percentage of solution creation is what should shift slowly – starting off with the mentor contributing the most, to a half and half to a point where the mentor just listens and corrects if something goes terribly wrong, and letting the entrepreneur take the helm. You gotta teach them to fish at somepoint Mister!
So Run, as fast as you could. Also make sure you are running in the right direction and doubly make sure that there is infact a door on that wall, and its open.
- In: Ask Vijay | Entrepreneurship | India | tips
- 11 Comments
Question: I am interested in starting my own venture and have been doing the groundwork for it. I currently work for a company, but would like to do the pilot run while still holding my day job and as the venture stabilizes, take the plunge fulltime. What would you suggest?
Dear X,
There are a couple of ways to do this and a few things to keep in mind.
1. Usually all job offers have this clause that you have to solely focused on the job you are hired for at your primary workplace. Hence usually taking up another offer or even a consultancy (even if the employer may never find out) is done by getting a letter of permission allowing the employee to be involved with other things.
a) Though this is not required, it gets you a lot of brownie points with your employer, just for the sheer honesty. As much as Proto.in does not interfere with any of the activities of what I do here in the incubation centre – but only enhances it – I still wrote a mail asking for permission and to let folks know that i am involved in something. They go easy on me whenever proto.in is around the corner.
The point: Keep everyone informed so that they can give their support in whatever manner that they could.
2. If you are going to do this as a proprietary thing, then even step 1 wont help, cause its assumed that you are fulltime with the venture – when you are the 100% shareholder and the guy running operations. So what some folks do is register the company in the name of the spouse – if she is not employed, or if her employment contract is not so stringent.
3. One thing to keep in mind is something called the corporate veil. When a company becomes a ‘corporation’ it becomes an entity by itself, that even the founder is nothing more than an employee in it. Because of that structure, if the company goes down under, it still doesnt take the founders along with it – nor their assets, since they were just employees. But there are cases when they consider the corporate veil to be broken, which would be when the personal assets of the founder are mixed up with the assets of the company and in such cases, the founder can be sued – if in the future the venture gets funded and things go awry.
I don’t mean to scare you, but just giving you a heads up on all the things involved.
I would suggest:
1. Go ahead and register the company – if you are sure you want to do this venture.
2. This would be the time to bring onboard some advisors and get them involved in the venture – since there has to be a minimum of two directors to incorporate the firm
3. Get the permission from your current job to be involved.
4. Keep going with that setup, till you are comfortable making the flip – hopefully which wont be too far away.
5. During the process of step 4, at some point your venture will possibly take enough time out of you as your day job. Do talk to the management to perhaps transition into a part-time role if possible. Its good to stay clear with your conscience.
I hope that helps.
Vijay
India a Technology Leader. Possible?
Posted on: May 26, 2008
- In: Business | Chennai | Entrepreneurship | India | Proto.in | Technology
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That was the title of a talk that happened at the Fastrack Sessions of Proto.in January Edition. Since we are sitting on three editions of fabulous talks, I thought I’d take the pains to transcribe them one at a time whenever i find the time so that the larger audience – some who didnt and couldn’t make it – could benefit from it.
Imagine a situation where a technologist is trying to showcase the iPhone. He goes through every step of the features of the phone, the gestures, the various user interface nuances of the device and the audience barely reacts. A little frustrated, the technologist tilts the phone to the side, and the picture aligns itself sideways, and the audience goes wild – almost giving him a standing ovation. We’ve seen this demo before, and we know what all an iPhone can do.
Case in point: Technology alone doesn’t fascinate. How it is packaged, and how it resonates with the audience and customer means a lot more. India lacks in that space, most times.
Questions to Ask your Investor.
Posted on: May 12, 2008
- In: Business | Entrepreneurship | tips | Venture Capital | Venture Funding
- 2 Comments
The truth of the situation is that there is way too much capital chasing too few good deals. So, If there was ever a time when you could be picky and be specific about wanting the best director and investor onboard, this would be it.
In an attempt to ensure that you dont come off as arrogant beyond reason, but as one who is sane and more logical, here are a set of questions to ask an investor to ensure that he is a right fit for your board.
1. How long have you been with this current firm that you are working with?
2. Hmm. What was your previous engagement? Have you always been an investment banker or have you had the pleasure of bootstrapping an enterprise yourself?
3. If You dont mind me asking, how many other company boards do you sit on?
4. So what is your first impression about what we do, and the market that we are aiming for?
5. How long have you been here in India? Do you have a lot of network and contacts here?
6. I’ve been through your portfolio companies (and you better have), and there are some interesting companies there. Do you envisage any direct synergies with any of them?
7. (If Yes to the above) Do you think you could put us both in touch so that we could probably do some preliminary discussions to see how far we could work together?
8. Lets theoretically say for a moment that you were in my shoes, and that your firm was investing in this company. What would you say would it take to take this company to a successful exit?
9. Are you in town quite often? We should certainly catch up again.
There are a couple of underlying reasons why you might want to phrase a set of questions this way.
Questions 1 and 2 help figure out if the investor has been with the firm for long, and if you are dealing with an entrepreneur or an overbloated MBA. If its the case of the latter, pick up the tab, pay for both of you and make a run for the door 🙂
Question 3 about how many boards he sits on will give you an idea of what you could possibly expect out of him, and possibly could also use as a means to get some references out of those companies about what he and his firm bring to the table.
Question 4: This is a nice way to see how far he can stretch his analytics skills and give you a different outlook from his perspective. This is an area that most venture capitalists will ace in. This is also the part where you want to shut up, make as less noise as possible and listen.
Question 5: How many people does he know? How much time will it take before he picks up his phone and will make that call for you. All that matters.
Question 6: This will pretty much tell you whether they are serious and have done their homework or are just messing with you.
Question 7: If they were seriously looking at you, he’d leap at joy at you proactively asking for a meeting and opportunity to evaluate yourself. Oozes of self-confidence, and the ability to network and market yourself. You’ll get oodles of brownie points for this.
Question 8: This will give you a picture of how big they are thinking. Just like question 4, pay close attention.
Question 9: Make friends with such folks, if you’ve been able to bear with him for so long. They are worth keeping around. its not everyday you meet guys who understand what you do, what your market is, and also can think of an exit. You need to be in touch, and even become drinking buddies if possible 🙂
Recommended Must Read: Befriend an Investor
- In: India | The Journey
- 1 Comment
ABCD – American Born Confused Desi. That’s what they’d call an individual whose parents are originally from India, but probably gave birth to, and raised a son or daughter in the American Soil. The kid probably grew up with nothing more than strong dose of american culture, idealism and the values which grow with interaction of the location population, but the skin color just gives it away. No matter how american you are on the inside, you always end up having to live up to the expectations that rise because of what is visible from the outside.
I remember some of my friends growing up in other countries, that whenever they met people who had lived their entire lives in India, they’d ask them something about the hometown of their parents and some remote village, or some news which was a headlines for a while, and they’d draw a blank. I knew that they always whispered under their breathe that this kid was pretentious, when he or she really wasnt.
That’s not where the issue ended. The issue really began there. The issue really got worse when it came to social engagements. Now Whom would an ABCD marry? An indian girl – in which case the girl would beat him with a worn out pair of slippers cause he’d be clueless about any of the local customs, or a foreigner of the land who’d possibly adjust well with him, but his parents and family would have a hard time reconciling?
Read the rest of this entry »
- In: Business | Entrepreneurship | India | Proto.in | The Journey | tips
- 5 Comments
Putting the right tools in place, can make the difference between you having to be stuck in the office managing the team, vs, a system doing its job and you supervising and even better – you remote managing your team and keeping a pulse on how things are progressing.
It sounds like a dream, but isnt too far.
Try the Zoho Suite. I had mentioned in the first part that you should get a corporate email. It seems Zoho offers that as well. Apart from Email, they offer the calendar suite, and everything from applications to take notes, to Wikis, to CRM, etc etc.
Google Analytics. The first thing you need to do after your website is up, is to essentially track your visitors, and ensure that the one channel that serves and mediates your image to the outside world is well taken care of. The second bit to this is to know how to use Google analytics. There are some very spiffy tools and insights that it can provide. See if you can leverage that.
If you can, get a Blackberry. There was a time when affording a blackberry was unthinkable. These days given that its price has touched just about the price point of a normal phone, its a luxury worth having. Email on the go, is something that once you get used to, will not depart away from.
Get a Project management tool in place. This is tough. And trust me, it will take its own sweet time for everyone to fall in place and start using it, but believe me when I say that without this you are not going to scale anywhere. You will end up baby sitting everyone. The only way to scale is to bring accountability and a mindless, neutral system to monitor everyone helps. Recommendation: Basecamp / Activecollab.
Financial Software: Your Excels are not going to hold those data for long. It is better to switch to a financial accounting software from the beginning to start with. There are plenty of freelancing accountants who will setup this process for you.
Invoice Application. Very soon, I assume you are going to run something for clients, and they are going to require invoices. By the time you figure out what template to use and what all is required, the client would have moved on to so many better things. Try Zoho’s Invoice Suite. Another option is Freshbooks.com
VNC: Virtual access is your best friend when you come home, and want to login to your development machine to get something out – after SSH. Block that darn FTP port and dont allow anything apart from secure access.
Anti-Virus. Firewall. AntiSpamware. You cannot afford to be stopped by these measly pests. Enough said.
Block Bittorrent. If you are on office lan, block the ports that Bittorrent uses. The sheer amount of network congestion that BT causes is not good for a productive environment. Block it at all means. Orkut is next on that list – you need to setup a HTTP Proxy for that.
Go Wireless. For Rs.3000 flat, you can go wireless. Eventually people are going to bring in their wireless and the fun element in a startup is the ability to be flexible. Go wireless from day one.
Theme the Office: You could be very cheap and not really look that way. A good chair will set you back by Rs. 5000 to anywhere upto 8000. But imagine if you can get bean bags, or even a few of those gym balls. I’ve been to offices where they have used floorings from Fabmall, thrown a couple of pillows on the ground, and had done an entire japanese – sitting on floor – with low tables and such. It looked fabulous. One could never pull off such things in a MNC.
Corporate Benefits:
When you are running a startup, the first thing your employees will feel is the lack of benefits. It doesnt take much to put together a few and bridge that gap.
1. Income Tax Filing: If you are paying fairly well, your employees will need to file their taxes in time. MYITReturn.com allows you to do it online. Set apart a date and get it all done, with an accountant.
2. Bring in a Financial Planner for Advice. If your Employees pinch the pennies, and do some planning, trust me, it helps you in the long run. Employees who dont save and burn everything every month, end up as liabilities when you yourself are on thin ice every month. Just before the end of the fiscal year, get a financial planner to come, and have a chat with everyone and get them all on a plan to save.
3. Corporate Mobile Plans. If you are anything more than a five people team, any mobile company would be interested to sell you some plans. Get a corporate plan for all your employees, and offer to cover upto Rs.500 in their bill. Also most corporate plans come with the option of being able to talk to each other for free. Will certainly go a distance in making sure they call and talk to each other when necessary. Picking up the phone and talking is still the best way to get something resolved Immediately.
3.b If you can get a guy to come and collect the payment every month as well, that’s even awesome stuff.
4. Suggest to your employees to stay close to where you work – not more than 30 mins commute time. Help them find a place nearby if required.
More to Follow.
- In: Business | Entrepreneurship | India | The Journey
- 8 Comments
What is it that really makes an entrepreneur tick? What is it that really motivates him or her? What is it that really kills the fun of the game? Whats the limit to achieve whatever folks set out for? When is a show over and ready to be scrapped? What does it take to make the leap, and moreso what does it take to make it to the other end? How do you define success? How much is too much, and how much is too less?
Everything that is poised as the questions of life, haunt an entrepreneur. The existential questions, some of which can only be answered by “it depends”, face an entrepreneur over and over again over the course of life, career and during the course of the venture. I sometimes wish that starting off a company and ending it was nothing more than a fixed set of rules and line item numbers of tasks to follow, but it really isnt. To quote Sahil of Deskaway who had commented on a previous post, sometimes running a company is very much the dance you do with philosophy, and entrepreneurship has a lot to do with your personality, and how it develops.
A lot of folks today are in a rush to succeed. Don’t ask me why. I don’t know and when asked, nobody has a straight answer. It seems to be taken as the norm that if you are an entrepreneur, the defacto is to make money and make it fast. Sometimes the truth couldnt be miles further.
Getting Rich Young.
Mark Zuckerberg, Kevin Rose, The Youtube Fellas, Nichalas Zennstorm: These are just a few examples of people who have made money in a short period of time – both in terms of age, and in terms of how fast they have created “value”. How do you do get there, if getting there is the agenda, and what do you do when you get there?
Whats the Agenda?
Start something that has a “purpose” says Guy Kawasaki in his talk “The Art of the start”.
To me, being an entrepreneur means that you are one of those gifted individuals who can look at the world, see its problems and come up with a solution. The solution might make sense to be groomed as a business, or it could simply be a solution that could change the way we think and see things around us.
Understand Timelines and Prioritize
If you look at Maslow’s hierarchy of needs, one of the key “needs” of an individual that comes up is the very notion of existence. How long will you be around in this world? When will death come meet you? And when it does, how will people remember you and for how long? If we knew that we’d be gone in a year, two or three, would we still be postponing the things we want to do and be chasing after riches that we won’t even be able to enjoy?
The answers are very personal and really does depend on each individual and the moral fibre that binds them. Personally, Existence means being able to define oneself expressively in the form of something that comes out of them, with their signature on it. Something that is an extension of yourself, and lives on beyond the person from whom it was born.
Be Aggressive, but Keep your Character.
My mentor often used to quote me the words “Talent will take you to the top, but only character will keep you there”. I know that I have to repeat those words to myself everyday, whenever I am by nature trying to respond in a not-so-positive way to the not-so-positive things that sometimes are thrown at you. Character is very much how we react to what happens to us. Bad things happen to people. if it happens to Good people, the reaction is always a good or better thing. It’s the reaction that essentially is an answer to the question of one’s character.
As part of being young, and many entrepreneurs being young, being agressive and moving fast has become a standard routine to follow. It’s the only way to get noticed, be taken seriously and to move up the so-called ladder. It’s important to keep the cool while doing that. Gotta play along with others. Put up with people who aren’t fast enough. Respect elders for their experience. And most of all bear with the little ones who arent showing maturity, but do get affected by those who do define it. They will say a lot of nasty things, just because they can. How you react is how you will be defined.
When? And How old?
I believe it was a quote by Craig Newmark (of Craigslist), who said that “We both know some people who own more than a billion (dollars) and they’re not any the happier”. It’s when you hear statements as that when you have to step back a bit and wonder, and sometimes even run through those existential questions one more time to ask what is it that one really wants to achieve.
You are 25 and you are a billionaire. What do you do after that? I’m sure the obvious answer is to go blow up that money, treat everyone around you with fancy gifts, world tours, your private jet, and maybe even own an island. All of that can be done in a month, and at a max of a year. What after that?
Age and maturity, though can be manipulated, do go hand in hand. I personally know that a lot of people think I am older than I am, and life has thrown me a fair share of trials (was diagnosed with tumor when I was quite young) which has contributed to all that, but at the end of the day, I know I am what my age is. The needs, how society categorizes you, and how you feel when you are alone with no one watching, reflects the age you are in. A lot of folks have become rich and famous at such a young age thanks to their talent, but not everyone can handle it. Money, comes with a fair bit of attention, a lot of pretentious love and care, and a lot of fabricated relationships. It can get a lot harder to see through what is what without losing your radar and moral compass.
Whats the hurry?
When I recently Met Subho Roi of IAMAI, he was casually mentioning how these days everybody is in a hurry to build a company, a product and sell it all under six months and max a year and move on. He rightly was expressing how much of a sad thing it is, and how most mature and stable businesses are built over time – and so are markets and products. I do concur with him.
A stable product takes atleast five years to mature. The Linux kernel, The Google search engine and even look at skype and companies which have built companies and products that have revolutionized things. The so-called first release was after a rough period of four to five years. The time it takes to build a service on the web, and the development process per se has been radically altered lately, but six months is still cutting it close – very close. The market analysis and product evolution would barely begin within a year or two. Market tractions take time, and so does customer adoption and loyalty building. Only time can build a company that can stand its test.
As much as revenue models are essential for a business, clarity in direction and vision for an entrepreneur as an individual is extremely important. At the end of the day, when all is said and done,you want to be satisfied with what you leave behind – and not some skeletons of the past by-gone era, a legacy worth remembering, and an impact that atleast a few would not forget. Take it easy. In the words of David Heinemeier Hansson (DHH) of 37signals, there will always be work in a startup. From bootstrapping to growing to scaling, you will always have plenty of work which will constantly keep overwhelming you. But define your own pace. Define what you want. Define who you are, and what are the values you hold. Evolve your own principles of what you will do and what you will never do. Live by it. If you don’t know who you are, moreso who you are not, survival itself will become an issue.
The Only Survival Strategies.
Posted on: April 21, 2008
- In: Business | Entrepreneurship | India | Open Source Innovation | Technology | Web 2.0
- 8 Comments
Venture Capitalists and Entrepreneurs call it Business Models. Economists call it as Game theories. They are such fabulously mind-stimulating equations. The equation which essentially makes someone give up hard, liquid cash in order to avail a service, and enable you to make a profit. It’s really quite as simple as that.
How do you get to that, is usually the question. If you do understand game theory, then valuations and how they are raised, along with expectations, become a wee bit simpler to comprehend. If not, its time to hit the books and look into what “Game theory” is all about.
Sometimes, the valuation game that the so-called MBA founders of startups are playing, start to get simply ridiculous that its good to return to the math and make one and one add up to bring back some sanity. Here’s the basis of how companies survive. If you don’t have one of these, you are very strongly advised the drop the high valuation game, and think of a way to claim one of these.
Strategy #1: Build Long Lasting Technology Claims.
I really don’t care what you think about Microsoft, but from a perspective of Intellectual property, and strategy, Microsoft is a company to learn from. Microsoft, Intel, IBM, all thrive on creation of Intellectual Property. Microsoft is infact quite a fabulous case study to follow, as its one of the longest running companies which still claims dominance. Given the sheer amount of grasp that they have – everything from the platform underneath your feet, the diversification of devices, and especially in how standards are dictated, they have a sure footing for sometime to come. I’d even dare say that Wikia (or some such guy) might put google out of business, but Microsoft will remain.
Strategy #2: Enter a very conservative market and dominate it.
The trick is that the entry barrier is high. Atleast it is conceived to be. it is a sector that folks are scared to get in. Case in Point: Durex condoms. How many folks do you know who want to get into the condom business? How many people do you know who want to make lingerie in India? They are all very fabulous businesses, for people with guts, and pretty much an open field for them to exploit.
Strategy #3: Scarcity is a goldmine.
Look at the headlines that India is making. There is almost a civil riot that is at the verge of breaking out because of the prices of commodities going up, and there are insinuations that there are governments who are hoarding these grains so that the prices go up. More demand, raises the price. it’s quite as simple as that. To lets get to the topic. Anything that is scarce, will demand higher price. If you hold one of the three operating licenses for the 3G spectrum, yep,that will be worth a pretty penny. If you hold land in an area that is quickly running out of space, yep, thats pretty much a gold mine. I’m sure you get the idea. It has to finite, and limited. If that is the case, pricing and survival is pretty much guaranteed.
Strategy #4: Control Standards.
Be part of every consortium which chews out standards and have a say in it.
Strategy # 5. Insider Info.
Imagine standing in an open view of the market and you alone know something that others dont. It could be simple as a technology trend (look at Ray Kurzweil), or something of very minute knowledge that adds to your efficiency to play your cards right.
Strategy #6: Build a reputable Brand.
Brands take ages to build, and ages to die.
Strategy #7: Superior Expertise.
This is most often the most common reason than any other for a startup. You might have heard this question a little differently as “So why do you think you are the right person to execute this idea?”. The answer to that question is essentially to figure out if you do understand something that others dont and have total grasp on the subject. This is the reason why when some senior personnel of a well established company goes out and bootstraps a startup, the valuation and expectation of the market is tuned to expect something fabulous – if nothing atleast a fabulous disaster. This is why teams make for the greatest assets and liabilities of a company.
In short, this is how things work. Lets say you have a startup and your shares are valued at INR 100, and you have enough shares allocated to put you at a valuation of One Crore. The simple math is that, whatever your current revenue is, be it six or seven paise or maybe even in the negative, people value you higher and put money into you hoping that in the long term you will benefit. It’s really the basis behind valuations. It’s all “In the long run”. But there is ofcourse a finite length to that, and people are going to constantly keep comparing their returns to the interest rates they can get from banks, ROIs on other assets and comparable other investments. You are going to have to measure up.
“In the long run” never happens, if you dont even exist. And the only way to ensure that you are there in the long run is find yourself a slot in one of these categories. If you havent, or cant, i wouldnt be too surprised to see someone sideline you and get ahead not too far in the near future.
Vijay Anand | The Startup Guy. 