Marketing for a start-up is crucial because the public needs to know about the product/service offered and avail them.
Start-ups are usually a little low on budget as they’ve to cope up with the procedures of starting a new business from scratch. However, marketing for a start-up is crucial because the public needs to know about the product/service offered and avail them.
Customers buy the benefit and not merely the product irrespective of the price. The value offered, risks and the demand for the product in the market are factors which boost its sale. However, it is important to position your product correctly in the minds of your customers. If a start-up makes a mistake in the positioning, it will affect the venture hugely.
For instance, Unwanted-72, a morning pill didn’t work well with the women in India because of the negative connotation attached to the word Unwanted. Hence, naming your product also defines its position.
Always stick by “you exist for the customer and not vice versa.” Try and give customers a feel of your product and make them believe that they are special while the use the same. Understand your target audience and then take steps to market your venture; otherwise, you’ll unnecessarily be spamming people which will lead in a negative name for your venture and cause losses in the very beginning. You could use various SEO tools available to understand and then, target your audience.
3. Be innovative
You cannot hope to get customers if you aren’t offering them something new. However, even when you offer them an old or revamped product, it is very essential to bring about changes in the marketing tactics to create new and lasting impressions in the minds of your customers. This can be done only by thinking out of the box and not sticking to the done and dusted marketing tactics.
Ariel, a detergent brand, used a hashtag to break gender stereotypes existing in the country. They denied the age-old belief that laundry is a woman’s job by using #ShareTheLoad. This campaign struck a chord with a billion Indians and it was an immediate success.
Social media is growing at a rapid rate today and platforms such as Facebook, Twitter and Instagram are used actively by marketers to promote their products. In the same way, a start-ups could employ various organic and inorganic tools to promote their venture online and target their niche audience.
All brands use social media to promote their products today. However, Hippo took it one step forward by asking people on Twitter for locations where there is no availability of Hippo. Through replies garnered, they improved their sales and distribution channels by providing Hippo to the locations suggested by the Twitter users.
5. Generate exceptional content
It is very important to use inbound techniques like content generation to market your product more. The website of your company should be dynamic and updated with relevant information, ads, success stories and more to attract more online traffic and boost sales.
This is a fool-proof, effective and simple marketing tactic through which an entrepreneur can build loyalty amongst customers. Once, they feel like they belong to a group, it is very difficult to switch from it. So, give preferences to loyal customers and try and incorporate them into a group.
MI did a brilliant job at this as the first few customers were given the status of MI pioneers who initiated discussions of the websites and spread goodwill about the brand.
There are many things we don’t know about the man at Harvard who started a social networking site only for his college which expanded and went on to become the world’s leading social network site.
Mark Zuckerberg is someone we all know as the founder of Facebook. However, there are many things we don’t know about the man at Harvard who started a social networking site only for his college which expanded and went on to become the world’s leading social network site.
Personal life:
Mark Zuckerberg became fascinated with computers at the tender age of 10. He built a network which connected his home computer to his father’s office computer. At the age of 11, he started receiving formal training and created Zucknet which was a type of network. Later, he started converting his friends’ drawings into computer games. He earned a diploma in Literature classics from Phillips Exeter Academy but turned back to his first love, computers. In high school, he created a version of the music software Pandora, which he called Synapse. Several companies—including AOL and Microsoft wanted to buy the software and hire the teenager before graduation. He declined the offers.
After graduating from Exeter, Zuckerberg enrolled into Harvard and this is when most of his projects came to life. He developed Coursematch, which helped students to decide what courses they wanted to enrol in based on who else was taking this course and other factors. He also came up with the idea of Facemash, which compared the pictures of two students on campus and allowed users to vote on which one was more attractive. This program gained massive popularity in Harvard but had to be shut down because the authorities didn’t find the idea too appropriate.
The next idea that he developed on would be the one that changed how people networked socially through the internet.
Based on the buzz of his previous projects, three of his fellow students Divya Narendra, and twins Cameron and Tyler Winklevoss aksed him to help them to work on an idea for a social networking site they called Harvard Connection. This site was designed to use information from Harvard’s student networks in order to create a dating site for the Harvard elite. Zuckerberg soon dropped out and started his own venture. He created a site that allowed users to create their own profiles, upload photos, and communicate with other users. The Facebook was run out of a dorm room until Zuckerberg dropped out to devote all his time to Facebook.
However, all wasn’t fine in paradise and Zuckerberg was soon accused of cheating the Winklevoss twins and Narendra’s idea and ConnectU’s secure code. This law suit was settled as the three received a hefty sum of $65 million.
Facebook and its growth:
In a very short span, Facebook grew beyond the education sector and Mark Zuckerberg started looking for investors. Peter Thiel, the founder of PayPal invested $500,000, and the amount was sufficient for immediate Facebook purposes. The project began to evolve rapidly. In less than a year after it was founded more than 1 million people joined the social network.
For further development of Facebook, Zuckerberg needed more investments. Accel Partners invested in Facebook $12.7 million and then Greylock Partners added to this amount $27.5 million. He still believes Facebook should be open to only students, hence, promoted it that way only. It was a unique concept that attracted other people as well because it was a very new and unique thing to meet people virtually.
In 2007, something astonishing happened. Microsoft paid $240 million for a 1.6% stake in the company. After the deal, Bill Gates created an account on Facebook. He used it to communicate with people who wanted to chat with him. However, he had to shut it down because there were too many people who wanted to chat with Gates. This helped Facebook gain massive popularity because the richest man on the planet was on Facebook.
85% of revenue earned by Facebook is through contextual ads. The most of the rest 15% are deductions from purchases made through the Facebook payment system. These are mostly not real, but virtual goods. For example seeds, fruits and vegetables, purchased by fans of the popular game Farmville developed by Zynga.
Virtual business is serious and the turnover increased manifold from $7 bn to $15 bn in 2014.
Acquisitions:
Facebook owner and CEO, Mark Zuckerberg, acquired photo sharing app, Instagram in 2012 for $1bn. He also purchased Oculus Rift for $2 bn in March 2014. In October 2014, Mark Zuckerberg completed the purchase of WhatsApp for $22 billion.
When entrepreneurs are hurled at with difficulties, they simply duck or give up which is a very wrong attitude to move forward with. Instead, we should attack the problem from the front and try solving it for the essential lessons it’ll impart.
In today’s life, we have surrounded ourselves with technology and everything can happen with the click of a button; this has lead to people becoming lazier and more laid-back than ever. When entrepreneurs are hurled at with difficulties, they simply duck or give up which is a very wrong attitude to move forward with. Instead, we should attack the problem from the front and try solving it for the essential lessons it’ll impart.
Here are a few ways on how to never give up:
1. Let the past experiences be history
It is a common practice of the generation today to let a part of themselves get stuck in the past and let the negative events or failures affect them. For instance, a failed business venture is capable of hampering an entrepreneur decision making capabilities today. So, it is very important to let go of the past and walk into the future with a fresh mind and new hopes. If you as an individual find the past experiences difficult to get over, try and embrace and hobby or a new venture and it’ll help you divert attention.
No matter how bad things might be going; you cannot afford to doubt yourself for even a moment because as soon as you do so, your whole venture is shadowed by doubts. You should be willing to face every difficulty hurled at you and always remember that you aren’t lesser than the other person. This virtue will stand by you every time you want to quit or give up, so, you need to build up on it in abundance.
3. Look for guidance
If you are demotivated in life for some reason, the best option that you have is to seek help from a person you really look up to. For instance, if your inspiration to join an industry is Mr X, try and get in touch with him for further guidance.
If you are distressed, there’s nothing wrong with seeking counselling or help from psychiatrists. They’ll help you identify your problem and provide solutions which will make you a more positive person.
4. Maintain the delicate balance between personal and professional life
For an individual it is important to strike the perfect balance between his personal and profession life because the two are interdependent. A glitch in your personal life can show signs of unprofessionalism while working, where as workplace stress and issues can hamper your personal life. Along with working hard, spending time with your loved ones is something you should do often.
5. Have a confidante
A person’s life might be under a lot of stress and no matter how self confident one may seem in office, s/he might need to go home and remove the outer cloak and break down in front of someone. For such instances, it is very necessary to have a confidante with whom you can share all your problems, sadness and happiness. After sharing your feelings, you will feel lighter and you might be likely to gain some insights and counselling from their side as well. A confidante can be a spouse, parent or anybody you trust with your life.
The worst thing you can do is let failure affect you adversely. Failures are stepping stones to success and each failure should be like a lesson to you to do better in future. Learn to stare at failure in the face and derive the best teachings out of your mistakes. Also, as an entrepreneur, don’t let the fear of failure keep you from taking a certain risk.
7. Focus on an end goal
You should be very clear from the very beginning about what you want to derive out of doing a certain task. The end goal is what’s important and should remain your point of focus always. If you think you team needs motivation to stay focused, inspire them as well because when everyone focuses and works together towards one destination, they are bound to succeed.
For instance, to boost employees’ performance in the office, Google allows them to bring pets to the office.
For aspiring entrepreneurs, it is essential to weigh certain pros and cons before venturing into a particular market.
A lot of entrepreneurs are trapped in 9-5 jobs and need a change of job for professional satisfaction. Some may have the required expertise but lack in experience. For such aspiring entrepreneurs, it is essential to weigh certain pros and cons before venturing into a particular market.
Here are four points to consider before you decide to start your own venture:
1. Learn to distinguish between what you can do and what you think you can
This is a very important consideration that entrepreneurs need to take into account before starting off. One shouldn’t be too optimistic about the different work domains an entrepreneur has to work upon.
For instance, an entrepreneur might be very good at marketing but social media might not be his forte. For stuff, one is not very proficient at; an entrepreneur should consider delegating for maximum results. When you have a fair idea of what your business should be like, you need to also make a list of the domains that you or your company needs to work upon- marketing, sales, social media, content etc. The tasks you know you’ll be good at should be done by you where as the others should be given out to people better in a particular domain.
2. Be confident about your idea and skills
An entrepreneur needs to be confident and have belief in his idea because he wouldn’t be able to convince customers or VCs regarding the venture otherwise. Also, if you as an entrepreneur believe that you’re good with marketing and pitching, you should be absolutely confident about the same.
Self-confidence is the key to succeeding in the business line. Without self-confidence, it is very easy to become a prey to criticisms and feel disheartened.
While you believe in yourself, you are able to inspire others around as well which leads to high levels of motivation within an organisation.
Researching about your own venture not only makes you aware but also gives you the power to take decisions more accurately. This step is crucial for any new venture because without required information, a business is doomed to failure. An entrepreneur needs to research about the market he wants to venture into and the target audience as well. This will help him reach out to his target better and maximise sales in the long run.
An entrepreneur also needs to be very sure about the start-up costs he is bound to incur from the venture he is willing to set up and have a fair idea of the capital he is going to require.
For instance, if a guy wants to open a shop, he should be aware of the rent of a shop in a particular locality and also the costs he would have to invest in the inventory. This will help him get a clear perspective and deal with stuff better.
Instead of worrying about the profits you’ll be making and the sales, you should enjoy what you’re doing because you chose to do it. All the time you decide to dedicate to your business, should be fruitful and worth it. Some days will definitely be more hectic than others, but on those days you should remember the sole reason why you started a venture. Also, be honest and dedicated because you as an individual are expected to spend a lot of time and effort on it.
If these considerations are met and you want to go ahead with your venture, we wish you all the best!
One shouldn’t give up their passion so easily and try and nurture it in spite of the hardships. Instead, one could follow these ways to encash on their passion.
Many a times we get caught in the dilemma of either following our passion or earning money. Mostly, people choose money because it is a basic requirement for sustenance. In the process, they let go of their passion and what they really want to do in life. One shouldn’t give up their passion so easily and try and nurture it in spite of the hardships. Instead, one could follow these ways to encash on their passion:
1. Embrace the inspiration
It is very important to embrace the pangs of inspiration brewing within you. For instance, if you’re interested in photography, a beautiful flower or an old-school bakery is enough to inspire your eye for detail. Instead of fighting your nudges, nourish them and let them grow. Once, you start listening to you inner voice, things become a lot clearer and you’re able to focus better and live in the present instead of brooding over the future.
2. Discover your passion
Sometimes, you need to provoke the child inside you to coax the truth. You need to ask yourself questions like “what really makes you happy”? Once you know the answer to this question, it becomes a little easier to believe in your passion and extract the unfathomable joys from it. As a child, you might have wanted to become a dancer. To revive your passion, you could always start taking dance classes at the nearby gymnasium. This way you are connected with your desires and can fuel them better.
3. Love yourself and believe in your passion
Most of us are stuck in the rut where we believe making money is ultimate and often end up sad because we aren’t making enough money. This kind of thought process will spike your stress levels and hold you from discovering your passion. Instead, learn to love yourself and embrace your talent with its flaws.
If you are a musician working a 9-5 job and hate it, to make things better, you could always start playing an instrument or go back to vocal training. This will make your life more exciting while you do what you love.
4. Write
This might seem a little far-fetched. But, you can take out sometime and maintain a journal or simply write a letter to your future self. Writing is a great way of getting out hidden or repressed thoughts or feelings. Writing will help you to figure out your passion better.
When you should be an intrapreneur instead of an entrepreneur?
Entrepreneurs are people who come up with an innovative idea which they are willing to work upon and expand. One of the major qualities of an entrepreneur is risk-taking. However, there are certain people with a similar skill set who can manage and build a business but don’t want to undertake the financial risk. However, the people who are willing to become entrepreneurs minus the risk can become intrapreneurs; a concept which has been gaining popularity over the years.
Over the years, intrapreneurs have been put down by the general public because it is a commonly held belief that entrepreneurs are people who embrace their freedom and like to be the boss. However, with changing times, this theory is slowly fading away. While starting your own business might seem challenging and exciting, working for other people holds great value too. It is just outdated and short sighted to not consider people with entrepreneurial skills working under an entrepreneur as futile.
If you are still confused whether you want to become an entrepreneur or an intrapreneur, you could ask yourself the following questions and decide based on these answers:
1. Are you ready to take financial risk?
The biggest risk about starting your venture is probably the financial risk you as an entrepreneur have to bear. All ventures need to have start-up costs settled and later seek out for venture capitalists to invest in the business.
Even if your revenue is negative, you need to keep bearing fixed costs.
Losses and absence of liquidation are two major reasons businesses shut down. Many a times, venture capitalists pull out because they stop believing in your idea and believe they have found a better idea to invest in. After a great sale period, your profits can start dwindling because of competition. These are a few financial risks every entrepreneur needs to bear at some point or other.
If these risks seem appealing to you, go ahead and own your business like a boss. If not, you still have the option of embracing entrepreneurship by becoming an intrapreneur.
A lot of entrepreneurs do not just seek just money. Some want recognition, some want success and some want to genuinely help the society through their innovations. Some entrepreneurs also seek freedom. You need to figure out what you really want and work towards achieving it. In a regular 9-5 job you might not really have the option of getting what you want.
Once you have your motivation sorted, you are now ready to approach the employer or an existing entrepreneur who can actually help you get what you want. Without any financial burden, you can utilise your skills by becoming a great intrapreneur.
3. Do you want to work on an already developed project?
Working for a new start-up means starting from scratch. You need to do everything from developing a product to the marketing to the launch of the final product. However, if you believe that you do not want all that additional burden of working on a newbie, you could always look for a start-up which is a little more established.
With existing businesses being relatively sorted, all you need to do is keep steering forward and continue with their plans. You could devise some new strategies as well.
If this seems appealing to you, you need to find a corporate partner who allows you to work for “square two”. It isn’t a very difficult task to find one in India considering the number of start-ups which are established and require intrapreneurs to handle logistics and marketing.
An entrepreneur needs to be constantly working upon methods to make the limited time that he devotes to his venture.
The life of an entrepreneur is dynamic and there are moments when he needs to keep pushing with no strategic focus in mind. Amidst marketing strategies, emails, conferences, meetings, a lot is lost. However productivity cannot be one of the factors that an entrepreneur compromises upon. An entrepreneur needs to be constantly working upon methods to make the limited time that he devotes to his venture, productive.
Here are certain things that an entrepreneur must to do to boost his productivity:
1. Customise a task list and learn to prioritize
It is very important for an entrepreneur to set a goal at the beginning of the day. Along with that, he must add the things he needs to do in a day ranked according to their importance. An entrepreneur must be very clear and focused about the things he needs to do in a day which will ensure the productivity for the day. Prioritizing also comes with certain benefits as an entrepreneur through his priority list knows all the tasks he has accomplished and gets a fair idea of the remaining tasks as well.
To prioritize the list, an entrepreneur should always give highest weightage to the task that will impact him and his business the most. The less important tasks on the list can be delegated to the other employees. In this way, maximum productivity is ensured and an entrepreneur can proceed to enjoy his life to the fullest.
A key quality shared by the world’s top entrepreneurs is focus. At all times, an entrepreneur needs to focus on things are absolutely essential and that cannot be compromised on. Focus can only be achieved when one’s mind is clear and working free of any kind of distractions. As soon as one starts to procrastinate, the productivity for the day is hampered severely.
Most entrepreneurs do not address personal issues at work which is why they’re able to be more productive and effective in the office. Trying to concentrate on too many things at once hampers productivity in a massive way. Hence, entrepreneurs must try and focus only on business during work hours.
Entrepreneurs need to decipher business like a strategic game of chess and execute the plan one step further in their head. He must also be capable of weighing the outcome or the risk of a decision and have a backup plan.
If one fails to devise a plan in his head or worse, execute it, it can lead to a lot of shortcomings and the failure of a whole business plan. Maximise productivity through result-driven actions and this can be achieved through the first point: prioritize. Also, preparation boosts confidence which is a very good boost for the company.
For instance, when people were busy making profiles on Facebook, Mark Zuckerberg was devising ways to make Facebook a model to earn revenue through ads.
It reaches millions of people and can make or break your venture.
Content marketing as an inbound marketing strategy has gained popularity over the years. The website of a start-up along with its social media pages has to be bustling with updated content which is interesting as well as informative to the readers. Great content leads to better higher SEO rankings and better social media reach.
Most websites make a crucial mistake of misjudging the power of content put online. It reaches millions of people and can make or break your venture. Hence, the material that goes up on the website should be crisp, informative and overall, a good read. If your content is not getting the desired audience, then maybe you are doing something wrong. Hire a content marketing agency to get the right help for your content marketing.
Benefits of content marketing:
i) Targeting:
Through a huge variety of informative content, you can target your niche audience. Through market research, find your target and through content marketing, target them.
ii) Creating awareness:
It is very important to make your TG aware about your offerings. An easy and effective way to make them aware of any new development or offer is through the content on the website as you can regulate it.
iii) Online relationship management:
Through the content on your online portal, you are in a position to hear out complaints and issues and solve them as the content on your website is a quick fix to relations with customer’s gone sour.
Five ways you can improve the content on your website are:
1. Research as much as you can
Before even beginning to strategise your content, research about everything- the need for the product, the target group, the demand etc. Researching thoroughly will give you a clear idea about the demand for the product and what people want to know about it. If you can, conduct surveys, focus group interviews and do a content analysis on a test batch.
2. Know your competitors
Along with your own research it is very important to be aware about your competitors- their positioning, the kind of content they put up etc. Once, you have a fair idea about the competition, it is relatively easier to strategise your content in a particular way to put it out to the people. Also, you could learn from their mistakes and tap certain areas that have been overlooked.
3. It is very important to set targets
It is very important to be clear from the beginning regarding what you want to achieve from the content you are putting up online. You need to set your goal which could be anything- better outreach, more followers or making the public aware. Strategise your content according to your goal. This helps the content writer in understanding what s/he needs to write and gives the audience a clear view of what you are suggesting.
4. Spend time on allocating your resources and priorities
After you’ve set your goals and targets, it is essential to set aside a budget for content marketing. This budget needs to be evenly allocated. For instance, if you want to build up an audience for your venture first, you need to market intensely on all social media platforms to make people aware. You also need to sort out where your resources and budget need to be allocated: if you’re going to have an in-house content team or source it out to external agencies; questions like that need to be addressed. Once, you are clear with this step, the process becomes relatively smoother.
5. Be accountable for the content
It is very important for a website or an online portal to be accountable for the content displayed. If it is written by an in-house writer, make sure you give him/ her credits. Also, if you’ve picked up content from other websites, make sure you add the sources and give due credit where necessary. Also, you must be willing to own your content and take charge if there is some issue later.
If growth hacking technologies are applied correctly, they can do wonders for your business.
Growth hacking strategies are out of the box marketing experiments that’ll boost and transform your venture in no time. It is usually combines unconventional marketing strategies that leads to greater traffic generation online, more customers and conversion of leads into sales. This increases your start-up’s market value and ushers in revenue.
Following a set framework and strategy can benefit you. Taking help of expert advisors from Entrepreneurs Hub will definitely help. Here are a few hacking techniques you could use to boost your venture:
1. Attract your target audience
The three strategies that are bound to attract your potential customers are:
i) Content creation:
Content marketing is a hugely successful inbound marketing technique which has proved to garner customers online. Through informative and interesting content, you could target your audience. Using social media, you could also make them aware about new offerings and help solve issues regarding your venture. Content marketing is great because through great content, you can reach a huge yet targeted group in no time.
ii) Captivating visuals and infographics
Captivating and well made videos and inforgraphics along with well-tailored content is bound to boost traffic on your website or social media page. However, it is very easy to go wrong while using this method. So, some rules you need to keep in mind are:
– Post relevant videos or visuals.
– Back your infographics with data
– Keep them short and simple
– Make them interesting
– Keep posting visuals at regular intervals
iii) Built in sharing
Keep sharing your content; you can’t post and hope that your customers find your content. You need to have a built in sharing provision and share good content on all social media platforms for maximum reach.
You could also have guest posts and social media influencers sharing your content for more reach.
These methods are bound to make the customers aware about you venture and once they know of it, they will be hooked if you can follow the steps effectively.
You need to accept the fact that customers won’t buy stuff immediately after knowing or reading about something. Hence, it is important to engage them. E-mail is still an effective way to reach out to customers. You can send the target group e-mails about offers, discounts, what’s new and good deals. This will force them to visit your site and they will learn more. However, make sure you don’t bombard their inbox with e-mails because that is plain annoying and they might get frustrated.
Sending messages via SMS or WhatsApp is also a good technique to keep customers posted about what is happening.
All websites follow this insanely effective trick. Amazon.in sends you sale details, Nykaa.com sends you promo codes via e-mail and FoodPanda uses SMSes to make you aware about new offers.
Most entrepreneurs make a crucial mistake of acquiring a huge customer base and then ignoring them. This leads to a customer feeling neglected and might turn out to be the reason why s/he switches from your brand to a different one.
Build CRM automation to keep them loyal. For instance, if they are dormant, poke them with new offers and discounts or if they’ve used your product, try and seek a review.
If growth hacking technologies are applied correctly, they can do wonders for your business.
Mindset of the entrepreneur is an important attribute for success.
Every entrepreneur is aware of how difficult a job being one is. With a completely new idea, you need to be focused and clock in long hours to succeed. An entrepreneur also needs to come up with path – breaking strategies and a focused team to accomplish all goals. However, another important attribute for success is the mindset of the entrepreneur.
1. Self-awareness
It is very important for an entrepreneur to be self-aware. Sometimes, an entrepreneur is so passionate that he loses track of the market and fails to see the shortcomings in his idea which can lead taking uncalculated risks and eventually lead to the downfall of the business. Passion is essential; however an entrepreneur also needs to be critical of his idea and plan and be able to identify the weak points. Also, once he starts working on the vulnerabilities of his plan, he has the option of turning the negatives into positives.
Entrepreneurs often make the basic mistake of denying any kind of help offered to them or believe that they can shine as a one-man team. However, this kind of thinking can be very short-sighted and dangerous. An entrepreneur needs to build a strong team of dedicated individuals who are willing to contribute. In addition to that, an entrepreneur should also be willing to accept help from people who are more experienced and have done wonders in the entrepreneurship field. In the process of accepting guidance, you will learn about a lot of things that you were doing wrong and can now rectify your mistakes.
Often entrepreneurs make a fundamental folly of ignoring marketing and sales tactics and stick to “the product is fantastic, so, it’ll attract customers” mindset. Customers don’t flock to a brand because it is a fantastic idea. They need to be explained and educated about the start-up and if they find it worthwhile, they will buy it. For instance, even though Ola is such an established brand, it focused greatly on the marketing of their new service “Ola micro” on social media platforms.
Positivity and passion are the ingredients to a successful start-up. When applied in huge doses to your idea, they will only work in your favour. Until you believe in your idea, you can’t convince others to. Also, staying positive is the only thing that keeps you going on days when you feel that the venture is worth anything. True success comes to people who are hard-working, positive and are willing to think out of the box.
For a successful business, it is very important that all these mindsets are embraced by the entrepreneur. Along with these mindsets, hard work and determination also play a crucial role in start-up evolving into a global brand.
To become a successful entrepreneur, one needs to have certain qualities which are a combination of innate and acquired ones without which s/he cannot run a company successfully.
To become a successful entrepreneur, one needs to have certain qualities which are a combination of innate and acquired ones without which s/he cannot run a company successfully.
Here are some qualities every entrepreneur should possess and work on constantly:
1. Innovative
An entrepreneur needs to be innovative because without an idea or a product, his start-up is doomed to be a failure. The first requisite to become an entrepreneur is an innovative idea which one can work and develop upon. Also, once the idea is thought of, one also needs to employ out of the box ideas to market the company and grow as a successful one.
For instance, Henry Ford had an innovative idea of starting the assembly line which was the reason for his success.
2. Hard-working
This quality is definitely not negotiable. Every successful entrepreneur regardless of how big or small the company is needs to shell out long hours. Calling shots of a company might seem like an interesting task but it definitely isn’t an easy one. One should be able to measure the pros and cons of every decision before making one. Every entrepreneur knows that a company’s entire pressure is on his shoulders which is why he needs to work extra but once s/he starts enjoying the job, it is a smooth sail.
One major stressful factor that an entrepreneur has to deal with is taking risks. An entrepreneur is always under a risk because he doesn’t know if his venture will work. Also, some risks could result in failure leading to a negative income and further hardships. However, for an entrepreneur, it is also very important to measure a risk accurately before it is taken.
After the failure of his first venture Traf-O-Data, Bill Gates decided to start his own company again called Microsoft. It was a risk he took which paid off well and he is currently the richest man in the world.
4. Determined
There are certain times in an entrepreneur’s life when s/he is bound to encounter failure as business is a combination of highs and lows alike. But, one should be determined to get through the bad phases of business with determination to make his innovative idea work. All an entrepreneur needs to do is believe in himself and his company before putting their idea out to people.
Milton Hershey had to watch three of his candy ventures flop before he could make it big by inventing Hershey’s. His love for chocolates and belief in his idea was what made him so successful.
It is absolutely important for an entrepreneur to be resourceful as he requires all the outside help he can garner for his company. At an initial phase, s/he requires funding which comes from big investors; to acquire which one needs to be courteous and needs to know how to deal with a particular investor. If an entrepreneur strikes at the right time, he can gain invaluable resources required to develop his start-up into a global brand.
TaxiForSure, a successful start-up, managed to raise $30 million in a series C funding. These kinds of funds are very essential to fuel a start-up.
6. Patient
A company cannot become successful overnight which is why every entrepreneur needs to be patient. An entrepreneur’s capability to do a certain task will increase with time and experience. As long as one continues to work on it with the right attitude, one can accomplish certain goals with time. However, once the initial phases of building a company are over, it is a relatively smooth sail; till then an entrepreneur needs to be very cautious about dealing with all kinds of stuff.
Thomas Alva Edison had to try 10,000 times to make a simple light bulb work. It was only due to his patience and determination; he was able to devise a formula to actually make it work.
An entrepreneur should always be open to criticism. If he’s made a certain decision and it hasn’t worked in his favour, he should accept his mistake and move on, This doesn’t mean that an entrepreneur needs to accept all kinds of criticism because that would slow down his progress if he begins addressing every issue personally. Also, it is very important for a budding entrepreneur to learn from his mistakes so that he doesn’t repeat them again.
All successful companies have social media pages to address complaints. For example, HDFC has a separate Twitter page solely for complaints by customers.
An entrepreneur may want to be a one man team but he does need a team to function smoothly. One also needs to have strong leadership and decision making skills in order to call the shots for his company. Leadership skills also come handy when the entrepreneur needs to delegate certain tasks or settle internal disputes.
One of the major things an entrepreneur has to deal with on a regular basis is risk. There are some ways in which you can manage the risks and minimise them.
One of the major things an entrepreneur has to deal with on a regular basis is risk. An entrepreneur can ever be sure if his venture is going to work or not. However, there are some ways in which you can manage the risks and minimise them:
1. Weighing the risk
An entrepreneur needs to weigh a risk before he takes one to minimise future losses. Most entrepreneurs specialise in weighing the risk- if the plan fails, they don’t lose much but if it works, they stand to gain a lot by taking the risk. Also, one needs to have back-ups in case their idea fails. Hence, through simple ways they make their business more viable and sustainable.
2. Lean to plan and forecast the risk
Let the failure not come as an unpleasant surprise. You need to plan extensively about everything-the idea, marketing strategies, back-ups and the post-success plan. If you manage to forecast a risk almost perfectly, you have a chance to reduce it. Also, because you’re able to forecast a risk, you can come up with a risk management strategy to reduce its effects.
Entrepreneurs often have the knack of spotting out shortcomings in the market and finding solutions to the problem. Pursing a new opportunity is a potential risk but in case their solution is viable, entrepreneurs stand the chance to gain a lot from it. Also, first mover advantage is what drives them to innovate further.
Example: Bhavish Aggarwal found a problem of transportation in the Indian market which needed to be solved. He came up with Ola services which is a huge hit in the market today.
4. Reduce financial risks
Reducing financial risk by managing your accounts receivable to minimize outstanding balances and identify poor credit risks early on in your business is the key to risk management. To reduce financial risks further, one can implement credit and payment standards, specifying which credit scores and payment records are acceptable. You can take professional help for credit control and manage cash inflow. Try keeping outstanding loans and financing needs to a minimum. It is very important to monitor growth rate and let the company grow to an extent which is manageable.
5. Insurance is the key
Transfer your risks to insurance companies by protecting them against damaged liabilities, injuries and incapacities. By insuring all kinds of raw materials and proceedings, you stand a chance to lose very less in case of a business or a plan failure.
When Sameer Grover was younger, he would collect the crowns of soda bottles and exchange them for discounts at local restaurants. It was like a game for him and his friends.
When Sameer Grover was younger, he would collect the crowns of soda bottles and exchange them for discounts at local restaurants. It was like a game for him and his friends – they’d finish their drinks, twist off the crowns, and explore new items on menus. For restaurants, it meant that customers were spending more money and coming back more often.
Making a game out of discounting worked so well on Sameer that the concept lay dormant in his mind for years. “I watched the Indian market for a long time,” he says. “Couponing is huge in the USA, but it’s not big here. Once you get a discount from a restaurant, you end up getting bad service. It’s not respected.”
He waited and waited, until one day, the ecommerce craze hit India. Suddenly, people wanted to make it easy for Indians to buy things on the internet. As they built up ecommerce sites, though, they all came across the same conundrum: most people were too used to buying things from the country’s many small and medium businesses to move online. And, if customers did move online, all of those small and medium businesses would go bankrupt.
That’s when Sameer realized his childhood game might come in handy. With his co-founder Ashish Munjal, he built out Crown-it.
Sameer describes it as an offline-to-online (O2O) marketing platform that helps local businesses make more money. It sounds complicated, but works simply.
When you buy things at registered stores, you get money back straight into Crown-it’s wallet. The wallet is closed, which means that it can only be used on chosen sites. This includes ecommerce sites Amazon, Flipkart, and Jabong, as well as budget room aggregator OYO Rooms, eBay, and ticket-booker BookMyShow.
The app works in Delhi, Mumbai, and Bangalore, and claims to have 800,000 people across 10,000 local markets using it after just 18 months.
“It’s a US$50 billion market across India’s top 25 cities,” he says. “The potential is huge.”
Challenges aplenty
At first, it was tough for Sameer to get people to sign on because the concept was very new. Most store owners weren’t used to visualizing online discounts and, plus, who would be willing to pay Crown-it’s per-transaction fee?
“Once they started seeing a value add, things changed,” Sameer says. “It wasn’t hard after the first few merchants, and we don’t charge them if they have no transactions on Crown-it.”
The other batch of people that Crown-it had to convince were consumers. This also wasn’t a big deal, explains Sameer.
“We really do offer good deals for consumers,” he says. “For a 1000 rupee (US$15) meal, you can get 200 crowns, which can mean a 500 rupee (US$7.50) shopping voucher from Flipkart. If you do two more transactions, you’ll still have extra crowns left, so the next time you’ll reload and pay for a movie ticket. It keeps people hooked in that way.”
It’s also a social app – if you refer a friend, you get free crowns. And, as a shiny little bonus, you can donate crowns to good causes. “There was a recent natural disaster where customers came up with lakhs of rupees,” Sameer says.
Oh, the places you’ll go
Sameer Grover, co-founder of Crown-it
The idea seems simple, but the opportunity is anything but. Crown-it has already raised US$5.5 million from Accel and Helion Ventures, so it’s reasonable that Sameer is pretty excited for his startup’s future.
“By 2019, we plan to be in 25 cities, as well as launch multiple categories like gyms, diagnostic centers, hotels, and other retailers,” he says. “We want to sign up big stores. Our proposition is that we can give them huge amounts of unique data, like customer analytics information.”
It’s not a new concept. There are plenty of other ways that startups are trying to win over the conjunction of the offline and online worlds.
Groupon India’s Nearbuy has one strategy, but “group buying won’t get anywhere because people have no incentive to return,” Sameer says. Another is Paytm and Tiger Global-backed Little, a site that helps merchants post local deals so customers can discover them.
Mydala is another popular daily deals site that’s been pushing cashback when people use wallets like MobiKwik. The startup replicates China’s Meituan-Dianping’s strategy, which raised a record-breaking US$3.3 billion in January.
Still, nobody has entirely taken the lead in India, and Sameer hopes that gamifying discounts will be what he needs to win.
He explains that he plans to eventually create an entire ecosystem around Crown-it. “There are vertical players and horizontal players,” he says. “We’re focused on a bunch of different segments, which is what makes us horizontal players. Once you have a few million customers hooked on one sector, it’s easy for us to add another.”
He cites an example of the many-headed WeChat in China, explaining that there will soon be a similar “super app” trend in India where a fast-moving single provider will dominate many services. Who knows, maybe the WeChat of India will start as a cashback app.
Understanding the fundamentals of setting up a start-up is a huge task and one needs to comprehend them successfully to proceed with his/her venture.
Like every activity, building a start-up is also a gradual process. To continue with this process successfully, one needs to understand the basics and master them. Understanding the fundamentals of setting up a start-up is a huge task and one needs to comprehend them successfully to proceed with his/her venture.
If one follows these basic fundamentals religiously, a budding entrepreneur can actually make it big.
Here’s a list of fundamentals every entrepreneur should master if he wants to become successful:
1. Have a far-sighted vision and stick to it
It is absolutely necessary to have a vision and a goal from day 1 for your start-up as they’d be the only things supporting you on days when you feel unsure about becoming an entrepreneur. Also, having a goal helps you stay motivated and focused on the journey to achieving it. The goal might seem like its far away but by breaking it down into smaller chunks, tasks you previously thought were unattainable can be accomplished. The best part about having a compelled vision is that you’ll realize the accomplishments when you actually meet tick them off your list.
2. Your business needs to make money
You might have a great idea and a solid vision but all that means nothing if your venture doesn’t sell. Every start-up needs to gather money in the till to keep functioning further. So, to make sure your business is a successful one, try and get the cash to flow inwards as soon as possible. This can be done by devising vigorous marketing techniques combined with an extensive sales distribution plan. As a budding entrepreneur, one can look out for investors and funding schemes to get money.
A lot of entrepreneurs make the crucial mistake of getting lost in the insane journey of making stuff that no one actually wants to buy. Instead, an entrepreneur should do a thorough market research regarding his idea. He should be able to identify the market he wants to venture into, the target customers and also make sure that the product/service is really required. Also, if there is no demand for your product and you still have faith in it, learn to create a demand for it.
For instance, a butler service called Jaadu Inc opened up in the NCR region which delivers food at midnight, repairs appliances and books cabs. The makers studied the market and understood the requirements of the people before introducing a new idea which is why it is doing well in the market.
4. Stabilise a cash flow before wanting to make profits
It is crucial to have proper investors and funding for your start-up for its basic functioning. Profits are very important but secondary. As an entrepreneur, make sure you have the required money to run your business and pay people timely working on your team. Once, the initial cash flow is stabilised, you can move on to focusing more on making profits.
Ring in the weekend by reading about these startups! A cloud storage firm with security as its selling point, another of India’s on-demand chauffeur apps, and an e-publisher all make our list.
Ring in the weekend by reading about these startups! A cloud storage firm with security as its selling point, another of India’s on-demand chauffeur apps, and an e-publisher all make our list.
ParaBlu
Photo credit: lifehacker.com
ParaBlu, a startup that deals in secure cloud storage for corporates, has raised US$500,000 in seed funding from Kstart, Kalaari Capital’s seed program.
Kstart, announced in February, offers a combination of capital and mentoring to help startups it has identified as next generation companies that have disruptive potential in their respective industries.
Founded by Anand Prahlad and Ananda Rao Ladi in 2012, ParaBlu offers a number of cloud management features that can help enterprises store large amounts of data and keep information confidential.
ParaBlu is the fourth company in Kstart’s portfolio. Other companies, announced in May, include Active.ai, AffordPlan, and Indee.
Drivify
Photo credit: Autocar India
India’s chauffeur space has been doing some serious shaping up. Over the past three months, we’ve seen Driverskart make an acquisition on the heels of a pre-series A round. Zuver gotfunded around the same time, while DriveU made its own acquisition.
Mumbai-based Drivify joined that club today, raising US$50,000 in seed funding from Citrus Pay founder Jitendra Gupta and Pankaj Tripathi, a high net worth individual.
Drivify was founded in May last year by Prasad Shriyan and Jatin Kamdar. The app scans for drivers in a 10 km radius of the ride booker. It has 700 registered drivers with 70 active drivers. The startup pays drivers a fixed amount for logging in and remaining active for a certain number of hours.
Pratilipi
Photo Credit: thenextweb.com
Bangalore-based Pratilipi, an online self-publishing platform, has raised around US$925,000 in seed funding from Nexus Venture Partners, as well as other investors.
Contrarian Opportunities Fund I, Times Internet Equity Crest founders Deepak Gupta and Amit Wadhwa, and Voler Car director Amit Banka also contributed to the investment.
Founded in March last year by Ranjeet Pratap Singh, Sankaranarayanan Devarajan, Rahul Ranjan, Prashant Gupta, and Sahradayi Modi, Pratilipi is run by Nasadiya Technologies. It allows writers to publish their work on its platform, where readers can check it out for free. It covers eight Indian languages – Hindi, Tamil, Malayalam, Oriya, Bengali, Gujarati, Marathi, and Kannada – and claims to have 3,700 writers with 1.5 million readers.
Earlier this month, Ahmedabad-based e-book publisher Matrubharti raised seed funding.
Even though it’s trendy in startups to say that ideas mean nothing and execution means everything, the reality is much less binary and much more nuanced.
Even though it’s trendy in startups to say that ideas mean nothing and execution means everything, the reality is much less binary and much more nuanced. For example, even the world’s best entrepreneur with incredible execution will fail if their idea is fundamentally flawed, or if their market is too small.
What we have found is that if an early-stage founder can check off the ten items below, they have a solid foundation by which to start a company. You are absolutely not assured success if you can check off these items (nor are you assured failure if you can’t), but your chances of success are much, much higher if you can.
See the infographic below, and scroll down further for a full explanation:
Money is no substitute for passion, so every entrepreneurial journey should start with a passion. In fact, every aspiring founder who comes into the Founder Institute with a goal to “flip” their company is advised to drop out during the first week for a full refund.
There are two reasons for this;
In order to power through the hard times of being an entrepreneur, founders need to be working on ideas that they can see themselves still working on in 5, 10, or even 20 years. As Elon Musk famously said, “Being an entrepreneur is like eating glass and staring into the abyss of death.” If you don’t have the requisite passion, your chances of seeing a project through are minimal.
Other people will easily be able to see through your lack of passion, like customers, investors, and press. For example, investors are typically concerned more about the “why you”, then they are about the “why” of your idea.
2. It’s Simple
“Think big” is a common mantra for entrepreneurs. And it is true – every entrepreneur should think big, because in most cases, starting a company with small ambitions can be just as much work as one with big ambitions. However, most people confuse the “think big” mentality into meaning they have to try and “boil the ocean” from the outset.
Big ideas are raised, not born, and they are most often raised by simple pain points. For example, Mark Zuckerberg didn’t wake up one morning and say, “I’m am going to create the social graph.” Instead, he set out to build a simple utility for Harvard students to see who was in their classes.
All the great businesses of our time have started with an incredibly simple idea, and then expanded upon that. If you can start by solving one problem, with one product, for one customer, you will be sufficiently focused and can have a great foundation for success.
3. One Revenue Stream
For some reason, the majority of early-stage entrepreneurs think that the more revenue streams their idea can support, the better. In the early stage, you need to be laser-focused on one revenue stream, and your idea needs to have a clear, singular revenue stream that can conceivably be large enough to support the entire business. If not, then its time to go back to the drawing board.
Also Read: Geometry of startup ecosystem
Also, it’s a common misconception that companies who focused on early user growth (ex. Google) didn’t have a revenue model in mind when they started. In reality, these businesses saw incredible early traction, and then the founders made a tactical decision to shift their focus to growth.
Can someone build a great company with a zero revenue mentality from the outset? Sure. But building a business with no revenue stream in the hopes of becoming the next Instagram is like buying a lottery ticket – except that lottery ticket costs a lot more time and effort than $3.
The more steps there are to revenue, the more complex an idea is to build out and execute.
This is a very important step during the ideation process: what are the things that need to happen before you make a dollar? If you have to provide a service in order to collect data that will then be sold to advertisers, for example, you have a very complex business. That would be 5+ steps to revenue. Try to limit the number of steps to revenue to around three from the beginning.
5. You Know the Customer
You need to understand very clearly who you are helping, what exactly they need, why they need it, how they would be willing to solve their problem, what they spend their money on, what goals they have in life… in other words, you need to have a very specific archetype.
A common mistake we encounter is that people don’t go nearly deep enough in their customer definition, or customer development. For example, many people will stop at “I am helping large companies hire.” In reality, they need to be able to say something like; “I am helping senior hiring managers at enterprise software companies in the United States with 400-800 employees. They are typically female, age 29-34, making an average of $58,000 per year. They report to the company HR lead, and their KPIs are X, Y, and Z, measured quarterly. They spend the majority of their day doing A, B, and C, and the biggest impediments to them hitting their KPIs include X, Y, and Z. Currently they are using products from companies A, B, and C, but those products don’t allow them to do these three critical things…”
Also, there’s nobody you know more intimately than yourself. That is why so many great businesses have been formed from personal need.
6. You know the market
In almost all cases, there are several people already devoting their lives to your idea. In order to win, you need to engulf yourself into your market in order to have the requisite insight and vision needed to win. Chris Dixon (Andreessen Horowitz) has said that you need to devote at least 10,000 hours on your market to get this insight – whether by working in the market, living the problem (ex. being a social media addict who then starts a social media company), and/or devoting that time towards research.
If you are not an expert on your market, then it’s time to get to work. There are no shortcuts here.
Large and fast growing markets have the power to pull mediocre companies into greatness, and conversely, dying markets can pull otherwise solid companies into the ground. If you are going to devote your life to an idea, the market where you operate better be big enough (or growing at such a fast rate) to support a meaningful and enduring company.
Any market with less than 10 million people or multiple billions in annual revenue that is not growing at a very fast rate will be very hard to address, and is probably not worth your time. For example, even if you were lucky enough to be moderately successful in a $500 million market, you would likely still only have around a $50 million business.
You will die winning a small market, so be smart and don’t start your company in a graveyard.
8. Original secret sauce
Every great business has a secret sauce. Given, not every company starts out with that secret sauce, but building a company without a plan for how you will differentiate and win from the outset is simply foolish.
Also, your secret sauce needs to be original. If it’s obvious, that is almost always a bad sign. The best ideas have a secret sauce that is transformational, not incremental.
What secret do you know that will help you win? For example, Tony Hsieh started Zappos with a very distinct insight and secret sauce – customer service. His transformational insight was that buying shoes online was really a customer service problem, and not a retail problem.
It is very easy to fall in love with your idea – after all, it’s your baby, and almost nobody will tell you your baby is ugly. Positive reinforcements are very easy to find.
Your job in the idea stage is to find the things that make your idea bad. Try to kill your idea, and then, one-by-one, iterate and eliminate the negative aspects of the idea. The result will be a much more defensible foundation by which to start.
10. You are sharing your idea!
Nobody is going to steal your idea. Think about it – do you really think your idea is so great, so original, that somebody who hears it is going to go home, quit their job, and devote their entire lives to it? And be successful? The chances are near zero.
You need to be pitching your idea all day long to anybody who will listen, and incorporating all the feedback you receive into improving the idea. Feedback is an entrepreneur’s best friend, and Silicon Valley entrepreneurs understand this better than anybody else. For example, on any given night, you can find 20 different events in Silicon Valley where people are openly sharing their ideas, and it is this collaborative, teamwork-oriented culture that leads to innovation.
One of the most difficult concepts that I have to discuss when advising aspiring startups is that a great idea can still be a lousy business. A wannabe founder will describe to me a product or service that all of their friends swear is going to be a game-changer, only to be confused (and occasionally indignant) when challenged with a series of questions that they hadn’t considered before. Often, they have spent months planning, building and scheming only to find out later that they have wasted their time on a product that no one wants, no one understands or no one will ever hear of because of 50 other competitors.
I can relate. I’ve come up with plenty of ideas that I thought would be great businesses, only to discover that they wouldn’t work because I didn’t properly assess the tremendous difficulty of building that idea into a profitable company. Building a successful company is hard enough without facing challenges that you might not be able to overcome through sheer will and creativity.
So what makes a great idea actually great? Here are the top three things that I look at when evaluating a potential new product or service:
Does it solve a problem that enough people will pay for?
Just because you found a problem and put the time and effort into solving it doesn’t mean that you will find people willing to actually pay money for a solution. For example, I ran into a business that created an awesome piece of software that significantly reduced the time and labor needed to complete huge data migrations. Sounds great, right? Unfortunately, their target customers were people who work on projects that bill per hour. They made a product that reduced the billable hours that their customers could charge their clients. And they were confused as to why no one would ever return their calls. Awkward.
You need to understand your customer, their motivations and their business model before you potentially waste a lot of time and money. I have wasted more time on this mistake than I would like to admit — don’t make the same one.
Can you dominate with meaningful differentiation?
We need to recognize how easy it is to fall in love with our own ideas and create a product with meaningless differentiation. This question is for those of you who love to “build.” Often, the differences we highlight between ourselves and our competitors aren’t that important to the customer.
This can be a fatal flaw when trying to stand out in a crowded marketplace. You can’t dominate an industry if you can’t differentiate in ways that resonate with your customers without a lot of explanation. If the difference between you and your nearest competitor is hard to explain, then you will struggle with marketing, sales and fundraising. By the way, “struggle” is my code word for “likely to fail.”
Hockey stick growth, or just a neat business?
Just because you can find potential customers doesn’t mean that you can find enough customers quickly and easily enough. And here is the worst part: You can initially sell the idea to a few companies, thinking that you are onto something, only to realize later that you were addressing niche issues that aren’t as common as you assumed.
This is why you need to understand the market that you are selling into early and connect with people who have been in the industry for a long time. That way, you can correctly assess whether or not your solution applies to enough other customers to really matter. There is nothing wrong with starting a company that just pays your bills and doesn’t scale to the moon, but learn to recognize the difference so that you don’t waste you time trying to build a huge company around a limited idea.
Sufficiently answering these three questions is not a guarantee that you have a successful business on your hands, but it’s a start. And these three issues aren’t necessarily the most obvious, especially to first-time entrepreneurs. The long and short of it is that I wish that someone had asked me these tough questions about 10 years ago when I started my first company. It would have saved me a lot of wasted time — and I find that the older I get, the less I care about losing money as much I do my time.
For those of you who’ve been in my shoes, what questions would you add to this list?
Author: Seth Talbott
Seth Talbott started his career in IT and software development 15+ years ago. Since then, he has run a global data center for a major software company, been CEO of the award-winning Longevity Medical Clinics, and founded numerous companies, including Promedev and AtomOrbit which VentureBeat named one of the most innovative early-stage startups in the 2013 Innovation Showdown in Cloud Software.
Here are seven reasons for budding entrepreneurs to give up the hunt for venture capital and angel investors.
Every year, about millions of new businesses are started, and fewer than one percent successfully raise venture capital (VC).
Whether it’s the feeling of acceptance into this elite club, or the misconception that it’s impossible to start a new business without millions in capital, many startup founders find themselves hypnotized by the pursuit of VCs and angel investors.
Perhaps the adage is true: We want what we can’t have. And yet it can be argued that your chances of success are greater if you stop looking for VC money and focus your energy on bootstrapping your business and attracting customers.
Here are seven reasons for budding entrepreneurs to give up the hunt for venture capital and angel investors:
1. You haven’t proven your market need
Sure, you’ve put together a pitch deck, business plan and financial projections, but those are all just that — projections. You’re basing the future success of your company solely on hypotheticals.
Before looking for VCs, prove that there are customers out there who want what you’re selling. Spend time talking to your users, and focus on giving them what they want. Invest your time in finding a place in the market before trying to convince investors to give you their money.
2. You lose control
Once you secure VCs, you’re at their mercy. Even if you maintain a majority stake, you’re giving up a percentage of equity, profits and control to a board that may have a different vision for your company than you do.
In most cases, your VCs will ask for one or more board seats giving them the right to vote on or veto key decisions that will directly affect the future of your company. These same people also have the right to fire you or members of your team, which means you could be ejected from the company you started.
3. You’re focused on the investor – not on your customer
Giving up control means you have a new responsibility. Your first priority is no longer to your customer, because your investors expect to come first. Among other conditions that are negotiated in a deal, venture capitalists can ask for anti-dilution protection, dividends, liquidation preferences, mandatory redemption and other perks that the founding partners may not even get the rights to.
In some extreme cases, VCs have the right to sue you for everything you own in the case you forget to tell them “bad news,” according to Bloomberg Business.
4. Instead of trying to make money, you’re trying to raise it
The irony of trying to raise venture capital is how much time you waste chasing down investors – when you could be chasing down customers. There are only so many hours in a day and only so much work you and your team members can take on. Every minute you spend chasing down a flippant VC is a minute you’re not working on creating a great business.
That’s all to say you’re putting a lot of your eggs into a basket that the statistics say you’ll never obtain.
5. Your burn rate is higher than if you were to bootstrap
What’s a burn rate? It’s the amount at which a company spends money, especially venture capital, in excess of income.
You may know the now viral story of CEO Maren Kate and the downfall of her company, Zirtual. She abruptly shut down all operations due to a glitch in the books that was overlooked. Basically, the company did not have a handle on its burn rate – and it ran out of money. This also supports the next point that…
6. You lose the hustle required in running a lean business
When playing with someone else’s money, many startup founders admit that it becomes less real. It’s harder to stay lean and savvy with the false impression that you’re rolling in the dough.
Investor and entrepreneur Gary Vaynerchuk writes: “Twenty-five to 50 percent of all the businesses I have ever looked at were more than capable of being a little scrappier.”
7. Your end goal is focused on an exit rather than building a company that will last
If your end game is growth over profit, then you are forever stuck in a cycle of having to raise more money. As soon as you’re no longer able to secure more from VCs, then your company will likely implode.
You’re relying on other people’s belief in you – based on hypothetical projections – rather than relying on a solid business model that turns profits and creates happy customers.
Author: Shannon Whitehead
Shannon Whitehead is the founder of Factory45, an online accelerator program that takes sustainable apparel companies from idea to launch — without raising venture capital. Committed to improving the fashion industry, Whitehead launched what was at the time the most successful fashion project on Kickstarter and now helps other fashion entrepreneurs bring their ideas to market.
How do you ensure success? Who stands out from the crowd? What separates the pros from the amateurs?
How do you ensure success? Who stands out from the crowd? What separates the pros from the amateurs?
There aren’t any definitive answers. And I’m not even going to begin to try and analyze them. What I will say, is that over the years, I’ve been observing. Working with startups and entrepreneurs on a regular basis has provided rare insight into what makes one person get ahead of the rest.
Here are five way to set yourself up for success that go beyond conventional wisdom:
1. Make it easy to help you
Most people are excited and willing to help out new entrepreneurs. But the likelihood of connecting with someone who is more seasoned in the industry is largely dependent on how you make the “ask.”
The first and most obvious way to sabotage yourself is by writing an inquiry email that scrolls on for block paragraph after endless block paragraph. In most cases if you’re looking for advice, the person you’re seeking out is busy.
Keep your email to no more than two to three short paragraphs. Your chances of getting a response are incrementally higher and you’ll come across as more professional – and more effective.
Bonus tip: Ask a specific question. Avoid using phrases like, “Can I pick your brain?” Instead, ask the exact questions you want to know the answers to. Once you have your foot in the door and get a response, you can follow up from there.
2. Write thank you notes
They don’t have to be handwritten and shipped via snail mail, but if someone takes the time to jump on a call on your behalf, follow up with them.
Regardless if the advice was good or not, it’s common courtesy to express gratitude to someone who gave their time to you.
This is especially applicable when a contact goes out on a limb to introduce you to someone. It makes that person and yourself look bad if you don’t take the time to follow up afterwards.
Good things come from gratitude. And the most successful entrepreneurs show how much they value the people who helped them along the way.
3. Start before you’re ready
Should I launch now? Should I get more real world experience first? Should I go back to school? Only you know the answer that’s right for you, but my recommendation to most aspiring entrepreneurs is to start before you’re ready.
Building a business requires a long runway. It’s not only about the amount of hours in the day that you spend on your business, but the months and years that you take building up to it. As I tell my entrepreneurs (on repeat), launching a successful company is a marathon not a sprint.
The sooner you can start fleshing out your ideas, seeking out mentorship, connecting with industry peers and educating yourself, the better off you are in the long run. The old cliche usually holds true: Tomorrow you’ll wish you had started today.
4. Be consistent
The entrepreneurs who get ahead are calm and collected. They’re methodical, they’re strategic and they don’t get easily frazzled.
When you’re first starting out, your attitude and the way you handle challenges are going to dictate how you respond in the months or years of your business to come. The entrepreneurs who get ahead know there is a solution for everything. And sometimes the solution falls under the guise of a better option.
Building a business is not an overnight endeavor. It requires consistency of action, which means not giving up if something doesn’t work the first time.
5. Ask for help
Nobody builds a successful business by doing it on their own. That’s right, nobody.
The entrepreneurs and mentors you see are all getting help, seeking out mentors of their own, building advisory boards and seeking out further education.
Solopreneurship is a farce. If you want to get ahead, then you have to seek out help from others and continue to invest in yourself. That’s what separates the amateurs from the pros.
Author: Shannon Whitehead
Shannon Whitehead is the founder of Factory45, an online accelerator program that takes sustainable apparel companies from idea to launch — without raising venture capital. Committed to improving the fashion industry, Whitehead launched what was at the time the most successful fashion project on Kickstarter and now helps other fashion entrepreneurs bring their ideas to market.
FreeCharge founded by Kunal Shah is one of the most popular online mobile recharge sites in India with their tag line- #LoDoKhatamKaro
FreeCharge founded by Kunal Shah is one of the most popular online mobile recharge sites in India with their tag line- Lo Do Khatam Karo (Split your bill and pay) started out with recharge only mobiles but has expanded and offers recharge of TV and Data card as well. FreeCharge was the forefront of the ‘Coupon revolution’ that took India by storm.
Mobile telephony has grown up in India from the costly days in 1996 to today when per sec calls cost only ½ paisa. After mobile revolution, recharging became the critical business and it was widely dominated by offline physical stores. This was a great business opportunity which was caught by Founder of FreechargeKunal Shah. Freecharge is an online portal which provides service of online phone recharging and give the customer discount vouchers of different brands of same recharge value. Recharging your mobile phone was never better than this. It not only eased up out life in mobile recharging but also in expanded its services towards DTH, Data Card and Electricity, Landline, Gas bill payments. Recently it added the service to buy tickets for Mumbai Metro.
Birth of FreeCharge
Freecharge was founded on 15th August 2010 by Kunal Shah and Sandeep Tondon. Earlier than Freecharge, Kunal and Sandeephad been working on Paisaback, which was cash back promotion company for organized retailers, one of whose clients was a store selling mobile phones. One day Kunal found that 95% of invoicing of that mobile store was Recharging. Then they realize that a big amount of traction could be gained by online recharges, especially when it could be make free.
I noticed that 90-95% of the bills were for recharge. My thought was that if this particular product was made free and that was used towards incentivizing a purchase somewhere else, it could result in creating a footfall somewhere else
Said Kunal Shah- Freecharge Founder
He tossed his idea to some retailers with whom he was handling the cash back promotions. Retailers denied him as the margins in mobile recharge business were not too high. This enforces Kunal Shah to pursue his idea on his own and thus Freecharge was born.
Mumbai based FreeCharge is controlled by Accelyst Solutions Pvt. and is backed by U.S. based venture firmSequio Capital, Belgium‘s Sofina SA and others.
The funding of FreeCharge
Online and mobile commerce platform FreeCharge raised funds to grow through various funding. It first bagged seed funding from Tondon Group of an undisclosed amount to grow the company until it could be able to generate cash from its own business.
In 2011, the company secured Series A funding of INR 200 Million from Sequio Capital. These results in the no bound growth of company; in November 2012, the FreeCharge claimed to be doing online recharge of INR 6 Million on daily basis translating to INR 2.19 billion a year. On the same year in 2011, FreeCharge was named one of the most promising technology startups from India by Pluggd.in.
In September 2014, Freecharge received Series B funding of $33 Million from Sequio Capital, Safina and Ru-net. At that time, it was the biggest fund raised by an Indian Technology Startup. Continuing further, In 2015 FreeCharge raised $80 Million from Hong Kong based fund Tybourne Capital Management and SF based fund Valiant Capital Management and existing. Company utilized these funding on expansion on team size, innovation and added engineered heads to the team.
After FreeCharge’s acquisition by Snapdeal, Snapdeal is tapping Chinese firms to raise money for company, seeking to bulk up its digital payments platform before pitting it against market leader Paytm.
“We are getting a lot of interest from sovereign funds and some Chinese investors” Snapdeal CEO Kunal Bahl told.
The main agenda of Snapdeal must be to make FreeCharge it’s cornerstone of business as it builds comprehensive online ecosystem of goods and services similar to Alibaba, Chinese e commerce giant. If Snapdeal would success in this formula, it can give a big competition to its rivals Amazon and Flipkart.
The building of Freecharge
In the begining 2011, when Sequio Capital, Shailendra J Singh joined the boards of FreeCharge, the marketing strategies of company were booming leaps and bounds. This was the time when they faced one major challenge. Their technology platform was not matching upto the marketing scale. Users were facing a lot of challenge in accessing the website and payment gateway. Kunal and Sandeep desperately searched for the CTO (Chief Technology Offier) to manage at the technology front. After few months of struggle, Deap Ubhi joined the team. Deap Ubhi was well known to Sequio Group and was the ex founder of Burrp.com.
In the end of 2013, unfortunately, Deap has to return to US with his family. Kunal Shah is a great ideator. He has a great mind full of innovative and mindboggling ideas. But he was well aware of the formula of execution. Being a CEO is more about ‘E’ Rather than ‘C’. So he fulfills his shortcomings and brought the ex googler Alok Goel as CEO of FreeCharge. Earlier than FreeCharge Alok was COO of RedBus.com.
It is rare when a founder cum CEO of an Indian startup steps aside and gives the crown to someone else; but this is what Kunal Shah had done for the sake of his company by bringing Alok Goel as CEO. This is the best quality of Kunal Shah, he always put his company as first priority. After this, Kunal continued to have an operational role in the company.
After joining of Alok Goel, Kunal took responsibility to launch many marketing campaign. It went successful and company gained brand recognition. Alok organized FreeCharge in smaller pods around specific product and engineering issues which paced the progress. From this point onwards, company started aggressively hiring and built a team to focus on m-commerce.
In 2014, Freecharge launched its new append suddenly transactions got increased by 50%. This was the time when FreeCharge raised two quick funds, and they launched their first TV campaign in September 2014. Freecharge became no. one shopping app on Google Play.
Snapdeal Takeovers Freecharge
In 2015, The FreeCharge team was on the 7th cloud of confidence on what the company could become. The board members have the plan to grow gross merchandise value almost five years in next one year and FreeCharge has $90 Millions in the bank account to get there.
But here comes the largest mergers and acquisitions deal in India; it was the merging of FreeCharge with Snapdeal. It all started when Kunal Bahal, co founder and CEO of Snapdeal contacted, Kunal Shah. The meeting took place in Mumbai along with Rohit Bansal, Co founder and COO of Snapdeal; Alok Goel, CEO of FreeCharge and Sandeep Tandon, Co founder of FreeCharge. They proposed the idea to merge FreeCharge to Snapdeal. Things moved faster and in Feb 2015, the board of FreeCharge agreed to 21 days of exclusivity to put the two companies together. In 22 days, the largest merger and acquisition deal in India was signed and closed.
After the merger, FreeCharge is able to function as an independent platform and all aspects of FreeCharge’s shopping experience are intact.
FreeCharge has more than 20 Million users who use the site to recharge their mobile phone accounts. And pay utility bills. More than 85% of transactions come through mobile phones. Roughly half of its customers have their credit card details stored on the site which makes them attractive as potential customers for Snapdeal.
FreeCharge has some interesting lesson that might be beneficial for upcoming entrepreneurs. The upcoming entrepreneur can learn the biggest lesson of Selflessness and hard work from FreeCharge’s founders, as this quality leads a normal startup into a big company.
Kunal Shah emerged as a selfless entrepreneur who gave up everything for the sake of his company. His talent was realized when he was able to let go and create an institute that could helped him in achieving his goals. Many founders face this challenge as they scale their company but the selflessness and lack of emotional insecurity in Kunal helped him to emerge as a wonderful leader. He did not have the title when Alok joined, but he did not care. He just worked insanely to grow the company at exponential rate. According to me, he is not only talented entrepreneur but also a great leader as well as a brilliant visionary of mobile and internet.
The second co founder of FreeCharge, Sandeep Tondon is also a great example to give. He was a person who was never full time, never drew a salary and yet available for the most important projects. It is impossible to find an individual who brings a founder’s DNA without any agenda. He was the true quarterback for the company and guided the team to achieve some major goals.
