It is a Startup time all around, especially in India it is a new buzz word. Everyone wants to plunge into this new band wagon called “Startup“. This is then replicated in many other South Asian and developing nations across the globe. However, I have always felt that majority of those take a plunge into this Startup arena have not made conscious efforts to understand what really Startup is? What does it involves? What are its pro’s and cons? How it will be affecting or influencing the life – economically, professionally, socially and even spiritually?
Few years back, when I decided to get involved into my first Startup in Europe, my then potential partner asked me to Google “Startup” and almost instructed me to take about a week to read, learn and understand about Startup. Looking back, I can say that it was much essential exercise that I did – as it helped me to understood “What it means to be a Startup Entrepreneur?”.
Startup is a LARGE company with UNLIMITED POTENTIAL that is built with SMART INVESTMENTS. – Vishwas
If I have to boil down my understanding of Startup to a single sentence, then I would say that “Startup is a LARGE company with UNLIMITED POTENTIAL that is built with SMART INVESTMENTS“. Three words that I would like you to focus: LARGE, UNLIMITED POTENTIAL and SMART INVESTMENTS. Let me explain them with few essentials to be considered while setting up a profitable Startup.
12 SMART INVESTMENTS:
With my own experience and close review of both successful and failed Startups across the globe, I can say with confidence that Startups is all about SMART INVESTMENTS. Here are 12 SMART INVESTMENTS that are essential for your Startups to soar to the height of success.
1. Good Partners means Good Team: The smartest investment in a Startup to me is the team work which begins with the partners. Good partners with culture of upholding ethical values, trust, transparency and spirit of collaboration is indeed a smartest investment qualities and characters that a Startup entrepreneur must not ignore at all costs.
2. Launch fast: With growing competitive Startup market it is essential to kick start or launch your enterprise as early as possible. Once you have a good partners, initial business plan and funding; then its time to ACT. Faster you launch is better for learning from pitfall and mistakes that might occur. Remember, you haven’t really started working on it till you’ve launched. Launching teaches you what you should have been building.
3. Let your ideas evolve: It’s a big mistake to treat a startup as if it were merely a matter of implementing some brilliant initial idea. Remember, you are not building an empire or a monument. Launch fast and iterate should be the mantra to follow. Because, most of the ideas appear and refinement happen in the implementing.
4. Customer is the God and Customer loyalty is a proof of success: Wealth created by Startup is directly proportional to number of lives you have touched as an entrepreneur for the better, or how many lives whose life quality have been enhanced or positively impacted due to your product or services. Factors that control your success are the numbers of customers and degree of positive impact or influence your product or services emanating from your Startup. Thus understanding of your customers and users is a must – both at depth and at breadth. In fact, one mantra that emerges from my own experience is “Customer is the God”.
Airlines do have loyalty programs for their frequent flyers. Weather your Startup is working directly with customers or users, or your Startup is just contributing to one aspect or component of customer services; you still need loyal customers. More the loyal customers, greater will be chances of wealth creation for your Startup.
5. FOCUS, FOCUS, FOCUS: Avoid distractions – Don’t spread yourself TOO thin: Let me be blunt and brutal here. One of the most severe and most ignored cause of the death of a Startup is the lack of focus.
Every Startup is susceptible to distractions. Especially, product development and services sector Startup may have many opportunities to engage into newer areas of operations. However, such calls needs to be taken based on your resources, core mission and growth potentials. There will be many more attempts to distract or deviate or drift you away your already set goals. My advice to such Startups is not to spread thin – and definitely not for short-term gains. What is needed is to focus, focus and focus and only focus on already set goals.
6. Work and Achieve Excellence: Good Quality and Customer Service is a key to a sustainable and healthy Startup. However, majority of the Startups ignore this advice often for express or quick gratification. Greed for quicker and short term benefits and financial gains makes your balance sheet dynamic, however, it shakes your Startups foundation severely and sometimes beyond repair. It is the excellence in every single operations of your Startup that ensures that your end products is of highest quality and that your services are of par excellence. It is the quality of your products and your services that will ensure returning customers. There is a simple principle – Health, wealth and long term existence of a Startup is directly proportional to the number of returning customer base, and increasing number of new customers who will be willing to return to you one more time, if not more.
7. Performance Indicators is key to measure your success: Both good quality products and par excellence service can only be a reality if you as a Startup entrepreneur have set of indicators to compare with. There is no denying that performance indicators are essential. However, majority of the Startups (especially and surprisingly one or more partners) resists setting up performance indicators early on. To such Startup entrepreneurs, I wish to suggest that “Startup is not a practice match, it is indeed a third and final round of a boxing match“. If your assumption is that I will learn during and after the launch of a Startup, you are terribly wrong and rather you are working against the interest of your own investments in terms of finance, emotions, reputation and profession. Not setting up the performance indicators and working to achieve them, is like digging the grave for your Startup to be laid at rest, even before it is launched or during early phases of its launch.
8. Spend Little, Find and Angle Venture Capitalists: If there is one unique quality of a Startup that separates it from the traditional business empire is its startup cost. It is important for a startup to be cheap. However, majority of the Startups also close down because they run out of money. Cheap does not mean in the business of low quality products or sub-standard services. Cheap or slim investment means Startup has faster iteration cycle such that it improves upon its products and services consistently. In fact, the culture of cheap or slim investment in a Startup keeps it young, dynamic, efficient and productive. However, for Startup to grow further needs that there is a consistent stream of investment. Often a question is where this investment will come from. Good news is that there are angel investors who are more than willing to invest in a promising Startup. Is your Startup – a promising enough to attract the investor or venture capitalist?
9. Work towards “Ramen Sustainability”: There is a new catch phrase that has entered into the Startup world called “Ramen Profitability”, that refers to Startup making just enough to pay the founders’ and employees living expenses together with minimal operational costs. However, for Startup to flourish performance that guarantees much beyond “Ramen Profitability” is needed.
What is really needed is the “Ramen Sustainability”,a point where in Startup is not reliant on external funding sources to survive. This stage where in Startup is sustainable without external funding, gifts an infinite runway to the Startup. Earlier you achieve this “Ramen Sustainability” point, more flexible you will be as an entrepreneur to tweak, iterate, and pivot the content of your Stratup without compromising with its soul. However, I have a alarm bell to ring – sometimes entrepreneur assume “Ramen Sustainability” point as the point where in Startup is likely to have peak performance. This is a false feeling. Rather, “Ramen Sustainability” is a point wherein a new phase of consolidating with proven ideas and attempt implementing next big ideas.
10. Don’t Give Up and Don’t get demoralized: Starting a Startup is a huge moral weight. It requires conscious effort not to be run down by this moral weight. Once the operations begins – there will be numerous complications and situations that needed that you balance between morality and practicality. While it is important to ensure that you don’t get drowned with the flood, its equally important that you don’t adopt to immoral practices or pick up an immoral behavior. If you inculcate the culture of immorality or unethical habits, crisis is bound to knock at your doors. In such a state it is critical that you don’t get panic and give up – unless your very existence is under threat. Let me also share a good news and this is personally from my own experience: just by simply staying put there and by not giving up; you sail through everything – storm, flood, frost and fire that Startup is likely to face. Because, storm, flood, frost and fire are temporary phenomenon. They simply taste your tenacity to stay-put under pressure. Stronger belief in your idea of a Startup and its future is all what you needed at an hour of crisis. Sheer effort is usually enough, so long as you keep morphing your ideas.
11. Build on your failures: Not all ideas fructify to its logical conclusions. Some ideas are bound to fail. Startup being a dynamic in nature, setbacks are possible. However, each setback or failure gifts a lesson to learn, experience to improve upon. Not all negotiations or tie-ups and collaborations will be a winning combinations. In fact, it is dangerous to your morale to start depending on deals closing, not just because they so often don’t, but because it makes them less likely to. My sincere advice to Startups on this aspect is – never shy or fear from failures. What is most important is to stand up one last time, each time you fall or fail.
12. Don’t kill Early Warning Systems: Listen to Them and Act Upon: We often don’t like to listen to so called negative stuff or outcomes. We quickly like to past by them and move forward. In fact, that is what most of the inspirational speakers and success gurus teach us. However, in a Startup ecosystem, there are often negative reporting or feedback that is actually a truest feedback about the lacunae or quality. However, at times the messenger who bring these messages is not skilled enough to wrap them in sugary coated words. His/Her tone, choice of words, way of delivery and style of presentation may not be aristocratic. This does not mean his/her integrity can be doubted. I have often seen that majority of the investors and entrepreneurs ignore such early warnings, simply because what is being shared and presented is irritating or unpleasant to your ears. There is a saying “Don’t kill the messengers.”. Startups that kill early warning systems, and shoot down the messengers of such warnings are often destined towards failures beyond recovery.
These investments are essential for strong foundation of your Startups. However, I have observed that majority of these essentials investments are often compromised for small time, quick gratifications. More you flaunt these investments or ignore inculcating ‘smart investment centrist attitude’, achieving success will be a painful journey. Of course, choice is yours. Needless to guess, what choice true entrepreneur will make!
Vishwas Chavan is the author of the best selling book “VishwaSutras: Universal Principles for Living”, and recently published e-book “PanchSutras: Five Fundamental Principles for Success”. Vishwas has had an amazing journey of self-evolution, self-transformation from a slum-boy to a science diplomat to an author, inspirational speaker, success strategist, transformational mentor and spiritualist. Prolific writer and inspiring speaker, Vishwas has literary bent of mind. He has co-authored a book of poems called “SoulBliss: A Poetic Tale of Cosmic Love” with Ms. Majbrit Villadsen. In 2015, Vishwas and Majbrit co-funded SoulBliss Academy. Vishwas offers counseling sessions to individual and couples. Write to him at: firstname.lastname@example.org