Understand cultural context, chase cash collections and more quick tips for startups
India’s potential as a consumer Internet and mobile startup market has been recounted time and again. Last year, the maximum amount of venture capital was invested in consumer web startups. With promising numbers and an increasing number of startups entering the market, these hot segments are becoming hotter. HeadStart’s June edition of Startup Saturday also had a panel discussion with the theme ‘Consumer Internet and Mobile’. The panelists included Amarpreet, Frrole; BK Birla, AskLaila; Naman, Find Yogi; Sanjay Anadaram, Seedfund; and YogendraVasupal, Stayzilla and the panel was moderated by Harsimran Julka, The Economic Times.Here are some key takeaways from the panel discussion for startups already in or entering this segment:
Solve a problem that you really understand
You can’t read a US publication and build a startup in India. The dynamics of the Indian market are very different. The problems in India are very different than that of America. You can’t solve a problem without understanding the context. You can’t just imitate a consumer startup from the US and make it work in India. There are real problems that need to be solved and the only people who succeed in entrepreneurship in India are the ones solving local problems. Provide quality service with credibility, using technology as a means.
Understand cultural context and consumer behavior
Understand the cultural context of the geography and the market you are in. Processes that run in the background are not visible to customers but they judge you on what they see. You have to understand cultural nitty-gritties. For instance, if a delivery boy takes off shoes before entering a home and then uses the same hand to deliver the groceries to the customer’s kitchen, you might have lost a customer right there. You can’t deliver a toilet cleanser and eatables in the same bag even though they are packed.
Revenue pitch vs. sales pitch
Getting paying customers is a worldwide problem. It is easy to sell when you have a revenue pitch instead of a sales pitch. Tell people what revenue they will generate from this sale, what are they getting out of it and not that what they are paying for it.
Cash is king
Making money for consumer startups in India is not easy. Investors want to see traction, then revenues and then want an answer to ‘how will it become a billion dollar company’. Getting early adopters is tough, getting revenue is tough; hence getting money is tough because there areonly a few risk-taking investors in India. It is a vicious cycle. Money comes after money – get some revenue and then go to the investors.
There will always be money in the market; you need to be on top of it to get it. Figure out if there is an intention problem that is stopping your cash in the market or is it some procedural or process problem. Focus on the cash and chase collections.
Generally, three kinds of founding philosophies lead people to startup:
1. People who want to build a business
2. People who want to solve a particular problem
3. People who believe that things should be a certain way and they go about making it better or the way they want it to be.
When startup philosophies align with the founders’ personality type, only then does the true passion exist and startups work.
In large organizations, people go into black holes and they don’t see the output of their everyday effort. The case is very different with entrepreneurship. It is a long grind and onemust sign up for hardships while choosing entrepreneurship as a career option.
The driving force for starting up can’t be money or just because it is t trendy. It has to be a passion to change a situation, to solve a problem. If the goal is to earn a lot of money, starting up is not the best way to do it.
Your team is all you have
If someone perfectly fits in a role you want to hire for, you can’t afford him or her. Don’t just ask for employee contribution, employees must also know what the company has contributed to them. That’s the only way they can feel attached to the vision. Hire for attitude, train for skill. Aspire to have happy employees but always share the bad news first. It builds trust in the organization.
Power of apology
No startup is built without having angry customers. Accept your mistake, apologize and convince the customer that you mean it. Then learn from this situation and move on. You are always going make mistakes, so learn to say sorry.
Meeting investors should not be about funding
Build relationships with investors, get their views on what you are doing, and take their feedback. Don’t meet with them just for the money. Your relationships are your wealth and they are going to take you a long way forward. Raise funds only when you really require it and when the market is ready, the ones that raise money without market maturity fade away very soon.