Beware of the 4 Startup exploitation traps!

Friday September 02, 2011 , 5 min Read

So, it’s all nice and sunny in the media and everywhere you turn, you see/read about starting up, entrepreneurship, interesting business ideas, innovation etc. But rarely do we get to hear of the so-called ‘casting couch’ syndrome (it’s not the same, yet it is the same!) that exists in the startup world. Having been in this space for some time and having dealt with innumerable people (and being privy to innumerable stories), here comes clear-cut account of what is likely to be a startup trap. There’s no denying the fact that this will make you wiser and maybe, slightly less rosy-eyed. But you’ll do well to be wary of such situations. Here are a few of the oft found traps-The Test Run

More often than not, your prospective client will keep you on the test run mode. As startups, we have a ‘never give up’ spirit and this works like a dream on a big client’s action plan. So, the typical lines you will hear are – “Hey! Surely you are good. But you need to prove yourself. Why don't you do this one for free? Our budgets are tight. So, you can do this on a trial basis and we will see what we can do later.” As startups, we have an inherent need to appease that “big” client. So, in all likelihood, we will readily agree (please note first free pilot is ok, infact good, but not the second, third and fourth) and keep getting sucked into the free or meagre payment model repeatedly. Yes, you need it, and need it badly, but don't let your client know how bad is the need. Negotiate, maybe go for the free trial, but please don't lose sight on the fact that this client has to pay you.

“I will take you to the top”On our startup journey, however strong headed we might be, we are prone to doubts and misgivings. And exploiting this inner turmoil, smoothly, are some of the middlemen in the form of advisors, well wishers and mentors. Typical lines include - "I will get you money. But first, give me equity." Yes, its not so crude and direct but you know what i mean. Then again, in some cases, this equity swap might work. No denying the good, real mentors and their impact on your journey. You will meet a number of people who will be ready to help. But have your lenses on and learn to differentiate between the real and the smooth talkers. Some of the so called successful, very polished mentors - seldom come without an agenda in mind and that invariably is equity. As startups, we don't have the money (especially if you are bootstrapping). All we have is the equity which we work relentlessly to build. Please think twice before getting someone on board and be firm about the person adding clear value. Mind you, this will happen more once you start showing signs that you are on the right track.

SSS – Subtle Sarcasm SyndromeThis is most rampant in our society. As a startup, you cannot avoid the subtle sarcasm syndrome, where you will find many around you using subtle jibes to put you/pull you down. "Are you making any money?" is the usual refrain. For women, it’s usually even subtler. Standard phrases include - "She is good in PR. What else can you expect?" The lines may vary from person to person. But what you need to know/learn is that the only way to be successful is to be super thick-skinned. Yes, it might seem like a simple thing to do but trust me developing a thick skin amidst all the doubts around you is tough. Practice it everyday. It will be far better than any of your wonder drugs.

ComparisonSince childhood, we are subjected to comparisons. So, it is but natural that, as startups, we will always be compared or slotted with something or someone. Entrepreneurs never hear the end of lines like, “Okay. So, you are in LBS space? But isn't XYZ and so many others also doing the same thing?” You might shout out loud your clear differentiator. But it will fall on deaf ears. With one billion dollar valuation news etc doing the rounds in the startup ecosystem, trust me, where you stand will always be comparative for everyone around you.

From my experience, I can tell you this much - all the above used to affect me a lot when I started out and I know many others who felt/feel the same way. But you know what they say - this is all a part of the great startup learning curve. Let us develop our own ways to avoid these traps and see possibility in all this adversity. Let’s focus on becoming better entrepreneurs.

I’ve discussed these points with some very successful entrepreneurs whose names I am not at the liberty to disclose. They’ve also been through all of this. All of them said just one thing - "We chose to ignore it."

Now, that’s a very powerful thought. What do we choose to be and how do we choose to deal with it?On a lighter note, yoga and a superbly energised team keeps me going. What about you? Eager to hear your take on this.

Disclaimer : This is strictly my personal view and does not reflect the views of YourStory in anyway.