Only 1% startups make it large. The remaining 99% simply die bankrupt. Welcome to the world of entrepreneurship!
I’m the co-founder of MaplePOS, that was recently acquired by Zomato. Post the acquisition, a lot of entrepreneurs asked us what helped us stay afloat and reach so far. Staying afloat is more important than the exit itself. So, I’m sharing what we learnt in remaining completely bootstrapped till exit. Hopefully, it’ll guide you through your bootstrapped stage. But, remember, there are no right or wrong ways in entrepreneurship. So take my advice with a pinch of salt.
Building a company can be hard; especially when you don’t have enough money, investor relations, concrete idea or links in the business community to give you an initial push. That was our position at the start of our journey. We just left our comfort zones and jumped right in to build a tech startup!
While I was doing my PGP at IIM Lucknow (2010-12), we started experimenting with ideas. Back then, smartphones and tablets were gaining momentum. So, we decided to build business and consumer apps for mobile devices. We also designed our own tablets to provide the ultimate experience to our customers. However, hardware is a difficult business thanks to China. No investor was willing to fund a hardware startup. So we took a step back, and remodeled our idea to focus only on software. We got our first project just before our graduation from IIM. It earned us about 4 lakh rupees which became our budget to start with in Apr ’12.
With a low budget and no definite direction, we decided to start with interns from DTU and hire people as and when required. It kept our cost low while many bright brains were developing smart solutions. We spent the first two years on developing multiple ideas – a Point of Sales system for F&B industry, a brand search engine for retail, car dealership solutions, and an in-car infotainment system - as well as providing consultancy & development services to various companies. Most of our in-house projects didn’t get to see the light of the day for a very long time. MaplePOS itself (Zomato acquisition) was shelved for over a year before we could successfully pitch it to Select CITYWALK Mall in Delhi. Perseverance was the key.
Learning: For a bootstrap, it is important to live today to fight tomorrow. It took us 2.5 years to find a stable source of revenue and just 6 months to be completely profitable. We saw many of our friends closing their startups because they hired people without giving their organization a definite growth path. Their resources drained quickly and they ended up in a bad place. The probability of finding customers or investors is low, but probability of having expenses is always 1. Keep your costs as low as possible and build a source of revenue, or else you’re setting yourself up for a failure.
One more thing; never force your ideas on others. Use your common sense to see if you are solving a real problem. You’ll see a response – positive or negative – if you do. Acknowledge if something isn’t working. Sticking to an idea that isn’t working can be disastrous.
Finding your initial customers is tricky. Every format (B2B, B2C, B2B2C) has its own strategy and needs the right team for execution. Business conferences, forums and events that are relevant to your field provide the perfect platform for networking. If not the customers themselves, you can find the right partners for your company. If you don’t have money to book stalls, attend as a normal guest, but make sure to attend at least a few big ones.
Don’t fear sharing your ideas with others. No one can steal them from you. It’s all about execution. There are good chances that you’ll end up getting a few customers / advisors when you share what you are doing. The probability of getting into the right network always outweighs the probability of someone stealing your idea.
Learning: We couldn’t sell our B2B products by solely focusing on selling their features or benefits to our customers. In fact, we got our good break by first solving what our customer needed and then introducing our in-house products. It may take longer but anyone who has run a successful business can relate that it’s important to do non-scalable activities at the start to ensure that you live the day to do the scalable ones.
Once you get your initial break, it’s important to build relationships. Make your customers feel comfortable. You have to be present wherever and whenever they need you. No one will rely on a startup to carry out a critical task unless the startup puts up an excellent show. Go after the things that are important to your customers, and it’ll make you important to them. Meanwhile, don’t forget to charge them for your efforts. J
Caution tip: At times, even the big clients try to extract maximum out of a startup without paying a fair fee. Don’t waste your time on such clients.
During the MaplePOS development, we were in restaurant kitchens more than in our office. Apart from CXO meetings, we spent great amount of time with junior staff - the real users of our system. I can’t stress enough on the importance of understanding the entire ecosystem. We take pride in saying that none of our team members slept for 72 hours, during the launch of our product. It was not because of any pressure, but the sheer excitement of doing something that we believed in. The result was a 100% uptime of the system and increased customer confidence.
Avoid expanding before stabilizing the product. Expansion can wait. If you expand too fast too soon, you may end up providing support to a sub-optimal product. At the very least, it’ll cost you time and money, and at the worst, your company itself.
Learning: Try to get the maximum business from your current customers rather than finding new ones (esp. true in B2B). Making new relationships cost time and energy. Unless you have big enough team, you might end up managing relationships without doing any real development work. Consolidate before you expand!
Customers Vs. Investors
When it comes to choosing between customers and investors, always choose customers. Real investors will value your customer focus. We spent an awfully long time making presentations for investors, but when we started doing it for customers, it helped our company stand on its own feet.
In the end, always go for the right team. There is a lot at stake in a startup. It may even cost you (and your team) your relationships. Unless the team understands what’s at stake, it won’t fight that hard. And once you find your right team, stand by it, no matter what!
Special thanks to Select CITYWALK, Mr. Yogeshwar Sharma and Mr. Pankaj Rohatgi to support us in our journey.
“It’s not about ideas. It’s about making ideas happen.” - Scott Belsky
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