Starting up has become the ‘in thing’ in the Indian business sphere. Fuelled by big-dollar funding news in page-long features of leading national dailies and rags-to-riches stories of India’s next-gen entrepreneurs, the startup ecosystem has suddenly gone into overdrive.
Stories of fresh college grads making it big, the likes of Mark Zuckerberg, Larry Page et al building the world’s largest tech companies while still in college has inspired a generation of students to contemplate starting up right after graduating. With the Indian higher education system still not mature enough to tackle this entrepreneurial wave, students are bound to face multiple challenges and hurdles at every step of their prospective startup journey.
I too started up straight after college. A year into my startup, I have plenty of learnings to share with young and aspiring entrepreneurs, which will hopefully help them take better decisions and make their journey a successful and fruitful one.
- There’s nothing more important than your founding team. And your team is your new family.
This aspect of your startup has been well emphasised and documented by almost everyone in the startup ecosystem. I can’t help but reiterate the critical importance of creating a rockstar team before you decide to take the plunge. Your founding team will be your strongest (and sometimes only) support structure in the first few years of your journey. You will live and breathe your dream, hustle, laugh, cry and experience all possible emotions together, like a family. So make sure you find the right people when you start up. There’s a reason why most successful companies were started by brothers or close friends, because you need understanding, compassion and mutual respect for each other to handle the ups and downs of building a business from scratch.
Another important factor to consider is having the right set of people in terms of soft and hard skills. Shared vision and belief besides having the same energy and passion for the startup are pre-requisites, but more important is having the right set of skills in the team to hustle your way through in the initial days. Yes, quick and passionate learners can swiftly adapt to certain needs and situations, but trying to build a technology product startup without a programmer doesn’t make any sense.
- Plan your personal and startup finances carefully
This is one of my most important learnings from my startup journey. I started off with very little savings (from my two-month corporate job and prior freelance income) to not only invest into the startup but also to take care of my personal expenses, however scanty they were. So slowly and steadily we started running out of funds, because we never really did any sincere planning on how much cash we needed to support the venture and ourselves, and for how long.
One mistake founders make (we did too) is to assume that they’ll be able to raise funds at a given point of time. This hardly ever goes according to plan, because unlike running your startup, raising funds is not really in your control. What if you run out of cash and are unable to raise funds? You’ll be staring into the death valley.
So secure your startup’s and personal finances well in advance. Make a detailed plan of your business timeline — product development, launch, initial users, revenue generation, raising funds etc. Then try to ascertain the expected costs that would be incurred in running the startup during this time — salaries/stipends of any employees, administrative costs, marketing expenditure etc. Factor in your personal and team’s expenses (utility bills, food, accommodation etc). Once you have a nice cash flow ready, keep at least a six–12-month leeway in case things don’t go as planned (they mostly don’t).
- Starting up is not a job, its a lifestyle
Right from a tender age, students are conditioned to think conventionally: get admission into a college after high school and get a job post that, or go for higher studies and then get a job. So the words ‘job’ and ‘work’ have developed very traditional connotations (9–5, work-life balance, free weekends etc). Working with or running a startup is anything but this.
When you’re building your own startup, the startup becomes your life. You eat and sleep your startup, and there is nothing such as ‘professional’ and ‘personal’ life. There are no fixed working hours; you work even during the weekends. Sometimes you’ll be working through the night, sleeping in short intervals (especially before an imminent product launch) and even skipping meals. But hey, it’s all part of this incredible journey.
For the last one year, not having any income has impacted my day-to-day life. I hardly eat out, have shifted to public transport, stopped buying new stuff (gadgets, clothes etc), because I needed to cut down on my personal expenditure. Obviously my social life has taken a thorough beating, but the most important thing is that it hasn’t bothered me one bit. My passion for the problem we’ve set out to solve is a much bigger cause than all these trivial matters. Remember, Ritesh Agarwal spent his nights sleeping on staircases when he was building Oyo. These are lifestyle choices that you have to make, unless you have a briefcase full of cash to take you through.
Things will become saner only after a few years, when you’ve grown to scale, have plenty of resources to expand your team, take home a decent salary and when your startup starts transitioning into a balanced corporate structure. Make sure you and your team are ready for such a life, often for the long haul.
- Building a company is not glamour; its pure grit and hardwork
The startup ecosystem has been glamourised and sugar-coated beyond anyone’s wildest dreams. Such exaggeration has its drastic repercussions. Young kids graduating from college tend to be attracted by all the rags-to-riches stories, big-ticket funding news, flowery speeches at conferences, awe-inspiring articles and self-vindicating quotes from famous startup personalities (how many of us have put up beautiful quotes from the Bransons, Jobs, Zuckerbergs of the world on our laptop wallpapers, as WhatsApp statuses!).
Lost in the midst of such sensationalism is the true story behind running your own startup: a very lonely and grueling path one must take to achieve something out of the ordinary. Successful companies are not built in a day; entrepreneurs are not made overnight; it takes years of relentless persistence, hardwork, grit and determination to accomplish one’s mission, turn dreams into reality and create substantial value in the society. The journey is filled with multiple failures and small victories.
One has to constantly adapt to the needs of the company, constantly move out of one’s comfort zone and learn and do stuff one might not have imagined previously. When I started up, I hardly had enough business or technical knowledge to build a tech product startup. One year down the line, I can comfortably code in multiple languages, have got my hands dirty with everything from marketing, product management, UI/UX to recruitment, finance, content and whatnot.
- Funding is a means to an end, not an end in itself
One of the most outrageous trends shaping India’s recent startup ecosystem has been its much-publicised romance with external capital funding. We see tens of news bytes daily on the millions of dollars being injected into Indian startups by angel investors, entrepreneurs, big local and international VC firms. Although the tremendous funding activity and availability of capital bodes well for the ecosystem, it’s setting a bad precedent among aspiring entrepreneurs.
Funding has almost become a holy grail for startups. Young startups getting funded go on relentless PR sprees, almost as if they’ve accomplished their mission and already built India’s next big thing. A very important point has been lost among all this hype and hoopla — that receiving external funding is just another process in a long, long journey of building a high-value multi-million/billion dollar company.
What we all need to realise is that startup funding is not equivalent to business validation and that it does not guarantee success at all. If that was really the case, then no funded startup would ever fail. Some experts believe that almost three out of four startups who receive their first round of capital either fail to raise a subsequent round or fail completely. Always remember: the only people who can validate your concept are your users or customers. The above hypothesis holds true both ways (if you receive external funding or fail to do so).
So don’t start a company with an aim of raising funds and adding your name to an illustrious ‘I raised VC money’ list. Build your startup with only mission in mind — to solve the problem you’ve set out to solve and create value in the lives of your customers. External capital only gives you the desired push; it won’t run your business for you.
About the Author:
Harsh is a 23-year old entrepreneur, currently building Fratmart.com, a peer-to-peer marketplace for college students. His believes the only motivation to start-up should be to solve large-scale consumer or business problems. He is an autodidact, has lost all faith in the Indian education system, and deeply believes in the cosmic power of self-learning. He can be contacted via his Twitter handle @QSportsLunatic