EDITIONS
Startup Advice

Build a business, not just a startup

Abhishek Sanyal
28th Jul 2016
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Have you ever wanted to start something of your own? Of course, you did! I did too. And the startup scene in India is very encouraging and inspiring today. There exists an ecosystem with angels, mentors, VCs and scores of other founders. It is brimming with passion and bright ideas, the media loves the 'startup mavericks', and even the Prime Minister has come out in support, all guns blazing.

But is starting up the only way of being your own boss? No! You can also satisfy your entrepreneurial hunger by starting a business, of the non-startup kind. There is a lot of opportunity (frankly ‘need’) and a lot of space in the market for such businesses, but sadly these are ignored in favour of the glamorous 'fundable' and 'this of that' business models.

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A startup, by definition, is an ‘organisation designed to find a rapidly scalable business model’. So it can quickly innovate till it discovers that ‘one model that works’. And once it does, it scales rapidly and becomes a business. It needs funding to innovate and scale, that is why it needs VCs. Whereas, there are tons of businesses that already know their models or will never scale that rapidly. My experience is in founding a startup (Rootin) as well as an engineering service business (Force SE), where we design bridges and flyovers. So I believe that I have a perspective on both. I have learned a lot from these two ventures about building a business, some of which are –

1) Build what is needed: The most critical aspect of a business is that people should need whatever you are selling. Our startup, Rootin, was about live-info on public transport. Now, India has 220 million smartphones, but a fraction of these phones have active data plans, and most of those wouldn’t be using public transport. We believed that there was a need based on our experience, but turns out, we are not the average public transport user. So think hard about your user/customer and figure out if what you are building is needed or not. Gear your product or service towards the market.

2) Sales is absolutely critical: One thing most founders usually give least priority to is sales. In Force SE, initially, we were focussed on our engineering and systems. And we would not have enough live projects to keep our engineers engaged. Customers do not come to you on their own, no matter how good you are. We had to commit to sales and maintaining relations with clients. Keep talking to your prospective clients even if they do not have a project for you immediately. You need for them to remember your name, so the next time a project comes up they think of you. My experience is that when I meet one person, he/she introduces me to three more and that’s how you grow your network. Most people are friendly and helpful if you ask them nicely.

3) You can’t afford to ignore your finances: The biggest difference between a startup and a business! As a business, you have to be profitable, or at least moving strongly towards it. Startups can afford to sacrifice financial soundness for growth but then they become dependent on external funding, like all the food tech startups last year. At Force SE, we don’t hire or expand beyond what our revenues allow us, so our growth is more sustainable.

It should not be that you hire 100 people at exorbitant salaries, and six months later, you can’t pay their salaries and you have to bring in emergency funding. This is how a Ponzi scheme works, not a business.

4) Growth may be gradual, and that’s okay: Startups generally have to have high growth, Paul Graham recommends 5-10 percent weekly. But for most other businesses, this is not the norm. In Force SE, our projects run for a duration of 3-5 months, and we achieve around 100-120 percent growth per year. For our business to increase in revenue, we would have to hire engineers proportionally, as there is only a fixed number of bridges a single engineer can design. A factory cannot increase production overnight, unlike an app like Pokemon Go, which can add millions of users before they have to upgrade servers.

5) The market has biases: A lot of industries have biases against young people or young businesses that have just started, like ours. Someone once told us to get a person with ‘white hair’ to just sit at the table and nod during technical meetings! That’s just how most people think. Imagine that you need a surgery. Would you prefer a doctor who has 20 years’ experience or one who has two years'? So instead of complaining about the way things are, it is upto us to make the customer trust us. Don’t be afraid to start small and grow strong. It’s not the same for a tech startup, where either deal value is low or you don’t have face-to-face customer interaction.

6) Think about the end game: Keep in mind that there was a reason that you decided to start your own business. Either you want money, or are passionate about a problem, or just want to be your own boss.

If you want to make a lifelong business, then focus on sustainability and hire loyal co-founders and employees. If you want to make quick money, then build a tech startup that has more exit options, like getting acquired. If you just want to be your boss, you can even freelance. Whatever it is, make sure it aligns with the long-term vision of your life.

There are huge gaps in the current Indian market. Many industries and sectors are run in an archaic manner and are in dire need of fresh blood. Ranging from engineering to manufacturing, media to art, and social to green initiatives, there are innumerable competitive and thriving businesses that can be created by you. These are sectors by and large ignored by the startup community as they are lacking a ‘billion-dollar market’.

Founding and running your own ‘high growth startup’ is indeed a great thing, but it is not the only way. So instead of asking questions like “Is this a billion-dollar idea?” or “Is this fundable?” you should rather ask yourself, “Does this business model really make sense?” and “Do people have a real need for the thing I am going to do?”. Don’t worry if your business is not a startup, if the answer to above questions is ‘yes’. You should go right ahead, because the decision to start your own venture can only lead to good things.

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)

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