Starting up can be exciting and exhilarating, but not before you've gone through the grind and actually survived it. Dig in to know what really lies ahead.
In this day and age of soaring ambitions and multiple avenues floating across the globe making these lofty dreams possible, starting up is undeniably the coolest, trendiest thing to do.
The thrill of being your own boss, being instrumental in developing your conceptual baby into a sturdy and lucrative business, big money flowing in from angel investors and even bigger returns fuelled by the imagined super-success of your idea, and last, but not the least – a ‘work culture’ of utmost freedom, elite hackathon and brainstorming sessions and a general glamour associated with taking an offbeat path as that of a start-up owner – are just some of the myths people have about starting up.
However, the pattern of start-up collapse observed in 2015 alone, with 11 start-ups either shutting down or reporting bad business, to Snapdeal crashing down earlier this year, have led many to rethink the start-up culture in the country and if too many ambitious souls are embarking on a journey they have no idea of.
1. Life at a start-up is more likely to be a time you forget which way the hands of a clock move – Let’s get the first of the many myths out of the way. Life at a start-up is anything but a walk in the park, it’s more a constant marathon of sleepless nights, long and tiring work hours seeping into your weekends even. You hated answering the occasional late night work emails back at your old job? Well, that has to go since team calls at bizarre hours are bound to be a regular feature when you are starting up, more so – if you have managed to get into the bracket of high-performing start-ups.
To sum it up in the words of Ben Horowitz, CEO of venture capital firm Andreessen Horowitz,
“As a start-up CEO, I slept like a baby.
I woke up every two hours, and cried.”
2. You could have a great idea, and your start-up will still fail – In a technologically-fuelled business culture where ideas are dime-a-dozen, this could turn out to be your Achilles Heel if you continue to cling to your start-up idea and imagine it bringing you truckloads of moolah, all in your head of course.
Sure, a great idea always augments the start-up process, but it is truly about “making ideas happen”, as Scott Belsky, co-founder of Behance puts it across. Having a working prototype and a customer validation process on the end product are must-dos if you want your fledgling idea to become anything more than a mock diagram on a piece of paper. You could also pick up existing ideas integrated into current business models around you and find solutions on how to make them work better. That is exactly how Google beat Archie (widely regarded as the first search engine) and Facebook trumped MySpace.
So keep this short mantra in mind while working on your start-up’s mission - if your execution falls flat and the customer does not like the end product/service, does not matter where your idea is from, it will not work.
3. Getting investors on board can be tougher than climbing Mount Everest – Attempting to climb Mount Everest certainly has its own risks, but at least there is a support system right behind you, should something go wrong. As a starry-eyed start-up entrepreneur keen on raising funds and being enthusiastically thumped on the back by powerful angel investors, the wait can be excruciatingly long and lonely, with no inkling of light at the end of the tunnel.
Angel investors are a strange class of people who, unfortunately, want to bet their money on start-ups that have already proven themselves, especially in India, where there is hardly a concept of risk capital. But then again, why would you need money if you have already seen yourself through the grind and are doing well now?
This irony may be lost on everybody except you – and so, it is important you do not completely rely on investors’ short-term investment horizon, else you might meet a fate similar to that of Koolkart.com, 21 Diamonds India, Rupeestreet, Giftology, iStream, among those of hundred others.
Some chaste advice from Silicon Valley biggies makes its way here – at least in the beginning, start-up entrepreneurs need to bootstrap and arrange funds from friends and family instead of hoping angel investing will kick-start their maiden venture. Quite in line with this view, lies the humility of accepting the scale of your start-up and filtering out the priorities – which means, advertising, marketing and chasing funds should lie at the bottom of the pack, only after you have built a product that can withstand competition.
4. Getting funded is only the tip of the iceberg – Even if you manage to raise funds for your start-up, all your hopes and dreams of growth and expansion can come crashing down if you do not follow through and build up on the initial success that actually led to your business being funded.
David Mandell, serial entrepreneur and founder of PivotDesk, describes the moment after the initial enthusiasm has sunk in, quite brutally, stating - those figures upwards of six zeroes “are only going to go down until you make them go up.”
You will be encountered with a massive burden, as you feel the clock ticking away and realize you have to make all the millions of dollars worthwhile so you can invite the next round of funding. Accountability is key. It is no good feeling entitled about the investment you have obtained, and go on a spending spree riding on investors’ money and not delivering the intended products to customers as Skully, the smart motorcycle helmet firm did. You will shut shop, of course, in due time, but more than that, your reputation will take a hit and there is little chance you will be entertained in the start-up circle again.
5. You will be making much less money than you did at your old corporate job, for a while at least – Being your own boss and working long weekends with no extra pay, cutting corners at every stage of the business, reinvesting money earned back into the business, are just some of the things you will have to go through if you intend to start-up. Which automatically means – there isn’t really a lot of money floating around in the first place for you to take home a hefty pay check.
Not even when you manage to raise million dollar-funds, as happened with Neil Patel, bestselling author and influencer with his first start-up venture. Despite raising three million dollars for their venture KISSmetrics, Neil and his co-founder barely managed to take home a humble $5000 dollar pay, foregoing a few months of paying themselves here and there when things didn’t work out. You could take home a bigger pay of course, but at the risk of rushing things too fast because you would have to raise even more money.
So if quick money is why you want to start up, you better hold on to that old, safe, boring 9 to 5 job.
6. Selling without a USP will not help you last long in the market – While it is perfectly doable to build something better on an existing idea, it must not merely be an extension of the original idea; having a USP or a differentiation factor even as you compete on other similar parameters is vital to your continuance as a successful business. So while Flipkart may have borrowed the Amazon model initially, it has gone on to own its power in the fashion and electronics categories, and while Amazon is quite openly rivalling with Flipkart in the latter’s home zone, it has already begun to taste success with its newest addition, Amazon Prime and Pantry.
So remember, if you are keen on starting up and wish to last anything upwards of five summers, make sure you have a strong USP in place. Something that makes you, you and a product/service only you can provide.
7. Choosing a co-founder can be tougher than choosing a life partner – Wanting to have someone by your side in this impossibly long and isolated journey can hardly be labelled an exaggerated emotional wish; when you read about these famous pairs – Steve Jobs and Steve Wozniak, Bill Gates and Paul Allen, Hewlett and Packard, you come to realize that two is obviously better than one, when working determinedly towards a single goal.
It might look heroic to imagine you have pulled it off alone at some hazy future date, reality is – you will need someone to share these ideas with, someone who can be a mentor just as much as a participant in this chaotic start-up scenario. Your first impulse may be to rope in your best friend as a co-founder; that could easily be the biggest mistake you commit in this journey if you both do not share the same level of commitment, respect, confidence, compatibility and a sense of practicality with no room for ego-driven clashes.
Facebook, Tinder, TVF are some of the most glaring examples of how friends-as-co-founders theory got trashed. And while love is a big part of how well a marriage will function, in business, a heap of emotions and personal equation is not what you want to bring to the table each day as ideas and execution bounce off the walls.
8. Not having the right team on board can take you to point zero sooner than you can imagine – It is no secret, that any business, organization or corporation is the sum total of all its members – the entire team of diverse professionals working in tandem towards a single mission, each bringing his/her own relative strengths to the job.
Thus, having the right team in place can aid in setting the tone and standards of what you can accomplish as a start-up, and help you aim for and achieve bigger objectives. As ResearchConnection specifies it – a start-up typically needs at least these six people to flourish and grow profitably – the dreamer, the visionary, the doer, the innovator, the taskmaster and the connector.
Under these broad heads come the technical people, people who look at marketing, customer support, HR, business development, etc. The key is to find the right leaders for each of these functions and then give them space to lead the way, while keeping the goal in sight.
Starting up is no mean feat, and is surrounded by a multitude of situations, which if described, would run into pages worth of gloomy material to feed on. And as miserable and brutal as it sounds, it is best to at least be somewhat prepared before taking on the mantle of being a start-up founder. From depression, an absence of any kind of social life, to even suicides, the road to entrepreneurship is marred by countless psychological traumas, none of which are as widely discussed as the external, tangible factors associated with being a start-up founder. It is therefore, best to have a realistic view of the same and jump in only when you have nerves of steel and an armour of your best strategies in place.