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The Right Time to Startup

What if experience and fresh ideas were both secondary to something more important

There are a lot of budding entrepreneurs out there who are torn between gaining experience or starting up right away up. Some are debating the worth of their work experience. People argue about the pros and cons of both the sides, having experience or having fresh ideas from which you can see everything with a fresh perspective. Now, I must confess that I have also taken the entrepreneurial plunge very recently, however both of the above factors never were a part of my consideration.

Starting a business can be a very scary and at times nerve racking experience. In the current atmosphere, with many startups closing operations, unicorns being devalued and a winter in the funding landscape, you will be reminded many times that atleast 4 in 5 startups fail, many within a year of launching. You will be reminded of the many pitfalls of starting up, but if the risk isn't big, the reward would also not be big. Externalities, can also play an important role in one’s decision about when to startup.

Some argue with examples. Giving you plenty of examples of fresh out of college people changing the world. Be it Mark Zuckerberg, Bill Gates, or Steve Jobs, they were all college dropouts, with no experience and still went on to create the biggest tech conglomerates in the world. On the flip side we have Jeff Bezos, who had a decent experience before founding Amazon. Closer home you could compare Ritesh Agarwal of Oyo vs. Sachin and Binny Bansal with the same arguments.

None of it Matters

Whatever your stand on this matter, whether you should gain experience or not, it is not important. What many people forget while taking such a decision is no matter your experience, you will never learn how to start a business, unless you have done it in the past. Neither will your network help you in a significant manner, because you would be entering a completely new, disruptive business line, where no matter the strength of your network, it will fall short. Also your fresh set of ideas and new perspective of looking at things will not come to your aid, if the timing isn’t right. Its all about the Timing!

The only thing that should matter is timing. Timing in the market. The opportunity that a particular market is offering and whether the market is ready for your idea to take off. Your idea should not be like beating a dead cat. Repackaging any business and launching it with investors’ money cannot guarantee you success. On the flip side your idea should not be so futuristic, that your consumers are not ready for it.

Looking at the Indian hyperlocal business segment, till last year it was all the rage, everyone wanted to get into it, investors were pouring in millions of dollars in the segment, with the bigger players itself raising upwards of $300 million, when the market is expected to reach just about $350 million in 2020. Giving a clear indication that the late entrants into the market would be in an upward battle against their well-funded counterparts. Timing is of utmost importance if anyone wants to enter this market, either all the players here were too early to enter the market, or the laggards were late.

Internationally there have been ideas that way ahead of their time. In 1997, the first social network had come up, known as sixdegrees.com, with the first dot com boom. However, it closed shortly after as it lost traction primarily because people weren’t ready for a social network at that time. It matters when you enter the market.

What should you consider as a favourable time?

Well, I do not consider myself an expert in this matter, and frankly, if someone does claim themselves to know how to judge it, you should know which way to run. Even the most seasoned and successful businessmen make decisions that are wrong about entering a market. Serial entrepreneurs fail at times to get it correctly. But that doesn’t mean that you go in on complete gut feel. Mind you I said complete! Obviously every entrepreneurial decision has some, probably more than some, gut feel involved in it. So, what all do you look for when trying to find out if the market is ready for your product:

1. Market’s existence: Whether your market even exists or not. A lot of which depends on the socio-economic condition of your market. If your business plan entails the usage of high speed internet in rural India. You are bound to fail from day 1. But, those are obvious things you will check. How about the social network opened in 1997. Market research is important here.

2. Market Size: Make sure that the market you are entering is big enough, or has enough space for you to grow. You do not want to end up in a market like the hyperlocal delivery space, which is overcrowded and not gaining enough traction. Whenever you feel that the market size is right for you to enter, do it immediately.

3. Technology: As most startups today do have a technology backing, you should make sure that the technology is well developed. Take the case of Augmented Reality. When Google first launched its Google Glass, it was launched with much fanfare and was touted as the emergence of AR in mainstream, however, a few years later, Google Glass was quietly shutdown, saying the technology needed to be developed further.

4. Copycat Models: Copying American or European models in India or for that matter any other market is fine, because the business is completely different in different countries, existence of such a model elsewhere in the world should give you confidence, that such a business can work. Another thing to consider is about technology adoption, you should consider the lag time between Indian and American markets, as that can be upto 2 years in some cases, so pace yourself accordingly.

5. Competition: Make sure you enter the market either when you are the only player or when your competition is also in a very nascent stage, giving you and them a level playing field. If you enter the market much later than your competition, you are doomed, as they will have a considerable lead over you. Unless of course, even when being the same market you are not competitors owing to your niche market or your immense technology superiority.

Lessons from quitting a job and starting up

I am one of those brats who quit a plush consulting job in a multinational, in less than a year of graduating from IIT Delhi. 2 of my friends and I ventured out in order to start our own entrepreneurial adventure. We started VadR, on a simple belief, now is the time for it.

How did we decide that now is the time for VadR? VadR is a mobile Virtual Reality (VR) ad network. Deciding on whether VR would be the right market to enter was simple. VR is being covered by tech journalist and enthusiasts as if the cure to cancer had been found. With Facebook, HTC, Sony and Google all tech majors investing heavily into it, it’s a no brainer that VR is going to be huge. But, if tech majors are investing in it, is there space. Yes. We are not looking at hardware, nor are we looking at content creation. What we are looking at is creating a sustainable ecosystem for VR, so that it can proliferate. Therefore, an ad network, that can help VR content developers earn revenue.

So why not wait for VR to become mainstream as it is only then that developers will require monetization. VR is now in its early adopter’s phase of life cycle. With major VR launches in games, consoles and massive hardware upgrades beginning to take place, it won’t be more than a couple of months before it hits the growth phase. Hence, our timing, to be ready as soon as it hits the growth phase.

I have also seen people starting up and then giving up on a venture as they felt that the market is not right for it at the moment. One of my friend’s venture, started with the idea of giving runners to people who need it, for their daily errands. However his timing could not have been worse. He entered the market competing with hyperlocal delivery majors in an oversaturated market. He had priced himself for a niche market, who also were not ready to pay. His idea was probably too early for a market where hiring a full time help is cheaper than a part time runner. And those who did not want a full time help, could not bear the cost of a part time runner. Although a novel idea, he failed as the Indian market wasn’t ready for it.

Conclusion

So if you’re thinking about starting up, don’t weigh options like experience and networks and risk taking capacity. Weigh the timing of entering the market. It is the only thing that will decide your success or failure. Even if it means waiting for 2 years for the market to mature, then do it. And if it means doing it now, else risk losing out to competition, then do it now. You take a risk only for one reason, to disrupt the existing, and you’ll only be able to do so if the timing is correct.

None of it Matters

Whatever your stand on this matter, whether you should gain experience or not, it is not important. What many people forget while taking such a decision is no matter your experience, you will never learn how to start a business, unless you have done it in the past. Neither will your network help you in a significant manner, because you would be entering a completely new, disruptive business line, where no matter the strength of your network, it will fall short. Also your fresh set of ideas and new perspective of looking at things will not come to your aid, if the timing isn’t right. Its all about the Timing!

The only thing that should matter is timing. Timing in the market. The opportunity that a particular market is offering and whether the market is ready for your idea to take off. Your idea should not be like beating a dead cat. Repackaging any business and launching it with investors’ money cannot guarantee you success. On the flip side your idea should not be so futuristic, that your consumers are not ready for it.

Looking at the Indian hyperlocal business segment, till last year it was all the rage, everyone wanted to get into it, investors were pouring in millions of dollars in the segment, with the bigger players itself raising upwards of $300 million, when the market is expected to reach just about $350 million in 2020. Giving a clear indication that the late entrants into the market would be in an upward battle against their well-funded counterparts. Timing is of utmost importance if anyone wants to enter this market, either all the players here were too early to enter the market, or the laggards were late.

Internationally there have been ideas that way ahead of their time. In 1997, the first social network had come up, known as sixdegrees.com, with the first dot com boom. However, it closed shortly after as it lost traction primarily because people weren’t ready for a social network at that time. It matters when you enter the market.

What should you consider as a favourable time?

Well, I do not consider myself an expert in this matter, and frankly, if someone does claim themselves to know how to judge it, you should know which way to run. Even the most seasoned and successful businessmen make decisions that are wrong about entering a market. Serial entrepreneurs fail at times to get it correctly. But that doesn’t mean that you go in on complete gut feel. Mind you I said complete! Obviously every entrepreneurial decision has some, probably more than some, gut feel involved in it. So, what all do you look for when trying to find out if the market is ready for your product:

1. Market’s existence: Whether your market even exists or not. A lot of which depends on the socio-economic condition of your market. If your business plan entails the usage of high speed internet in rural India. You are bound to fail from day 1. But, those are obvious things you will check. How about the social network opened in 1997. Market research is important here.

2. Market Size: Make sure that the market you are entering is big enough, or has enough space for you to grow. You do not want to end up in a market like the hyperlocal delivery space, which is overcrowded and not gaining enough traction. Whenever you feel that the market size is right for you to enter, do it immediately.

3. Technology: As most startups today do have a technology backing, you should make sure that the technology is well developed. Take the case of Augmented Reality. When Google first launched its Google Glass, it was launched with much fanfare and was touted as the emergence of AR in mainstream, however, a few years later, Google Glass was quietly shutdown, saying the technology needed to be developed further.

4. Copycat Models: Copying American or European models in India or for that matter any other market is fine, because the business is completely different in different countries, existence of such a model elsewhere in the world should give you confidence, that such a business can work. Another thing to consider is about technology adoption, you should consider the lag time between Indian and American markets, as that can be upto 2 years in some cases, so pace yourself accordingly.

5. Competition: Make sure you enter the market either when you are the only player or when your competition is also in a very nascent stage, giving you and them a level playing field. If you enter the market much later than your competition, you are doomed, as they will have a considerable lead over you. Unless of course, even when being the same market you are not competitors owing to your niche market or your immense technology superiority.

Lessons from quitting a job and starting up

I am one of those brats who quit a plush consulting job in a multinational, in less than a year of graduating from IIT Delhi. 2 of my friends and I ventured out in order to start our own entrepreneurial adventure. We started VadR, on a simple belief, now is the time for it.

How did we decide that now is the time for VadR? VadR is a mobile Virtual Reality (VR) ad network. Deciding on whether VR would be the right market to enter was simple. VR is being covered by tech journalist and enthusiasts as if the cure to cancer had been found. With Facebook, HTC, Sony and Google all tech majors investing heavily into it, it’s a no brainer that VR is going to be huge. But, if tech majors are investing in it, is there space. Yes. We are not looking at hardware, nor are we looking at content creation. What we are looking at is creating a sustainable ecosystem for VR, so that it can proliferate. Therefore, an ad network, that can help VR content developers earn revenue.

So why not wait for VR to become mainstream as it is only then that developers will require monetization. VR is now in its early adopter’s phase of life cycle. With major VR launches in games, consoles and massive hardware upgrades beginning to take place, it won’t be more than a couple of months before it hits the growth phase. Hence, our timing, to be ready as soon as it hits the growth phase.

I have also seen people starting up and then giving up on a venture as they felt that the market is not right for it at the moment. One of my friend’s venture, started with the idea of giving runners to people who need it, for their daily errands. However his timing could not have been worse. He entered the market competing with hyperlocal delivery majors in an oversaturated market. He had priced himself for a niche market, who also were not ready to pay. His idea was probably too early for a market where hiring a full time help is cheaper than a part time runner. And those who did not want a full time help, could not bear the cost of a part time runner. Although a novel idea, he failed as the Indian market wasn’t ready for it.

Conclusion

So if you’re thinking about starting up, don’t weigh options like experience and networks and risk taking capacity. Weigh the timing of entering the market. It is the only thing that will decide your success or failure. Even if it means waiting for 2 years for the market to mature, then do it. And if it means doing it now, else risk losing out to competition, then do it now. You take a risk only for one reason, to disrupt the existing, and you’ll only be able to do so if the timing is correct.

Image source: http://www.dignited.com/wp-content/uploads/2014/11/StartupWordCloud.png 

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