Optimise time, effort and money to get ahead
Entrepreneurial interest is picking up in India among students, mid-career professionals, younger members of traditional family businesses, and homemakers. Nandini Vaidyanathan's new book, Start Up, Stand Up: A step-by-step guide to growing your business’ offers useful tips on ideation, product design, customer engagement scaling and investment. Are you hoping to see your business expand this year? Read on...
Nandini Vaidyanathan founded CARMa CONNECT in 2010 as a platform to connect entrepreneurs and mentors. She has 20 years of corporate experience in India and abroad. Her company has mentored over 2,000 entrepreneurs, and its website offers templates for business plans, mentorship agreements, employee contracts, mentor agreements, mentee guidelines and NDAs. Nandini’s previous book is Entrepedia: A step by step guide to becoming an entrepreneur in India.
The 20 chapters or ‘sutras’ are spread across 290 pages, and are packed with checklists, tips and examples. Here are some of my takeaways from the book; see also my reviews of the related titles The Manual for Indian Startups, Failing to Succeed, Indian Innovators, Recasting India, Dream with your Eyes Open, and Arise, Awake.
Products, customers and needs
In some cases, customers are already out there looking for a good product (eg. Chaayos entering the tea market), in other cases the product has to be created and customer segments won over (eg. Ola pitching its app to those who have their own cars or use public transport). The customer needs and wants are clearly known in some cases, and in others, the entrepreneur is expected to give customers what they do not even know they want or need. This involves creating habit-forming behaviours that do not need to be promoted by advertising.
Early choices entrepreneurs will need to make are between niche or mass market customers, low-hanging fruit or long gestation period products, and large user-base or early monetisation. Unfortunately, many entrepreneurs have “product obsession” without regard to who the customers are, how they can be reached, why they would use the product, and how much they would be willing to pay for it.
Entrepreneurs need to map out users and non-users, and tap frameworks like business model canvas and design thinking to dive deep into customer needs and aspirations. For example, Aravind Eye Care used multi-level level analysis to drill down into its problem domain and come up with an affordable solution. It involved manufacture of lenses in India, exporting them, adopting a McDonald’s process efficiency approach, using stretchers made of bamboo instead of steel, launching a training school, using technology for remote online diagnosis, and even building dormitories for patients’ families.
A mix of online and offline approaches can be used to target prospects, eg, via LinkedIn or kiosks at apartment complexes. Customer service should be outstanding, right from site visits to online resources and tele-support. Nandini cites Urban Clap as a good example; she herself wanted to clap for their service when they addressed her needs.
At a time when CC Avenues and TechPro were the few players in online payment, Citrus Pay emerged with a payment gateway that was much more robust, and also offered analytics. This opened the door to a new wave of players such as Mobikwik.
Entrepreneurs should show consistent empathy and not arrogance towards customers and partners (not “I am God’s gift to the world”). Instead, they should aim at becoming the “Pied Piper” with a wide customer following.
Innovation pipeline
Innovation applies at pre-market stage (early product development) as well as post-market stage (eg. using messaging platforms for customer engagement). Entrepreneurs need to ideate, pivot and reinvent themselves in a nimble and agile manner.
Whirlpool supports its culture of innovation via budget, training, incentives, quarterly reviews, fast-track board, tools, portals and metrics. Genentech widely shares stories of how its cancer research saves lives, thus inspiring its employees to innovate more.
Investors prefer companies with a robust innovation pipeline. There needs to be a phased plan for new products, features, and customers. Single products, markets and customer segments don’t excite investors at all, according to Nandini.
The board of a startup also helps in this regard; they should have work experience as well as an innovation mindset. They should have broad industry insights and be able to connect the dots, so as to spot new innovation opportunities.
Mentorship
Mentors should be chosen for their knowledge, skills, network and attitude; different mentors will be needed at various stages of the entrepreneurship journey (see also my book review of The Manager’s Guide to Mentoring, profile of EO Cares mentorship programme, and write-up on the TiE Bangalore panel on mentors). Successful mentoring is based on trust, empathy and patience.
Nandini Vaidyanathan
Good mentors are those who are themselves willing to learn from the mentee along the journey. They should be able to help the entrepreneur in profiling the customer, understand when to pivot, engage with investors, and keep up with regulatory requirements.
Mentees, on the other hand, should also be willing to do the seemingly boring work of documentation, look for critical feedback from mentors and not just agreement or validation, show ability to learn outside their core domain, be disciplined in following processes, and have the humility to accept the limitations of what their formal degrees or theoretical classes taught them.
Scale stage
As a company scales, the founders need to brush up their ability to nurture good organisational behaviour (OB). This includes hiring, emotional quotient, decision making, negotiation, and conflict resolution. “Every employee in your organisation should go through a crash course in OB during the induction phase,” Nandini advises; there are many useful online resources in this regard.
Management styles will become more formal and contractual as the company becomes big; founders will need to be more communicative as well. Big-picture thinking is needed, without losing the eye for detail of ground-level activities.
Some are born leaders, but others can be made as well, explains Nandini. Founders should invest in upskilling themselves to be strategic leaders. They will need to conquer fear, especially fear of failure and the associated stigma.
The board of a startup plays an important role in operations, performance, compliance, integrity and credibility. Board members should have cross-domain expertise, solid personal values, experience with spotting and bouncing back from failure, and wide professional networks.
Organisational culture
Founders should clearly plan, articulate, and implement the elements of organisational culture, which include vision, values and behaviours. “Good culture does not just facilitate strategy implementation. It becomes the most powerful strategic tool in itself,” emphasises Nandini. “Cultures have the capability to outlast organisations and entrepreneurs,” she adds.
Successful companies have high-performance cultures, such as Whole Earth Foods. Bonuses are given each week to effective cross-functional teams; teamwork is celebrated through a “Declaration of Interdependence.”
Toyota has a culture where employees are encouraged to speak up about problems and take ownership of solving them. NCR was a pioneer in setting up an internal sales training school. Infosys has a culture of frugality. Kishore Biyani’s Future Group even hired Indian mythologist Devdutt Pattanaik as Chief Belief Officer to help define the culture.
Investors
The pitch message of an entrepreneur varies at different stages of the journey: seed capital (hope), Series A (vision), and Series B (performance card). The Internet boom of the 1990s spurred the equity model of investment. Investors with risk capital are typically interested only in “gazelle” businesses that are feasible, scalable, profitable, and fast-growing.
They prefer founders who can pivot to new opportunities (eg. InMobi moving away from SMS-based mobile ads), adapt new ideas from outside (eg. Snapdeal adapting models from China), fine-tune aspects of the business model (eg. Flipkart’s logistics), and keep things simple (eg. DropBox).
In addition to angels and VCs, some founders have themselves become investors, and crowdfunding opens up new models of “sachet” investment. Crowdfunding creates a new asset class that is diversified, vibrant, global and robust. Products in the social and creative sectors with popular appeal work well with this model. Success factors include effective storytelling, prompt responsive communication, and early enlistment of supporters.
The regulatory framework in India needs to change to include equity crowdfunding. Social and investor attitudes towards women entrepreneurs also need to become more supportive, Nandini urges.
Timing is key in the entrepreneurship journey, the author says, explaining how e-commerce site Fabmall may have been too early in terms of internet penetration in India and consumer attitudes towards online shopping. Customer service was not outstanding, there was no great team beyond the founder, and the founder himself was not flamboyant, according to Nandini.
Investors have herd mentality, and may prefer startups where the business model is not radically unique, customer acquisition cost is low, and capability to absorb capital is “like a sponge.” If the business does not need further capital down the road, it makes it difficult for the investor to make money from a quick exit within a few years. “Exit is as important to the investor as a return,” explains Nandini.
“Choosing your investor is as important a decision as choosing your customer or your co-founder,” advises Nandini. Good investors bring to the table not just money but strategic capabilities via knowledge, skill, attitude, commitment, ethics, customer connects, and networks of mentors and future investors. A good example is the technology and scale mindset that Alibaba has brought to Paytm.
It is important to have trust, faith, comfort, empathy and ideological fit in the relationship between an investor and entrepreneur. Unfortunately, in India, today, the dice are loaded in VCs’ favour. Hopefully one day, the entrepreneurs themselves will become picky and choosy about their VCs, says Nandini.
Negotiation and networking
The art of negotiation applies not just to the investor stage but throughout the journey of an entrepreneur: right from career choice and family discussions to choice of co-founders and employees. This extends to partner contracts and customer offerings as well.
Successful negotiation calls for empathy, focus, patience and creativity. “Don’t let it disintegrate into a power display or an ego trip. Go to the table wanting that both should win, not you alone,” advises Nandini.
The author also offers advice on effective networking (online and offline). Networking helps reduce risk (by getting advice and validation), reuse insights (learn from other’s mistakes), and recycle experience (sharing learning). A good networker optimises use of time, effort and money. Stalking, spamming and trolling are to be avoided.
Truly successful entrepreneurs are driven to make the world a better place and are inspired from within, Nandini sums up. It would be fitting to end this review with some of the inspirational quotes in the book.
Set your course by the stars, not by the lights of every passing ship. – Omar Bradley
Games are won by players who focus on the playing field, not by those whose eyes are glued to the scoreboard. – Warren Buffet
A bell is just a cup, until it is struck. - Wire
If you can’t explain it to a six-year old, you don’t understand it yourself. – Albert Einstein
People don’t care how much you know until they know how much you care. – Theodore Roosevelt
The greatest good you can do for another is not just to share your riches but to reveal to them their own. – Benjamin Disraeli
The currency of real networking is not greed but generosity. – Keith Ferrazzi
What would you attempt to do if you knew you could not fail? – Robert Schuller
It does not matter whether you win or lose, until you lose. – John McEnroe