A comment made by Alok Goel, MD at SAIF Partners struck a chord in me. While talking about startups and entrepreneurship he said, ‘don’t get lured by the ‘sexiness’ or glamour associated with entrepreneurship.” Unless you have an idea that addresses an issue or a problem that needs to be addressed, your startup is bound to fail’.
As someone who went through an independent phase, trying to build a business (and failing), these words rang true. A lot has already been said about success mantras for a startup from those who have succeeded. Herewith some thoughts from someone who failed:
Differentiation is a must: I know this is a Captain Obvious statement but too many businesses (more so in the services domain, as compared to product) get started without a clear, relevant, sustainable ‘what makes us different?’ proposition. In the ad agency business for example, so many breakaways have sprung up of late. Most of them claim to offer a differentiated service proposition but offer pretty much what everyone else does in the industry. They then depend on the founder’s skills and relationships with clients to survive. If the services offered are commonly found (e.g. digital marketing, app development or design, UI/UX etc.) it makes ‘getting heard’, ‘opening doors’ that much more difficult. Then the pressure shifts to creating remarkable work to get heard which can only happen if a client has already heard of you – typical chicken & egg situation. Needless to say, differentiation becomes even more critical for product companies.
If in service business, a client whom you can bank on: while one has heard stories of entrepreneurs opening shop and then waiting for a client to sign up, it helps to have a client who supports you with business from the beginning. After years in the service industry it is common to find seniors build a relationship with their clients. The clients respect, trust and look forward to such a partner’s inputs. Most often those who breakaway to start an independent business bank on such clients to support them.
A biz model with recurring revenue stream: hunting for a new client every month to keep the cash flow going is a strain. It is always better to figure out a business plan where a monthly, recurring income is built in
Perseverance and capacity for failure: whether it is the mental resolve or a cushion of some sort (financial, age advantage) it is important to be ‘prepared’ for failure. Venturing out early in life or having sufficient bank balance as cushion for lack of regular income for a while are important factors related to capacity for failure. Such factors also have an impact on the ‘never give up’ attitude.
Not everyone can be an entrepreneur: harsh truth is that most of us are not wired to take up a job, not start a business. There is nothing wrong in being a professional working ‘for’ someone. But entrepreneurship has to be innate and can’t be taught. Only a handful of have that drive, energy, enthusiasm, perseverance and risk-taking ability. If you are not one among them, accept it – don’t pretend to have those skills.
Independence can be false high: being independent is a high. It can also spoil you in a way by making you look down upon a typical 9 to 5 job. And as Alok Goel said, there is glamour associated with entrepreneurship. But it could also make you believe you are cut out for entrepreneurship, when you may not.
Any other thoughts? Do comment in.