The evolving start-up ecosystem in India is certainly fascinating, especially with its disruptive changes. Moreover, they also contribute to the country’s economy by becoming centres of innovation and generating employment.
As we come to the end of 2016, let us take a look at 16 ideas about start-up’s that are nothing but myths.
You need to have a lot of personal cash: There are innumerable funding sources such as line of credit, using a business incubator, finding an accelerator, and crowd funding platforms, among others today. One need not always depend on their own funds entirely. Once convinced with the business idea, these external funding sources are willing to provide the necessary support.
Entrepreneurs are extroverts: Some of the famous introverts – Bill Gates, Mark Zuckerberg and Warren Buffett, among others have been successful entrepreneurs. Introverts are generally good listeners, and in business, listening is worth more than its weight in gold. Being realists and objective, introverts never allow emotions to overrule their rationality in order to solve business issues.
They don’t know how to quit: Making a choice to quit a self-nurtured business is not an easy one, but today unlike in the past, decisions are made quickly to avoid further losses in the long run. An entrepreneur holding on to his/her business despite challenges, is equivalent to a gambler who sticks to the game, anticipating a win.
If we have a great product, investors will find us: We find similar Ideas and products being produced in abundance by different start-ups. It is not just a question of having a great idea and building the product, it is also about building relationships, sales, marketing and customer support.
Best Friends are best Business Partners: It is always best to separate one’s professional and personal life. A friend at home, or in an informal situation may not be similar to having a friend at work. People are known to have different behavior styles at work and there could be clash of ideology. Personal agenda will also take precedence over friendships. History has shown us that a lot of friendships have lawyered up when it came to business interests.
Marketing is not essential: Best products and ideas get lost without proper Marketing. It is an important component that investors look for, to truly understand how a venture can grow further and also to determine the rate of growth. How the offering solves a continuous ‘pain-points’ of customers can be through strategic marketing. Besides it also helps in attracting the right talent!
It’s all about the ‘idea’: One amazing idea has led to mushrooming of unicorn companies valued at US$1 billion or more like Uber, Xiaomi, Airbnb, etc. The idea, by itself will not make any profit in most cases. Other factors, such as the leadership team’s quality, the talent hired, and a robust growth plan are very essential. ‘Timing’ of the idea is equally vital, which means that there should be an existing market to buy that idea.
You need a detailed business plan: A detailed business plan can be a waste of time in the VUCA world, because of the possibility of unexpected changes in the marketplace. With disruptions everywhere, nothing can be predicted and business implications cannot be configured in the first instance, thereby making the details of the plan redundant. Often it’s better to pull the trigger and take some risks.
Founders are their own bosses: Unlike decades ago, upcoming businesses today have a stakeholder ecosystem – including investors, vendors and employees, among others, who contribute at different levels for the running of the business. Founders have to cater to everyone in order to run the venture profitably.
You need one big customer: Why? Is the offering so specialized that it is designed keeping one customer in mind? That is suicidal! Having a multi customer strategy is key. A large single client knowing how important they are will start making aggressive demands for pricing concessions and other privileges.
Cheaper than competitors = win: To remain competitive and convert a prospective customer, start-ups should definitely be sensitive in their pricing. However that should not be the main criteria, there will always be a competitor who can offer a cheaper option any day. Start-ups are not falling for the game of low-pricing these days. Offering quality, service and having a USP is more profitable and supports in building the brand image in the long run.
Culture, Processes don’t have a place: Then there is no place for businesses either. Work culture and structured processes define what the company stands for and provides the differentiator and the brand image for the Company. It showcases how people work and behave, which is one of the most tangible forces that can be positively reinforced time and again.
Life is a breeze, with a fancy office and titles: In today’s society, with communication at lightning speed, WFH and the BYOD culture, employees are co-located. With such a culture picking up, investing in a plush office is not a good decision. Leaders are being judged by what impact they are having on the ecosystem, the positive changes and results they bring to the table and not necessarily by their designation or size of their office.
Start-ups raise cash really fast: In the recent times, investors have had more choices of start-ups to bet their money on than ever before. With so much competition, a company should actually do a whole lot of homework and walk through ‘fire’ before even becoming worthy of being noticed by a good investor.
Make money and retire quickly: With costs of living on the rise, one cannot predict what the right amount of money is anymore. Planning for the future is even more difficult and retiring quickly, a true myth. If your motivation is money and not how to solve a problem, stop right here! Doing something you are passionate about is what ultimately ensures satisfaction and a happy journey towards it. Money is only a by-product.
Government does not understand: Startups have a huge potential to boost the nation’s economy and the government is slowly realizing this. The Government has initiated startup friendly initiatives and is working towards removing the hurdles. With faster patent registrations, financial support, tax incentives and faster exit strategies, the understanding is almost here.
Start-up reality is far from the myths we have observed. Appropriate understanding of these will ensure that successful business is not just a forlorn dream.
