Startup DNA

What does the DNA of a startup look like? While almost every startup believes that it is building something entirely unique, there are some defining characteristics that dramatically increase the probability of startup success.

Shane Snow – the Chief Creative Officer of Contently – lists some excellent points in his post. Here are a few of my favorites…

  • Rather Than Planning, Doing
  • Looking For 80/20s
  • Split Testing And Iterating

Bias for Action has got to feature among the top of any list you see on this subject, since a startup is essentially about getting started with the idea, and not just making elaborate plans on paper (or on a spreadsheet!).

If you are planning to launch a startup soon, be wary of collaborations with key stakeholders (partners, vendors or even senior staff) that do not exhibit this trait. You will regret it if you don’t, and waste precious time in the bargain.

Pareto’s Principle of 80/20 will definitely apply to your ToDo list, once you start your journey on the road to entrepreneurship.

Yes, the list of things to do will be long, and every item on it will seem important. But, every entrepreneur has limited resources and limited time at his/her disposal. And, in the end, what will matter is that you did the things that mattered most – and ignored the ones that didn’t.

Finally, Testing and Iteration will get you further than most, and also ensure that you get bang for the buck.

Should you advertise on Facebook or Google? Should you use subject line A or B in your introductory email? Should you go with logo option 1 or 2? Very often, we don’t know what will work in a particular context, but can ascertain our course of action based on data, as long as we are willing to learn from the experiment, and iterate as needed.

If budget is a constraint – as it often is – you need to run carefully though-through experiments to see what works better. Discard what doesn’t, and scale up what works by putting more resources behind it. If budgets are generous, run even more experiments!

May the force be with you.

Entrepreneur Dilemmas

This post was also featured on YourStory

Start your own business, and you will soon discover that the life of an entrepreneur is full of dilemmas – ones that have no easy answers.

Yes, we may have learnt some lessons from the dot-com crash of 2000, and some of those learnings apply even today. But, the environment in which we operate is far more complex and dynamic than ever before. As a result, there are more questions than answers.

What compounds the problem is the fact that many entrepreneurs often have no one they can approach with such questions – friends and family may not have the business context or skills, and experienced mentors are hard to find.

Organizational Tradeoffs

It starts with the kind of organization you wish to build.

Some will advise you to build a Lean Startup while others will advocate the importance of thinking big.

A “lean” startup means bootstrapping your way to success, building on a Minimum Viable Product, and iterating based on real customer inputs. Thinking big, on the other hand, involves ambitious plans that need a fair bit of funding and large-scale thinking for them to succeed.

This issue assumes even greater importance if you’re not already flush with capital, since the “run way” you have to remain in business will be directly impacted by the choices you make in this regard.

So, which way should you go? Is being cautious better than being ambitious, when it comes to building a business?

Product Tradeoffs

It’s not just the organization – your product approach can significantly impact your chances of success.

A newly created product or service should either address a specific customer need previously unmet, or do it in a manner that is cheaper or better than current alternatives. But how good is “good enough”?

Should you labor over the details of every pixel… ensure that even the packaging is picture perfect? Or should you focus on the all-important shipping date, and risk rolling out a buggy or less-than-perfect version to paying customers?

Some will remind you that the earliest versions of Facebook or Google were far from ideal, while others will wax eloquent about the attention to detail that makes Apple products such a worldwide hit.

Which path is better? Which route is likely to bring success?

Market Tradeoffs

Simply building an excellent product is not enough – there are dimensions to your Market strategy that also need clarity.

A key question here is: How important is competition? Should you be focused on improving on the competition, or ignoring the competition and building something no one else has done before?

Peter Thiel advocates in ‘Zero to One‘ that incremental advances will only get you so far – what’s needed is to choose boldness over triviality, not just make incremental advances. But in the ‘Lean Startup‘, Eric Ries writes of the virtues of the iterative cycle of Build-Measure-Learn, and of continuous testing and experimentation.

So, who is right? Which approach will get you the glory and riches you so deserve?

Capital Tradeoffs

Even if you’ve figured out the answers to all of the above, there is the issue of the most important resource of all – Money.

Here too, the choices are as tricky as you can imagine. After all, every business has a limited amount of capital at its disposal, and often needs to make choices on how that money should be spent.

So, should you seek capital early on to ensure rapid scale-up, or delay external funding as much as you can, to retain ownership and control? Should you focus on Revenue, or place a priority on Growth and customer acquisition so that a competitor does not end up blowing you out of the game altogether?

What’s the best way to solve this dilemma?

The Journey Within

What should a business owner do when facing such choices?

Well, my learning has been that the journey is more of self-discovery.

Yes, it is important to learn how the ecosystem works, how business works, and how the economy is shaping trends that can be leveraged to your advantage. But, it is equally important to know what you are, and what matters to you.

That understanding of Self becomes your compass, when you seek answers to such dilemmas. That understanding, is how you separate the noise from the music, as you figure out the answers for yourself. And, that understanding informs your decisions, as you traverse the path that you alone must walk.

Lewis Carroll got it right when he said, “If you don’t know where you are going, any road will get you there.

Yes, you will continue to face conflicting advice, and come across opinions of business leaders that make you question your own beliefs. But a true entrepreneur must stand his ground in the face of adversity and conflict. After all, the ones who change the world are “the crazy ones, the misfits, the rebels”!

May the force be with you.

Taking Stock: Year 1

It’s been one year since I launched “ThinkShop“.

Yes, this was my second stint as an entrepreneur. But, in many ways, the experience was completely different. Unlike the last time (which was more than 13 years ago), I was no longer a starry-eyed, young man, without a care in the world. This time around, I was a wee bit wiser, more mature, and understood a little better – what lay in store for me. But even I couldn’t have anticipated all that transpired.

Here’s a quick look at how Year 1 has fared…

  • Attended a plethora of business & technology events
  • Addressed hundreds of eager listeners via workshops and talks
  • Reached out to hundreds more via press mentions and articles
  • Met with a range of interesting folks from different industries
  • Signed up a number of clients, across domains
  • Worked on multiple projects, across platforms and solutions
  • Attended dozens of workshops on a diverse range of topics
  • Made connections & exchanged cards with hundreds of people
  • Experimented with different formats in the quest for a workplace
  • Worked more hours in a day (and week) than I thought possible
  • Stayed up nights “figuring out the answers” (work-in-progress)
  • Improved self-awareness, and discovered a little about myself
  • Learned to enjoy higher highs and deal with lower lows
  • Clocked more steps on my Fitbit than I’d imagined
  • Tried out a few pilot experiments to develop products & services
  • Collaborated with a few people, but had to part ways, soon after
  • Said “No” to countless things, ideas and people (ongoing effort!)
  • Learned of a lot of things, and realized how much I still don’t know
  • Traveled to places I’d never been to, including some that I had
  • Joined in a number of family celebrations and events
  • Did not miss a single important occasion related to my children

When I look back on the year gone by, it has been nothing short of living life to the fullest – making each day count.

I wouldn’t trade it for anything. Would you?

Questions for a Business Owner

Many years ago, I came across an intriguing little book called ‘The Book of Questions’. It was full of questions. No answers. But, it made you think about what was most important to you.

Here is my list of questions for a Business Owner… Just questions, no answers. But, it should make you think!

  • Are you really a risk taker? Really?
  • Do you have the right DNA to run a business of your own?
  • Are you leveraging the ‘Long Tail’ enough? (If you don’t know what that means, do look it up)
  • What keeps you from investing in the idea/venture/business?
  • Should you be a franchisee? Why aren’t you one already?
  • Should you be a franchiser?  Why aren’t you one already?
  • Do you have the systems and processes needed to build a team and empower them?
  • Are you afraid of delegating control?
  • Are you aware of the opportunities that surround you? Really aware?
  • What are you doing to tap into the opportunities around you?
  • What skills don’t you have? Which ones don’t you want to build yourself? What are you doing to acquire them?
  • Why do you want to start/grow your business?
  • Do you know what your sweet spot is in terms of scale of operations?
  • What is the worst that can happen if you fail at this? And then, fail again?
  • Will you be able to manage the social adjustments needed when you shift from a “job” to a “business”?
  • Do you think owning/starting a business means less work than working for an employer?

Time for some introspection…

How To Quit Your Job

This post was also featured on YourStory

On countless occassions, I have heard folks lament about their jobs and how they wish they could simply quit and do something else… perhaps start a business of their own. If you are considering that option, this post should be of some help.

When To Quit (And, When Not To)

Yes, we’ve all been on the wrong side of cruel bosses, inept organizational structures and long commutes that sap the life energy out of us. If you’re waking up every day dreading the thought of going to work, there is a strong case to make big changes in your professional life. But that does not always have to mean quitting your job.

Take some time to analyze your present situation (take a friend’s help if you’re not good at the ‘analysis’ part). I would not recommend picking up your briefcase and walking out of your cubicle at the first sign of trouble.

If you’re bored with your current role, it will help to understand that you can multiply your learning (and hence, excitement) by changing one or more of the following variables: Industry, Company, Function and Role. In fact, you can aim to change more than one of these simultaneously, if you’re so inclined.

If an unpleasant boss / manager / colleague is the source of your unhappiness, it may help to know that no one lasts forever. Besides, there is no guarantee of your new employment not having a worse personality to contend with, and almost any person can be managed if you have the right skills or approach.

If you live under the assumption that starting your own business = being your own boss, please know that it is nothing but a myth. Yes, you get more flexibility when you are at the top of the food chain in your own setup, but businesses ultimately serve customers. So, in a sense, the customer is always going to call the shots.

Are You Ready?

Of course, every case is different, and no writeup can cover all the possible scenarios. If you’ve come to the conclusion that beginning a new venture is the only way out for you, it will help to keep the following in mind:

  • Monthly Buffer – The first significant impact of leaving behind the comfort of a monthly salary is the opportunity cost involved. Every one has monthly expenses – make sure you have a good handle on your’s, including factoring in rent/mortgage payments, insurance, travel and other one-time or annual expenses you incur in a typical year. Then, aim to have 6-12 months worth of monthly expenses covered by way of savings, so that you have a decent buffer while you go about establishing your business footprint.

    Tip: If you have the foresight to plan years ahead of time, aim to get debt-free as soon as possible. It will make a considerable dent in the monthly buffer needed.

  • Business Costs – Depending on your business model, you will also need to factor in the costs that will need to be incurred before you start clocking any revenues from your new venture. A lot depends on whether your plans involve manufacturing (as in, a whole lot of capital costs) or services (which are more likely to involve ideas, technology and people). If you plan to seek a loan to fund your business, learn about your credit history and line up some contenders with whom you can vet your business proposition, well in advance. If you intend to seek venture capital, understand how the VC industry works and don’t get too optimistic about your chances of securing funding too soon.

    Tip: In today’s age, crowdsourcing of funds is another idea that may work in your case. But your chances of success will greatly improve if the amount of capital required to get your new venture off the ground is not prohibitive.

  • Planning vs Action – There is no substitute for planning before you take the plunge, but sometimes too much planning can also result in ‘analysis-paralysis’. Regardless of the business idea, remember to do your research and understand the market in which you intend to operate. But, also remember that a plan is only as good as its assumptions. Try and validate your assumptions with potential customers, if you can talk to some. You can reach other, more experienced folks in industry, if finding your target segment is not possible.

    Tip: Make “shipping date” your priority. Don’t worry about building the perfect mousetrap in your first attempt. (Remember the first version of Facebook?) It’s better to have something out there that your customers can respond to, than months of working on ideas and having nothing to show for it.

Oh, and if you have decided to take the plunge, understand that your financial freedom will now solely depend on the success of your new venture. If you have dependents, it is a good idea to make sure you are adequately insured.

One last thing: Anyone can start a business, but not many can sustain one or make it scale. When things get tough, as they inevitably will, you will need all the passion in the world to get past it and come out shining at the other end.

If you think that quitting your job and starting a new business is a get-rich-quick proposition, I wish you luck. You will need a lot of it. But, take care of the essentials, and hopefully, your new endeavour can mark the beginning of an exciting new chapter in your Life.

Also Read: Corporate Life vs Entrepreneurship