Whenever there is a discussion around startups, you would find all the jargons around it like:

1. Great Idea.
2. Great Team.
3. Bootstrapping / Venture Funding.
4. Time to market.
5. Potential customers.
6. Marketing and ……………

As I have mentioned in the previous article, IMHO execution would always be the key; whether you are a startup guy or work for a startup.Also,when we think about Startups, the first comparison that always comes to our mind is The Silicon Valley, but many times, we tend to forget that Indian Entrepreneurial Ecosystem is different from that in the US.May be it would still be many years when a college dropout like Mark Zuckerberg or a whiz-kid like Anshul Samar of Elementio would be accepted in our ecosystem.

In this article, I would like to focus on the Cobweb of Myths[termed Myth-Web] around Indian Startups , which when dusted off, may lead to a better ecosystem.

Note:
The views in this article are my personal views and it would be nice, if someone corrects me wherever required neutral.

1. Ecosystem = IIT(s) / IIM(s)
There is no point in mentioning how much impression premier institutions like Indian Institute Of Technology[IIT] or Indian Institute of Management[IIM] bring in our minds. For sure, they bring the best of the minds together under one roof, but Startups are not only restrained to them.In fact, an attempt should be made to take the IIT culture to the normal colleges(like mine) so, that there is an entrepreneurial ecosystem developed there as well.We need to get rid of the pre-made impression that “Entrepreneurs can only come from IIT’s”. IMHO, if we limit ourselves to only premier institutions, we won’t be able to find our future Mark(s) or Anshul(s) sad

2. Venture Funding = Success
Funding always holds a major aspect for any startup but many times, people feel that – More the funding, more successful is the Startup.Dharmesh Shah of HubSpot has a very nice article on the same when His Startup raised $12 million in series B funding.
Money is always important in any business and each one of us understand the same but that alone does not materialize into success.This is an impression that is prevelant everywhere and hence, Hubspot[though not an Indian startup] was taken as an example.

3. Media = Success
With media not only restrained to mass media, so called Media Coverage has become somewhat simpler. Media may be coverage on blogs, websites … But there is always a downside to the coverage in the media.Many startups(may not mention the name here) try to be in the news(in Magazines and other media) and this coverage is many times wrongly treated as Success .And it becomes difficult to digest this success.
With Web 2.0, media(except print media) has completely changed so, “Being in the media at the right time may lead to wonders else things may crumble” sad

4. Startups can be built in isolation
Why Bangalore is so famous in India is because it has a Brand Image attached to it and the Entrepreneurial Ecosystem is by far the best in India.But it is not the same elsewhere.Many of us forget that the Ecosystem is a crucial factor in any startup and to bring a change , we need to be a part of that ecosystem.
I have spoken to few entrepreneurs from other cities(apart from Mumbai / Chennai / other metros) and the importance of Ecosystem is not yet penetrated there….Startups need all the support they can and hence, they can be built in isolation for some period [after which they have to join the change to make the change].

5. Why should I attend Unconferences?
This is just from a small conversation which I had with a friend of mine who works in a startup.The founder of that startup was very active at Unconferences like BarCamp, BlogCamp, etc ….. until one day they got funded.I asked my friend that your CEO is no longer seen in unconferences and the answer was : “We got angel funded and hence, he does not feel a need to come to Unconferences”.The answer was shocking
rolleyes
IMHO, Unconferences is the most prospective place where you can find your cofounder/prospective employees or even a new idea for a venture.Though this incident was personal, Unconference is one place which may work wonders for your startup since, it has been instrumental in shaping up my career wink.

Note:
If you can think of some more points , do leave them in the comments section and I would be grateful to add them with the article.

Reader’s Contribution:
Alok Padhi – An inspiring story of a A waiter who would be an IAS Officer

Last few days, have been quite busy for me w.r.t Travel & Work and hence, could not blog for a very long time sad. Last weekend, I was at an Unconference named IdeaCamp in Pune [about which I would blog later]; where I met a friend of mine, who had an interesting Web 2.0 idea.He explained me about the concept and everything was fine until when he said “The big guys would definitely have a tough time and would face a big competition from me !!!!“. This statement made things look so simple like “You have an idea, you execute it [without any problems] and you have a great market share lol“, but things are not always as easy as he mentioned during the conversation.There are so many uncalculated things that come during the phase of execution that may make a GREAT idea AVERAGE or an AVERAGE idea GREAT !!!

This was the best time to write an article on “Things that may break a Startup“, which was featured in the DARE magazine.It is one the most practical article’s, I have come across and hence, I thought of penning down the same on my blog [which would serve as a checklist for me as well for others who might have missed the article !!!].

NOTE:
The credit of this article goes to DARE magazine and below are some of the most important points from the article.

1. Your IDEA is STOLEN
Virtually, all the entrepreneurs believe that their idea is path breaking and it would take very less time for someone to steal their idea[if it is been discussed in public].Though this might be true[in some cases] but it is one of the biggest misnomers about entrepreneurship.Assume that you keep your idea trade secret and after few months, come out with your product or service.How much time would it take for a competitor to come up with a better product; learning from the mistakes you made or some of the loopholes that were left in your product, which may lead to another better product idea.If your product is hot, how much time would it take for China to mass-produce it? The first mover advantage does not always work the way it has been advertised.
Who came up with the idea of portable music player[PMP] ? And who made the most money out off portable music players ? One of the last entrants in the field : Apple.Who came up with the first cellphone? Motorola.Who is the lord of the cellphone business? Nokia.

It is not always the idea, but the execution that makes the difference.Being a first mover is not always the best.Learning from others who went before you helps.

2. You got it WRONG
You start off with a wonderful idea and after lot of hard work, realize that the things did not work as per the plan.The limitations could be simple, like you are not able to get the components of the exact precision that you wanted or you make a basic blunder in your calculations or assumptions that were revealed in the later stages. There could be market readiness issues or limitations in the delivery mechanisms.What is the way out to this problem – Stringent and frequent reality checks. At the concept stage, do not make sweeping assumptions.Get the basic figures of market size, technology availability and costs right within reasonable limits[+- 15 to 20%].Cross check these numbers thoroughly and recheck them FREQUENTLY. If your business has come about as a result of some market feedback for example from a market survey, recheck to ensure that the sampling and the interpretation is correct.

3. Takes LONGER than PLANNED
This happens due to the following reasons:

  1. The complexities were not very well understood in the beginning.
  2. A bigger problem is when the founders fall in love with the product and fiddle around for ages to make one cool feature or trying to make it prefect.
To manage the first problem, budget for more time than you think it will take.Many successful entrepreneurs say that it would be wise to budget for anywhere from 25 to 50% more time than you expected, depending on the scope and complexity.The second one is more difficult to get rid off.Do not fall in love with your idea[though it is easier said than done], forgetting the passage of time even as we make the most minor changes to it.Taking learning from Gmail, which is there in beta from 2004 onwards.The way to handle this is to break down your project into clear activities and milestones and work out how much slack you can afford to take at each point.Having some [co-founder or even an employee] sound an alarm bell on slippages is also a good idea idea

4. COMPETITOR releases FREE EQUIVALENT
This is a very common problem that is unique to the software industry.But it can happen in various other industries also, where the competitor reduces prices to rock bottom just before you launch.This is the most toughest one to handle and the only solution being to cut your losses immediately and move to Plan-B [if you have one].

5. ONE-MAN shows DON’T WORK
There are very few businesses where a one-man show can pull along and grow for long , which are either in the show business or in sports.If you are not an ace actor or a sportsman, you will need a team that will help you to achieve your goals and grow big.One man shows collapse from sheer exhaustion.
Another version of the one-man show is where the team is kept too small , because the founder does not want to give up control or because of fears of quality being compromised. While this does not lead to the business closing down, it does limit its ability to scale.

6. CO-FOUNDERS fail to GET ALONG
This is one of the most deadliest reasons of all. You have all things in place like your idea, business plan, development team but the only problem is that your top team can’t get along.Too many ego clashes, too many instances of my-way-or-the-highway !!! Some differences of opinion are bound to happen and an occasional debate is not a bad thing, as long as you can put all that behind and get back to work.But if these get too frequent, than it is better to part ways than to continue.A clear exit plan is a good thing to have as your agreement.
Worst of them all is when the LEADER himself/herself is responsible for all the troubles,which if not corrected may lead to very serious problems[including closing down] in future.

7. CAN’T AFFORD key skills
You need a specific skill without which your offering is incomplete and that particular skill is not available to you or is too costly to afford.Depending on how critical the skill you are looking for is, and how the demand for that skill in the market is, you need to offer a challenging deal to the candidate. In most of the cases, the right combination of Money and Challenge[in work] would do the trick.

8. MARKETS do NOT accept your PRODUCT
All the things are in place and you are out with your product, but what if the market is not willing to accept your idea. Many startups fail because they have no relevance to the market.Another reason is that they are too overpriced for the market to bear.
It is always advisable to adapt to the market realities and to create a product which is well-inline with the market requirements.Cost effective methodologies for market research like Dipstick Surveys can be effectively used by startups.

9. MARKETS CHANGE
Market and technology changes are a part of the business cycle and like any other business, you need to change your business to be able to survive and prosper.BPO Business took over most of the Medical Transcription businesses.The revolutionary PC completely drove the typewriter out of business.
Those who change with the times survive and prosper, those who don’t , become a footnote to history sad

10. MONEY RUNS out
Most of the startups are conservative in estimating the costs and get too aggressive on income figures due to which, money runs out.Making a good business plan is not a one time activity.As the business environment changes and as you get good understanding of the business, change the business plan[at least for yourself].
Another reason could be a slump in the economy which stops the inflow of money.The solution is to have a realistic plan in place and making it more & more mature as your business gains maturity.

11. YOU GIVE UP
What happens when the leader himself/herself looses the way and gives up.If you fall in the category of startups that cannot make it big, there is no need to loose heart. Try again exclaim

I hope that you gained lot of insights from this article, just as I did. Thanks DARE for such a wonderful article, which is an eye opener for all the startups !!!

Recently, I was on an official visit to Ahmedabad where I stayed at my friend’s place.He is a budding entrepreneur and one of the things which caught my attention, was posters which were stuck in his house biggrin They were motivational posters and the theme was “Quitting” and “Failure“, just as they were motivational for him [as well as me];I just thought to have the same on my blog :

Don’t Quit [The Mantra]


Don’t Quit , when the tide is lowest,
For it’s about to turn;
Don’t quit over doubts and questions,
For there’s something you may learn.

Don’t quit when the night is darkest,
For it’s just a while until dawn;
Don’t quit when you’ve run the farthest
For the race is almost won.

Don’t quit when the hill is steepest,
For your goal is almost nigh;
Don’t quit until you are not a failure,
Until you fail to try.

Success [The Mantra]

Just because
something is
Difficult

does not mean you shouldn’t
Try

It means you
should just try
Harder

Quite interesting and motivating …. May be, this may sound a bit philosophical but this is what keeps the Entrepreneurial spirit ticking biggrin

Reader Contribution:
1. If you have trouble succeeding , Fail [Kent Beck] – Bhasker V Kode, CTO of Hover
2.
When the going gets tough, the tough gets going Vaibhav Pandey

Being in a startup, we have come to know that along with day to day technical, marketing and other difficulties, Legal Aspects are so very important. Today, we have a guest article by Gaurav Singhal , Non Executive Director of Siddhast Intellectual Property Innovations Pvt Ltd, a company specializing in providing services in IP Consultancy, Strategy and Legal Consultancy.More details about Gaurav can be found here.So, let’s start off with the article !!!

It’s a vast topic to be covered in few lines. When we move towards the naming of the venture, from that day by itself Law comes into existence, as one needs to get it registered; so that (s)he can get some exclusivity for that name and further that could help him to distinguish his company from other’s.

Let us integrate each step about how an entrepreneur should take when (s)he just thinks of starting out of his/her venture; to the level when (s)he institutes his/her venture with the Legal purview.

In this article, we would touch upon legal aspects from the stage of Idea generation to Incorporation[Pre-Funding stage].

Some of the basic elements to remember are:

Your Idea may not be YOUR idea :
One fine day, you get a nice idea and write it on a piece of paper.Here comes the Intellectual Property law, particularly Copyright law in particular. A person as (s)he writes also gets a copyright over it. But (s)he needs to get it in the shape, so that it can be used in the legal transactions and documentation as well. So, (s)he should get it copyrighted from the Registrar of Copyright. The idea need not be too abstract but it should have some specific representation.

Form a team to work out :
Get into agreement with all the team members clearly stating the purpose of the agreement and what would be the Initial share percentage if the venture works out. Try to get every liability right on paper, which would make the work smooth and well going.

Draft a Business Plan :
In drafting the business plan, one of the most important component is that it should be according to the law of the land where you are instituting your venture. The various time Lines should also to be included for that purpose. Even every small decision could be struck by the Legal structure, like if there are low prices of land and Tax Holidays in N-E but the labor laws are too tight for your industry then you can’t choose it. Or if the basic manufacturing of the product of your future venture is barred by the regional law or the Environmental laws then again, you would be debarred to practice it.

Disclosure of Business Plan :
Whenever you are disclosing the plan to anybody please get a Non Disclosure Agreement signed; otherwise it would be like throwing your idea in front of dogs to bite off cry.

Getting Funded :
Here it is important to decide whether you are going to get the fund from Bank or Venture Capitalist[VC] or some small investors. Every thing should be crystal clear in the Funding Agreement. Even a person should check out , if there has been any funding agency which is giving some special rebates for a particular industry in Legal Compliance w.r.t Environmental aspects or other financial law, taxation law or any other legal machinery.

Thanks Gaurav for all the insights and I hope you enjoyed reading the article, just like me biggrin This article would be followed by another article, which would focus on the other legal compliances ,to be kept in mind after the Post-Funding stage.

All of us know the phrase “Slow and Steady wins the race“, but most of the times,the reverse holds true especially in business[First Mover advantage].Apple entered the Portable Player Bandwagon very late yet, it still rules the market with it’s revolutionary iPod [Slow may sometimes be the most Steady smile].

Teams have become important rather than individual performers and the same is shown in the improvised version of the “Hare and Tortoise” story shown below[must read for anyone in the corporate or a business environment] :

As shown in the presentation, some of the key learnings from the “Hare and Tortoise” story are:
  • Never give up when faced with failure.
  • Fast and consistent would always beat the slow and steady [but may not always be true].
  • Work to your competencies.
  • Compete against a situation , not against a rival smile.
  • Team work always creates wonders than individual performers.

After BlogCamp,Mumbai, now is the time for some Ideation workshop in it’s nearby city – Pune.

What is IdeaCamp?

IdeaCamp is a BarCamp styled Unconference catering to the discussion of ideas and doubts[and issues] revolving around ideas [it’s birth, market validation, implementation etc.].As stated on IdeaCamp Wiki, below is the aim of IdeaCamp :

Often our ideas remain ideas and we are not sure whom to discuss them with. You may have a great idea, but the real challenge lays in finding its appropriate application. Cohesive and divergent thinking is what is required to build ideas from scratch to working prototypes. In the process we need to discuss with people from different walks of life to identify how our ideas can make a difference in their lives. Can our ideas make money for anyone?

When and where is it held?
Persistent Systems Ltd. [Senapati Bapat road] ;10th May,2008 17th May,2008

Important Links for IdeaCamp:
Registration : IdeaCamp Wiki
Blog : IdeaCamp Blog
Google Group : Group Home Page

I would be there at the Unconference and it would be great to meet you guys there biggrin

Have been pretty busy off late and hence , not been able to blog much and in the process have been missing many interesting events happening in Bangalore and Chennai cry

Few days back, I came across this article in LiveMint, which focussed on an important discussion from the perspective of a startup – Hiring the RIGHT kind of employees for a startup.Needless to say that every employee in a startup should have that KILLER GENE to make HIS/HER startup successful.Very important to note the term HIS and HER in the previous statement, which indicates that these employees are very clear about their basics – “If they fail, the startup fails and if they succeed , the startup succeeds“.

But there are many issues in finding this perfect set of people for your startup and even if you get you MR/MISS RIGHT, it would be a much bigger challenge to retain them !!! This was the topic of discussion in the April edition of the Open Coffee Club, Chennai. Below are some of the excerpts from that meet.

[Thanks to Siddartha Govindraj for the minutes of the meet].

1.
The first step is Hiring good employees. Good here means that they should have the attitude to learn and grow with the company. Better having someone who wants to work with you and then train them , rather than get someone who may have better skills but who doesn’t have the attitude and would leave you, when given a better offer. Best is the right combination of attitude and the skills.

2.
Once you get your right set of people , the next big challenge is to Manage them.Freshers can’t be left alone because they need someone to guide them, so you need to continuously interact with them, help and guide them.This would help in boosting their confidence , so that they can take up more challenging roles in future and be a valuable asset to your startup.

3.
Experienced people can be left alone, but many of them who have worked in larger organizations may not have the attitude of working in a startup. So, there are two things which are possible in this case – either they get frustrated or they get accustomed in doing all the work by themselves.

4.
Generally, experienced people are good for high level strategy/marketing/advisory positions, and fresher/intermediates for development kind of work [but there has to be someone to nurture them & guide them). But if you get experienced people with the right attitude for startups, then thats great in any position biggrin

5.
You need to interact with everyone continuously, so that they know where they stand. In case someone is not performing, you need to bring this to their notice.This should not be done in a confrontational way, but rather you can mentor them ,so that they can perform better.But if there is no further improvement than you need to tell them that either they are not right for us or we are not right for them.

6.
Different people are good in different roles, so you need to keep an eye on mismatched roles. For example: Someone might be good at learning new stuff but may not be detail oriented, this kind of person might be good for research/prototype projects, while a detailed oriented person might be better for client production products. If they take up opposite roles, than it would be a complete disaster for your startup.

7.
Avoid a situation when you hire some people and then don’t interact much with them.In this case there would be a series of confusions about their role, their expectations, your expectations; which may subsequently result in a drip in their performance.This would in turn be a cost to your company and there is no time for such confusions in a startup !!!

8.
At every moment of time, we should remember that the motivation level of the employees would always be different from the motivation level of the founders of the company hence, as discussed before[during the start of the article] always thrive the OUR attitude from the beginning.As long as your employees remain motivated and enjoy the work , they would stay and if they are not, you can be sure that they would join your competitor wink

9.
Sometimes whatever you do, your employees would leave you…in which case, you need to check your attitude, hiring strategy and other important aspects which may lead to such serious decisions. Always remember,”One person might be wrong in judging you, but if there are a series of people who follow their footsteps, than it is high time, you raise the ALERT signal and get your officials to discuss this issue

10.
There are many proactive people in the crowd who would follow you and your startup from the day your startup was born.Always keep an eye on such people, since they can be future partners or employees in your company.You can always use the Stanford Shopping Center test to get your MR/MISS right in your company.

Today, we have a guest article by Nithya Dayal, Co-founder of an online music community named Muziboo. Muziboo is a great example of community building and how effective is Word of Mouth marketing[WOM] in business.

In this article, Nithya focuses on “Mantras of building an Online Community” , something which has been an integral part of the Web 2.0 space.

Web 2.0 [ Of the people, for the people and by the people]:
It is not fashionable anymore to say that Web 2.0 is not as much about technology, as it is about people. When this is an accepted truism to such a degree, it is worth spending some time to analyze the dynamics of such a model [from my experience with Muziboo]

Before you build a website [hence a service] on the assumption and wish that users will come forward to generate content, you need to understand what it takes to drive those users to contribute content.

Mantras of building an Online Community:
Keep in mind the following mantras , while trying to build an active community on­line:

Is your service unique?
During your whole thought process ­ while planning to start, build and maintain a new website­ , if ever this question sounded clichéd within yourself, you are sure to come up with a non-­starter for a service. Unless there is something unique in what you offer, how fair is it to expect people to spend their time in your platform to generate content, when either, they are already comfortable doing the same elsewhere (or) they do not see a new source of satisfaction in your service. This satisfaction as your uniqueness could be in any form for the user – expression, recognition, entertainment, social and business networking and so on and so forth.

Initiating a Culture and Driving the Culture
Once you have decided on what should differentiate your service from similar others, you as the owner should become one of the patrons and initiate that ‘culture’ among users, which will in ­turn give the desired uniqueness to the service. As the first few hundred users go a long way in giving a face and feel to your service, it is vital to have given due thought about your uniqueness at a very early stage of conception of the service. Also, one has to be around constantly, driving it in the positive direction. Majority of users need hand holding while you wait for them to acquire the taste of what you have to offer. This is the only way to bring in the kind of culture [that showcases the uniqueness] that you want to offer. Because if you leave it to the users to bring in uniqueness all by themselves or give them a good idea and not follow ­up with efforts to involve them in building the same, the only guaranteed result is the establishment of a culture characterized by stagnation and inertia among the users. Do not forget that this need for hand holding is not a reflection of the users intelligence – if you can come up with something too exciting that it needs no hand holding, then good for you – read Flickr blog to understand that Mr & Mrs Butterfield had to work hard to establish the uniqueness of Flickr, which is not just a photo sharing site but a thriving community.

Here it is important to note that this ‘uniqueness’ refers to a dynamic aspect of the site, which has the potential for something exciting or which has a proven record of enthusing users to contribute. It rarely or seldom refers to the uniqueness in technology that the site has adopted. And, more often than not, only while enjoying the ‘uniqueness’ will the users be spending the maximum chunk of their time when logged in – even if it is a little peripheral to the main service that you offer.

Unfortunately some websites after getting a whole lot funding, start operating on the premise that marketing the whole service will encourage people to register and generate content. It is not enough to ‘sell the website’, you have to ‘sell the uniqueness’ of the website after establishing one in the first place.

Post ­sign-up
User assimilation is a slow painstaking process. The new user should immediately be made comfortable with an interactive interface. With an interactive interface, one should make easy the process of a user getting acquainted with other members of the community.

Recognizing Users
Most online community members like recognition, [rightly so] either for the content contributed or for participation. Couple of ways to do that would be featured articles and featured users.

Empowering users ­ Democracy
Empowerment is a great form of recognition and by doing the needful on that count, as an owner, you manage to stay away from ruffling yourself with too many responsibilities. By empowerment, I refer to the minimal barriers that you put out for content acceptance. All generated content need not go through great levels of moderation or quality checks before being published. The motivation to contribute from the users end is highly dampened if they get spiked. Also if you shackle users with too many do’s and dont’s , you will have a lot of fire fighting to be done everyday as the service scales up. Democratize as much as possible. Let most things be decided on user votes and ratings.

Having a balance – So Much Democracy
In the nascent stages, many users come forward with their ideas – both functional and business. Some will always be more relevant than the others, the ‘others’ being the ones that do not align with your vision of the service. It is for the service owner to handle this embarrassment without stepping on toes. You do not want to paint yourself in a corner while asking for ideas, because when not implementing those bonafide suggestions, you are likely to come across ‘rude’ or ‘technically in­competent’ ­ both equally hurtful for your image.

Promoting Offline meets
Promoting local offline meets is also a way to create stronger bonds among the community members. Posting updates about such events on the site can enthuse users from other cities to initiate such activities.

It Ain’t Easy [because if it is, then it ain’t fun]
Does this need elaboration??….Neah; remember the community is very intelligent and can help make/break your business.

I hope you also enjoyed reading the article, just as I did.Thanks Nithya for sharing your thoughts with us smile Muziboo has been quite instrumental in all the aspects as a startup and has been covered a number of times in the press, you can find the articles here, here and here.

Other Guest Articles on Thoughtsprevail:
Ten steps to improve your E-commerce business
Financial Management for a Startup Firm