Sometimes the most challenging part to any venture is to actually begin. But how do you know you’re ready? The Founder and Managing Partner at Unicorn India, Bhaskar Majumdar deciphers every start-up founders’ dilemma.
Once you are convinced that you have the DNA of an entrepreneur and you are not fazed by the journey, you need to make a move. One of the questions that I am frequently asked by those who want to embark on the entrepreneurial journey is ‘how does one start?’ Is there a ‘eureka moment’? And if so, how does one recognise the eureka moment. Is it a flashpoint or a series of sequential events? Is it something that one has experienced oneself and hence, comes with the idea? Or is it an idea that someone pointed out? How long does one take to decide the right time to quit a job? Can one stay in their job and start the business?
There is, honestly, no definitive answer to these questions. There is a Chinese proverb that I like, “The best time to plant a tree was 20 years ago. The second-best time is now.” If you have an idea and you are passionate about it, go for it. Unless you get head on into it, you won’t know if it works.’ The fact is, there is never a bad time to launch a business. It is obvious why it is smart to launch when the economy is strong and growing. People have money and are looking for ways to spend it. Investors are in a more positive frame of mind.
But launching in tough or uncertain economic times can be just as smart. It is well documented that some of the success stories like Uber, Vemo, Air BnB all started during the 2008 Global Financial crisis. Even now, during the pandemic, as a Fund, we are seeing a number of interesting business ideas, some of which will turn to unicorns in the years ahead.
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People believe starting a business is a mysterious process. They know they want to start a business, but they do not know the first steps to take. Fear of the unknown paralyses many before they can take the step. Others keep on rejecting ideas because they feel they are not new or unique.
Start-ups are not just about the newest and path-breaking technology products. It could well be about repurposing an existing technology for a newer and better use, devising a new business model that unlocks value or simply bringing a new product or service that already exists, to a newer region or to a new set of users at cheaper rates.
Another quip I hear from wannapreneurs is “I want to start but any idea I have has already been done before.” To them I have only one message. “Ideas are cheap, it is the execution that matters.” In fact, as we know in the startup world, it isn’t usually the first mover who has the advantage. It is more often the later movers who succeed.
Facebook learned from the mistakes made by Myspace and Orkut. Therefore, don’t get bogged down by the fact that your idea isn’t a path breaker; think how you can customise it better and solve problems better. Take the case of Ola in India. When they launched in India, Uber was already established in the western world. But Ola created it for India – with a unique OTP (one-time-password) to ensure the right customer got the right service, built in wifi and OTT video services realising that Indians need to constantly communicate. The Ola founders didn’t fade out their thoughts because Uber had been launched; they improvised it with better services for the Indian consumer.
The other tricky part of kicking off a start-up is how to approach the same. If it were a traditional product launch of a large company, one would do focused group and deep market research. These would enhance the success rate and provide confidence for a launch. That is what we learned in the annals of classical management.
However, these do not hold true for the start-up world. The uncertainty of the start-ups, unpredictability of the business model and lack of clarity of the customer’s reactions make it difficult to undertake research and if undertaken, it’s difficult for the research to hold water. This leads to some founders being too instinct-oriented and who say, ‘Let’s just get on with it.’ While this plays to the entrepreneurial impulse, having been involved with so many start-ups, I think this is a recipe for disaster. Before these founders realise it, they are too far down the path without any feedback loop, deluding themselves into thinking they know what the customer wants. While this is one extreme, on the other extreme are founders who spend incessant hours talking to customers, reading myriads of research reports and strategizing their ideas prior to the launch. They are caught the classical ‘analysis-paralysis mode’ and they too will not know what the future holds, as the patterns in a start-up are unpredictable.
What then is the best form to launch products and services in a startup. Can one have a method in the manic world of start-up madness? How does one attempt to reduce the failure rates? We cover some of these aspects in a later column, which entails how, from day one, one can plan so as to enhance the mortality rate of the start-up.