Seven Myths of Starting Up a business
Alok Kejriwal is one of the mentors on MakeIndiaWork - the startup ecosystem by MonsterIndia.com to support and encourage startups. Here Alok shares seven myths of starting up a business.
Myth 1 - I have a great idea but I can’t share it coz someone will steal it.
Oh man, if that were the case, then dreams would be the most expensive commodity on the planet.
Salvador Dali- the father of Surrealism slept on a couch with a spoon in his mouth. He would start dreaming up crazy ideas and as he would drift into his sleep, the spoon would slip out of his mouth, fall on the floor and wake him up. He would immediately get up, rush to his canvas to paint what he had just dreamt. The million $$ Dalis that exist today are paintings, not dreams.
Truth – An idea is worth nothing. Execute. Execute. Execute to make it valuable.
Myth 2 – When do I approach the investors? Hmmmm… What’s the best ‘timing’?
Huh?? Were you Sleep Walking?
If only investors were like the Black and Yellow Mumbai cabs that you can hail and get into any time you want!
No VC or Investor is waiting with bated breath biting her fingernails for you to call! It’s quite the opposite scene actually. In a booming Economy (like India), investors are deluged with lots of high quality and established business investment options, so you have to fight hard to get into the VC's visitor’s area to begin with!
Truth – Capital Chases Entrepreneurs, not the other way around. Invest all your energies in building a GREAT business. Everyone will be ringing your doorbell.
Myth 3 – I have no money to start. (Sniff Sniff).
Most new business ideas today really need very little capital. If you are thinking of starting an Internet enabled business, the cloud takes away all the pain of investments. Domains cost less than 20 US$, and the rest of it is almost free. Sites like WordPress and their plugins can get you a fully loaded website up and running in a few thousand rupees spent.
Sure, if you have a more Capital Intensive business idea, then think really hard. Start Ups don’t survive on Love and Fresh Air. They need real hard cash. If you are on the Poverty Line, don’t attempt to start up. There will be better times to be more adventurous.
Truth – Be ready to sacrifice a good couple of years’ earnings into starting up and not looking like someone who lost all her baggage after a 24 hour flight. Once you have the cushion of 2 years’ savings, a lot more confidence will seep into your decision-making and improve your risk taking capabilities. Also Budget your Burn to say last for a year or whatever your test horizon is. That discipline will go a long way even after you get funded.
Myth 4 – Let me Grow First. Revenues can come later.
Oops. That’s the spine breaker.
Unless you have a massive, massive overnight hit like a Twitter or Facebook, tread the ‘growth first, revenue last’ road with caution.
You may be suffering from a deep-seated insecurity to generate revenues and conveniently shoving that fear under the carpet by postponing revenue generation. It’s like hiding a body in the deep freezer and hoping that it will never be found.
Generating revenues is a real PAIN.
And it’s best confronted in parallel to building your business. In fact, so many extra features of your service or enterprise may never be needed if you listen to the fat men with the cheques books early on. Also, as investors, partners, and potential acquirers start noticing your business, they look your Generating Revenue Experience (GRE) scores. If you didn’t apply for the exam, you won’t get in.
Truth – Get that begging bowl out. Try and test (if you want to maintain Facebook like early start up Virginity) what people will pay for – but make sure that you know where the light switches are when the darkness arrives.
Caveat (added on 22.9.2012) - I do not mean that make revenues the 'focus' of your business. The focus is Business creation - but a proven revenue model validates that model. As long as you even know 'where and how' the revenue will come, I believe that its fine
Myth 5 – I’m a techie – I don’t know anything about business. I am a business guy; I don’t know anything about technology!
The demons of the mind that says you don’t know how ‘business’ works need to be exterminated on day zero of starting up. Look all around you – the greatest geeks in the world – Steve Jobs, Bill Gates, The Google Twins, Marc Z – all have understood the science of business better than anybody else.
Also, for a M.Com dud like myself, today, technology and self -serve platforms have become so easy to understand and implement, they are like those do it yourself Lego Puzzles. All you need is the patience to sit down and assemble the rocket you are trying to build step by step. Read the instructions carefully and you will be set.
Truth – No entrepreneur can be in-complete. This is actually also the first step in becoming an entrepreneur – understanding a domain that you otherwise had no clue of.
Note - I am not suggesting mastering all domains, but rather just understanding them.
Myth 6 - Professionals whom I want are too expensive to hire.
Did you ask them? Did you look into their eyes and explain your invention and what can happen with it?
So many of the ‘been there, done that’ types are so bored and stuck en-cashing salary cheques every month. They are waiting for folks like you to go up to them and redeem them! I meet so many professionals (earning much more than me) ever so often who say ‘Wow Alok, I wish I could be doing the exciting and innovative things you and your Company do’!
Truth – Professionals with big compensation packages may not quit their job in a hurry for your Love Songs, but they can certainly begin associating with you. Start meeting them and burrow into their experiences. Shed a few shares and get them on your board. You may even realize that you never needed them full time!
Myth 7 – I HAVE TO make this work. (Stomping of feet on the floor heard).
Once in a while, when you sample a new restaurant or cuisine, you do risk getting in there, and ordering a meal you have never tasted before. In the first few bites, you know if it is a ‘disastrous’, a ‘will do, let’s get this done with’ or a ‘wow’ meal.
In a startup land, while your dreams may have taken you to heaven in a first class seat, when you actually implement the idea and hit execution, you may land up in rubble, deep under the ground.
Do not deny the ‘badness’ of the idea or the common sensical fact that ‘this was a bet that should not have been played’. Enterprises are built on hypothesis. If even a couple of assumptions or facts (which are crucial to business) don’t turn out the way as per your expectations, ditch the business, kill all engines, sit back and revise the learnings earned.
Truth – Get out, as soon as you see smoke. Don’t put on a mask and enter the fire pretending to be a firefighter. You will not come out alive and your soul will be too charred to boot up again.
Alok blogs at therodinhoods.com - the community of entrepreneurs he has founded.