Startup Challenges, Trends & Opportunities; a Quick Look into Entrepreneurship
Date: Tuesday , January 26, 2016
Headquartered in Mumbai, Avalon Consulting is an international management consulting firm that advises clients across the world on strategy, business transformation and innovation by implementing Big Data, Web Presence, Content Publishing, and Enterprise Search solutions.
What are some of the major startup challenges currently prevailing globally?
Talent is the biggest challenge - both in terms of hiring and retention. People were attracted towards the startup culture till a few years ago as the prospects of most of them looked bright - they were trying to disrupt the \"way stuff works\" for newer sectors. However, with investors now putting pressure for profits and business model challenges faced by many startups, talented individuals are taking a cautious approach on joining startups.
How can these challenges be overcome?
There are various different ways of overcoming this challenge. For startups having technology as the backbone and operational excellence as a critical success factor, there is a need to hire talent on short-term contract basis. For example, a restaurant delivery startup will need hundreds of people for on-boarding of restaurants initially, and these people should not be on full-time payrolls. There are various companies such as TeamLease that can help startups with short term hiring needs. On the other hand, startups need to build a home-grown culture and hire experienced and fresh MBAs directly from B-Schools for scaling up non-transactional/ core functions. People coming from B-Schools find it easier to fit-in to the culture which will be very difficult for lateral hires. The mix of contractual, fresh hires from engineering/B-Schools, experienced hires from B-Schools and lateral hires needs to be evaluated scientifically for each function.
What are some of the crucial elements startup entrepreneurs neglect or are unaware of? How can they be enlightened with the same?
I believe that Start-Up entrepreneurs neglect two major elements - 1) their value proposition and priority customer segments, and 2) operational difficulties that they may face in scaling up.
Value Proposition: Entrepreneurs need to do a deep-dive into the customer segments their product is relevant for and what is their value proposition statement. They need to answer these questions - 1) What problem am I trying to solve with my product/ solution? 2) How many people face this problem? 3) How does it matter to them if it does not get solved? 4) How much do they value a solution for this problem? 5) What are the current competing solutions to this problem? 6) Given the answers to the previous questions, what is the target market size (value and volume terms) that we are looking at targeting?
Operational Difficulties: Although it is difficult to map each and every process that your start-up needs to excel at while scaling up, it is good to take cognizance of the fact that there will be many such processes. For example, for a typical e-Commerce player, the amount of orders expected during Black Friday sale is hard to predict, but putting in the systems in place with a view that they will be at least four times a normal Friday is wise.
Similarly, as your marketing expense goes up, it needs to be married with operations - more FaceBook marketing spend will lead to more hits and more orders. So if we plan to increase FaceBook marketing spend by 400 percent (as we got funding), what are the operational issues we need to take care of beforehand?
What technology trends do you see emerging in the coming days that will interest you and why?
I believe a collaborative approach to marketing is the need of the hour. Companies that don\'t compete with each other need to co-promote themselves to lower their marketing spend and increase the eyeballs. We have already seen tie-ups amongst the biggies - OLX and FlipKart had run a joint marketing campaign last year. I see this becoming a big trend and a lot of startups automating their marketing along with others which will result in optimization of their expense and more bang for the buck!
What would be your piece of advice to startup entrepreneurs?
Focus on utilizing some old-school techniques for conducting due diligence of the market before investing in people, processes and marketing. Certain tools such as focused group discussions can be very helpful to understand the right customer segments and your value proposition. This way, you can have a clear segmentation based targeting and a fundamentally sound & manageable growth.