DOs & DON'Ts Every Entrepreneur Must Follow
Date: Friday , March 04, 2016
Helion Venture Partners is an India-focused venture fund that invests in high growth technology powered businesses and consumer services, irrespective of the company\'s stage.
What are some of the major startup challenges currently prevailing globally?
* We are increasingly seeing startups caught up in the scaling/funding vs building a real business debate, and more often, the founders need to ignore noise caused by fund raises and obsession with sky rocketing valuations
* Startups certainly need to channelize their energy on real product management, i.e. building an MVP fast, optimising features, product performance measures and others, essentially building on their beta version; clearly for a B2B play, the gestation period may be much longer and startups should prepare themselves for the long haul.
* Startups need to be thinking of a partnered eco system to help leverage momentum, very critical in the B2B space and increasingly the case in a B2C play. This collaborated approach both at the product and Go to Market areas often decides the winners from losers.
* It is incumbent upon founder/founding teams to ensure their teams are focused and motivated, and are on the same page in terms of execution
* It cannot be said enough that understanding the pulse of the customer is pivotal, and the ability to assimilate and adapt to changes to ensure momentum. Here, we would like to re-emphasise that if founders treat their product as being in permanent beta, it allows them to forge ahead that much more effectively.
Think, from an Indian context, some more are apparent
* The angel/mentor eco system in India needs to be leveraged more, as it will help with the above. The U.S. has an excellent nurturing eco system in place. In India, we are still evolving, according to the recent Nasscom 10000 startups landscape survey, 3 to 4 startups are springing up across India daily. To make the eco-system sustainable as such, we ought to involve larger enterprises in the innovation eco-system while increasing the ratio of investors to founders; the need for local LPs, encouraging HNIs to invest sensibly in early stage startups is definitely the need of the hour; given the government support to encourage startups!
* It is especially relevant from a B2B perspective, understanding the subtle and not so subtle nature of customers in different Geo\'s when exploring Go to market approach or embedding solutions. Sometimes the need to trim away one dimensional use cases while focusing on core product features helps in discovering multiple points of entry to scale business. For example, your product could be designed for energy savings, but may not have enough takers. However, being open to focus on your analytics engine can build sufficient client reach across energy related issues.
* The key differentiator as a startup is the nimbleness to change - so, with respect to people management, establishing transparency with investors, ensuring the management/team on one page, and the culture to discussing problematic situations early and in a frank manner has way too many merits to ignore.
How can these challenges be overcome?
I think the angel/mentor/early stage investor eco system needs to evolve, and ensure that good ideas/entrepreneurs are well taken care off in terms of feedback and guidance. Sometimes a little tough love helps in getting them to think differently and sometimes you have to be encouraging because often times the first few customers, are hard to deal with or acquire. In this context, it is worthwhile to mention the NASSCOM Industry Partnership Program or NIPP, which is designed to help startups build goodwill, revenues, and investments from large enterprises. Currently, about 30 large enterprises including Kotak bank, Google, Amazon, IBM, ICICI, Microsoft, HDFC, Axis bank, Citrus Pay, Swiss Re, Dell, and Wipro, to name few are working with a number of disruptive Indian product startups towards fine tuning go-to market strategy in domestic and overseas markets towards scaling up; sandbox innovations, build multiple PoCs and enable strategic growth investments.
What are some of the crucial elements startup entrepreneurs neglect or are unaware of?
* Founders are often susceptible to a \'halo\' effect: A mistaken belief that their idea is really differentiated; be aware, there are several smart folks around the world and in India, and you are not unique!
* Building a solid core team, more often is put together in haste, typically getting people that are known from the past, may or may not work out, so be deliberate in your choices. Scaling the organization, and dealing with senior/experienced professionals who have seen and done more, is critical, if done poorly it will create a negative spiral at some point. It is but natural to give into an \'availability\' impedance match and make hasty decisions which could be costly.
* As mentioned earlier, focus squarely on strong product management, and tapping senior operational experience is critical. This will help you build what you need and not an iota more, and watch operations from both growth and cash flow perspective, while keeping a customer focus. Quite often when scaling up, some of the above areas often tend to get neglected, and lead to irreversible situations.
Connecting with strong mentors, customers with whom you can constantly bounce ideas and having them review different aspects of the business is crucial for all early stage innovators, and in most cases mid stage startups!
What technology trends do you see emerging in the coming days that will interest you and why?
* Mobile first, Cloud (B2C & B2B), the web will always be around for a certain user base
* Messaging as a Class A interface, chats/video interactions (could include aspects like NLP, taxonomies, and some Machine Learning)
* Data driven businesses (based on relevant data and analytics, which could include aspects like ML)
* Personalization that is relevant (including context based search and some of the aspects mentioned above); by this one means relevant personalization, NOT individual personalization!
What would be your piece of advice to startup entrepreneurs?
Always try and address a large market, ideally global. Ensure you are solving a real pain point; focus on getting a solid core team together, validate your idea, and during this phase, seek support from friends and family. Get it to a point where you are comfortable about scaling your business (different geo\'s, or regions within a geo, understand relevant aspects of operations, understand competition, risks and offsets), and then seek investments from the right investors (chemistry is key here, they need to be on board as a partner). Being open to changes as inputs from the right investors and mentors early on could help, this would include pivoting appropriately so that your key differentiators and growth metrics are better aligned to ensure success; finally, stay focused, motivated and keep the team together!