Easily Maneuvering Through Entrepreneurial Risks
Indu Navar
CEO,
serus corp
serus corp
Start thinking about how to win paying customers to validate the product idea. If the service or product is needed, the market will respond and customers will be willing to pay. Entrepreneurs need to start thinking about revenue per employee and profits from day one—the matrices we cared about 10 years ago. Focus on creating long-term value and the investment you seek will come.
Control your destiny: We see that most founders of young startups are asked to step down and new CEOs are brought in to revive the company. Often the investor himself becomes the CEO. This happens because the entrepreneurs (Founders) fail to own up to the responsibility and ownership they worked so hard to build. Honesty and integrity are the foundations of a working relationship between an entrepreneur and the investor.
Entrepreneurs need to understand the responsibility involved in taking someone else’s hard-earned money as investment. Think deeply before you spend. When you spend, ask yourself the question “Will this $1 dollar I spend generate an opportunity to bring in $10 to $100 dollars in return?” Luxury products, services and perks should be purchased from the profits the company generates, not with the investment funds!
Until entrepreneurs start owning up to the responsibility of returning back the investment they received, there is going to be enormous anxiety between the investors and entrepreneurs.
Serus Corporation was founded in 2001 after evaluating the market and the founders’ expertise and identifying a problem we could solve. Our first job was to find a customer who wanted this problem solved and recognized that no solution to it existed then. With a $250K purchase order from our first customer, we obtained $100K in seed money from an angel investor. With that seed money we ensured that we had 1. A satisfied customer, and 2. Built something of value that could be sold to other customers.
Serus took on some advisors and some more seed investment. We used that capital to get our next two customers and worked very hard to make sure those two customers were satisfied. Our customers are the best sales assets we have. They helped us sell to many more customers.
This is the same model SAP, HP, Microsoft all followed. SAP started three decades ago much of the same way. (sapfans.com/sapfans/saphist.htm).
How do Entrepreneurs make it work?
• Show that you are committed to returning the multiples
• Take only the needed amount of money
• Spend only on valued items (Only when there is true return)
• Acquire only paying customers
Own up to the primary responsibility: creating Return on Investment!
Indu Navar Bingham is the CEO and co-founder of Serus Corporation, Mountain View, CA. She has been on the ground floor of several startups and large companies, including Healtheon (WebMD), Silicon Graphics, Black and White Software (Segue) and NASA. Indu was Co-founder and President of RightOn.com, a wireless scheduling solutions company for the services industry. Bingham holds a B.S. in electrical engineering and an M.S. in computer science.
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Reader's comments(9)
1:
This is a good article and as NexGen my venture is just 2 weeks old and i can still implement some of the stratergies of Bingham....
Posted by:Subin B - 14 Jan, 2010
2:
I am writing this comment to convey a message to sameer goel, hi... you can get in touch with me on ajith14285@rocketmail.com.I can give you lots of information about people who are ready to fund practical ideas.I suggest you to mention your contact no in any future communications if you wish to have...:)
Posted by:Ajith Kamath - 14 Sep, 2009
3:
Entrepreneurs,Very valuable article. Will recommended it for anybody aiming a start up. This is truly helpful to people who is in the middle of starting a new investment firm.
Jacob J Kallupurakal
Boston, USA
Jacob J Kallupurakal
Boston, USA
Posted by:Jacob Joseph M Kallupurakal - 16 Jul, 2009
4:
Thanks a lot mam. this article is really inspiring.
Since i am planing to start a costume boutique for the artists your article will help me a lot. thanks a lot
Since i am planing to start a costume boutique for the artists your article will help me a lot. thanks a lot
Posted by:Valsala Johny - 19 Jun, 2009
5:
mistakes man a man perfect subject not repeat again.
struggle is life & again try to see.
regards
r g sharma
struggle is life & again try to see.
regards
r g sharma
Posted by:RAM GOPAL SHARMA - 15 Jun, 2009
6:
Mam, I have completed my B.E in computer science few days ago and have a very great idea of a business and I'm very optimistic in terms of the success of that business very rapidly.
But the problem is the capital required for that and I want a VC to fund this project and in this regard, i have some questions following below:
1. How can i trust a VC that after seeing my business plan, he won't invest in that project on his own and reject my proposal because for him, I have nothing but a great idea and great enthusiam to be successful in that.
2. I have seen many articles saying about the contents of the good business plan but no one has the detailed description of the contents of the business plan. So, how can I get the detailed list of the contents of a business plan.
3. How to find which VC would be my true business partner and on which parameters I should choose them. Can you provide me some references of VCs interested in investing initially 1-2 crore in a business in IT field.
4. Since I am not from a business family and havn't done MBA, Would it be better to enter in business field right now or to first do MBA and then get some experience in any company and then start my own company. I don't want to wait for 5-6 years because I have threat in my mind that if someone would start that kind of business before me, then I will loose the competitive edge i would get otherwise.
But the problem is the capital required for that and I want a VC to fund this project and in this regard, i have some questions following below:
1. How can i trust a VC that after seeing my business plan, he won't invest in that project on his own and reject my proposal because for him, I have nothing but a great idea and great enthusiam to be successful in that.
2. I have seen many articles saying about the contents of the good business plan but no one has the detailed description of the contents of the business plan. So, how can I get the detailed list of the contents of a business plan.
3. How to find which VC would be my true business partner and on which parameters I should choose them. Can you provide me some references of VCs interested in investing initially 1-2 crore in a business in IT field.
4. Since I am not from a business family and havn't done MBA, Would it be better to enter in business field right now or to first do MBA and then get some experience in any company and then start my own company. I don't want to wait for 5-6 years because I have threat in my mind that if someone would start that kind of business before me, then I will loose the competitive edge i would get otherwise.
Posted by:Sameer Goel - 09 Jun, 2009
7:
Thanks,
A very good and informative article.....
A very good and informative article.....
Posted by:rohith sathees - 05 Jun, 2009
8:
Thanks a lot!! In this article you have put all those that is running in my mind at this point of time. As Renstas is just a week old, I am only planning to keep my clients happy for creating a long term value.
Posted by:Anoop Menon - 28 May, 2009
9:
Awesome strategies for the upcoming entreprenuers.. But due to upgrade in technology, it is very difficult to the upcoming new one's to sustain in this highly competative market.. May be one has to think out of the box... Hats off Indu....
Posted by:Bharath S - 12 Jan, 2009
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