This time the ENTEPRENEURIAL BUG has bitten me again the only difference is this time it has bitten me very hard.
Partly it’s the inner desire to start something of my own and partly it’s the ego arising from a jealousy after getting to know that some of my juniors have floated a company of their own. A belief and a confidence that if they can do it I CAN DO IT as well.
Now the most obvious question is what kind of company will I form? What will I sell? How will I sell? How much investment will I need to make…..????????? Oh I know so many things, I have been doing so many things so why not sell all the things; at the end of the day I will be selling knowledge. There is a business opportunity for everything so let me encash.
Having said that and thought about it I only know what I should not be doing. Thanks to the experience of having worked with startups I for sure know where can I go wrong! Three things I learnt are - never have myopic vision do not dilute your focus and never fall into the trap of early premature scaling-up of your business model.
It is always better to be known as expert of couple of things rather than trying to do everything, this does not mean that you need to restrict yourself but to stay FOCUSSED and scale up when the time in ripe.
One of the most common mistake some of the startup companies have made is “spending money right in the beginning, beyond what is really essentials for building the company (e.g., hiring sales personnel at high price tag, expensive marketing, recruiting huge staff with an assumptions that you will need them as soon as you launch your company, perfecting the product, leasing offices, etc.) before establishing the identity of your company.
Startups can die in-spite of having good business model. They can die because they are doing good things but doing them out of order. In other words, they are doing things that seem to make sense, like investing to create the product, hiring good people to sell it and essentially doing all the kinds of things that big established companies with lots of resources do. But most startups are chasing an idea they might also be entering in highly competitive market: the founders, no matter how much they believe in their idea, are operating on just a guess or assumption about an opportunity and a belief that you have the solution which will be accepted by all.
It is very important to enter the market with right product mix with the right market fit and only after you have nailed the customer properly you should scale up gradually. It often takes 2-3 times longer than founders expect to really nail the customer before scaling the business. It is always essential to establish a steady cash flow through one category of market offering before venturing into another.
The number one mistake of early scaling up of your business model is to invest most of your cash reserves right in the beginning, which results in difficulty in readjusting your business model if required.
More on this will come in the subsequent blogs.