The journey from planning to launch of a startup, to reaching the 100th customer and more is an exciting and learning experience.
I had had my failures and successes as an entrepreneur in my decade-long experience in International BPO as a service provider before I decided to launch my own startup to be able to create a global brand which would be trusted and add value to the lives of customers.
This time around I was sure I would do all the right things but ended up committing many blunders which I want to share here as the top 5 silly mistakes I made. Most of these blunders were either misunderstood advice or the result of me putting more faith on experts rather than in my gut feel.
In retrospect, here’s what I should’ve known:
1. Work on the business plan: I began the process of planning the startup by validating the business idea by simulating the business plan on an excel sheet with data and figures based upon research and assumption. I even hired a consultant and spent substantial amount of time and money in validation and correcting them to fit in our pre-decided results.
I believe in the saying that nothing is wasted in life so I assume this exercise must have helped me to understand unseen scenarios though in reality, things were not even near to scenarios assumed at the pre-launch stage. Lesson learnt: I surely should have spent less time and energy on the business plan and more on real business.
2. Think big & plan big: I was guided/misguided by some experts to always look for a scalable venture. To think how I can have 1000 customers in the first year, how staffing would be when my startup grows etc. Expert opinion says that the founder should not be fire-fighting since he/she is supposed to be doing bigger things to grow the business. But if a founder won’t do the fire-fighting initially then who will? Moreover, unless you get your hands dirty yourself it would be very difficult to nurture a leader to take up your role. One of the many ‘Mr. Experts’ I hired always used to narrate Barista’s expansion example -- that they had a target to open 50 stores and they started working on efficiency and profitability; I was encouraged to get more customers and not think of quality so much. After almost a year into the business, I realized that I had acquired enough customers to breakeven but because they did not stay longer I was still doing the fire-fighting myself. Lesson learnt: Think big, start & plan small.
3. Raising funds is as important as acquiring customers: Well, waiting for funding to come in before one starts a venture, or before one gets profitable is a sure shot recipe for self disaster unless of course you are a superstar and will get funded because of your last venture or your academic & professional backgrounds. Surely, I was not and am not a superstar yet. Again business presentations, elevator pitches etc. must have added value to my personality but nothing to my bank account. It is the customer himself that funds a startup at the initial and critical level. Lesson learnt: Do not rely on funding for your startup to launch or survive. If funding comes it is a bonus, else your venture should be planned to be self-sufficient.
4. Being cheapest is a USP: Naah! Not really. The BPO mentality made me think like this initially and we priced and packaged our service at par with the least expensive in the world. Though with open-minded thought, we increased the price slightly and could see no change in customer acquisition, however, it did increase our revenue. Lesson learnt: Work on the quality and not reducing the price to get more customers.
5. Hiring experienced and expert advisors and consultants: It is highly advised by experts to have a board of advisors and expert consultants who would advise you on important situations and decision making. Advices and suggestions definitely help, but one needs to keep a balance in one’s self belief and an expert opinion. When you’re hands-on, raking in the muck every day, every week, all month – you’re the one who gets to know the business best. Your brain picks up all these little infra-signals about your product or service, about your customers and your competition that others might have missed. And this is what subliminally informs you when you are taking critical decisions. That’s gut feel; don’t ignore it! Lesson learnt: Listen to all and act based upon your inner voice.
These are surely not unique scenarios and many startups may have or are facing similar situations. Though best lessons learnt are ones which come from one’s own experiences. But hopefully some of you can take a cue out of mine and shorten your learning curve.
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