INDIA SHOULD STAND UP WITH STARTUPS – ECONOMIC TIMES

A popularly-held belief is that startups have thrived and the ecosystem has flourished because the government has stayed away from and out of it! If the absence of a government were to benefit startups and the ecosystem then we would have a thriving entrepreneurial ecosystem in Swat Valley, not Silicon Valley. The corollary isn’t good either. A government fully immersed and involved in the ecosystem can lead to entrepreneurs spending time “managing” the power structures in Delhi instead of building their businesses.

Our startup ecosystem would have developed at a greater pace if the government had played its role of being enabler, facilitator and regulator. That government should have its eyes and nose in the ecosystem but not the entire body. Close, but not too close. Here is what it must do.

EASE-OF-DOING BUSINESS

India is the eighth-largest economy and is still ranked 130 in the world for “ease-of-doing business.” Ease of doing business needs to encompass all aspects of business from starting to managing to closure. Today, the law requires a company maintain books and files taxes for eight long years even when it has no business and no employees.

ACCESS TO CAPITAL

Risk capital is the fuel needed to start a company. In India, almost all-available risk capital (or venture capital) is powered by overseas investors (called limited partners or LPs). LPs are primarily pension funds, endowments, family offices, and trusts. Why not allow large Indian pension funds, the EPFO, and other financial institutions to invest in Indian venture funds that will ultimately invest in startups?

RESEARCH AND DEVELOPMENT

Two of the most impactful technologies in recent times — GPS and the internet — were funded originally by the US Federal government for defence purposes and then dispersed for equal access by all. Indian defence spends over a billion dollars on indigenous research and development and there will be core technologies developed that can be mined to create innovative companies that solve the common citizen’s problems.

ACCESS TO GOVERNMENT DATA

As the provider of public goods and services, the government is the repository of huge public data. It sits on huge amounts of data for health, transportation, and utility services. For example: If land records and transactions were digitised, and the data made available as an open source, then online real estate companies could use this data to help consumers make more informed choices.

OUTCOME MEASUREMENT

Any government initiative is viewed with cynicism because government initiatives are never measured for outcomes, and even if such measures exist, they are not in the public domain. I believe that the government should measure its startup initiatives against measurable outcomes (such as jobs created) and do so in a transparent manner.

Communism failed because private enterprises are better at creating jobs than government and within private enterprises, small and medium businesses create more jobs than large enterprises. The biggest loss to any economy isn’t startups that didn’t make it but startups that could have been but for want of support.

To paraphrase Mark Twain, The government is merely a servant, a temporary one! It can’t be its prerogative to determine what is a right startup and what is not, who can be an entrepreneur and who can’t be.

Source: Economic Times

Startups: New Year Resolutions

Every time Earth finishes a lap of 940 million kilometers, people greet each other to celebrate it. They build a long list of resolutions to enjoy the next lap peacefully.

Some begin a year by staying fit, some want to be intellectual, while others aim to live happily. But, there are group of people who are passionate towards bringing a transformational change. Such groups are known as entrepreneurs.

These entrepreneurs are always thinking and have a proactive approach. They continuously accept challenges, solve real problems, wish to grow at a lightning speed and build things from scratch. They go on to inspire many like-minded individuals with similar vision and passion. But is passion enough for disruption?

“If passion drives you, let reason hold the reins” , inferred Benjamin Franklin.

So before making this New Year’s Resolution list, focus on being passionate, Following are two cents on the resolutions you can adopt.

Big Picture, Smaller Steps

To complete a picture, each pixel is equally important. Losing focus is easy when faced with obstacles on a daily basis. Pledge to celebrate every milestone, however small, to instil that sense of achievement. A good habit would be to acknowledge your team from time to time. Remind them regularly how their small steps- a line of code, an article edit, one phone call, one meeting, all coming together and creating an impact.

Re-Innovate

As Steve Jobs rightly put, “Innovation distinguishes between a leader and a follower.”

Probably the best resolution a startup should adopt. Keep experimenting, keep pivoting, keep innovating. What will set your company apart is novel thinking. Your idea is not a solution if it falls short on solving the problem.

Hence, ensure your startup evolves with customer feedback while maintaining its originality. This year, resolve to introduce unconventional methods, be prepared to walk the off-beat path, bring in refreshing ideas.

Own it, Live it.

Every successful venture is based on a foundation of individual ideators. Every word, every mail, every code should entail a sense of ownership. Instil these important core values in the problem solvers you hire. Leadership thrives in an environment of ownership. If it isn’t the case, motivate your think tanks to add it to their resolution list.

Data Driven Growth

It is not when you start, it is for you to start it right. Commit to reason out  all your decisions via data. Regularly observe the synergy between your team’s output and the market. Recognize the next immediate logical steps, which will help drive growth. Analytics is a great assistant for instantaneous feedbacks and evaluation. Adhering to this, resolution will maximise the output while automating the processes, thus eliminating the excess of any efforts.

Hiring the right bunch

Understand the demands of your company. Know where, when and whom to invest in. Hiring is that thin line, the deciding factor, between success and mediocrity. Your team can be your most prized possession, so  hire the right people for the role. Start fresh this year by understanding the problems faced by them. Recognizing and responding to their problems can go a long way in establishing the core value of loyalty. Before hiring, know what kind of team you would like to develop and recruit accordingly. Sometimes being the best is not enough, attitude matters.

An Entrepreneur is an individual chasing dreams to disrupt how the world works. In an attempt to scale quickly, losing out on the above factors is a common recurring issue. Competition may seem to work better and morale might be at an all-time low.

On days when your organisation feels the progress is at a standstill, send in this small reminder. The Earth is orbiting at 30 km/s around a galaxy moving at 250 km/s which is advancing in the universe at a rate of 600 km/s. Nobody is at a standstill, ever.

Source: Aniket Deb : http://www.entrepreneur.com/author/aniket-deb

The Startup Survival Rules

The Startup Survival Rules

Pick good co-founders. What kills most startups are the startups themselves. Everything starts with finding a bad co-founder. Bad co-founders may be very good people. They also might not do well in a startup for reasons that are not bad by themselves, like going back to school or having a side project. That’s why it is hard to gauge in the beginning who will be a good co-founder.

Launch fast. Until you launch,  users can’t use you. If users can’t use you, your startup is useless to them. The longer you stay that way, the harder it will be to break the habit. Launch before you get used to not being useful.

Let your idea evolve. Many successful startups changed their ideas fundamentally. Paypal started thinking they would transfer money between Palm Pilots. Do you remember what those are any more? Exactly. Had they not stayed open to the possibility of needing to change everything, we might have never heard of them.

Better to make a few users happy, than many ambivalent. If you ask people whether they like your startup, they will most likely say yes. People are nice. But that means nothing to you. Let them vote with their time and money. If they actually use you it counts. If they say it’s a great idea but don’t use you, you have to worry.

Offer surprisingly good customer service. At the beginning you can afford to talk with your customers on the phone or in person. Why not? They are the first people who found your product useful. They are like investors, only with their time. Learn from them, and give them the best you have.

You make what you measure. Unless you grow, you are not a startup. Growth, though, is often deceptive if you measure the wrong metrics. Figure out what exactly it means for you to grow.

Spend little. No matter how much funding you have, you are always closer to death than you think. Unless you are profitable. So spend little. Your investors’ money is the money you don’t have.

Get profitable. Even if you have little money coming in, it means someone values you product enough to pay for it. That is the ultimate sign that your company might survive. Now it’s just a matter getting more customers to do the same.

Avoid distractions. The only reason a startup exists is to serve its users. Funding is a distraction. School is a distraction. Magazine photoshoots are a distraction. These may be useful distractions of course, but if they take the time and attention away from building the product, they become useful but lethal distractions.

Don’t get demoralized. In a startup nothing will happen until you make it happen. People won’t respond. Customers will try not to pay. Partners won’t come through. Investors will flake. Employees will leave. What can you do? You can’t leave. Just keep trudging through until you find what users need.

Don’t give up. The surest way to make people believe is keep growing, and if you can’t grow, keep going. The moment you give up, it is really over.

Deal fall through. It may be hard to believe, but even after investors say yes, they might still never send you the check. People, even the most sophisticated ones, have buyers remorse, second thoughts, insecurities – in short they are no different than you, so expect that from them. And keep going despite it.

Inspired by Paul Graham’s essay  “Startups in 13 Sentences”.

Source: fundersandfounders.com 

What Angel Investors look in while evaluating your investment pitch?

When evaluating any investment there are many things to look for with respect to analyst, Angel Investor who is going to invest in your start-ups:

1. Team.
The first thing Angel investor does is to look at the founders and be convinced that they have what it takes to be successful entrepreneurs and can build a business. People are the most important thing in start-ups so team and talent always comes first when deciding -especially for early-stage investments.
                                         

2. Experience.
Alongside talent, experience is the other important thing. Most successful entrepreneurs (against popular belief) are experienced, middle aged people that have done it before and know how to do it. They know the market, how to make products, how to sell them, how to raise money, etc.

3. Idea.
The entrepreneurs need to have an idea for a market that is sufficiently attractive for an investor to make a return. Angel investors need to be convinced that they are proposing to solve a problem that someone today has, that is not being addressed by current products or services, and that it is important enough that people will adopt their product to solve that problem.
                                                  

4. Valuation and Round Size.
The other thing Angel investor does look at is where the company is, and what they are asking for both in terms of total money to raise and valuation?  

5. Who Are The Other Investors?
This shows the ability of the entrepreneurs to attract smart money which is particularly important at the beginning; their criteria when choosing partners, and how much they value to be around good people. It also helps them to validate their thinking about the company, discussing it with other investors they trust and value.