Starting your own business has never seemed more cool or exciting than right about now. Everyone wants to do a startup and raise a million dollars! It’s a good dream to have; it’s also probably never been easier to get investors to believe in half-baked ideas that might one day find a mass audience. The problem lies in the vision. Let me explain, any idea that a person believes in seems exciting. We now tend to fall so much in love with this idea and that all sense of practicality fails to reach us and there is reason feeling guaranteed success! The idea only seems to be missing the fuel of money and funding seems to be the one sole goal for the entrepreneur. Now, I hate to shatter this dream but funding or money isn’t the secret to success. Startups like Food Panda, FabFurnish, TinyOwl, Housing.com, and many others are proof of this. I follow startups, VCs’, rounds of funding very closely because it’s very important to understand market trends, mistakes and what has been done right. While everyone obsesses overvaluations in the words of the Softbank’s President Nikesh Arora, “To live up to these valuations, there is a need for perfect execution!” So stop being a romantic and falling in love with ideas. Be passionate but practical because, in the end, the only thing that matters is execution! I will be writing a part two to this real soon about what a startup should focus on.
Humans are social animals; we interact with each other, share information, opinions, and experiences. It’s with this interaction that we build relationships, relationships that are the building blocks of a community and a society. A community is a group of individuals who share a set of common values and beliefs, and so is an organization. Here is a list to make the point that, if you don’t understand people, you can’t understand business. 1. Meeting People Despite all the technological revolution you still have to interact with people in person, you have to be there to carry out the business, and when all your customers, colleagues, employees are human it becomes very important to understand people if you want to understand business. Understanding people involves studying the way people work, their individual styles, what attitudes and perceptions they bring to work, how they interact with a team and the nature of their hopes, dreams, and desires. 2. People = Business Have you ever heard of people less business? Neither have we. People are what you build your business around. When you understand them better, you understand your business better. When you are good at understanding your company’s and customer’s needs and concern, it shows. You can work on your business plan better to make it work, and your plans are more optimized to produce the end product 3. Understanding Builds Trust You don’t trust strangers, do you? You just can’t. Yet building trust is the most crucial aspect of doing business, just knowing that a person is good at doing something doesn’t build trust it builds reliability and appreciation. To trust someone you need to know that person. You must understand the person you work with in order to trust them, which results in better work. 4. They Influence You Remember how your mother used to warn you about bad influence when you were young? Her words are still true. The people you surround yourself with influence your behavior and decisions. The kind of people you collaborate with influences the work culture of your organization, and they influence the way your company conducts itself. 5. Understanding Improves Teamwork Understanding each other is one of the key ingredients in buildings a great soccer team, and a company is not much different. Your colleagues are your teammates. Understanding people you work with helps you to work better as a team and in turn amplify your strengths and make up for the weaknesses. ‘People’ do you get it? That’s the whole point.
In our last blog, I explained why it can be dangerous to fall in love with ideas and lose focus on execution. So considering that what should a startup be focusing on? Here are the three things that can make or break a startup: 1. Structure It is very important to understand that a business has a legal side and having the right paperwork goes a long way. Also, think of structure in terms of the people that become a part of your business and what core functions will they be executing. Managing people is a core part of a successful startup because your team can be your biggest asset but also remember they come with a fixed cost that will be a major chunk of your burn. Remember, as an entrepreneur you can’t do everything on your own! 2. Profitability There are a lot of startups that focus on the adoption of their services and products versus profitability. Keep your eyes on the prize. While investors are ok with startups bleeding for a few years in order to become a mass accepted service/product, this usually motivates people to lose sight of the cost of customer acquisition and then most things go downhill from there. Any resource whether time, energy or money is spent must have a measurable and acceptable return on investment! 3. Scalability No one wants to invest in or run a company that can’t grow beyond its first ten customers. There must be constant innovation and growth because that is an undefined goal of every startup. It’s crucial to keep an eye on the competition, changes in technology and ensuring your concept is future proof. Someone bought 500 horses a day before the car was invented!