Startup Mistakes We Make

In a course on startups, I heard the coach saying that startup is not the miniature version of a large corporation. I find it so true on many occasions when I interact with many people who are either planning to start a new business or have just started a business. Most of them approach the entrepreneurship as a Business Manager of a large business conglomerate and have the same idea of changing the world, but what I think that they need to change themselves first and take every case of entrepreneurship as a unique case than benchmarking it with other examples. I have found people coining in big marketing and branding jargons and what not, with no money in the pocket. It makes a laugh. Some of the points I want to make here, which I have learned:

Ideas become big, it’s rarely planned

I have talked to few people in last couple of months, who despite little money in their pocket and being in the business of generic products having a huge number of competitors, were boisterously saying that they want to change the consumption behavior of people of their product category. There is nothing bad in thinking so, but, all big things take time to materialize and as an entrepreneur, one should focus on piecing together all the small steps at a time. ‘Tata Nano’ and ‘Tesla’ are very big ideas; one is very cheap and one is very costly. I am not sure whether both financially very big idea or not. I am also not very sure whether founders of Google or Facebook were having the idea before starting the business that their idea is very big as it is today.

Big words are not a big idea

People mostly coming from corporate world to entrepreneurship believe that big advertising taglines and glossy communication language is big idea. Not all people are poetic in this world and some may like to hear direct communication. If you have money to cater different segment of consumer, then do whatever you want to do, but when you are an entrepreneur, running on low fuel of money, then you should focus on communication which matters the most and not something which looks glossy and beautiful. A big idea is something which solves the big general problem, like if something solves the problem of housing or sanitation easily in India and that also at affordable cost, then it will be called a big idea. Apple made music a real problem, though the idea was first started by Sony, Altavista was there but Google connected more and gave more, Myspace was already there but Facebook made networking fun, open and clean. I am not sure whether these people really had the idea that their idea will become too huge in the future. I think they were just making life easy for people and lot of people found their idea of implement and it became big. And if you look at the homepage of Google, Facebook or iTunes, you will find one of the cleanest pages of all.

I know what customers want

Around 7 years back, my brother was developing software for financial institutions. Project was big and involved lots of money and time, so I asked whether he had tested his idea. His answer was “I know what they want. They are going to love what we are developing”. “But you should test it; after all IT people run and maintain the system but it is common people who use it and they are not as computer literate as you are”, I protested. But he ignored my suggestion as all the tech professionals normally do and think about people whose knowledge is limited to MS-Office. The result came out as per my assumption and their codes are resting the hard disk of their computers. Yes, you may be having the sense of what consumers want, but won’t it be a good idea to test your idea with some of your target customers first?

Idea outshines the money in the pocket

I was working on a project few years back as an external consultant and business owner came up with a completely outlandish demand about sales. Knowing the impossibility of task in the timeline he had mentioned, I refused the task. So, he obviously hired a project head, who in turn hired more than fifty people and made him incur huge cost every month. For survival, the project head coined in new ideas, and the business owner funded them till halfway but run out of money soon. Resultantly, the entire team hired by the project head along with him was fired within the first year. Now, the business owner is running the business with a grossly scaled down version of what he had dreamed of.

There are many things which I keep observing in my day-to-day life and keep writing. I will come back later with a few more mistakes we make…

 

__________________

Sharing is caring, so please share this post. Thank you!