When I started, I made mistakes and wasted a lot of my time in doing things which were counterproductive or didn’t align with building and growing a business. My Startups learnings are as follows:
1. The idea and What to build
Do what you want to do. I am a firm believer in this as startups require a lot of hard work and if you are not having fun and doing what you don’t find it exciting, you will soon lose motivation.
Ideally, you want to start from a point and see what solution you can build. It will be good if that is a problem faced by many as this will determine your market size. There is also “sell Antibiotic and Not Vitamins” concept as people only pay for antibiotics, not for vitamins.
Almost all the startups (at least the successful ones) are built around a solution for a problem. Do not create artificial problems as it is easy to have tunnel vision as a startups founder.
Also almost always people start with something else and end up building something else after a few failures and iterations.
Going solo is stupid and suicidal. Always have a co-founder who will share pain, expenses, problems and workload.
Normally college friends become the best co-founders. The founding team of 2-3 is best. I have seen teams which are too big often split up later and ends up as 2-3 companies anyway. You can have your brother/spouse as co-founder too but make sure he/she shares the responsibility.
Way too many people add directors/co-founders for namesake which creates a false illusion of someone being there.
Build your core team based on character and not on skills, since skills can be built easily, the character can’t. Make sure you like these people and enjoy working with them since you will be spending 50% of your time with them.
3. How to start
Don’t jump to take an office, furniture, startups branding material, forming company etc. These things are not important initially. Way too many startups founders make this mistake and lose focus. When time and money are scarce, use it wisely.
Spend all your time and resources on building and selling. Don’t bother about fancy office, furniture, stationery, t-shirts and even registering company. These can be dealt with later.
Whether to register a private limited company or not is your choice. My opinion on it keeps on changing but It feels if there are multiple co-founders and partners, you should register a private limited company. You can get it done for around 20k. Do get proper partnership agreements too.
Initially, you may want to pool some money and keep it in your bank account say 5 lakh which can be used to pay the bills.
Such buffer amount is needed so you don’t have to keep using your personal funds which will make tracking expenses difficult.
One of the founders has to understand technology. Way too many startups fail because of a bad technical decision. Especially in choosing the wrong technology stack. Ask others what is the best option for you.
Ask a few more people. This is one thing which has a huge cost of failure involved. Don’t just chose something because this is all you know. You can spend 3 months learning something which will be far more beneficial, so be open for it.
Also, do not do premature scaling. Don’t buy costly servers and start talking about scaling. Don’t use technology just because it is cool.
5. How to Hire?
There is no silver bullet, the best of the best I have seen hiring mistakes. Ideally, you want to do the inbound hiring. Let people come to you by hearing about you and your startups. This often brings ownership and commitment.
You will rarely find your core members from Naukri or Monster. They don’t work out for any startup. HasJobs, Startup Facebook Groups, LinkedIn/Twitter, Company career page, on the other hand, has worked much better for me and others.
Don’t go for the resume screening too. Just talk to them and look what they can bring now and in future as well. Always prefer character over skill as skill can be built in a few months, not character. Hiring a wrong person will be a huge liability in terms of time, money and resources invested, not to mention asking someone to leave is never easy for anyone to be very careful in hiring and always keep 3-6 months of screening/trial period.
6. How to Raise Funding?
At first, there wasn’t really much to show, there was no product or team and I was extremely hyper. Needless to say, I couldn’t raise anything but still, I did learn some very valuable lessons by getting rejected by every VC and angel investor of India. DO NOT chase them, let them chase you.
There are plenty of associates hanging out on LinkedIn and so if you are doing good, they will contact you. Raising Funding is a two-sided market and investors value good startups and will quick to jump on to you if they see the value.
From what I have seen, do not raise anything below 50 lakh. It is not worth diluting or going through the hassle of issuing stocks for small amounts. Normally with just 6-8 people, your burn rate will be 5 lakh per month at least so 50 lakh is a minimum. If you can raise more initially, even better as raising money is a huge pain and sucks time and energy.
Don’t have too many feelings and emotions with funding though, some of the biggest and successful tech product companies in India are bootstrapped and there are businesses which are family run. Raising money is not your primary job, building a business is.
If you are running a private limited company, make sure you keep your finances clean. All the data for private limited companies are publicly available with directors name so you don’t want to default anything as a director.
Your name may get blacklisted if you don’t file a returns. Hire a good friendly CA (not a firm, they are only there to make money) who can advice you well.
Ideally one of the founding team member should manage finances as money is oxygen for startups. It is also important if you want to raise funding for the future too.
8. Sales and Marketing
Make sure you grow organically initially. Nothing is better than growing without sales and marketing teams and zero budget and growing by word of mouth. Let the users find you as this will validate your business model too.
Avoid hiring too many sales and marketing people initially. Premature hiring specially of sales and marketing team will burn your cash really fast.
Also, I have seen people being casual in hiring sales and marketing people as compared to developers (often because the founders understand technology so can screen people better as compared to sales and marketing) which often leads to a wrong hire.
If you don’t understand sales and marketing, it is good to learn by doing things yourself. Sales and marketing will take more time than technology and is an integral part of the business growth.
9. Relationship, Health, Life and Fun.
Every startup founder is a dreamer and wants to make it big but it is stupid to do it at the cost of relationships, health, life and fun. I think its OK to work 14 hours a day, living on Maggi with your startup as the center of your life for some time but you can’t do it for years.
I can write a lot on this from my past mistakes but I feel if you are reading this, you can easily connect the dots.
Take care of your health and relationships (parents, brother/sister, spouse, friends) since you can’t buy it with money, success and fame. Also, keep learning and having fun in life and have it today, don’t wait for tomorrow.