Moneyball

When starting a company, it is easy to focus only on the product you are developing and the scope of services you want to provide. Easier would be to let the upkeep of financial accounts slip. Cashflow is a terrible and persistent problem with all the startups. While the major concerns are about how to get cash, startups overlook where their cash is going. While “bootstrapped” is what a part of the definition for startups is, running out of cash is why most startups die. Mismanaged cash has the power to take down a fundamentally strong and dazzlingly promising company. So, what should you beware of? Read on.

Too Much Optimism

Optimism, no matter how sunshiny and important, should not be too blinding. Be realistic, even a little pessimistic, about your finances. Do not invest too much, too soon while thinking that the sales would bring brighter-than-ever results. Sales can take twice as long and revenues quite less than expected. You can go bust before you even begin to achieve all that you have set out for if you let your cost increase before sales convert.

Thoughtless Generosity

Think twice, thrice and again before spending on anything apart from developing your product and selling it. Until you have above-decent profits, you need to be tight with the salaries you are handing out – therefore, you need to be sure that the people you are working with share the same enthusiasm for your entire idea. Make investments only when the returns are clearly defined and fit within the timescale of how long your cash can last. Spending too much money on delivery capacity in the hypothetical hopes of a tsunami of demand is a bad idea. Unless you are terribly lucky, demand will only start as a trickle.

Scaling-up Before Time

Phase one – a startup refines its positions with early adopters and keeps pivoting until it has the right way of positioning its brand and product

Phase two – the company scales up

Investing more right in the first phase would not help. Spending on sales and marketing from the start would not result in better returns. Once you have reached phase two, you may start spending a little more and should be able to start to establish set metrics based on what works or doesn’t work for your business, and future growth.

Don’t Be Beggars

If you have run out of cash before you thought of raising money, no investor is going to take you seriously. Your management prowess directly comes under doubt. Even if you manage to raise funds when you are out of cash, your company’s valuation is not going to look too positive and you will look like somebody desperate for money. Result – you might end up losing most of your ownership. A classic case of “beggars cannot be choosers.”

It will be most advisable and much easier to raise money when you look like you do not need it – like Flipkart did after its Big Billion Day sale.

Bottom Line

Exactly how much cash you need is impossible to be gauged from the start. Not raising enough investment is a disaster. However, raising too much from the start can only result in a smaller personal fortune when you come to sell. Pick the lesser evil.

In any case, be exceptionally tight until you have your objectives nailed, and until you understand correctly the financial metrics of how sales respond to investment.

India’s Only Glocal: A Case Study

A computer hardware distributor, Rajesh Agarwaand, decided to enter telecom and mobile equipment industry in 1991. By 1998, he was joined by three others – Rahul Sharma, Sumit Arora and Vikas Jain. Together, these unlikely co-founders brought Micromax from being a mere distributor to a telecommunication equipment marketer. By 2008, Micromax was a mobile handset maker. 2010 saw the company as one of India’s largest handset company that differentiated itself by offering feature-rich smart phones at unbelievably affordable prices.

Their investors would love them to be “underdogs and challengers”, with valid reason. Micromax has not yet been devouring the markets of big brands but, together with Xiaomi, it is very well hailed to be a monster in India quite soon. Let’s see why.

Their Product

Micromax was the first brand to launch a phone in India that had a 30-day battery life and the one that offered hi-tech features at comparatively dirt-cheap prices.

  • Dual-SIM products make for about 85% of their portfolio
  • Sleek and stylish handsets made from a “me too product” perspective with aggressive prices
  • Canvas and Turbo have been huge successes
  • Android and its market is lapping their products up

Their Strategy

“We owe our success to our ability to understand the Indian consumer.” – Rahul Sharma, co-founder

  • When it came out, Micromax targeted the rural market with Micromax X1i: a good handset that considered well the issues with electricity and solved those
  • Logistics were sorted through a network of over 450 distributors and 50,000 retailers
  • Made distributors pay in advance for their products but offered generous margins as incentives; those who did not pay in advance received thinner margins
  • They have partnered with Yamaha for their audio experience

Their Promotion

A shift towards the global market was seen when adverts for Canvas came out. Then Hugh Jackman nailed it.

  • From Bollywood celebrities and MTV to Hugh Jackman, advertising was a priority
  • Unveiled their new logo during a cricket World Cup, for which they paid heavily and reaped even more heavily
  • Traditional marketing aside, Micromax even advertised on most Points of Purchases online that proved to be their strongest promotional feature

Their Pricing

Where the big brands haven’t been doing that well, Micromax’s sales are consistently picking up.

  • Quality at affordable prices
  • Lower rates haven’t just increased their market share but it has successfully fended off competition from giants like Nokia, Samsung, Apple, etc.

However, not all is roses. Micromax is still dependent on Shenzen, China to get its handsets manufactured, the demand-supply gap is also persisting along with increasing sales and the mobile is often out-of-stock. The advertisements are everywhere but they are not that catchy, if you can keep Canvas’ jingle aside. Lastly, it needs to watch out for Karbon and Xiaomi.

Still, their hard work to keep price-value equation right has helped them. Micromax manufactures its products with off-the-shelf technology that proves to be cheaper than proprietary ones. They have spent big bucks in marketing and have even launched up to 50 phones a year. Their strategy has always been sorted, it seems, now that they have over 125,000 retail outlets in 560 districts across India.

With plans to start state-of-art manufacturing units of its own and upgrading its RnD department, Micromax – clearly – has sights set on reaching new markets globally.

Bottom Line

At 22%, Micromax has left Samsung behind in race to capture the Indian market share. It isn’t a name that one flaunts – YET – but it has also become a brand that just will not be ignored anymore. The investors say that the co-founders are the driving force, the co-founders say that they just seek to bring innovation at the most affordable price. Whatever be the reason, Micromax has shown that it Can.

Learn from a Salesperson

Robert Kiyosaki emphasizes that the job of a salesperson is one of the best jobs. Wonder why?

Not sure if you have done the job of a salesperson, but quite sure that you’ve dismissed one with complete negligence. We all have. If there is a most rejected person ever, it has to be a salesperson. Hundreds of customers everyday, uninvited and undeserved abuses, more than those are the people who do not want to talk to them or want to be contacted ever. Still, the targets need to be met!

Salesmanship is not only the art of convincing your customer, but to never give up.

So what does a startup get from this? To never – we repeat – never give up. Be a salesperson!

As a startup, it is imperative for you to convert every opportunity into success, learning from the mistakes, coming up with different ideas every time the existing ones are dashed down. Experimenting with new things while keeping in mind the resources and the results, and constantly renovating approach to everything is the key. Taking responsibility of not only your own actions but also of your team and taking ownership of every consequence of your cumulative actions is what will define you as an entrepreneur.

And, trust us, nothing teaches it better than salesmanship.

Bottom Line

You know, those flashy interviews of golden success stories show nothing but a tip of the iceberg. Sometimes, even the best preparations are met with worst results, as Richard Branson has told multiple times. What is important is that you do not allow the results to intimidate you. The next time you look at a salesperson, know that they have been through countless NOs and abuses yet are still there with a smile upon their face. Learn. Learn from them about tackling severe disappointments and harsh bottom lines.

Our Favorite Startups And Their Mantras

#Startup! #Entrepreneur! – #LatestBuzz

Startups are fun! Startups are exciting! Startups are in VOGUE! But… Startups also face infinite problems when they try to establish themselves: How to get the funds? How to attract the right talent? How to sustain in this fast-paced bubbling environment? After all the struggle and challenges, some startups flourish and some die. It’s the hard work, passion, proper planning and brilliant implementation of plan which makes all the difference.

Here we have compiled a list of 4 successful startups  alond with their success mantra!

Twitter

Talking about this company in just 160 words is impossible but this is, precisely, what Biz would want from us! Yes you guessed it- Twitter sure does top our list! Founded in March, 2006 by Jack Dorsey, Noah Glass, Biz Stone & Evan Williams, Twitter saw its monthly active-user base rise to 284 million in just 8 years. On any given day Twitter transmits more than 500 million Tweets in 35+ languages.

Amazon

Second on our list is, of course, the amazing Amazon.com! Amazon was founded in 1994 by Jeff Bezos in his own garage. Headquartered in Seattle, Washington, It has grown to be a Fortune 100 company. Amazon operates in 10 marketplaces around the world.

Goodreads

Who can deny the power of reading?! We sure do not. The next to have entered our list is Goodreads. It is the world’s largest site for readers and book recommendations. Very niche target audience but it is loved by the book enthusiast all over the world. Goodreads was launched in January 2007 and has 30 Million members, 900 million books and 34 million reviews till date.

Flipkart

The last to enter our list is, our very own Indian eCommerce giant, Flipkart. Started by two IIT grads Sachin Bansal and Binny Bansal in 2007 with the idea to deliver books at door steps, Flipkart today hasover 20 million products, 26 million registered users and 4 million shipments every month.

Negative IS Positive

Remember those Bollywood flicks where the dejected college-wala-boyfriend would suddenly come back in the life of a heroine dealing with a mid-life crisis and an unsatisfactory marriage? Only, now that boyfriend has a pay cheque that devours the lifetime earnings of the heroine’s hubby dearest.

“Ye sab maine tumko dikhaane ke liye kiya, heroine!”

Then there is a money-versus-morals and the heroine’s side wins and, suddenly, her husband is rich enough and blah, blah, blah!

Now… Rewind and stop at the return of our dejected boyfriend. Poor soul worked hard, day and night, to earn big bucks and – even if he just does not win in the end – he is the magnate.

POINT being… Negative thinking has its perks, especially for entrepreneurs. It is okay to not believe it right now but give us the next few minutes and, at the least, you will re-look at what this “negative” might also mean.

Big Plans – Vs. – Future Obstacles

Of late, all the things that used to be stark are mellowed down. So, “negative feedback” becomes “areas of improvement” and “problems” have become “challenges”. While a rosy picture and a bright future is what we run after, too much positivity will end up choking a lot of vital crisis-control measures.

A singularly focused mind is not the one that just looks at one side of the coin. Too much optimism will put a shadow over where you really stand and your limits. An incorrect analysis of the situation is on the cards, bro, the reader advises you not to be too blinded by the imagined sunshine.

“Sab ho jayega” – Vs. – Calculated Risks

There are two types of “sab ho jayega”, to be honest – one, where you apply the world famous Indianjugaad and, the other, where you just hope that all would fall in place. The problem with optimists is that they digress a lot towards surrealism. The constant battle with their real emotions results in an unnecessary pump to their egos that in turn prompts unreal expectations. Often, they have to overestimate themselves because, as The Secret assured, merely thinking positively will throw the entire world in your lap, right!

The truth is that the market is a dirty place, governed by stark numbers. And, more often than not, numbers do not favor blind optimism. If you are only looking at the sky with hopes that God will take care of the ground beneath your feet, not even God will be of much help. It will be better that you take your reality check – often – and assess your own capabilities in a cold manner. Taking calculated risks is going to be a MAJOR part of your entrepreneurship. Do not smudge the picture with too much optimism.

Imaginary Super Powers – Vs. – Back Up Plans

Even the biggest geniuses have suffered failure and, often, the reason has been that they expected too much. As an entrepreneur, you need to have a Plan A and a Plan B. How will you really get at developing Plan B? When you can learn to be critical of Plan A.

At any workplace, it is the most optimistic people that are lauded whereas the negative ones go unheard. The truth is, as many psychologists claim, negative people tend to be rationalists. And, psychology goes on to claim that the so-called “negative people” are not only better at communications, they even think more clearly and make better decisions and are less gullible. Simply because their constant use of critical parts of brain has helped them in enhancing their information processing strategies.

Bottom Line:

Sometimes, it is better to have somebody who is capable enough of perceiving the worst-case scenario. Especially, in business where the time allowed between falling down and getting back up is just too less. What we all have been calling “negative thinking” is just hardcore practicality. For every optimistic aspiration, you need a high-contrast reality check. Call that as “negative thinking” but, if you do not have it already, develop it!

The Big Picture Perspective

Something as basic as chai is now being ordered online. Do not be surprised at success of more such ventures. ‘Brunch’ Hindustan Times’ weekly magazine says that we spent more time on internet in 2014 than ever. The number of hard copies is decreasing, as people are now moving towards e-tickets, e-bills and e-books. What is happening to the world? With everybody going gaga over the internet, entrepreneurship should evolve in the same trend too.

Statistically, of late, startups are venturing into online services or online portals, with considerable investment in applications. Most of the big companies, media groups, game developers have already launched their apps. Probably you’re planning to do the same as well.

But this post is about something bigger. We want to introduce the basic principles which will widen your understanding about entrepreneurship. Have you ever wondered why are all these companies, the entrepreneurs are focusing in mobile apps? This blog, while focusing on a few examples, is aimed at introducing to you some important aspects to be kept in mind, as an entrepreneur.

Present and Future Business Prospects:

The sales of smartphones in India rocketed in 2014, and is expected to go higher in the consequent years. The eyes of an entrepreneur should, therefore, be focused at millions of smartphone owners and isn’t a mobile app just the easiest way to reach them? Higher the sales of smartphones, more will be the number of apps downloaded. Economics calls the two products as complementary products. So when you think about your product, keep the present and future business prospects as an important criteria.

Glocalization:

The development of a venture about mobile apps, or websites is also supported by “glocalization”, which means that you, as an entrepreneur, can start locally but you can expand globally anytime. The approach would be universal, but serve the local market in the beginning, and expand accordingly.

Engaging the User:

On researching about the early years of Mark Zuckerberg, one finds a contest he initiated in Harvard, called Facemash- Hot or Not. The blog went on to become an instant hit, with every user voting many times. The success mantra of websites like Facebook, Twitter and Youtube – apart form being one of a kind – is that these websites have engaging content. And they’ve made it better by giving the user “suggestions” based on the stuff one likes. Big online-shopping websites like Amazon and Flipkart save the products viewed previously, and the products turn up every time you visit the website. They know how to tell their customers that they have been paying attention to them, and so should every entrepreneur.

Bottom-line:

Even the largest of the business is not large because of its investment, but the idea behind it. And any idea cannot thrive unless it is dynamic enough to adapt and metamorphose with trends. Also, the secret to a continuing success of any idea is a loyal customer-base. How do you keep your customers loyal? You care about them and let them know that you have been paying attention without them demanding for the same. For, even if you are your own boss, you need to bow to the customers.

Marketing Express

In your lifetime, you will see all kinds of movies. Some would be thought provoking and some would be inconsiderable. However, every movie is going to leave you with its own aftertaste. No movie is completely forgettable – especially, if it is an SRK movie. Same was the case with Chennai Express. Here are a few factors that made Chennai Express break a lot of box-office-collection records and this should teach you, our dear startups, some guru-mantras. Or, so we hope.

1. Get Your Budget Right

Here are some numbers from Chennai Express’ total budget:

  • Production Cost: 50 Crore
  • Print and Advertising Budget: 30 Crore
  • Rohit Shetty and Team Fee: 15 Crore
  • Red Chillies & SRK Distribution Share: 40 Crore

Only a mere 27% of the total cost for producing the movie and the rest goes to marketing and sales. The result? Chennai Express went to 3700 screens that reached a wider number of audiences and generated more revenue.

What to take away?

Sometimes, average is good enough. There are those movies with 4-5 star ratings which don’t even manage to collect 5Crores. While nothing can be perfect enough to please everybody, a decent enough thing that pleases everybody will fetch you money. Success in market can, actually, be achieved by focusing more on activities that take your product to the end users. And, yeah, like the movie is a no-brainer, keep your product simple enough so it does not tax the user’s brain too much.

2. Leverage the Established

The movie didn’t just ride on SRK’s shoulders, Rajnikanth played a huge role. There were reports from Chennai claiming that the audience did not leave the hall after the movie ended. They were waiting for the “Thalaiva song.” Despite doing absolutely nothing in the movie, Rajnikanth did a lot for the movie. Like we have said before, SRK knows his own brand value and his own market. He has his own strong foothold in Mumbai, North India – Bengal is crazy for him! – and the North-East. Deepika added all the masala and Yo-Yo took care of Punjab, at the least. Then there was Midas Shetty himself.

What to take away?

There is no harm in associating with something that has already been established if it leverages your product’s visibility and market. Why do even the biggest brands go on changing their brand ambassadors? Play upon what is working until you get into a position whereon you can change the game entirely.

3. Small Things Count

SRK promoted the movie everywhere – from IIFA, Macau to a mall in Bhopal via appearing on TV shows. He practically listed out all the features and benefits of Nokia twice in the movie despite the fact that it had nothing to do with the script.

What to take away?

You just cannot afford to ignore any media or marketing platform, no matter your personal opinion about it. Yes, this goes on to mean that Google+ cannot be ignored just because it is yet to catch-up with FB or Twitter. Any type of marketing is good, exactly how no type of publicity is bad. You never know where you accidentally find a market.

4. Get Innovative

SRK did a lot of brand tie-ups for RaOne and, similarly, no stone was left unturned for Chennai Express as well. There was a mobile game for Android and Java based phones, a special line of Deepika-style sarees was launched and a timely Rakshabandhan free tickets offer did the trick.

What to take away?

A lot of startups believe that every promotional activity is going to cost a lot of money and, thus, it will be better to do without it until they raise some funds. The fact is that, even if you do not have enough money, promoting a brand needs creative tweaks and some smartness. In the long run, your OTB methods are not only going to result in a lot of word-of-mouth but can also establish a quirky market reputation of your company which can affect your future integration or exit plans.

Bottom Line:

The next time you are gaping at a mindless movie making 200 Crore or more, think about the behind-the-scene WHYs of it.

The Difference “Being Different” Makes

Numbers suggest that more than 90% of the start-ups fail and there is a slight chance to reach the top ten. This goes on to imply that the expectations you have from your venture will shatter once you enter the practical world stuffed with cruel competition. The words could have been softer but the core reality remains the same. Statistics may be deceptive and unreliable, but the idea conveyed is loud and clear.

What do you think is the reason behind such a meager success percentage? And don’t you think it would be a little too difficult to make to the Top Ten?  Those who’ve failed aren’t fools. They aren’t much different from you.

But here’s another secret we’ll tell you. If you want to make it happen, if you want to gain an upper hand, to gain an edge over your competitors, you need to be different than a common entrepreneur with avision that puts you on the path which most would shy away from and create something no one imagined could be created.

One of the most successful start-ups in the recent times is Xiaomi. While Xiaomi’s success was credited to its very unique, but effective “marketing strategies”, other factors were taken perfect care of. Similarly, it is important to keep track of all the departments and to think out of the boxin order to convert every situation into your favor.

The simplest formula is that if you want different results, your efforts and your thinking should be different than the beaten path. Come up with blazing ideas – ideas which work wonders and convert. If you think that you already have an answer to the problems you are looking to solve, think again and come up with a better one. If something has been done in a particular way, think of revamping the process. World’s greatest marketers and leaders are not there because they did what everybody else did. And, well, if the existing systems and MO were perfect then we wouldn’t have had problems in the first place.

“Be different” is not just a mantra that you need to chant in order to get miraculous returns on your hard work. It is the defining rule if you want to attain anything remarkable. Look around. How many people can you count who are perfectly settled in their routine – even if they are unhappy? Countless, right? When you’ve decided to stray from the established norm then stray fully and do not look back to how things are supposed to be done.

“Two roads diverged in a yellow wood,

I took the one less travelled by.

And that has made all the difference.”

-Robert Frost

Bottom-line:

Take the road less travelled by. Your being different makes a whole lot of difference. Accomplish what you’ve always wanted to do. Competition becomes secondary once you accelerate and run at your own pace.

Imagine like an artist, plan like Chanakya, map the scope like Einstein and observe like Sherlock. Genius is eccentric, so be that.

However…No! You cannot be Batman.

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