Start early, fail fast, and stop worrying about statistics! Is that the way ahead?
In this edition of Venture Upbeat I look at some of the data points which could help us correlate aspects related to how to ensure your startup journey is successful and some expert insights on how failures can be tackled based on their real world experience.
It is quite encouraging to see Indian start-ups going global and even more promising to see 72 per cent of the founders are less than 35 years old, according to the world economic forum (WEF 2017 report).
However, as many as 997 (43.7 per cent) of 2,281 startups have had to down their shutters since June 2014, shows latest data with market research firm Xeler8.
Another research, driven from analysis of blog posts from the start up founders on why they failed, succinctly captures the hardships on starting a company and running out of cash..
So, what lessons can be learned from these learnings? Business models, funding, and customer traction are the major areas that need to be strong. But you might have all these and if you still get the market timing wrong you are bound to find it difficult.
The right timing, the right decisions
There are lot of examples wherein being early in the market did prove to be a wrong decision.
Finally a great management team who can take right decisions at the right time is a crucial factor for success.
Mr. Hemanth S M, Business Head of Bezirk, a Bosch Startup, has this to say on the area he sees as major focal point to succeed:
“A critical phase in the life cycle of a startup is the scale-up. While it is important to be quick and agile in the solution rollout, it is equally important to ensure that the product or solution is reliable, secure and scalable under real-time conditions. Independent validation in real- time scenarios under various stress conditions help to resolve issues early on and roll-out a durable and a reliable product.”
Now coming back to statistics as per report of The Statistic Brain Research Institute nearly 50 per cent of new businesses independent of industry do not make it to four years (Source: tech.co).
So ensuring you cover your financial risks and have sufficient cash flow to keep the business running is critical.
Statistics and numbers are always good to know but you cannot rely on them also for taking on the ground decisions.
The importance of compliance
As Mr. Showri Rajan Director in one of the Big 4, has an opinion that giving importance to Governance and regulatory policies are also of importance:
“Most of the early Start-up Companies have their priority on building the business and sustaining in the market. While it is of utmost important to focus on both, it is even more important to be compliant with the law of the land. Ignorance may not be bliss, regulators, VC/PE are always worried about good governance and fiduciary responsibility by the start up in the wake of ever changing regulatory framework.”
Another major point that needs to be understood is the importance of a clear cut plan for exit strategy in Indian context for startups.
You see too many founders starting off on a high note, but don’t have a proper exit strategy beforehand like they do in Silicon Valley.
On finding the right partners
Mr Sanjay Chopra, CEO and Co-Founder of Cognistx, is of the opinion that finding right partners for your ecosystem is critical — especially when startups partners with huge enterprise where they bring in the passion and dexterity of a startup with the stability and knowledge of a huge enterprise.
It is of utmost importance to ensure that founders focus to ensure adequate equity/debt investments are there to meet the next business milestone while planning.
Any startup cannot fail or succeed based on a single factor, and getting over excited or let down with statistics definitely is not the way forward but rather than work on the key fundamentals which would help in succeeding.
Pavan Govindan is part of Bezirk, a Bosch Startup which is an Intrapreneural venture of Bosch Global.
The views expressed here are of the author’s, and e27 may not necessarily subscibe to them. e27 invites members from Asia’s tech industry and startup community to share their honest opinions and expert knowledge with our readers. If you are interested in sharing your point of view, submit your post here.
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