Note: The following article is derived from our session with Bhushan Karn, Co Founder, Entropy Innovations for Startup Saturday Navi Mumbai.
Flying through entrepreneurship ain’t like dusting crops, farmboy.
– Han Solo as the founder, The Millennial Falcon. Can you imagine!?
The single most difficult line to cross: Idea phase
We all have ideas. “I came up with [x] waaay before [y] made it cool” is a deceptively common statement. Yet the number of people actually taking the plunge and going for their idea is minuscule.
It requires confidence, faith in oneself, money and a certain ‘gates’ to be crossed before you actually start up.
Being a genius not mandatory (unless you are the next Google. In which case, Whoa.) The entire process is going to be very rewarding, flush with chances for networking, opportunities to create your own experiences, to pursue your passion and make money in the long run. Of course, initially you won’t be seeing any money, but in the longer run it is certainly a productive experience.
The biggest barrier for an entrepreneur is actually the decision to take the plunge.
“Entrepreneurship is like jumping off a cliff and assembling a plane on the way down”
The journey is incredibly tough, stressful and the equivalent of a garbage compactor crushing you while C3PO turns off the comms!
Only a crazy person will take that step. And you have to be conviction that the crazy person is you. There is no such thing as a part time startup. Step out of your comfort zone to eventually make the decision to quit your job.
Reasons to quit :
- Conviction in your idea and passion to do something
- Confidence in yourself and your idea
Terrible reasons to quit a.k.a NO
- Dissatisfaction with current position
- Desire to earn more/ improve profile
Once you have actually made the decision, Prepare. Secure your finances, take friends and family into confidence – you will require a lot of support in your venture. (Jumping off a cliff. #insane)
Remember – No plan survives first contact with the enemy. It is going to be worse than you can ever imagine.
Expectation : Funding in 6 months, excellent traction, investors knocking at doors.
Reality : (*hums theme song*)
Do excellent research.
Research is not a 500 page colour coded report with charts and graphs.
It is critical to understand the problem you are trying to solve. Is it actually a problem worth solving? Who are your customers? What is the market size? Who is your competition? How are you different? Talk to customers from day one. Make sure you thoroughly understand who is going to pay you, who your competitors are and what will investors see.
Plan your Exit
Is it going to be a merger, is someone going to buy your company? Investors are definitely going to ask about their exit anyway, so make sure your answers are ready.
Assemble a diverse team.
Most human beings prefer to associate with like-minded people. Get out of your comfort zone. Hire people who get you out of the box & stretch your potential. (*whispers* Infinite diversity in infinite combinations!)
It is highly recommended that you have a Co founder, especially for your first venture. You are going to need a support system, and road ahead is incredibly tough.
How to bootstrap?
- First thing tap into savings if possible (Hence the preparation stage).
- Option two is to approach cofounders of companies who have already had exits, are willing to invest in and are interested in great ideas.
- Final option is to approach friends and family- least recommended. Make sure all your plans and projections are carefully laid out, so that they know what to expect from you.
Once the ball starts rolling and you have a sizable user base, traction, paying customers then approach angels. Have a good business plan and some traction ready in place.
Keep in mind: Find a lead angel who leads the funding round.
It is difficult to find someone willing to add their name to a new team, product or idea. In such a case it is best to involve them as an advisor/mentor for them to understand and eventually tap into their own circles.
- After closing funding be very careful with your term sheet. Ask for help, if needed. Invite close friends and people you have confidence in.
- Don’t sign a deal you are not comfortable with.
- Raise only the amount of money you require. If you raise a greater amount you be under pressure to perform. Just have enough to go from Point A to B, which is by your definition. This definition is also needed to be presented to investor.
- Have a timeframe in mind. If your estimate is 6 months then be prepared for 12 months. Compliances take time, such as 4-5 months to file papers etc.
Pivot: Be adaptive
When to pivot? When customers stagnate or stop coming and cash flow reduces. Try new models and ideas. This is one area where a diverse team is incredibly advantageous.
However, know when to stop. There is no use beating a dead horse. You will end up wasting your time and your team’s time.
Remember that there is no place for ego on the table.
Fail fast and recover faster.
Finally, don’t forget to have fun. It’s one hell of a ride. Even if your sofa and back are busted 😉 Hang in there Chandler!
Know when to take the plunge from being a salaried employee.⚡️ “Basics of Starting Up: Startup Saturday March 2017”https://t.co/8m4uzlGN9o
— SS NaviMumbai (@SS_NaviMumbai) March 15, 2017
Paras from Headstart felicitating Bhushan 🙂
Blog by Aishwarya Meenakshi
These sessions were conducted under the theme ‘Basics of Starting Up’ on March 11, which is Part 3 in our ‘How To Startup’ Series.