A few years ago, as a founding member of a health-tech startup, we were trying to improve the overall research outcomes of the global pharmaceutical companies. Even though the end motive was clear right since the start, yet the path we took was entirely different than what we had planned. We had to make multiple changes to our product, pitched in front of a lot of investors before getting funded and saw many days where the future looked uncertain. I consider myself fortunate that our startup became a success, and mostly attribute it to the zeal of our team to be the best, our ability to research and build a product which is loved by the consumers. Looking back, it was an exciting journey, and is one which has helped me gain a lot of positive experiences. Being an experienced entrepreneur, here are a few things that I believe every entrepreneur should work on before starting up.
1. Target a Market Need, instead of Tackling Problems that are Interesting to Solve: Before starting up, it is essential to see that the problem you are targeting is one that exists universally and can be solved in a scalable manner. Any startup with great technology, insights on consumers and expertise would not become a success if it does not have customers who are willing to pay for their product or service. Thus, it becomes essential to research your target market, the competitive landscape, the political and legal scenario of the country so that the chances of success increase exponentially.
2. Estimate your Cash Reserve and Burn Rate: Money and time, even though, seem infinite, yet are not, and thus it becomes essential to allocate both in a judicious manner. It would be a wise move to plan as to how the money and time will be spent so that you do not run out of cash at the most crucial point of time. I know that estimating the cash spend is not an easy task when starting up, yet a plan in hand always helps to secure yourself against the future. Further, know that while you have opened a startup and it is your intention to put all the profit back in the business, yet it is essential to keep some money separately for your personal expenses as well.
3. Form a Diverse Team with Diverse Skill Sets: A diverse team with diverse skill sets is one of the most critical reasons for the success of a startup. If the founding team is unable to build an MVP or is unable to put out a product on its own, then there remains no reason for starting up. Further, a trusted team helps to put in balances and checks, and thus ensures that the business and technology decisions being made are for everyone’s best.
4. Understand the Statutory Requirements: Every company, including startups, shall take care of the statutory requirements so as not to fall into a world of legal complexities. Legal challenges is one of the most cited reasons for a startup to fail. Not being statutory compliant would ultimately lead to a lot of cash burn on lawyers, court cases and legal services, eventually leading to shutting down the growth of a startup. Thus, it makes sense to find out all the legal requirements right since the start and follow them.
5. Form Connections and Grow your Network: It does not make sense to do everything on your own, and there are many people and institutions (such as us, at Brandshoots Ventures) out there who are willing to help the entrepreneurs, and build successful startups. Thus, it makes sense to grow your network, form connections, and learn from the experiences of others. I know it can be difficult to ask for help when one is new to the business world, however, not making this mistake would help you and your startup to succeed in the future.
6. Size up the Competition: We hear the clichés that startups shall not pay heed to the competition, yet the reality is starkly different. Ignoring the competition is one of the major reasons that a startup fails. Once you enter the market, and the idea gets the market validation, there can be a lot of entrants in the same space. And it might be possible that these new entrants have a product that are solving the same problem cheaply or have built a product which is easier to use than your product. Thus, while obsessing over the competition is definitely not a healthy thing to do, yet ignoring them can have far reaching consequences.
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