This blog-post includes the most important business lessons that I learnt in last 8 years by running multiple startups/ projects namely ( Qwerz, Startup4Startup, MDU.li, Uni2vesity, SocioMedio, SkilledInterns ).
1. Name your Startup carefully: Due diligence must be done when you are naming your startup. Name of the Startup will give about the type of product / services you are planning to offer.
If you name it in rash or the name is unrelated to business, chances are there that you will end up causing confusion to your prospective clients which should make it hard for you to turn that into a solid brand.
2. Focus on a niche market: Since you are starting up new, you might not have deep pockets, latest technology, etc. Therefore, if you are bootstrapping or you are looking for a faster growth rate then as per my experience, growth rate in niche business is higher since you are already focussing on very limited audience and offering specialised product / service that your competitors might not be able to offer anytime soon.
When you are offering multiple services in multiple domains i.e. product offering is generic, growth rate will be less/ slow and easily you will burn out all cash.
3. Never run out of Cash: When you bootstrap, you will always have limited money to sustain for limited period of time. You must work hard ( adopt the Japanese/ Chinese startup work culture - 9 to 5 is basics,to start with). You must hustle, meet new people, explore, talk to media guys for free PR, pivot the business plan, get feedback from your users, research, analyse if you are moving in right direction, etc.
Consequences – If you won't maintain a speed then you will end up burning all of the money and your team, startup will starve to death.
4.Document your business processes: Document Agreements – Documentation is critically important for every professional setting. So it has to be made compulsory for every business dealing no matter the size of the deal.
Why? Because verbal agreements are harder to prove and things must be in black and white so that it can be presented in the event of dispute. Both parties are clear about their deliverables which is very important. Always have exit clauses for any unforeseen circumstances and also have liability constraints. Put in a clause about yearly increment in costs.
Document Processes – Document every minute details of all the processes you have in your startup. Why? Because you won't like to repeat briefings to your staff again and again. You can have SOPs ( Standard Operating Procedures ) for different departments to ensure smooth and streamlined functioning and to track the progress efficiently.
5. Have minimum commitment time with your startup: When you startup, stick with it dedicatedly. If you will keep on working on multiple startups simultaneously then chances of being successful in any of them would be marginal.
Startup is a baby, and your startup is yours. It needs to be grown with extreme care. You need to raise one a bit old to gain experience and replicate. If you will try raising 5 babies at once, then you will be surrounded with lots of noise and shit. Master the art of raising startup by successfully raising at least one.
6. Choose your co-founders carefully: In the past, I started startups with different founders. And the process was maddening. We are human beings and human beings are egoistic, afraid of risks, expects massive returns from zero investment and expects success quickly!
When you are choosing your co-founders give stress on : their vision and synergies you can find while working together. Quite often, great buddies make bad partners so document every clauses carefully in the partnership agreements in order to create a boundary between your personal life and the professional one.
It's advisable to have co-founders expert in different skill set than you. Why? Since you are startup, you will be having limited capita. Having co-founders good in different complementary skill sets will add more value to the business than having multiple ones having same skill sets.
1. There might be times, when people wants to join as partners without investing any capital. You may offer some sweat equity but calculating that is tricky and complicated.
2. Paul Graham suggests that you should offer partners equal equity in order to ensure that their commitment to the startup is utmost. You can release the equity overtime, however.
7. Seek Help & Help others: There might be times when you would need help. Don't over think. Approach someone who you think can help. Seeking help is a must and we are human beings and we need help.
Just in case, you are looking for some help and you think I can be of any help, feel free to write at firstname.lastname@example.org
I hope this will help you understand why things don't work out initially in the startup world and hopefully you won't repeat these mistakes which I did.
Read more of my blog posts on topics such as Startups, Digital Transformation, Digital Marketing, Data Science, Analytics: http://bit.ly/2RqFXKq