|
Startup
Guide
 Have
a big idea? Dreaming of ‘Kab Banega Crore pati’?
Driving down the road…and flash! You hit upon an idea that
could change the world. An idea that will put you into the annals
of history as a pioneer…but how and where do you start? I’ll
help you find out.
The key to successful start-ups
Not
all start-ups are successful. Amar Bhide of Harvard Business School,
after almost twenty years of research has come out with a few
answers that could help the budding entrepreneur choose the right
direction.
What
do successful entrepreneurs start out with?
Most
people do not bother with an idea that is not novel. A successful
entrepreneur is the one who builds upon an existing idea, improvises
on it, and delivers the end product faster, thus adding further
value to the customer.
It
is important for the entrepreneur to possess good interpersonal
skills in order to be able to draw potential investors. When the
opportunity arises, he seizes it often with little time for preparation.
He is driven by the belief that the venture is profitable, and
he can serve the customer faster and better than the competition.
What
about the risks involved in a start-up?
In
the initial stages, the best entrepreneurs do not innovate or
take excessive risks.
Entrepreneurs have very little human capital at their disposal
during the start-up. Most of the entrepreneurs ensure that the
financial stakes during start-up are low. Keeping this factor
in mind they are sure that they are not taking on a great deal
of risk.
It
is a tolerance of ambiguity and not risk that makes a difference.
Entrepreneurs take the plunge without an idea of the possible
outcome. This tolerance is characterised by embracing the opportunity
without a novel idea or a great deal of capital backing.
Who takes the risks?
What
is the difference if entrepreneurs do not have the proprietary
idea, the required capital and not innovate the idea? The difference
lies in the product that such companies have to offer. The product
is neither aimed at nor designed for the typical consumer. The
sales are not instant, and it takes weeks of selling to clinch
the deal. Successful start-ups sell directly to the end-user,
and not through retailers or intermediaries. In the majority of
cases it is the entrepreneur who does the selling himself. When
selling during start-up, an entrepreneur is able to adapt products
to meet customer needs. An entrepreneur listens to what the customer
has to say, and is able to convince him through effective interpersonal
skills that he is well established.
There
are a host of constraints that an entrepreneur faces - lack of
financial resources, professional qualifications and human resources,
to name a few. It takes immense creativity on the part of the
entrepreneur to break these barriers, and at the same time ensuring
that the customers are convinced about his track record (or the
lack of it).
The
success of the start up depends on the success of the entrepreneur.
It lies in being able to convince the customer to take the risk
of trying his product. It is the customer who takes the risk.
The entrepreneur spends time and money on a product, and risks
a great deal in switchover costs (if the start-up goes bust).
In many cases, the entrepreneur has investors who also take risks
by providing capital at an early stage in the venture.
The
risk increases progressively once the start-up has been established.
Once established, there are customers and assets, there are risks
being taken because there is much more at stake. It is in this
stage that risk-taking becomes important.
•
Archives
• Top
|
