The startup
phenomenon, it appears, is gathering pace in India. Startup, in fact, is
emerging as a concept different from entrepreneurial business. Entrepreneurship,
as we know, has been in existence for as long as the history of business. Trade
or service, design or manufacturing, and sales or marketing, entrepreneurship
has been the foundation of today’s successful corporations. Entrepreneurship
has been synonymous with spotting business opportunities and building a
delivery infrastructure for them. Typically, an entrepreneur focuses on
building a big business that can continue to thrive. All entrepreneurship is
not about innovation or being first time to market. It is also about doing things
better than others, and excelling in both well-trodden paths and in uncharted
territories.
A startup, on
the other hand, is fired by an entirely different consideration. He or she
seeks to convert his or her product or service idea into a technically feasible
and commercially viable practical proposition. A startup founder does not
typically start off with the objective of setting up and growing a business to
a certain scale and scope; his or her interest is solely on product development
and proof of concept (POC). In fact, POC is the key milestone, and in some
cases, even the final milestone for some startup founders. The latter class of
startup founders would even consider selling away of their startup companies
immediately after POC as a perfectly legitimate goal. That said, risk taking
and attempting something far beyond one’s resources permit is a common factor
between a startup founder and an entrepreneurial founder.
Thematic matrix
Startups are
usually based on matrixes of certain core themes. Uber was started on a matrix
of cabs and aggregation, Paperboat on a matrix of contemporary packaging and
traditional Indian beverages, Lunch Box on a matrix of nutrition and delivery, TravelTriangle on a matrix of value addition
and customization, Knowlarity on a matrix of voice application and cloud
hosting, Bluegape on a matrix of customer idea and digital printing, Reportbee
on a matrix of data analytics and performance mentoring, Grey Orange on a
matrix of robotics and warehousing, Paytm on a matrix of customer loyalty and
monetization, Zomato on a matrix of search and review, and so on. There are two
aspects, however; almost all modern startups are powered by software and Internet.
As with all industrial activity, one thematic start-up prompts several follow-ons.
Not all
startups may have a unique thematic matrix but all do have a thematic matrix,
for sure. Successful start-ups use thematic matrix to look at established
products or services differently. Uber applied thematic matrix for something as
simple as cab services while Knowlarity applied thematic matrix for modern
information technology solutions. That’s where startups score over classic
entrepreneurial companies which typically look at product-market spaces. Startups
do not look at available product-market space for entry; rather they look at redefining
or recreating the space. The intersection of the two dimensions of the thematic
matrix leads to redefinition as is the case with Paperboat or Lunch Box. Certain
dimensions of thematic matrixes are more universally applicable than others;
for example, aggregation and analytics. So is the power of Internet and software.
Common thread
Every
individual may have skills but only a few have ideas that could utilize their
skills. Even fewer have clarity as to how their ideas and skills could be
dovetailed to create a product or service, and eventually a business. Those who
possess the common thread of skill, idea and clarity tend to be better placed
as startup founders. There is yet another set of education, experience and experimentation
forming another common thread. Typically, startups are co-founded as multiple
common threads are needed to make the product or service idea work, from design
to delivery. The introspective ability to identify and the intuitive ability to
feel the common threads is an important component of startup development.
Given that the
actual universe having the skills, ideas and education, experience is large,
the key to expanding and enhancing the startup ecosystem is the ability to
develop as many common threads as possible. The startup system is full of
examples that reflect startup founders discovering their common threads in
successive iterations. What starts as a supply of nutritious food for school
children can evolve into supply of nutrious food to elderly and later to all
age groups. Experience in aerospace and experience in food may combine to
establish a startup that delivers food through proprietary drones. At times,
common thread need not be only between the founders or employees of a startup. As
Reportbee illustrates, teacher-student connectivity forms a common thread
through what may be viewed as evaluation. Thematic matrix and common thread
constitute the core of a startup.
Uncommon passion
Passion is an
often misused word. Increasingly, it is being reflected to categorize
individuals as leaders and followers, entrepreneurs and professionals, and so on.
Passion is actually more universal. A doctor who works the most hours to save
lives is a passionate doctor. A doctor who speaks up for patient rights and
clinical integrity is also a passionate doctor. So is the case with an engineer
who toils to complete his design project and the one who swears by quality of
design than mere timelines. In all these instances, the individuals are
sacrificing something, be it family life or lucrative career. Passion, to be
distinguished from hard work and diligence, faces its litmus test when it has
to face the test of sacrifice. From freedom fighters to entrepreneurial icons, passionate
people would typically have had periods of sacrifice. The same is the case with
startup founders who invest most, if not all, of their savings (sacrificing
regular employment) in their ventures.
Co-founded
startups rank high not only on thematic matrix and common thread but also on
passion. Unlike the first two, passion is an emotional attribute influenced by
both intrinsic personality and extrinsic social factors. Presence of a
co-founder who can compensate for or reinforce the passion quotient certainly
helps in creating successful startups. At the same time, founder exits or leader
churn in startups the moment they become successful is indicative of dilution
of passion quotient and entry of familiar organizational dynamics of big
corporations. It is important that founders of startups view passion as more
than effort to successfully deliver their idea into POC but bind the
organization into a hub of passion, where each supports the other, and in the
overall achieves a fair work-life balance. Thematic matrix, common thread and
uncommon passion (TTP) integrate as the basic motive force of startup success.
Idea banking, Crowd funding
For a thriving
startup ecosystem, a proliferation of ideas is critical. It is heartening that
graduates of premier institutes are increasingly ideating during their final
years and are prepared to forsake lucrative careers to pursue their ideas. Some
others are shifting gears from regular employment to startup ecosystem.
Educational institutions should make idea cells as important as placement
cells. Corporations should also be willing to give sabbatical to their
executives to pursue their startup ideas. Luminaries should mentor startup
projects even when they are in active service and are able to provide positive
influence. They can pick up niches from the value chains of their businesses
which can be reinforced with startup ideas.
A review of
India’s successful startups show that with investments ranging from a few
thousands of rupees to a few lakhs of rupees, several startups have succeded.
With angel investors and next stage investors adding their financial mite in the
second and third stages, startups blossom as full-fledged corporations. The
most difficult stage is the first stage. There are more TTP platforms waiting
to become startups than have actually become. A liberal crowdfunding investment
environment could make a significant difference to India’s start-up scenario. Crowdfunding
enables more differentiated startups to come into being as organized financing
typically tends to focus on successful domains. It is also important for
consultants to retool their consulting templates to chisel startup proposals in
a manner that attracts investment.
Posted by Dr CB
Rao on July 26, 2015
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