You may have heard of the statement that “9 out of 10 startups fail”. I realize these statistics weren’t specific to India and I haven’t come across any local body here taking the statistics nor can they due to the non-transparent nature of businesses here. But I’m going to assume it’s true for India too and share my thoughts on how this can be changed. It has to be true — why else would there be initiatives like “Startup India” to begin with?

All the arguments that I make in this post are based on my experience as a freelance fullstack developer. If you’ve read some of my earlier posts, you’d know that I have a registered startup but I work in a freelance fashion. This article isn’t about that. Here, I’m presenting some of the lessons I’ve learned:

Be solution centric, not idea-centric

Lot of the prospective clients that I’ve met talk about how their idea is precious and unique. Often, I’ve heard the same idea from more than one prospective client who says that it’s unique. This is rarely true. One, there are around 8-billion people so it’s very rare to come up with a unique idea unless one goes out of their way to do so. If they really thought that their idea was unique, then why not apply for a patent rather than asking developers to sign NDAs before working on their project? This is my default advice to such clients. If the patent goes through not only will they verify that the idea is indeed unique but can also enjoy the benefit of royalties when someone actually does try to rip off their idea. Secondly, regardless of an idea being unique or not; it really doesn’t affect the outcome of their startup. Really, it doesn’t! Ola came over a year after Uber did, Amazon India after Flipkart, and majority of Apple’s products were not the first of their kind in the market. So what’s more important than the idea is the solution one comes up with the solve a problem. And more the number of people who face the problem, more likely is the solution likely to be adopted.

From my own experience finding clients to work on their projects, I look for certain aspects to determine whether a client is worth working for. One of the most common reasons that I reject an offer is when the client claims that their idea is unique or “first of it’s kind”. The more annoying thing is when they invest far too much time on things such as signing NDAs or making new visiting cards, etc. that in no way will help their startup grow. This may be fine for companies but a startup should be concentrating more on building their line of products and services than investing on these. And coincidently, 9 out of 10 clients fall on this category so I could say this itself holds true to account for the 9 out of 10 startups failing.

If you are reading this and think it’s difficult to find ideas worth solving then I’d recommend you to take a look at this. I’ve written some ideas there and the community has too, and many of those are products worth making.

Invest more in people than products

In this digital era, there are so many ways to find people for a job. But a very small fraction of these people are actually trustable. Finding trustable and loyal people is important for any business esp. when these people will be part of the top managerial decision making C-level members, staff, partners or co-founders. And more important is not to screw them over and lose their trust, otherwise the business is likely to fail — because the way one treat’s their co-workers is very close to how one would treat their products. In order for products to succeed, they have to be built with passion. And this can happen only with passionate people who are truly engrossed into the product. Only then can the product be truly great. Take the example of Apple products, the iPad and the iMacs speaks more of the people such as Jonathan Ive, Steve Wozniak and Jobs who were the passionate workers behind these products.

If you have read some of my earlier posts then you may know that a certain ex-client whom I had respected, tried to swindle me and made some personal attacks on me. When I was building the app, we had a discussion for me to step up as the CTO and co-founder of his startup and we had even discussed the numbers. I had been a trustable person, and on countless occasions, provided great advise for building a better user interface and providing a richer user experience in doing so, market better using more cleaner ways of marketing than giving money for users, or sticking posters or even using this guy (who has only left a huge carbon footprint and done nothing to fix it) to promote it but the advice was overlooked. Eventually the numbers showed that the product wasn’t fairing as good as the competitors in the same category.

The chart shows the actual numbers between these apps (taken from appbrain.com). From a marketing perspective, ixigo road trips did way better than highway help which in turn did better than highway delite. If this client had instead concentrated on his job of marketing using fair means, then this graph would have painted a very different picture and the app would have taken off and won the competition. But he was too busy coming up with an evil scheme to steal the source code and swindle me. Towards the end, he couldn’t even directly talk to me and I can only assume this was due to a guilty conscience. But who knows for sure. My point being that — you invest in people and not products, a good product is merely the outcome of having the right group of people and steering them towards a common goal.

Get the right funding

Every startup needs to raise funds in order to run it’s operations. There are many ways to get funding.

  • Self-financing from savings, family money or loans.
  • Other person’s money (OPM) from VCs or angel investors.

Among these, the first is the safer bet esp. if you have a mentality of goofing around with investors; although I wouldn’t recommend doing that. With OPM funds, your business is not fully under your control and you may have the risk of being kicked out of your own venture.

When I started my startup, I began with absolutely ZERO funding. This was bad because everything took off slowly and it’s better to get funding to jump start your business. I even called this strategy with a fancy name — “The n-Venture Zero Investment Business Model” and went with it. It worked so well that I made good money out of it. The concept was to start with a venture that required no investment. For example, take App development which was my first venture. All I needed was a laptop / PC to work and coincidently a friend needed an app made so he became my first client. I invested the money I made from him into designing brochures and legalized my startup by getting it registered. With this I invested into the second venture — workshops for colleges. Even that worked out but unlike the first venture, it needed initial funding. A small portion of the profit I made out of it was first funneled back to mitigate the cost of the initial investment and hence it appeared to be a zero-investment venture. After that I got more app development clients and have been working on their projects ever since. The second venture has ceased but I’m hoping to restart it soon. In the meantime, I’m also testing out my third venture which would be a surprise once it comes out; like the rest of the 4 more planned ventures which I shall keep as a suspense for the future.

If on the other hand, you plan to get OPM funds then my suggestion would be to hire a tier-1 college graduate, not for the sake of employment but for pitching. From my experience with investors, I’ve come to realize that startups get funding much faster when you have a IITian or IIM graduate in the founding team or even as an employee. While some of these guys do really well even with work, I’ve noticed most of the good ones go abroad and the ones left here are usually not as great at work as even tier-2 and tier-3 college passouts / dropouts. But this is merely a generalization and I’m certain there are some of them who are really good with their work. However, I do know that they are very useful while pitching as VCs and angels tend to invest easily when there’s a tier-1 college passout on board.

Listen to your customers

One of the best way to improve a product or service is to get the feedback from the customer. In most cases, customers and clients don’t even know what they want until you give it to them but once you reach a point where you have a good customer base, you are likely to come across customers who properly use your product and service. These are your most valuable customers and hearing out their issues or suggestions could be the deciding factor to make your startup the next big thing. Sometimes it would even make sense to keep your product’s core feature plan in hold in order to incorporate suggestions of your customer. Once again I’m taking the example of Apple to show that one of it’s products — Apple music got promoted because of listening to the customer’s feedback. I see that Microsoft too is following suit. However, from my own personal experience. There are companies such as IBM that do not do this and I believe that’s why they are losing customers. Amazon, on the other hand, treats customers really well and by far I’ve seen the best customer support from them so I’d say that’s another way of listening to your customers.

Location, location, location

A friend told me once that he had a property at a particular place and asked me which business he should start there to make a lot of money. I told him that he is looking at the entire problem incorrectly. Starting a business that solves a problem or supplies a deficient commodity that’s in demand in that locality is a good idea but it is merely one aspect of a business — it does not guarantee a success. My advise to him was that he figures out what business he is capable of doing best and pursue that — after all the locality he suggested was a main street and most businesses that could be started there would succeed. On the other hand, it is also completely stupid to try starting a business of selling ice in the Himalayas. So remember that location is only one important factor and does not guarantee a successful business. Besides we currently live in the internet age where there are successful business that operate completely online so it only proves that location isn’t the most important aspect of a business.

When I started up I originally started to look for clients in my hometown i.e. Trichy, Tamil Nadu but then I moved the Bangalore, Karnataka and the very first day that I reached there I had thrown my bags and hurried to a coffee shop to meet my first client. I couldn’t get proper clients in my own hometown, most of them were looking for very low-priced work and many others wanted me to work in their companies for a meagre salary instead of a freelancer. But when I moved here, this first client itself gave a reasonably good offer and things picked up and worked out well.

These are my tips to build a good startup and make the “9 out of 10” statement, a myth. If you have any suggestions or feedback, feel free to drop a comment. Cheers.

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