The Right Way to Startup

Business Hack – Go Deep, Not Wide

This is a tendency of a lot of entrepreneurs when formulating a business idea. We need to focus on doing some things well rather than doing a lot of things, especially during the early days of a startup. We have limited resources in the form of skills and money. Focusing on a niche and becoming string in it with these available resources will give us a better chance of succeeding.

In Beveragewala, we wanted to create a platform selling all beverages including tea, coffee, juices, squashes, energy drinks and maybe even alcohol. We realized that our budget was a big constraint for us and if we start with the complete gamut of products, our collection would be limited across categories. Hence, we decided to start with just tea and coffee. We were able to offer our customers the widest variety of teas and coffees and were able to get good user traction and reviews.

A 20 Year Old Entrepreneur vs A 30 Year Old Entrepreneur

There are some stark differences between the mindsets and approaches of a 20 year old startup entrepreneur as compared to one who is 30. I just turned 31 and have felt most of these changes myself.

Responsibilities – When you are 20, you have no responsibilities. You tend to think only about yourself and your startup. On the other hand, when you are 30, you are probably married and maybe even have a child (or two ;). Your parents are older. Suddenly everyone’s problems seem to become your problems.

Energy Level – You are younger, fitter (generally) and have more energy and zeal when you are 20. You attitude is ‘I am gonna nail this’ or as we say in Hindi ‘phod doonga’. At 30, this just doesn’t come out.

Friends Group – My friends when I was 20 were all mostly in college and looking what to do. During my first startup Bitequest, I simply convinced some friends to join me and we started. Now, when I am 31, all of my friends are in jobs or their businesses. Being 'settled', convincing them to leave and join me in a startup is much more difficult.

Network – The network of a 30 year old is wider and can be more useful.

Role of Gut – Gut has a big role to play in decisions of a 20 year old. When you are 30, ‘I feel’ turns into ‘On the basis of facts’.

Money – A 30 year old has more money to bootstrap the startup. A 20 year old has to spend time to get the initial amount to build even a prototype.

Experience – A 30 year old has more experiences of life and work. Experiences help in reducing the number of mistakes one makes in the early days of a startup.

Permission – Getting parent’s permission to startup is part of a 20 year old’s journey. A 30 year old can take his/her own decisions.

These are some of the differences I can think of and have experienced in my journey. In 10 years time, I’ll try to post about any differences I will experience between then and now.

Why Budding Entrepreneurs Should Look at India?

India is emerging as a hotbed for entrepreneurship activity. With a large number of startups and startup funding in recent times, the ecosystem has come a long way and is set to explode in the years to come.

Some reasons I feel which make India very attractive are as below.

English Speaking: English language is used by a large part of the population.

Big Population: This has to be the biggest reason. India with it’s huge and ever growing population has immense potential in the domestic sector.

Big Ratio of Millennials: The population has a high ratio of millennials, who are generally quicker to adopt new startup models.  

Largely Unorganized: Since a large part of the population still lives in Tier 3,4 cities and rural areas, startups have not yet been able to tap into this opportunity in an organized way, thereby presenting an amazing space to look for opportunities.

Less Competition: Since the startup ecosystem is relatively nascent, we still do not have very aggressive competition, leaving aside a few spaces. A lot of scope of innovating and improving on current players exists in many markets.

Owing primarily to the size, demographics and stage in the growth curve, India is a market which budding entrepreneurs should look at very seriously.

Should I Start a Tech Business?

With technology and the internet being the major hunting grounds for new startup ideas, this question comes up time and again. Budding entrepreneurs deciding they want to start an e-commerce company or a tech company without knowing what to do or sell is quite common. I am not too sure if this is the right way to approach things.

Technology for me is just an enabler, i.e. a way to do things. What has to be done has to be decided first. For example, I felt that there should be a place where tea lovers can come, read about and buy their favourite teas. I felt e-commerce was the right model which could be used to reach wider audience. Hence came about Beveragewala.com.

So to sum it up, I feel that right question should be –

‘I want to start a ??? business. Will using tech create value in this?’

3 Ways Whatsapp Can Help E-Commerce Companies

Innovation is the key in today’s e-commerce space, where the competition is getting steeper by the day. New techniques to improve customer experience, reduce costs and increase the top line is always on the minds of the upcoming e-commerce companies.

Here are three ways in which Whatsapp can help solve some of these issues for these companies: 

1. Improvise the delivery system

E-commerce companies are looking out for new delivery mechanisms to reduce their cost, optimise spends and decrease the total order delivery cycle. Various new techniques are being adopted: some are taking the kirana route to deliver the goods, setting up pick-up stores and others are tying up with the already existing delivery systems like the Indian Post network and the famous dabba-waalas of Mumbai.

Whatsapp can also help improvise the delivery system of e-commerce companies. Customers can be encouraged to share their location on Whatsapp. Getting the exact coordinates of the delivery location can help the companies in faster delivery by choosing the shortest route to optimise their operational cost. They can plan multiple deliveries along the route to further optimise the delivery mechanism.

2. Faster grievances redressal

Whatsapp is immensely popular among the mobile users and has an active user base of 800 million and it is increasing every day. With Whatsapp’s user friendly chat and call facilities, e-commerce companies can reach out to the customers faster and in an efficient manner. Customers can share the images/pictures of the damaged goods without having to go through the hassles of the current procedure which includes writing an email to the support team, calling customer care innumerable times and waiting for your turn to express the pain point. With Whatsapp, it can be effectively communicated over the chat.

3. Groups can be created for push marketing

Groups can be created on Whatsapp on the basis of customer segments defined and targeted marketing can be achieved at minimal cost. For instance:

: Discount coupons can be sent to price sensitive customers and brand conscious customers can be informed about the sale, discounts and promotional offers applicable on their favorite brand.

: Groups can be created on the basis of geographical regions and location specific information can be shared on the group. Such as, discount coupons on electronics exclusively for people residing in South Delhi

Email-marketing is losing its effectiveness as the customers today are bombarded with promotional emails from restaurants, online stores, banks and even recruitment companies. New avenues to catch the attention of the ‘ever-mobile’ customer needs to be explored and Whatsapp definitely has the potential to be exactly that in the coming months.

(article written by Anamika Singh, Associate Consultant at Mindtree (India).)

Why do they keep asking for 'Unit Economics'?

'Business is about profit'. Sounds weird right... Especially in this era of scale and growth and volumes, no one thinks of profit. Then why am I saying this?

Yes, business is about profit in the long term. We can start off with no intention for earning profit in the early part of the business. We can look to invest, scale and grow and all our emphasis can and should be on that. However, to sustain the business, profit will need to start flowing in gradually. To estimate what that profit can be, unit economics becomes of prime importance. Unit Economics tells you the exact revenue, expenses per unit of sale. These economics can be estimated using future figures (eg. once we do 20,000 transactions a month, our courier charges would come down to Rs. 20 per kg), but they help us ascertain what we could earn going into the future, thereby giving us a direction and fair estimate of what the business can generate.

These economics can be for the operations of a business and also for customer acquisition. The numbers for operations can help us ascertain the business profitability. The ones for marketing acquisition can help us ascertain how much money we are spending to acquire new customers vis a vis the amount we are earning from that customer (this obviously has to be positive to generate value for the business).

Hence it is very important for an entrepreneur to come up with these figures and to use them in the business plan.