The Right Way to Startup

Marketing Hack – Fake It Till You Make It

Any startup, especially an online one, can use this hack to build trust and credibility. You can try to look bigger than you actually are. If you act like a big deal, customers will treat you as a big deal.

We did this in Beveragewala as well. We were actually a very small startup doing around 10-15 orders a day when thought about doing this. Some of the things we did were as follows.

Professional Packaging – We started using good quality branded packaging to dispatch the goods. This made the look of the packages very professional and coming from a ‘big’ player.

Customer Care – We bought a toll free number which started with the 1800 series rather than having a regular mobile phone as our customer support helpline. Also a professional recording giving users various options to navigate through gave the entire experience a very professional and big player touch. Along with this, we also created multiple email ids, one each for every possible query.

Stationery – All our printed material like flyers, invoices etc. had our branding on it and were well designed and printed on reasonably good quality paper.

Website Interface – We added a lot of sections to our homepage to make the site look very busy. Also the banners and photographs were changed frequently.

Making your startup look as big as some of your competitors can be done with little investment. However, this tends to make an impact which is quite strong in the minds of your customers.

The Chicken & Egg Problem of Networking Startups

This is a problem which is prevalent in startups focused on building traffic or user networking. Getting the first set of users is difficult as the incentive of these users is dependent on some factors which in turn are met only once these users come onto the website.

This would clearer with some examples.

Facebook faced this problem initially. A user would not see the value of the website until he/she had atleast 10 friends. The challenge the startup faced was to get a group of friends collectively so that they could experience the benefits the portal had to offer. Most social networks have faced this problem and require a minimum threshold of people to join before users can see the benefits and get engaged with the platform.

For a classifieds site like Craigslist, this was a problem as well. Buyers of goods/services would not want to come and use the website until they knew sellers were there on the platform and vice versa. Only getting both sides together could enable users to experience the potential benefits of engaging with the platform.

Dating apps like Tinder also face a similar situation early on. Boys would like to enroll only if there are profiles of girls on the platform and girls would start enrolling when profiles of boys were there on the platform.

For a new entrant in either of these business models or similar to them, this ‘chicken & egg problem’ has to be thought off and addressed in the initial days itself.

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 a Bigger Startup will buy your Startup?

A lot of entrepreneurs start up with a vision of getting bought out by a leader in that space. So why would these leaders want to buy a smaller player when they can probably do the same themselves? 

Here are some reasons which I perceive would be important for them.

Scale: If your startup has scaled up enough and a bigger player feels it will be most cost and time effective to buy rather than build, you may get lucky.

Good Fit for Business: If your business acts as a potential forward/backward integration for a bigger player and adds substantial value for the latter, you may end up getting an offer.

Good Model Fit: The models of your startup and the bigger company should be similar to ensure smoother integration. For example, a horizontal marketplace may not be very keen in buying an inventory model based vertical player.

Intellectual Property Rights: If you have a patent or any other IPR for an interesting product, the bigger players may get interested in you.

Good Team: Sometimes bigger players want to buy a startup to acquire their team in the process.

If you are looking to selling your startup in the future, look at building something which can attract bigger players in the space.

Marketing Skills for a Startup

A product cannot create value until marketed well. Marketing forms the backbone of value creation in a startup. New age marketers, also called Growth Hackers now, need to keep evolving over time, in order to propel the startup.

The role of the marketer has changed from someone merely analyzing different advertisement options to one who takes care of much more. From working closely in product development, to putting it into the market, analysing the result and going back to the drawing board is what a new age marketer is expected to do. Growth has become a marketer’s major focus and responsibility and working independently is not value additive in this competitive environment.

The IRR for Starting Up

In the world of startups, a different IRR is what budding entrepreneurs should be more concerned about.

IRR = Idea, Research, Responsibility

Idea: The first step is to get an idea.

Research: The second step is to research the idea thoroughly and make a solid plan around it.

Responsibility: If I feel I have a good idea, even after researching about it, it is my responsibility to ensure that the idea gets it’s share of planning, hardwork and diligence.

Startup Success is more about Good Execution

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).)

Your Business Card

Your business card is the first impression you make when you meet someone for the first time. It speaks a lot about your company and it's culture. The designation you mention, if you do, gives an idea about how your company is structured, again pointing to the culture and value system of the company.

It's important to make a good business card which is in harmony with the working style and culture of your company. This first impression does play a role in building new relationships.

"A good business card should feel like a good handshake – flexible but firm"...Manish Sharma, Printo

Identify the 'One Metric that Matters'

Collecting data is easy. There are lots of tools out there and ways to gather data about everything that’s happening with your business, from lead generation through to customer satisfaction.

But what are we supposed to do with all that data? How does it help us focus on the key challenges at hand, provide us insights into our next steps, and drive success?

The data you collect may be helpful at some point; but if you can’t cut out the noise, you’ll get buried. That’s why you should think about a single metric that’s most important for the stage of your company’s development, a single number that you want the entire company to focus on and improve upon. I call it the One Metric That Matters.

The One Metric That Matters (or OMTM) is a single number that you care the most about at the current stage of your startup. First, let’s understand a bit more about the OMTM, then talk about what makes a good metric, and finally how to pick the right number to focus on.

Four Reasons You Need the OMTM for Your Startup

As I’ve said, the OMTM is a single metric that you care about at a given point in time, for the stage of your startup. So the first thing to remember is this: the OMTM will change. It’s not a single number that matters throughout your startup’s existence. We’ll discuss how it changes and why later on. For starters, let’s understand why you need the One Metric That Matters in the first place:

1. It answers the most important question you have.

At any given time you’ll be trying to answer a hundred different questions and juggling a million different things. You need to identify the riskiest areas of your business as quickly as possible – that’s where the most important question lies. The OMTM is responsible and necessary for measuring and answering that question.

2. It forces you to draw a line in the sand and have clear goals.

After you’ve identified the key problem you want to focus on, you need to set goals. You need a way of defining success. It’s very hard for most startups to draw a line in the sand. Let’s say conversion on your website to trial accounts is your OMTM, and it’s currently at 0.5%, which you know is too low. So you’re going to put your entire startup’s resources into improving that number. But what should it be? How will you know if conversion is high enough that you’ve been successful?

At this point you need to draw a line in the sand and pick a target. The line you’re drawing is in sand for a reason; you can shift it as you start experimenting with solutions and learning. Just stay honest with yourself about why you’re doing it – don’t set a high bar, miss it, and then lower the bar in order to say you’ve succeeded and move to the next step. The One Metric That Matters is a forcing factor for encouraging you to set targets and analyze your results honestly and transparently.

3. It focuses the entire company.

Focus is good. In fact, it’s better to run the risk of over focusing (and missing some secondary metric) than it is to throw metrics at the wall and hope one sticks (the latter is what Avinash Kaushik calls Data Puking.) Put the OMTM front and center, physically visible to everyone all the time.

4. It inspires a culture of experimentation.

The Lean Startup movement has shown us the importance of experimentation. It’s critical to move through the “Build -> Measure -> Learn” cycle (explained in Eric Ries’ book, The Lean Startup) as quickly as possible to generate enough learning so that you can start executing effectively in the right direction. You want to instill and inspire a culture of experimentation throughout your organization – the One Metric That Matters can help.

(taken from https://blog.kissmetrics.com/single-startup-metric)

'What gets measured gets improved'... Peter Drucker

This reiterates the importance of not just doing things, but also measuring them along the way. If something is not measured or assessed, it cannot be improved. Without improvement, you fall behind and eventually succumb.

How big is the market???

This is one question entrepreneurs have to deal with.

At times, a lot of us wonder why. Even I did when I had attempted to start a 'Zomato for Spas' back in 2010. I used to see the number of spas growing exponentially in Delhi. Seeing so many spas, I thought that there should be a service which could tell users which spa is better, what massages do different spas offer, pricing of services in different spas and so on. I could see a gap and could also see physical growth of the Industry. However, one thing I did not take into account was the existing size of the market.

Think of it like this. If I have a vision of disrupting an Industry and becoming a leader in it (which has to be a vision when starting up especially in the technology space), I would eventually want to capture a 5-10% of the total market share. So if the Industry size is bigger, the business vision automatically becomes bigger. If the vision is bigger, the opportunity cost of doing something else (like doing a course or a job) becomes comparatively smaller and it makes more sense to start a company. If I target a small market, the potential vision for my company becomes smaller and comes close to the line which separates doing a startup vs getting employed elsewhere.

Also if you look at it from an Investor's perspective, they know that typically they will only make good money from 1-2 ventures out of 10. Hence, if they invest in smaller markets, the multiple of returns for them in that particular ventures becomes smaller. Taking into account the money they will lose in some businesses, the averaging of returns doesn't quite work out for them.

So to sum it up, identify a big market, find a gap and innovate in it. It's better to go after a good idea in a big market than to go after a great idea in a small market (unless you want to set up a small/local business).