Monthly Archives: August 2017

Starting up to Sell (S2S)

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In today’s world, starting a company, finding funding and taking products to market is not tough, but the toughest is to sustain the business. The moment your idea is out in the market, there are a hundred others who will bring similar products with different Business Models. As an Innovator and Entrepreneur, your success depends on how well informed you are about your competition and how deep you understand your product and domain itself.

You notice that big companies buy smaller ones to consolidate and also reduce their competition. This is the law of nature. We need to accept it.

As your startup grows not just in financial value, but in the Value Proposition of the offering and the market capitalization of the product(s)/company is what drives a potential acquisition.

One of my acquaintances was explaining his idea and business to me. It was a tech product and I asked him, where do you see yourself in next 5 years and his response was very clear “Similar kind of company was acquired by XXXX for Rs.XXXX, so, am working to find a buyer and wish to sell”. No harm in this approach, but you need to understand how you build your company to be acquired.

When you start a business wanting to sell it off after a while, the efforts are more arduous.

First, even though it is your idea and you feel this is the best the world can have unless you have convinced your customers/clients there is no value-add. After this, if you are wanting to sell, then you will need to identify the kind of companies who might be interested in acquiring you. After you identify, you will need to understand how you can stand out from the competition so that your potential acquirer looks at you and after they see you, you must present yourself to them (only after their invitation) in such a way that they should be  convinced that this is the best product for their portfolio.

Considerations and key metrics for building a Sale Strategy:

Articulate the WWH -If you have watched Simon Sinek’s talk on Start with Why you know what I am talking about. Very clearly articulate What you are developing, Why and How you are going to impact lives. When this clarity in the vision exists, it becomes easy for you to build your value proposition. 

Identify a good Value Proposition – The key to a successful company is its value proposition. The value proposition cannot be lame, but a real problem should be solved. For instance, Apple manufactures iPad cases with a keyboard, but if you notice they do not have a button on the keyboard for the function of double-click of home button the iPad, but still they sell more smart cases than the others who do. Logitech, for example, manufactures fantastic keyboards for iPad’s and they have a key for the double-click function. Why do you think Apple is not doing it? It is their product and they wish to sell more of the accessories, but even after these many years and so many people asking for it, they have not incorporated the key in the keyboard. Why? Because Apple’s belief is in simplicity. In order to go to home screen, all you need to do is press command+H, it does the job as the double-click does. And if you want to navigate between apps, use cmd+tab. Simplicity is Apple’s mantra and they will not budge, instead, they will push their consumer to adapt to their way of doing things. When more consumers adapt, it increases their value proposition. Simple.

Build a breathing Business Model – A Business Model is a blueprint of how your idea can solve a problem and how you can make money by solving the problem. What is a breathing Business Model? It is nothing but having an element of adaptability when circumstances change and the tough get going. Consider Google, Apple, Nokia, all major companies which have marked their presence in this world. All these companies were on the brink of collapse at one point of time in their lifetimes and only bold moves helped them recoup and stabilize.
          
Google never had a business model. They were a loss-making machine not knowing how to bring in revenue with searches. AdWords changes everything for them.

Apple almost collapsed before Steve was called back. It took just a year to conceptualize the iPod, but that changed everything for Apple.

Nokia is more than a 150-year-old Pulp and Paper company, how they adapted to the changing times and build a portfolio of businesses is what made them what they were.

The list can go on, but the most important aspect is that your business model should be able to breathe. Remember, none of the companies which I mentioned above changed their business model but instead diversified into what was valuable at that point in time.

Identify who can acquire you – Based on what you are building, identify who will be the most interested in acquiring you. The list you make might not be interested to buy you at all, but the list will help you understand what these companies look at. For instance, many Health-tech startup’s today look at being acquired one day, because the domain is a lot complicated than you can imagine. How do companies identify potential acquisitions? Apple recently acquired a Hyderabad based Machine Learning Startup. Without going into details (which I am not completely aware of), this shows that Apple is foraying seriously into Artificial Intelligence. Apple also made few AI acquisitions in the recent past. Do we know if the founders were targeting Apple? We don’t know, but this is just an example to understand what companies might look for.

Keep margins high – If you watch Shark Tank, you notice that the Shark’s jump into making deals with entrepreneurs who show higher margin’s for their products. Why? This will enable them to take the risk and also demonstrate you don’t have much competition. If you produce at Rs. 10 and sell at Rs. 12 (because of the competition), then you will really struggle to survive and also this means there is a lot of competition which is making you sell at a marginal profit. It is like earning Rs. 10,000 per month and then having EMI’s worth Rs. 6,000. The math does not match and you cannot sustain for long.

How do you achieve this? You achieve this by having good processes and a solid estimation methodology. This gives your investors a lot of confidence.

If you look at e-commerce companies, this is why they struggle. Even though their valuations are high, get a lot of investment, the only hope is that tomorrow something changes. It is a dangerous way to build a company, but today investors accept it and also you should be lucky to find a good investor.

Yes, all the points which I mentioned above are same for building a company without an acquisition strategy. However, the small caveat is identifying your future and being prepared for it. Honestly, building a company to sell is a bigger task and emotionally draining, because if you are not able to sell, you are stuck and you will be frustrated which will lead to collapse unless you are strong-minded and can take it forward.

In summary, it is double the effort in starting up to sell and hence requires more energies. I call this the S2S (Starting to Sell) Syndrome.

My personal recommendation is that you start with your ideas, look at how the market is responding and after your first-year financial filings, start evaluating how you might want to sell, that is only if you want to.

Being an Entrepreneur – 1 Year Review

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Last year, in August (precisely on the 11 August), I announced to the world, that I am transitioning to be an entrepreneur.

When I started, had a very big idea to build a Strategy Consulting firm focusing on Ideation and Business Model Validation for start-ups.

In the last one year, have done 4 in person sessions, 2 webinars and have been ideating on 3 ideas out of which 1 is development phase, 1 in ideation phase and 1 in the design phase. Well, what has been my learnings in the last 1 year? Here are few of my experiences.

You will feel lonely – Like it or not, if you are coming from the corporate world where you are working in a team, you will feel very lonely to be on your own. Accept the fact you will no longer have people around you to have a chat, share your experiences, catch up for a lunch/coffee or going out on team outings.

During this time, your Facebook timeline will be filled with more travel check-ins and pictures of fun times at work. Read this as a test for your commitment 🙂

How I handled it, I reduced my FB time. I only browse through the page once in a day and don’t go back to it. Fortunately, there will be one person in your network who will post a motivational quote and that will help you come back to track.

Self-doubt – You will have this each day. Am I in the correct path, am I doing things right? Should I get back to a job? These questions will come to you each day and especially when you look around and people are busy in their lives and when you have a lot more time to ponder about.

STOP self-doubting. Your heart will tell you if you are in the right direction or not. All you have to do is be conscious of what your heart is telling you. If you are not being comfortable with something, then you need to change something. Think of new ways. There are various tools and techniques on the internet, find something which will help you focus. For instance, I used BusinessModelYou, a toolbox for evaluating yourself.

Days are much longer than you thought – When we are in a job, our outlook calendar drives our day. But, when we are on our own, we drive our calendar. There is a lot of difference in this. In a job, you are driven by what the company needs, but when you are an Entrepreneur, you drive what the company needs.

You will be in control of your day. You plan your meetings and you plan what you will need to accomplish over the course of time. Since the time is in your hands, you will feel that the days are longer than you actually thought.

Health improves – Knowingly or unknowingly we take a lot of stress when we are in a job. There are exceptions, I know people who handle stress amazingly well and never let it affect their health. Being an Entrepreneur it is much more stressful than you ever think – Social pressures, responsibilities at home etc take a toll on you. But, if you leave these aside, then life becomes more beautiful.

Meditate – You must have heard this everywhere, but I will put in a simple line. Don’t get carried away with all the jargons you hear, but just focus on one thing – Sit down for ten minutes each day at a said time and just focus on your breathing. That’s all. The key here is the time, stick to a time schedule. If you want to do at 7 in the morning, ensure each day you automatically sit down at 7 for ten minutes, where ever you are in this world.

Accept and Focus – You will see down times more regularly during the start-up phase. Each day will be a roller coaster. Accept it. It’s ok to feel low and depressed. Watch a cartoon movie or an inspirational movie or speech, it will help you regain your confidence.

Find a life coach – If you need to work on building on your strengths and transform the power of your thoughts to reality and you need a little help, find a Life coach. Remember the movie, Dear Zindagi? How does Alia Bhat find herself? Through her coach Shahrukh. I, fortunately, watched this movie after I took life and professional coaching. It made a lot of sense and in fact, I went back to another coach to help me fine tune my learnings. So, don’t be afraid to ask for help. It will change your life.

PS: If you are reading this post and want to know my experiences, don’t hesitate to shout out to me.

Of all the above, before you embark on your entrepreneurial journey, spend time thinking, find your favorite place – a park, coffee shop, a religious place, an ashram or a relaxing center and just think of what you wish to accomplish. Accomplishment here is not money, Yes, all of us want to be rich, but remember, this is a by-product of what you are going to do. So, don’t focus on money, focus on what you want to change or make an impact or remembered for. This is the key. When you begin, the plan will be labyrinth or you might not see anything for tomorrow. Focus on what you want to accomplish and over a period of time things will start falling in place. All you need is to commit to what you want to accomplish.

If it helps, The arc of ambition will give you a very good sense of direction and motivation. This is my bible.

Good luck, more experiences to come…

Being ruthless

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If you have watched The House of Cards, you are not new the word ruthless. Being a true leader needs you to be ruthless, ruthlessness to the core in focusing what you want to achieve.

Frank Underwood might be a wrong illustration for depicting this quality in a leader, but surely there are few things we can learn from him – Unmatched devotion to his vision. The vision of being at the center of Power.

All of us love having the power, be it at home, office or in the society. Power gives a sense of satisfaction and ability to shape our surroundings the way we wish to. According to the dictionary, the word ruthless means – showing no pity. This can be read in different ways and all we need to understand is how we can build this quality in us in a positive way.

Building the quality of ruthlessness requires us to work on developing ourselves in various contexts. First, we need to understand the work what we do, second, we need to have a complete understanding of the environment we live in, third, the most important of all, we need to have a very good clarity of what we wish to achieve.

If you look at how FU (these are the alphabets on his cufflinks) operates, he has a complete and deep understanding of how the political parties work and operate. He exactly knows whom he needs to approach for a certain task and how to get through their mind to get his work done. This plays a very important role in building your strength.

While trying to understand the environment we live in, it requires a deep understanding of the work we deliver and how we deliver. This gives the sense of confidence and also allows us to think of various options to get things done identifying the most optimal path.

The third point is where we all get lost and confused. We need to have absolute clarity of what our end goal is, be it power, money, satisfaction or sense of accomplishment. What ever it is, we need to be very clear as to where to get to. Else, the journey is about confusion and chaos. If you look at any successful leader around us, you can clearly identify the clarity in their mind, if you spend some time understanding what they do and how they do.

It is ok to have confusion, most of us cannot identify what we want until we really spend some time in understanding what our strength is. So, as you traverse along, identify where your strength lies, understand the work and environment and be sure to build the right character to reach your goal.

Be ruthless in the right way, and you will reach your destination.