7 stumble to look out for professional turning entrepreneurs!
Alok Kejriwal is one of the mentors on MakeIndiaWork - the startup ecosystem by MonsterIndia.com to support and encourage startups. Here Alok talks about the stumble blocks to look out for professional turning entrepreneurs.
My office manager recently told me that the tally of my visiting cards collection has touched a count of 9000. That means, in the span of 15 years of being a startup entrepreneur, I have met almost 600 people a year or about 3 new people a day (considering holidays)!
Amongst these 9000 people, many of them are blue-blooded “professionals” who have often tried to “start up” - only to fail and go back to their comfortable Ivory Towers (Large Companies). What are the common mistakes these wannabe entrepreneurs make when they try to startup, especially when they come from formal, established organizations?
These are 7 striking reasons I attempt to explain via popular phrases!
- Uneasy lies the head that wears the crown
It’s convenient to have a boss. Perfect to hurl abuses at, direct the blame, point fingers at and conveniently blame for all your miseries. But have you tried being your own boss? Many professionals who have worked grumpily for years following instructions of balding men find it very difficult to ‘boss themselves’. A 46 year old silver fox told me, “Since I was 6, I was told what to do – from mother to teacher to boss. As a startup entrepreneur at 46, I cannot instruct myself and am going back to my Nazi boss.”
- Missing the woods for the trees. Are you sure?
Many entrepreneurs who come from formal backgrounds miss the woods for trees. What do I mean? In startups, it's the small things that make big things happen (the woods are the trees; not the other way around). For instance, while launching Hotmail, Sabeer Bhatia realized that there was no way the 7th free e-mail site in the world was going to succeed on its own. So he focused on that one innocuous line at the end of every e-mail sent out that said, “Get your own free e-mail at Hotmail”. That message spread like wildfire and made everyone sign up!
I call it a classic case of focusing on the trivia that delivers grandness.
Something big shots don't get!
- All that glisters is not gold
We are in the midst of an unprecedented startup boom and I have begun coming across a lot of professionals who want to abandon their top class careers and become ‘startup entrepreneurs’. When I ask them why, they refer to lofty valuations (all on paper) and fancy press stories of Mergers & Acquisitions. None of these guys have seen a downturn and not one will survive the crash of the 2000 dot com bust if it repeats itself. They just don't have that survival stamina.
A startup business takes 10-20 years to become seriously successful. Angry Birds took 8 years just to get their first hit. Nothing comes easy – least of all, riches!
- A fool and his money are soon parted
Last week I was speaking to the head of marketing of a well-known MNC, who was about to squander Rs. 75 lacs of his personal money as contribution towards a startup. When I asked him why he was putting his hard earned money at stratospheric premium into an unknown Company, he seemed bewildered to explain the logic to me.
Just because professionals have saved large sums of money doesn't mean that they invest with the same largesse into small startups. It's a well-known fact that in 2015, you need the least money and most brains to create a valuable startup and not the other way around.
Professionals don't seem to get that logic!
- Birds of a feather flock together
The Art of Starting Up is as much about execution as it is about meeting people, getting connected, and hanging out with as many diverse people as possible with whom you will be doing business. Older professionals from formal backgrounds, sometimes lack the motivation to go down to the fingernail grime of the business and mix with the ordinary.
In a conversation with an entrepreneur who started a grocery business, he revealed how he spent 2 years going to New Mumbai Grocery Mandi every day at 3.30 am to understand how the business of fruits and vegetables operated. When I asked him why the other startups who were bigger and better funded than him had failed, he said, “Sir, the bosses are too big to come to the market and understand why onion prices fluctuate by 2 rupees. Without that knowledge they cannot succeed”.
Professionals must be able to overcome their comfort zone of hanging out with people of their own circuit if they want to become serious entrepreneurs.
- There is no such thing as a free lunch (oh really?)
Well there is, and that's the secret of starting up! Most of the recent success stories in the digital startup world have been massive businesses that were set up to be given away for free to consumers before being leveraged to generate revenue.
The art of ‘letting go’ and waiting and waiting till the time is right to make money, is a discipline that very few can inculcate – the least of whom are professionals.
One dude I knew, invented online reputation management tools way before the world knew what ORM meant – except that he insisted on charging for it from day one, despite my passionate pleas to let it float free for a while. He said, “From the Fortune 500 Company I come from, if you don't charge the consumer the first time, they never pay” Bad luck! He closed down before he even started and then had to live with the pain of watching small-inexperienced startups eat his lunch up.
- A penny saved is a penny earned
Nothing better than a Marwari background can teach you that! In each business I started, beginning with contests2win.com way back in 1998, I kept snooping around for that one ‘sugar daddy’ that could help me by promoting my business for free. For contests2win it was MTV, for Mobile2win it was Sony TV and for Games2win it was Viacom USA!
Most of the professionals I met along the way always thought I was a fool and recommended that I spend on “marketing and promotions” because that was the “only” way to get noticed. They always asked me to “budget” for this and that. When I told them I was too broke to have a budget, they laughed!
Starting up is probably the worst punishment you can inflict on yourself. But no one will tell you that, because that's not being “professional”.
Alok blogs at therodinhoods.com - the community of entrepreneurs he has founded.
This article was originally published on Economic times