Compiled by Neel Vora
When you hear the word Start-up the first thing that comes to mind is one needs money/funding and an idea but that’s not all which goes into a start-up. It needs sufficient time, research, and strategy at various stages of the company’s life. Before giving the gist of guidance on start-up let us understand what it is. Start-up is an idea of an entrepreneur who wants to seek, develop and validate a business.
Guidance for start-ups
Starting a new venture needs an idea that can be converted into a company. The idea need not be a unique one or out of the box but can be an idea that fills a gap in the day-to-day activities of the consumer/customer. Once the idea is in place then the entrepreneur needs to research thoroughly on the idea of things like how the idea will become viable, what all options are there to penetrate the market, and what type of strategy to be used to navigate through every stage of the start-up.
Funding is the next thing that is required for a company. If your venture is new then you need to look for your own money or money from friends and family, a technique which is called bootstrapping.
One of the major things an entrepreneur/founder of the company needs is to have a team as no one can work alone and expect to do each and everything. The team needs to be set in place for the firm to move forward with its idea of going public. The team needs to launch the product as soon as possible as a prototype or beta version (applicable for tech companies) to see if the customer is ready to accept it. If the product is successful then one has to look for outside investors now like venture capitalists or angel investors or banks so that the venture can build on its own.
According to the data compiled by Fintrackr, total investments that flowed into Indian start-ups stood close to $38 billion in 2021 which is over three times more than the $11.1 billion in total funding received during 2020.
Let’s talk about some common myths:
1) Profit making from year 1:
There is a myth that it will show profits from the day it starts selling the products or services which is not the case. Many start-ups even after 10 years are still facing losses and are not generating any profit but on the other hand, they are building brand value. Example: Pharmeasy, Netmeds, Paytm, Zomato, etc.
2) Money is the most important capital:
Money is everything is a myth as it is only one of the important capitals, other types are network capital, time capital, reputation capital, technical know-how capital, etc. To make the start-up a success all of the above is required. It is tough to survive on only money and zero assets in other areas.
3) Start-ups need a unique idea:
It generally need not be developed on a unique idea, the start-ups fail to uncover the main reason behind others’ success which lies in the business model, product positioning, and customer experience. For example- Microsoft was not the first to introduce GUI OS, it was technically inferior to its competitors but won the market share war between IBM and Apple. This was simply because Microsoft understood what the consumers wanted whereas IBM and Apple failed to pick it up in the early stages.
So as to conclude the above discussion, money is not the capital thing that is required for the start-up but also different factors to excel in the competitive environment. Funds are given to each and every start-up, say 100 companies get funds but only 10 become Unicorn.