How important is a working model for your start-up?

Today’s generation is on a mission to build the future the way they deem fit. Inevitably they are breaking many rules in order to create their own niche in the start-up ecosystem. Among the many aspects for consideration is one thing that is crucial for the survival of the idea, and will have a long term impact on the success of the venture. A working model for the start-up.MVSMANI

Choosing the right working/business model for your company is a decision that will shape the future the way you aspire it to be. It will have a direct effect on whether you are headed for success or not. Of course the right working model for your start-up depends on the kind of product/service that you are offering. Here are some of the reasons why having a working model is essential.

Idea to product

The journey from an idea to a product begins with a model. It is only through a working model that the ambiguous idea turns into a concrete product. The working model hence helps reduce the time taken from the idea stage to production and the ultimate rollout.

To Forecast Future

A working model helps you in forecasting—that is to understand where you are headed, your goals and visions. This prediction cannot be done for a longer term, however a 12- 18 month period can be foreseen without much of a disruption. This also indicates to the investors that you are committed, and well past the idea stage.

To communicate your value

What is special about your offerings? Your working model will help in portraying what is unique about your product/service. This is going to be the selling point when you offer it to your customers and this is what will determine its success.

Revenue Estimation

Your working model will give you a necessary understanding of your cash flow. It is your way of demonstrating— both to your prospective investors and to yourself —how you plan to capitalize on your profitability and earn income. This also helps one to identify potential investors. One of the most important things you can do to ensure the financial health of your business is to create your revenue model. Estimating this is an ongoing process that will help you to manage your cash and continue to grow.

Identify the key variables for your company

Your variables will be process specific and will depend on what stage you’re in. Basically you’re looking to find those variables that have the most impact on your revenue—and figure out what they are most sensitive to. A working model helps you to identify these inconsistencies and work towards a profitable future having understood the implications.

Swivel without dire consequences

The only thing that is constant about today’s market is change. Every entrepreneur has to deal with it and in case things do not work out, it is always more sensible to swivel after having completed a working model, rather than close shop after having begun a full-fledged start-up.

As an entrepreneur it is essential to choose your model according to your belief in your idea and its execution, according to the potential of your product and the resources that you have to make it all happen. Choose what is better for your start-up and don’t be afraid to change direction if you don’t feel that you are on the right path.

The original article appeared Bizztor

Advertisements

How important is legal advice for a start-up?

As a start-up, you are embarking on something that will impact not only your future but the futures of many. All businesses are underway with an idea and some money. If you come up with a great idea and decide to start selling a new product, or you begin working on a new technology platform, it is important to have adequate legal advice. Every Start-up needs a few legal advices without which the success of it will become very challenging.

Here are 5 reasons why legal advice is important to start-ups.Mani Mvs

Mutual/ Contractual/ Vendor agreements

Chances are that no matter what service/business you are in, you will need vendors or service providers at various points.  Anything from your telephone/internet provider to your website designer would be considered a vendor/service provider for your business. Having a vendor agreement in place is important because it helps set the expectations between the parties when it comes to the type and quality of services provided, the duration of services, the cost and payment terms, and liability considerations if things don’t go as planned. The Goods/Service, Payment Terms, Termination/Term, Warranties, IP, Confidentiality, Liability and Indemnification are some aspects that need to be clearly stated in these contracts. For example, if you have outside assistance on design or development of the product, manufacturing contracts, EPC contracts (relevant for a factory or plant), platform contracts, marketing contracts, content supply agreement, distributorship agreements, advertisement agreements franchisee agreements etc. are important – depending on what business you are in. However, an agreement shouldn’t be signed blindly, instead, a legal expert must review the agreements to ensure that it adequately covers your interests.

Compliance on company formation; Company secretary for MOA

Legal advice is also critical when it comes to incorporation. There are a list of compliances that need to be adhered to, based on their applicability. Board Meetings, Registered office, PAN/TAN etc. and a list of compliances will save you money, time and much hair-pulling later on. A company secretary has a vital role in ensuring your company complies with the law as he/she is the head of the administrative division of a company under the Companies Act. They file the annual returns and other documents to Companies House, normally on an annual basis, and are responsible for convening board meetings. A Memorandum of Association (MOA) that is prepared in the formation and registration process of a limited liability company to define its relationship with shareholders is also important. This is the constitution of the company along with the Articles of Association.

Financial advisor to set up process, tax compliance and to raise money

Many fall into the trap of thinking that they need to “have money” to work with an advisor. One has to remember that financial firms/Consultants work with clients at each stage of the game. According to a 2013 Sage Survey, most of the successful entrepreneurs interviewed brought on an accountant at the early stages, and fifty-three percent reported doing so right when they started up. Studies on business failure regularly find poor financial planning to be the second leading cause for a company’s decline. It is important for a start-up to navigate the complicated financial landscape and for this one needs a financial advisor.

Advisory team or advisors for Business validation

Start-ups that have mentors track metrics effectively and grow faster. Start-ups with mentors raise 7x more money and have 3.5x better user growth than start-ups that do not explicitly seek out the assistance of advisors. Advisory boards boost start-up credibility and facilitate growth and increase start-ups’ chances of success.

Human Resource advisor / Partners

In light of the recent scandals at high-growth start-ups like Uber and Thinx, we need HR in all organizations, big or small. HR isn’t only for compliance, but they are the foundation for talent and human capital. Today, HR is involved in business forecasting, creating business ROI and executing progress that is directly tied to business success. HR is your company’s strategic business partner invested in the success of your organization. Once the company has a founder and more than two paid employees, your third employee should be an HR manager. This person must be highly experienced with HR compliance, strategic hiring, work culture and structure.

 

The original article appeared on Bizztor

6 MAJOR EFFECTS OF DIGITAL ERA ON START-UPS

Gartner predicts that startups born in the digital era will be instrumental in killing off tech giants. So huge is the effect of digital revolution in the startup community. With 3D printing, wearable tech and the Internet of Things heading for a race, the future symposium will reflect AR, VR, and Real time data collection to be of substantial need for the survival of any startup.

Digital transformation has changed the way enterprises do business today. Without the adoption of new age tech and platform-based business models, innovation and renovation, startups will foresee a challenging endeavor to scale up their growth aspect, and this will gradually transit them into the ‘no profit zone,’ ultimately culminating into an untimely shutdown of the venture.

Here are 6 major effects that the digital era has had on startups:

The Virtual Reality Experience

Virtual Reality has come and gone several times in the past but its real use as a business opportunity that can create a difference is being realized only now. VR can make things a lot faster and convenient. For instance, VR has created a new set of market for healthcare startups in the technology that is vastly used in surgery, neuroscience, imaging, mental health, and several more aspects. If not for VR, the gaming industry probably wouldn’t be where it is today. Creation of virtual reality games is an upcoming opportunity for tech-savvy entrepreneurs. VR has also made possible simulation solutions that are flexible and affordable which has given a new lease of light to engineering today. Apart from these, there are endless possibilities to explore for edu-preneurs with VR. 

Improved Consumer Engagement Experiences

Customers will now get to know a brand more personally.  VR and AR, when implemented properly, can help consumers experience how a product or service works better. For instance, something as simple as creating a 3-D advertisement with the suggestion of using 3-D glasses can transform the way the consumer remembers your product. Today, startups or vintage brands are considering 3-D technology for virtual reality marketing. Now, model creation through VR can enable startups to get early feedbacks from customers allowing them to save a lot of time and money. Adventure based business startups can now use virtual reality to give customers a taste of what they can expect if they visit their attractions. Hospitality startups who own resorts or campgrounds that offers things like zip lining or white water rafting, can have virtual reality versions of those activities.

Increased possibility of a Virtual Office

Firstly, from a strictly financial standpoint, having a brick and mortar office is expensive. ‘Virtual offices’ allow for a lot more flexibility. Secondly, virtual offices are a green approach to business, a very appealing aspect for startups to present before their investors and customers. Thirdly, it acts as an impressive employee perk. As long as your employees are getting the job done, available during crucial times, or working a certain number of hours per week, you might be able to let them choose their own hours for work – increasing the window for a happy employee strength.

Digital Analytics accelerating early growth

Improved service level performance and supplier management, better order fulfillment and product management helps in maximizing customer experience, increasing brand loyalty and prospects of growth early on. Without digital analytics, these concepts might not have existed in the first place. For instance, for ecommerce startups like Amazon or Flipkart, analytics allows them to predict their ability to meet customer demands, which often include on time delivery, manage peak hours, by understanding the impact of traffic patterns and average delivery times for each supplier in major locations of the cities. Analyzing supplier performance helps identify which of their many suppliers will give the highest probability of success for any given orders based on location, which increases their order fulfillment.

Transformed Marketing Strategy for Products/Services

Digital media has been one of the biggest equalizers in the industry for startups. The medium to drive customers through digital medium for marketing campaigns, events, launches and offers have changed completely. Due to the advent of technology, tracking tools, landing pages, pop-ups, and even product images can be assessed for their effectiveness with tweaks being made to ensure maximum results. Even the positioning of products on the website are measured to identify the best location to help drive engagement and sales.

Augmented the comfort of starting a business

Digitization of processes have allowed industry to achieve better control of their credit facilities, reduce fees and speed up the application process, enabling them to grow transaction volumes without the requirement for additional credit. It has ideally boosted connectivity between established businesses and new entrepreneurs, facilitated global reach of the Indian companies, increased the ease of establishing a company and executing ideas.

Conclusion

Virtual reality and the entire digital aspect have created new industry for emerging startups. With its ability to improve just about anything, starting businesses with new age technology is a necessity today! India has been advocating the digital change through its digital India campaign for a long time now. Startups have already started to reap the essential benefits of the same. The future will foresee a new series of startups cropping up to give shape to the digital needs and tech services – which will formidably increase the growth for startups community in the longer run.

The original article appeared on Bizztor

Changing Recruitment Dynamics – New Product Launch

 

When I heard of Bots and how they can revolutionize the engagement experience, my mind went over the possibility of how we can use this in the Recruitment space to engage with candidates the way a good recruiter would.

Another need of the hour from clients has been technically vetted candidates that saves the client’s effort and time in shortlisting.

Taking this problem and adding an engagement layer with bots, we came up with a solution – the Focus Interview Bot.

And what good is a product if we don’t use it ourselves to see if our assumptions are validated.  Sharing the below infographic where we ran the bot for our internal requirement and saw astounding results that validated our assumptions in a big way.

The learnings have been immense.  First I decided to share the outcome of interview.

Will share more learnings in my upcoming blogs.

Why are start-ups failing in acquiring customers?

This owner of a garage startup has topped Forbes richest man’s list this year for no umpteen reason. He could do it because he knew how to smash-up those tricky startup challenge of customer acquisition and grow manifold within years. And wonder what he believes in when it comes to his business growth? He says, “If there’s one reason we have done better than of our peers in the Internet space over the last six years, it is because we have focused like a laser on customer experience, and that really does matter, I think, in any business. It certainly matters online, where word of mouth is so very, very powerful.” — yes! We are referring to Jeff Bezos, Founder and CEO, Amazon.com, currently the second-largest private employer in the United States.

MVS Mani

Today, we will talk about 4 points that are obtrusively failing startups in their life long goal of sustenance and acquisition of customers:

Failing to create ‘Real Products’

The secret behind creating real products is to transform ideas that solve actual pain points or helps even a bit. A pain point is not just the problem you solve for your customer, but the specific reason they finally choose to use your product. Most startups fail to do so. Even if they end up creating one, they can’t find innovative, early-adopters within their target market.

Inability to set clear expectations with the customers results in disinterested customers! Lets look at what a popular beauty brand did!. For e.g. Pantene, the hair care brand, used contextually based mobile advertising, real-time location-based data and strategic partnerships with Walgreens, the US pharmacy chain, and The Weather Channel to address a key consumer pain point – ‘bad hair days’. Upon checking the daily forecast on The Weather Channel, mobile phone users were served a personalised “haircast” with suggestions for the most appropriate Pantene product to suit the conditions outside. Quite innovative, right?

Inability to choose target group appropriately

It’s just a fact that most early stage startups go after the wrong customer segment at first. They are not open to sharing product details with all and more often Talk More and Listen Less’ when the opposite is what is necessary. Hence they are not able to analyze the acceptability of their creation. In most cases, they don’t ask customers their challenges, what value they would potentially see in their product, and if they’d be willing to test it. They often fail to track most of the feedback, find similarities in them and most importantly figure out what those specific individuals have in common. This way they miss to locate their probable target market entirely.

 Random marketing moves

Most startups start spending before even understanding their target group. Instead of figuring out where they’re spending their time online, how they are communicating with each other or what events they are attending, they jump on executing random marketing strategies. Not being tactical and focused in their outreach is another grave issue. When the cost to acquire customers is greater than the company’s ability to monetize those customers, the business model fails. For most startups, first customer acquisition is most likely going to be harder than you originally envisioned. But a majority of the newbie fail to understand this fact and let this govern their willingness to better their product, strategy or spending motives.

Startups don’t realize that their shoestring budget can’t keep them from carving out their own niche if they really want it. Most of them don’t ideate around it.

Blurred and Inadequate Communication Strategy

If you look at the communication strategy of many of the startups, you would notice that they try to guide the customers instead of informing them. Customers are not allowed to make their own judgement and they perceive the company as a pushy advertiser trying just to sell their product somehow.  Even when startups generate customer interest, they mostly don’t get back to their queries and cultivate delay. Sometimes, they are seen to hold back important information about their product/service too which ends up in annoying the customer.  Even if they do, they use negative verbatim when communicating.

Conclusion

Startups, big and small have both felt the withdrawal pangs at some point. Flipkart struggled to raise funds and saw its valuation slashed repeatedly. Japanese giant SoftBank wrote down US$550 million in its biggest India investments, Snapdeal and Ola. 2015 had 11 startups closing their doors and 2016 an alarming 25. Well that’s not the end of the story – India has added over 1000 startups in 2017 with rising focus on new-age advanced-tech startups (Nasscom). No matter what, dreams will unfold and transform into reality only if one can tame the slight glitch in their customer acquisition strategy.

The original article appeared on Bizztor

Challenges that second generation entrepreneurs face

The charisma and capabilities of the first generation are often the key drivers of the early development of the family business, but they may impose great pressure on the second generation during the succession process. An estimated $10 trillion is expected to change hands and be managed by second generation entrepreneurs. It is certain that the economy of the nation as well as the world will be driven by these second generation entrepreneurs. Technology, competition, and the ever changing workforce in today’s business environment certainly makes it more challenging for these new entrepreneurs. This will be coupled with the active involvement of the first generation in decision making as well as the running of the business.

As the first generation steps down, what should the second generation do to consolidate its role in the family business?

MVS Mani

Take those risks and not fear failure: Second generation entrepreneurs can be highly risk averse in comparison to their peers and might go more by research and processes, relying less on their gut. They can even be more brand-conscious and can even fear failure.

It is pertinent to take those risks that are needed for the business to move in the right direction. At the same time, this risk must be followed through with meticulous work to ensure that the chances for success are high. Hard work and diligence will pave the path. They must remember that the first generation entrepreneurs reached where they are today by taking those difficult paths.

Maintaining business legacy: Second generation entrepreneurs need to find the confidence from within to be their own people and get over the awe in which they hold their parents. While they get good hands-on experience, they can be process-oriented and hierarchical. They are expected to take on the role of the visionary and to be able to do this one must trust his/her instincts.

Moving into unchartered territories: The second generation has to redefine processes and operations to extract the maximum out of businesses and make them future ready. For this, they need to foray into unchartered territories. How long will the business sustain in its current form? What profit will you make in 5 years? Will the customer like your product? They need to secure an enabling environment within the family business to ensure a positive response for these queries. Dealing with this volatility is something that these entrepreneurs need to ready themselves for.

Succession planning: For the current generation of business leaders to realise their true potential, succession planning within the family plays a key role. Clarity in the minds of family members regarding their expected rights and duties is important, because a lot of it is about perception. It is important to make ensure that there is a positive progress in the right direction when it comes to the future plans for the business.

Young business leaders need to understand global trends, emerging risks and opportunities much better and at a detailed level. Challenging and even breaking barriers; taking calculated risks; continually focusing on their people; making innovation the new normal—these are the cornerstones to success for the second generation entrepreneurs.

 

This article has appeared on Bizztor.

What India can learn from the Israel start-up ecosystem

Israel is often known as the Start-up Nation. Through its vibrant ecosystem and human capital, Israel generates more startup companies than large, industrial nations like Japan, China, Korea, Canada, Germany and the UK. There are nearly 6,000 active start-ups, with 1,300 start-ups being founded every year. Apart from favorable government policies, they have a strong military-backed platform for research.

Corporate biggies such as Google, Apple and Facebook have their biggest R&D centers in Israel outside of the US. In fact, last year saw exits worth $9.2 billion. Compared to the US, Israel has attracted per capita over twice as much venture capital investment and 30 times more than all the members of the European Union combined. Israel is the second most innovative nation in the world, according to the World Economic Forum’s Global Competitiveness Report 2016-2017.   Mani MVS

According to The Startup Ecosystem 2017 report compiled by the Startup Genome project, which tracked 55 start-up ecosystems across 28 countries, Israel’s capital Tel Aviv was ranked sixth in the world, whereas Bangalore was at No. 20 and the only Indian city mentioned in the list. There are many reasons why the Israeli ecosystem is ranked far superior to ours and we can learn a lot from them. Some of the best lessons are:

Do not penalize failure, learn from it: One of the basic cultural differences between India and Israel is how the latter view failure. In Israel, failure is not penalized. Entrepreneurs who created companies that failed are looked upon as people who gain from their experience. It is critical that people who fail are not looked down upon. As the country is located in a warzone, Israelis have developed a refuse to die mentality and they strive to progress forward no matter what. Persistence is key and they are never afraid to challenge the status quo.

Setting up incubators to nurture startups: The Israeli government has set up special purpose vehicles to give $600,000 risk-free loans to promising starts ups. If the companies fail, then they do not need to pay back the loan but if they succeed, they pay back a 3% annual royalty. The entrepreneurs want to give back to the ecosystem and 25 leading investors and high-tech entrepreneurs joined hands to set up a unique tech innovation hub called SOSA (South of Salame) in 2013. SOSA has created an exclusive global network that bridges the gap between supply and demand of corporate innovation. The open data policy, city-funded co-working spaces, free public wi-fi and strong relationships with global partners are also enabling factors for this kind of ecosystem.

Rich ecosystem: Tel Aviv has all the characteristics of a global tech ecosystem—Education, entrepreneurial spirit, technology, a global mindset, government support and R&D. Outside Silicon Valley, Israel has been able to build a good ecosystem where the government, corporates, the Israel Defense Forces (IDF), venture capital firms, and startups have aligned themselves. With over 140 scientists, technicians, and engineers per 10,000 employees, Israel boasts the highest number of scientists and technology professionals per capita in the world. The amount spent on R&D in relation to gross domestic product, and the percentage of Israelis engaged in scientific and technological activity, is the highest in the world.

Industry-academia collaboration: It is one of the foremost examples of the rich collaboration between companies, university researchers and entrepreneurs. Israel has led the world in technology transfer from universities to creating new enterprises. Technion, a science and technology research university, makes it mandatory for every student to take a Minor in Entrepreneurship, leading to the creation of 100 student-led businesses a year, with revenues exceeding $32 million. At Hebrew University, researchers are strongly encouraged to liaise with professionals from the industry to deal with real-life challenges and opportunities. That has considerably influenced academic research outcomes and products based on the university’s tech transfer have generated over $2 billion in annual sales.

India would do well to take a leaf out of Israel’s book of achieving global competitiveness and success through their start-ups and aim to take the leap on a global scale.

 

This article has appeared on Bizztor.