A lazy Saturday morning, sipping my
fresh coffee and lost in thoughts with the success (??) of TheAugustFest behind
all of a great team, I was pouring over the many tiny teeny things that could
have gone better. One thing I am not able to get over is sitting thru the
pitches, thinking we should have done a better job. Then my mind travelled back
to few months back to a Sunday evening in ISB listening to people sharing their
ideas. A few shortlisted groups shared ideas. While watching these kids present
and during TheAugustFest one thing I noticed commonly is that not many of these
Wannabe Entrepreneurs know what it takes to go another mile than many have
travelled.
Two points every one misses for a
successful journey in the start-ups world in my mind is – managing finances and
pricing the product /services right. I will run by two scenarios (one for each)
and write what to consider in these situations.
Managing Finances:
Investor: how much money did
u put so far and what’s the source?
Start-up: about 20 lakhs –
raised thru friends and family
Investor: Do they have stake in company? and what percent?
Start-up: no no they don’t
want anything. They are helping me.
Investor: What did you use
this mosey for?
Start-up: Spent it in last
year
Think for a minute not as company
owner but a person or organization investing in your start-up. Every penny that
was ever put in a company MUST have a stakeholder; be it your parents, friends,
family. RK from Uttistha a private incubator says “Most of these people do not understand
finances. They don’t keep record of the money invested and money spent which is
key to raise money in next rounds”.
Lesson: Be prudent about
your money; whether someone helping you or the money you are spending.
Price is Right:
I have come across many youngsters
who are using the money in their start-ups without thinking of ROI.
Me: How much are you charging for your services?
Start-up: I am using AMC model where I charge Rs 4,000 to Rs
1,00,000.00
Me: Does it work for
you to make money?
Start-up:
No not necessarily
“most of the people I meet do not
have a concept of ROI and break-even” says Praveen of Kauphy Talkies. They
don’t understand the break-even point and profit.?
Lesson: You as a start-up person must have an idea of what and how
to fix a price. Are you making money at the end of year or you still losing
money
“In Valley (Sa Francisco valley)
people expect to fail, but fail fast and move on. They don’t bet on Living
dead” a quote from a CEO visiting us from US. Find your exit soon instead of
becoming Living dead
