MxMIndia

Tag: start-ups

  • Most startup promoters are armed with fancy cars, internationally designed workspaces and an amazing work culture, but do they possess the craft and grit to sustain, asks Jaisurya Das

    Jaisurya Das: Careers at stake as startup financials fail

    By Jaisurya Das

     

    Yet another robust member of the famed startup ecosystem in this country just announced an 87 per cent cut in its workforce. Almost overnight the HR department handed out pink slips with 90 days’ severance pay.

     

    In 12 calendar months starting January 2016, over 11,000 employees of the startup ecosystem have been rendered jobless. Check the headlines: Snapdeal decides to get lean, Flipkart’s valuation takes yet another downsizing…

     

    Are we seeing yet another dotcom bubble on its way to extinction or is this much-touted ecosystem just losing focus?

     

    It’s interesting how a lot of young entrepreneur startups behave the moment they get their first round of funding. It’s almost magical, the old Accents are replaced with spanking Audis and Mercedez cars, cursory exploratory trips move from Indian cities to NYC and other exotic locations.

     

    No, I don’t envy them one bit despite their in-the-face display of opulence.My heart goes out to the investors and VCs who saw merit in a fancily packaged presentation and let their flood gates swing open.

     

    Great ideas and slick packaging isn’t a sign of maturity any longer. I wish a lot of these young companies had the ‘sphericals’ to weather the market. Unfortunately, they did not as a majority of them are built on the promise of community building beyond what is humanly possible.

     

    For long, valuation was the game and then came the dotcom crash and the ground realities brought people back to brick and mortar. And now, it’s come full circle again with exponential expansion and million in sales numbers bandied around as success.Enter the downsizing era now and every conceivable “successful startup” is busy crunching numbers to figure its relative staying power. What is the perfect business model then? And why do VCs believe in them? Maybe its time to examine the very fabric of business in today’s environment.

     

    As a keen marketwatcher, I can say with vehemence that a lot of the companies that are currently figuring the way ahead have majorly flawed business plans and projections. Unreasonable may be too kind a word for the sheer creativity used in their Excel-powered forecasts.

     

    All fine for the men at the helm for they have probably encased out but what happens to the thousands who are unleashed into the market in search of new employment? Is it time for regulation to avoid such bloodbaths? I seriously think a lot of this needs a closer look before a few more companies shut shop or downsize to dwarfed numbers.

     

    Several crores of rupees are borrowed and spent on higher education and all this seems comes crashing down when the fancy employment is pulled under their legs overnight.

    1. At the risk of sounding myopic, today I seek answers to these questions of every startup that’s touted “a success story’.
    2. How well do you know the audience of today? Do you know how irrationally their neural networks work?
    3. With such price-points, where do you ever see breakeven from a sustainable business point of view?
    4. You’re keeping the consumer happy, your brand is all over town but when will you deliver to your VC?
    5. How important is your personal gain in this enterprise? Shouldn’t this be linked only to profits and not revenue much like taxation ? Or are you a significant cost that the VCs need to fund despite horrid bottom lines?
    6. What is a successful business finally? Shareholder value? Consumer benefit? Employee Satisfaction? Or Principal Shareholder Wealth?

     

    To be honest, I haven’t got answers for these questions from all the discussions I have had with eminently successful startups that I have met.

     

    Yes, most are armed with fancy cars, internationally designed workspaces and an amazing work culture that comes pre-loaded with a generous wad of pink slips to meet that eventuality, but do they possess the craft and grit to sustain?

     

    Right at this moment while I write this, I hear of another telecom major Le-Eco firing 85% of its staff in India and two of its senior most resources have exited with immediate effect.

     

    Maybe it’s time they wake up and smell the coffee.

     

  • Not everyone has the mental toughness required to face up the uncertainties and challenges of a start-up; Vijay Singh lists the traits that get one there.

    The Anchor: 6 must-have traits for entrepreneurs

    By Vijay Singh

     

    There is a newfound zeal these days for being an entrepreneur, and a number of folks are chucking away the securities & comforts of “salary on the 1st” and venturing into the unknown.

     

    Entrepreneurs are the best thing that can happen to a society, economy and country. Entrepreneurs create value out of nothing, create opportunities and fuel overall growth, and they need to be deeply respected for it.

     

    However being an entrepreneur is the toughest job in the world. There are no cushions; no soft landings and the failure rates are very high.

     

    In an environment where most won’t make it, while luck might play a huge role, there are other traits that I believe an entrepreneur must have to break through:

     

    #1 Imagination: A good entrepreneur sees not just the big picture but well beyond the picture. He / she needs to imagine ideas that will create solutions to obvious and everyday problems.

     

    #2 Foolishness: Now made famous by Mr Jobs’ speech, foolishness is a virtue that is a must have, to pursue a dream that others don’t see, understand or give a damn about.

     

    #3 Stubbornness: An entrepreneur lives in a lonely and often unkind world – especially in the early years. There are, more that you need, armchair advisors and critiques that would question the validity everything starting from the macro business environment, to the business model, to scalability, to ability, to sustainability. The entrepreneur needs to stay the course with persistence.

     

    #4 Willingness to evolve: While staying the course, it is important to learn from mistakes and spot opportunities along the way and evolve into a better idea. It is my view, however, that one should stay true to the original & pure DNA of the idea and not drift at every opportunity (or failure) that pops up, as there would be plenty of both.

     

    #5 Team: As an entrepreneur one you get into every aspect of the business, however, to do justice to the organization that you are going to create bring in specialized talent for specific roles and ensure they are better than you at that task.

     

    #6 Passion for the idea:  Take up your entrepreneurial journey for the right reasons – the reason being absolute belief and passion for the idea that you have imagined. If one feels deep down that the passion has started to drain, that is the green light to quit and maybe take up a lucrative 9-to-5 assignment.

     

    Not everyone has the mental toughness required to face up the uncertainties and challenges associated with a start-up; however, it is my belief that everyone with a real passion for an idea will acquire that toughness over time and they should jump in.

     

    Professionally let me assure you there is nothing more fulfilling that to create something of value – out of nothing.

     

    Vijay Singh is the CEO & Managing Director, AaramShop, and can be followed on Twitter @vijaysingh.