The beginning is dreamy
When a startup gets going, the entire excitement is about the one big idea which defines the innovative product or process. At this stage of the enterprise, a good product/process proposition, a small, smart team, good sales and marketing efforts and a lot of hope are seen as adequate to drive growth in business.
The business potential looks great and billion dollar day dreams are the daily diet.
Then reality strikes
With initial growth and early customers quickly come complexities and challenges.
- Customers start giving feedback after actual usage
- The product that was to get a billion dollars revenue, starts looking inadequate
- New opportunities come up with the same or other customers which look more lucrative.
- Other players in the market show functionalities that the startup had missed.
And the catch up game starts!
The startup starts reacting and resources start getting deployed to address these on priority.Multiple product/process change needs come up at the same time, resulting in quick fix solutions to meet tight timelines.When this continues for sometime, patchwork happens in products and processes.
This builds inefficiencies in the overall business process, leading to sub optimal results, deviation from original plans, higher funds burn due to lower revenues/higher costs than projections, management frustrations and even team discord; And the funds start drying up.
Common sense gets lost in transit
Business Management is a lot of common sense put into a structure. The fundamentals are the same, whether for a startup or a large enterprise. The only difference is the financial power to sustain despite setbacks.
14 steps to keep the startup on track
The following steps help in avoiding cost and time wastage and building a firm direction for the business.
- Develop a pilot product and test it thoroughly with at least one good potential customer.
- Be sure the need is truly felt by the customer and the solution truly appreciated before you start. If a product or service does not show a noticeable reduction in the customer’s time, effort or operating costs, it is not likely to be accepted wholeheartedly.
- Do not under-pitch the price just to get started. Any discounting should be only for a trial period. Do a proper cost analysis and ensure you have buffered enough margins for yourselves.
- Define your priority in terms of customer segments to be serviced and the particular customer needs to be fulfilled, based on their product feedback, volume commitments and price acceptance.
- Do not jump at every new opportunity that looks like a quick sale.Be sure it has a large opportunity and is sustainable. Be ready to say NO to customers/opportunities that may deviate you from your profit plans.
- While you work on product development or process improvements, be sure each change is really needed and not just a cosmetic demand.
- To expand the business, in the early stage, prefer more customers for the same product rather than new products for new customer.
- Keep evolving in the design and management of your sales channels to reach multiple customer segments for the same product at the lowest cost of acquisition.
- Have a tightly run but effective customer management process; you are only as good as yesterday’s customer experience. Customer experience is a sum total of the pre sales, product usage and feedback management experience.
- Add people only when you really need, but ensure key positions are backed up, just in case some one quits.
At all times in business
- Look outwards for more customers; look within for better profitability. There is always scope to streamline processes and keep costs tight without hurting customer experience.
- Ensure your teams are working together and not at each other; build appreciation of a common agenda.
- Keep innovating; technology changes can make you obsolete in no time. Have separate teams to manage present product modifications and future product development.
- And lastly, ensure you have enough funds to last for at least one year’s activity at any point of time. Conversely , do not push up operating costs if that reduces your fund availability to less than one year’s need.
Please do leave your comments at the bottom and do share with others if you like this article.