5 stupid beliefs busted while doing a startup in/from Nepal
Every year I feel I was stupid last year. This happens to me every year. What I believed the year before is often shattered to pieces by what the things I learn during the year. And I feel stupid “why I didn’t think about that last year.? “ Does this happen to you guys as well?
Today, I am going to share about five things I believed last year to be true. But those things turned about to be stupid. Those five things are about:
Technology adoption in Nepal
Location of the start up
Let me start with the app market.
In 2014, I ran a start up called 11Beep. I started believing that app market is a good market and a start up can generate revenues in the app market.
But let us see some data. In 2014, globally 23 billion dollars revenues were generated in playstore and appstore. 8 billion dollars in playstore and 15 billion dollars in appstore.
Top 10 apps raked in 25 % of the revenues. And top 20 apps raked in 5 billion dollars out of 8 in playstore and 7 billion dollar out of 15 in appstore. This means in playstore, rest of the 2,60,000 developers generate less than 8,000$ on an average. In appstore rest of the developers on an average generate less than 23,000 $ per year.
When I looked at the entire pie. It looked like app market is pretty big pie of 23$ billion dollars. But, I had to be in top 20 to share any substantial part of the pie. Either I will get really large pie or I won’t get any.
8000$ or 23,000$ per year is clearly not good enough size to build a start up. Therefore, an app market is almost impossibly hard for startups to generate revenue. It will take really long time to reach to the top 20.
So, if I were to a start up. I wouldn’t focus too much on a mobile app. If I were to do a mobile app, I wouldn’t consider it for monetization through the app. The mobile app would be for distribution of value or customer engagement. I will have to find different business model outside of mobile app.
I was a stupid to believe that a mobile app market is a good market. Today, I don’t believe so.
Number 2 stupid thing I believed was, there is a possibility for technology adoption in Nepal. Some people give data such as there are 4 million facebook users in Nepal. There are more than hundred thousand broadband users. Mobile penetration is almost 100%. So, Nepalese do adopt technology. These all are true but useless for a start up. These are incomplete understanding. One thing which, I forgot analyze was that “ at what stage these technologies entered Nepalese market.” . All of these products have been widely popular in the global market when these entered in the Nepalese market. These entered really late stage. This makes Nepalese laggards of technology adoption. I didn’t need laggards. I needed innovator adopters. Let me do a brief poll here. How many of us try new technology everyday? Once a month? How many of us have paid for an app? How many of us have paid for a new app? We are the innovators in the society and we rarely adopt anything new.
Therefore, being an innovative creator is irrelevant if your users are not innovators. Hence, today I feel selling a new technology product in Nepal is impossibly hard. I won’t do that. My belief is busted. I feel stupid about it today.
The third stupid belief I had was location of a start up didn’t matter. I had read world is flat. Geography of my startup does not matter. I was really really stupid to believe so.
Many people argue that there are successful startups from small countries such as Israel, Singapore, Switzerland etc. Those people forget one thing. All of those are rich countries with a lot of funding opportunity and a great culture of adopting an innovation. I live in Nepal. Even to get a visa to travel for a meeting with an investor is impossible. I couldn’t bump into an investor in a cafe. One cannot raise money on an idea. One needs users to raise the money. A conversation starter to raise money is traction. Traction from Nepal is impossible for one reason. There aren’t just enough early adopters in Nepal. So, the conversation is over in the very first minute.
So my friends, today, I don’t believe world is flat. The world for me is a steep cliff. The slope of the cliff is 90 degrees for someone from Nepal. Of course, I can climb the cliff. But I need the climbing gears ready to start climbing the cliff.
The fourth stupid I believed is “ I will succeed if I persist long enough.” Yeah! I could persist for long. Only thing I didn’t realize was persistence means 1% hard work and 99% financial back up. I had the team which most of the people in Nepal would envy for. They are crazy good. I was fortunate to have the team who would consider taking no money to get things done. But how long could I have persisted? I went without finance for almost 18 months. Knocked so many doors. Pitched so many people, and talked to so many people from around the world. We did all the hard work. Hard work amounts just 1% for the persistence. 99% is financial back up.
The fifth and final stupid thing, I believed was “ getting a media coverage is a good strategy for customer acquisition.” I got written in many popular blogs, TV, and also wrote feature article. Getting media coverage is momentary flattery. Besides that it serves no purpose. It did no good to increase users.
Today I figured out this. “Wannapreneurs go to the media and real entrepreneurs go to the bank.” Wannapreneurs try and build fancy mobile app. But real entrepreneurs do the boring stuff, get the paying customer, and laugh their way to the bank to deposit the money. “
I stopped working on my start up in the first quarter of 2015. I started last quarter of the 2013. For almost about 1.5 years I kept pushing my start up believing above stupid things. Eventually, I snapped and just stopped working on it. Every now and then my team brings up “11Beep”, and my response these days are so passive and detached that as if we had not created it.
It’s time to move on. I will definitely not work on another app. I will definitely not sell technology in Nepal. I will definitely not base my startup in Nepal. I will definitely not venture out without financial backup. I will definitely not use media as a strategy to get customers.
Instead, I will do something which I have an unfair advantage. I am working on to create an unfair advantage. The best way to create an unfair advantage is to collaborate with great people.
Collaborate with people who can design stuff, who can build stuff, who have a massive network of people, who can invest money to lengthen the persistence period. I think an unfair advantage is collaboration among people with complementary skill sets. Magical things start happening when you collaborate with great people.
Perhaps I will feel stupid for thinking this next year. I don’t mind being stupid. This stupidity makes me think and then let me do new things.
p.s. This is a transcript of the speech I gave at KTM mobile Monday held at entrance cafe on Dec 6, 2015.