3 Tips for startups in Sri Lanka
A few weeks back we did a Vlog with Mirantha Jayathilaka highlighting 3 Tips for startups in Sri Lank. This made us think about how things have evolved since I first met him back in 2016. The startup ecosystem in Sri Lanka is evolving. And the rules of engagement seem to change with every passing year. As such, we felt that we could try and share some of our insights and shed some light.
Note: the content within this blog post is more suitable for early-stage startups and budding entrepreneurs who are considering starting their own startup. Furthermore, the content is also more applicable to Sri Lanka.
#1 Problem/founder fit
Entrepreneurship is about solving problems. Problems are faced people and they are solved by people; not technology. Technology is only a vehicle that delivers the solution. We learned that before validating product/market fit, validating problem/founder fit helps. Basically understanding the relationship between the founders & the idea. You try to answer why this particular idea important to these funders. Our data indicated that those who have a vested interest is good at pivoting to a plan that works before running out of resources. This, to us, is a critical success factor that deserves a higher importance. Because from an investor’s POV it’s better to back such founders than those who have a better plan A.
#2 Purse a use-case NOT an idea
Ideas are cheap and available in abundance. They’re not unique or constrained by geography. Above all, they have no value until you execute. Executing an idea has three stages;
Avoid building your solution from the get-go, this is how most startups fail. The vision is the foundation of every idea. It helps you break the product into different milestones. Vision is important but it does not drive success; it points to success. Success is driven by strategy and this is where all startups first compete. By competing on strategy, you end up creating value ie. solving the problem. The strategy brings out different use-cases and the value proposition assigned to each use-case. Use-cases bring about uniques insights which allow you to differentiate yourself. Understanding the use-case is important to hire talent, attract customers and even investors. Finally, you compete at a product level as your startup gains tractions and grows.
#3 Maximise your return on effort/time
You will be pushing 15 hours a day, 7 days a week for the next 7 years. That’s more than 62% of the total time that is available to you. It’s pivotal that you learn to maximise your effort from day one to avoid any burnouts. The best way to do this is to measure your progress(traction) against your effort. During the early days, we recommend following Dave McClure Matrices.
These 5 metrics fall into two categories; Value & Growth. As a startup, your first job is to deliver value. Once you have data confirming the same, you focus on growth. We see too many startups in Sri Lanka focus on building a brand from day one. This might be possible but believe that you first need to demonstrate value. Once people realise confirms there is value, then you can look at building a brand. The reason is that brand building requires a ton of money. And money is scared in the beginning. So, 3 main metrics you monitor are;
In the beginning, you should focus on value metrics. Hence spend time identifying and quantifying your early adopters. We believe that if you’re creating value, you should start charging from day one. If you have to give the solution for free, do so for a limited time and measure the conversion. If people are not willing to pay, chances are they will not pay no matter how many features you add. They will definitely request additional features. But the cost of implementing them vs. how much they would pay might not make sense. This is important for B2B products. As a startup, you have little bargaining power and your immediate response is to promise everything. Try to avoid this trap and see if you can get them to agree on a fee prior to building.
End of the day, your solution alone isn’t going to make your startup successful. Your startup could still fail even if you have an awesome solution. Naturally, this sucks way! For you to become successful, you need to have everything else (business model canvas) coming together. Connecting each component is much difficult than building an awesome solution.