From Idea to Business — The Journey of a Start-up and What it Takes to Get There
In my humble experience of about 4 years as a Co-founder at WorkIndia, I was fortunate enough to witness several key phases of a venture first hand. Seeing it grow from a 8 member team in a small rented apartment to a 50 member thriving business sprawled across an entire office floor, the journey has been exciting, insightful, and enlightening.
Before I share my insights from this journey, I would like to go over what a business is.
Simply put, a Business is a repeatable process — something you can do over and over, every day — in which you do the following (inspired by The Personal MBA by Josh Kaufman):
1. Create value for others
2. Get as many people to use it as you can
3. Get people to pay for it
4. Ensure you give them the value that you promised
5. Make enough money so that you can keep running it
Now while most parts of this definition are self-explanatory, I would like to emphasize over the first and the most critical one — Create value for others. It’s simple — you can’t participate in trade if you don’t have anything valuable to offer. Look around your house, every thing you’ve ever bought is the outcome of a business that is creating value for you. A humble banana vendor at your local market is creating value too. You pay 20 rupees for half a dozen bananas because you don’t need to take the efforts of growing a banana tree, climbing it and then harvesting the fruit — the banana vendor and his suppliers are doing it for you.
No matter the nature of the business, no matter the scale or size of the business, every business universally has to create value for others. So a worthwhile question to ask before you begin is — Why am I doing this? What value am I creating for others?
Now that we’ve established what a business is, let’s move on to the phases that a start-up venture typically goes through. Each phase comes with a key question to ask yourself about the venture:
1. Research — Is there a problem that I can solve or an opportunity that I can seize?
2. Ideation — How can I create value for others?
3. Testing — Am I really creating value for others?
4. Product Market Fit — Are people actually using my product / service and finding it useful?
5. Revenue — Are people ready to pay for my product / service?
6. Profitability — Can I make enough money to keep running this business?
7. Scale — How fast and how much can I grow this business?
Based on the nature of the business and the industry you choose, some of these questions might be already established for you, but they’re all important questions nonetheless. For instance, if today I want to start an Ola / Uber cab business, most of these questions are already answered. It is then just a matter of putting together the capital and team to actually start the business.
Speaking of team, almost every successful business is a team effort. Barring exceptions where people run their own solo venture, let’s talk about the kind of team you typically need in order to run a business. The composition of the team might vary from business to business, but generally, you’ll need people in each of the following business functions:
1. Product / Service Development
a. Responsibility: Building, maintaining, innovating and improving your business’ product / service / offering. Exploring new trends in the industry and experimenting with new ideas.
b. Desired Qualities: Analytical, Jugaadu, Enthusiast, Quick Learner, Knowledge of the industry
2. Customer Service and Operations
a. Responsibility: Ensuring day to day operations run smoothly, and keeping customers happy
b. Desired Qualities: Disciplined, never compromises on quality, Someone who is a Good listener
3. Finance
a. Responsibility: Ensuring the business has enough funds to keep operating. Maintaining best accounting practices.
b. Desired Qualities: Diligent, Sincere, Accounting / Finance background
4. Sales
a. Responsibility: Help potential customers buy your products / services
b. Desired Qualities: Aggressive, go-getter, target oriented
5. Marketing
a. Responsibility: Attracting more and more potential customers for the business
b. Desired Qualities: Creative, Confident, basic understanding of what marketing is
The size, structure and order in which you set-up these individual teams can differ from business to business but one critical point to keep in mind is: It’s about the processes, not the people. A process is nothing but a set of steps that have to be followed to carry out a task consistently. The beauty about creating processes is that your business then becomes people-independent. Even if a team member leaves, you can get someone else to follow the same set of steps and your business keeps running.
Having covered the kind of team a business typically needs, let’s talk about the key skills that an entrepreneur himself must develop which will benefit them during this journey:
1. The ability to get things done
In my opinion, the most important skill one needs to develop. As a thumb rule — It doesn’t matter if you do it or get it done from someone, as long as it gets done. A simple mantra to remember when it comes to this skill is: Either do what you said you will do, or just say that you can’t.
2. The ability to deal with uncertainty
The real reason behind fear and procrastination is Uncertainty. People get afraid or delay their actions because they don’t know what’s going to happen next. And although you can never avoid this uncertainty, a few points that help deal with it are:
a. Always ask What is the objective? Why am I doing this? — Being focused on the end goal helps build confidence around your actions
b. Have the Let’s try it and see what happens attitude — Once you’ve tried it, there’s no uncertainty left.
3. Fund Raising
Disclaimer: I must admit, I haven’t performed any fund raising activities myself, so this is just my understanding of the process, take it with a grain of salt.
This point could take up an entire book by itself, but very simply put: Every business needs capital to operate and to grow. You could put your own money, get friends and family to invest, pitch your idea to an investor or the come up with a business idea that makes enough money to sustain and grow. The key point to remember is that Fund Raising is the means to an end and not the end itself.
4. Perseverance
Basically, keep taking actions and never quit.
Hopefully, these insights of mine shine some light on what the intriguing journey of start-ups is all about and what it takes to get from I have an idea to I have a business.
