The onset of the global pandemic in early 2020 indeed changed the course of history all over. Many believed that launching a start-up amidst the early days of a global pandemic was, admittedly, bad timing. In our case, the great product market fit along with more than ten years of experience in the ad tech space gave us the courage to launch something new during this tough time. With 1,436 startups launched in the calendar year 2021, the count of new startups grew by 15%. Just among the startups launched in 2021, 71 ended up raising funding totaling $871 Mn in a single year. In fact, India’s startup arena saw the birth of 44 unicorns in 2021 and within a span of three-four months in 2022, 14 unicorns were made- a testimony of that even during the global pandemic startups in the country continued to create wealth and value.
Indeed it is remarkable to witness the diversification of Indian unicorns and how the world of startups is reflecting a spirit of new India with entrepreneurs also coming from small cities and towns.
At the same time, statistics on ventures having failed are astonishing. In India for example, recent studies indicate a 90% failure rate among the majority of startups, primarily attributed to the inability to accurately gauge the market and lack of preparedness to deal with fluctuating market conditions, viz., the Covid-19 pandemic (source-Adcounty India). The first two years can be a roller coaster ride filled with emotions and challenges for any entrepreneur starting a new tech company. There are highs and lows, successes and failures, and lots of learning in between.
Many startup founders come with prior experience before entering the entrepreneurship bandwagon. While there is plenty of information available about the best practices for launching a start-up, there are some things entrepreneurs can only learn through experience. Let’s take a stock of five startup success mantras.
1. Don’t go at it alone- “No man is an island.” “Two heads are better than one.” It’s crucial to have someone to lean on and thus rightfully so, one comes across multiple cliches on the importance of having help; it’s the truth. Some entrepreneurs may be better at the product and overall business and that’s the space where they tend to shine brighter. Their co-founders may have a strong edge in the domain of tech and infrastructure and together the combination works well. It is important to evaluate that the skill sets of the founding team complements each other. There are way too many things to take care of in the early years of a start-up. To scale, founders need a team — preferably, one they know well and can rely on.
2.Discover your product market fit- This is a somewhat known fact that is still worth reiterating. Entrepreneurs should ensure that they aren’t replicating something that’s already been done — this is a surefire way to fail. Claiming a share of the market relies on providing something that solves a pressing pain point for end customers. A way of discovering one’s niche and customers is to evaluate the needs of clients and the market in question. Entrepreneurs should never rush and take ample time to put in place a business strategy, product, and services to ensure they are launching a compelling entity to the market. In our case, the customers needed a highly reliable solution that belonged to the current era of automation, innovation, and privacy.
3. Bank on mentors- Founders should focus on enriching their network beyond business partners and employees when it comes to having a team to support them through the first years of their start-up. While finding mentors is an integral part of success, it is even more important to find the right ones. After all, business experts and industry influencers know the marketplace landscape better than anyone else. A crucial factor underlying success is whether or not a product meets a need in the marketplace and mentors can help tell entrepreneurs about the landscape accordingly and guide them on how to navigate it. It makes more sense to turn to people with a vested interest in a startup’s success. Our angel investors, for example, have been in the industry for a long time and understand how we fit into the market. Their literal investment in our company means that they have a stake in our success, and are more open to lending us their time or advice.
4. Having a plan is crucial- I can’t stress enough reiterating the importance of having a roadmap in place. How are you going to scale? What factors do you anticipate playing into the business? How are you spending your money? What team members and infrastructure need to be invested in? These are the kinds of questions founders need to have answers for. Unfortunately without a plan, they will not be equipped to answer these questions to keep them on course. At the same time, it is vital to regularly review the progress of the business plan on a weekly basis. Milestones can vary a lot, and following a business plan ensures lesser distractions along the way. It can be high-level, but your business plan gives you direction.
5. Be flexible – Plans are important, but so is the entrepreneur’s ability to adapt when necessary. Come to think of it, many startups were launched during the pandemic. Currently, across the globe, there is an economic slowdown. No one can foresee the future, and the ability to roll with the punches is integral to success. Founders must be prompt in adjusting their business plans in accordance with such situations. It’s important to understand that not all elements stay as planned, whether we talk about financial projections or product delivery dates, hence it’s important to build buffers into the larger plan. Sticking too closely to your budget or customer projections can lock businesses into a rut. It is advisable to stay transparent with one’s investors, even if founders run into some inevitable unexpected hiccups. Remember, the right investors will continue to believe as strongly in the products as the funders do, and will not be focused on the fluctuations in the numbers driven by outside forces.
At the end of the day, any startup can face challenges, but once its leadership team knows how to keep an eye out for them, they are easier to avoid. Everything else is just a daily operations issue.
(The author is Ms. Yogeeta Chainani, CEO & Co-founder, Swaarm and the views expressed in this article are her own)
