“Startup” is the buzzword around the world, not for the wrong reasons as well; some of the successful startups have solved age old problems very smartly, in some cases created a new vision and new consumer behavior. Startups like “Whats app”, has made staying connected so easy, it has helped business to communicate smarter. Startups like Uber, Foodpanda, Airbnb, Dropbox, Square and many more are hugely successful for one reason only; they had a sound business strategy to their business. Many startups only plan till the time they get funded or develop a solution hoping some would buy it out. This is such a myopic view that most of such startups either do not take off or die off soon.
During my travel I prefer to book a cab through a very popular startup in India called the “OLA cabs”, I like to interact with drivers to have a better understanding of the strategy of the business owners. For all the common person using the service the multi-billion dollar startup is just an app that allows you to book taxis, but speaking to these drivers in different part of the country made me realize that they had many strategies for the success of the business.
- Business Model: What is the core service and how would we deliver it
- Penetration strategy: how to enter different market and capture
- Marketing strategy: how to promote the business
- Scale up Model: how to expand in business by newer service , new geography or deeper penetration.
- Revenue Model : how to make money, directly and indirectly
- Exit model: how would we move out of business if needed..
Understanding the above for Ola was great learning journey.
I have been consulting for quite some time now and have been interacting with startups from middle east, Australia, India. My experience with most of such startups is their idea lacks conviction. What I mean by this they rarely have all bases covered. To have a strategy for startups, the thought should be on following lines
- What is the problem they are trying to address: to do an analysis to see the need for solution and what is problem they are addressing with it, and whether people would be willing to use it.
- What is their unique selling proposition: what can be done to make sure that service delivery or the product itself is not out there.
- How do they make sure it is not easy for anyone to enter with same solution. What is the thing that you would have that a new competitor with deeper pocket would have trouble getting
- How do you Market the solution: what is the target market and how do you take your product to market.
- What is the revenue model and Break-even : what would be the income generating source and when do you expect to make profit from the business
- What would be investments strategy : when and how do you get in funding and what stage
- How do you scale up: what lies ahead do you have plan for expansion.
- What is exit strategy: when and how do you expect to return investors’ money?
The most critical strategy that a lot of failed startups have ignored is that, how do you return investors’ money with handsome profit. To be a successful startup it is also important to identify the strength of the founder and more importantly their weakness. Knowing your weakness would allow you create right team with right skills and with a right team you would be able to focus on the strategy created and the drive them to achieve it. There many startups, where the founders have hired CEO to take the organization to greater heights.
Lastly, the most important aspect is to keep trying and working hard, as the famous Thomas Edison once said, when asked, how did you feel after failing 1000 times while making the bulb “I did not fail 1000 times I just found out 1000 ways, how not to make a bulb”. People who try hard are the ones who get lucky.
Meet us in Gitex Technology Week 2016 at stand no SR-E8, Sheikh Rashid Hall, if you are also a Start-up company. We can suggest some good ideas.