Image Courtesy : WebDesingerSpot
Today, we are closer to 2030 than we are to the year 2000. The events that seem ‘like yesterday’ are pretty old in reality. It has been roughly 14 years since the first iPod was released and today, we stand on the verge of making fantasises like virtual reality a commercial success.
Around the early 2000s, the industrial giants with their corporate laws and their strict regulations started becoming villainized in the eyes of the common man. People started dreading going inside these huge blocks of concrete and becoming a mere hamster in a wheel.
If you ask me, Facebook was the first successful startup to be established since the turn of the century. The idea of working for yourself, wearing boxer shorts to office and having the liberty to work, whenever or wherever was way too lucrative. The people trapped inside their cubicles at IBM, wearing their suit uniforms and stuck in front of their monitors all day could only dream of this alternate universe.
Was it too good to be true?
Come the year 2015, we were surrounded by startups. From ordering cabs, renting hotels, delivering our food to taking care of our babies, they wanted to do it all.
A few survived and plenty plummeted to the ground. Some of them were way too inexperienced to handle the money, some faced the backlash of the ‘established one’ but most of them perished because they were trying to solve a problem that did not exist.
For instance, there were around 34 food kitchens in Bangalore (The Silicon Valley of India) at one point of time functioning parallel to each other. Today, there are only 3 or 4 left. Instead of working together to give the end user a simpler experience, they confused them with too many choices.
Time to dust off the old suit & tie and head back? Or is it?
Let’s try and analyse where these start ups really went wrong.
- Revenue Model, What? Never forget that not only ideas run businesses, money does. You need to work out where the money is going to come from to sustain your business.
- Inexperience of young entrepreneurs at handling investor money; spending exorbitant amounts on hiring new people, buying bigger offices, over-advertising led to a cash drain and a fatal collapse of so many startups.
- The Fickleness of Vision; Zomato started their own delivery chain to compete with TinyOwl & Foodpanda and failed miserably. Zomato was founded as a restaurant aggregator and collected data about almost every restaurant in India. The idea of venturing into a saturated market was not the right move. A partnership would have been more sensible.
- Those Damn VCs; while investors are critical to doing business, today’s venture capitalist have wandered to the dark side. They want to milk the cow till it runs dry. You need patience to make the business grow. This increases pressure on everyone to over-perform which usually breaks down the entire structure and vision.
Does this mean that the concept of a startup is flawed? No, definitely not!
This era has given rise to so many successful startups; Uber, Flipkart, Amazon, Snapchat, Pinterest, Groupon and yes even Facebook. But before you enter this domain, have a clear vision about your product/service, a definite plan of execution and strong grip on your finances.