11 components for Startup Success!

Why do Startups Fail?

    11 components for Startup Success!

Are you a start up?

Or

Are you planning for one?

Then it may benefit you to read this real story...

Couple of weeks back, one of my friends called me over phone.

His voice was very enthusiastic.

He said that he has tied up with an organisation backed by people who are well connected and  with lot of resources.
He also said that the organisation has great ideas and plans in the a particular industry, and he was front ending the entire operation.

He requested me to join him to the Business establishment of a common friend who had spare capacity in the same vertical chosen by them.

They were to sign a MOU for utilisation of spare capacity available in that friend's establishment.

Before signing the MOU, we were discussing about the new project.

I was really astonished  to know that they didn't have a business plan.

The MOU prepared by them had no clarity in

° List of  products and services
° Scope of lessor and lessee
° Requirement of capacity,
° Compensation for the utilisation, etc.

Interestingly, people who were involved are well educated and some are even considered as experts in their respective subjects.

End of the real story...

I have noticed this happening with many a startups where the founders have no clue about all the components of Business.

Their simple fundamental is this:
I have a great idea, I have a great product and it is a winner.

Many such people with such "great ideas" don't even consider whether their idea could be converted into a saleable product or service and eventually to a sustainable business.

Quite often I notice that their understanding of the following components which are required for Business success is lacking:

° costing of product
° Understanding what problem the product/service is solving 

° Target Segment
° How and where to position the product 
° Marketing strategy
° Awareness of what they require in their Team
° Funding the business for the capital exps Complete 

° Providing for the Working capital 
° Knowledge about their Competitors/ their activities/strategies
° commercial viability and
° Financial Prudence and Discipline - awareness of where the money comes from and where it goes 

This kind of unpreparedness or  undue complacence is the major reason for the failure of most startups or inability to reach the destination called success.

Of course, The thought of starting something leads to a lot of excitement.

Just that, the excitement needs to be coupled with a clear roadmap.

An analysis and understanding of
1. purpose
2. Objective
3. Goals(both short and long term) Required 

4. Resources
5. Target community
6. Marketing strategy
7. Time lines
8. Milestones
9. Challenges
10. Roadblocks and ways and means of
11. Overcoming them.

A lot of time has to be invested before starting a new project:

One has to
visualise
Take a  travel mentally
Do a lot of research
Do market study
Talk to people
Take expert advice....
as many as possible.

Once clear with everything,  preparing a blueprint of the Plan of Action, leading to a comprehensive business plan.

Chances are that this exercise will
Open up lot of avenues
Throw light on grey areas
Clear a few doubts
Bring familiarity to the project and Take the founder closer to clarity.

This exercise will also increase the chances of success many a time.

Begin with a Complete Business Plan.
Have the end in mind.

Best wishes...

Muralidharan Margabandhu