Start-ups: Failure is the Key to Success!
1. Start-ups are not smaller versions of large organisations. Bonsai has a different life and game plan as compared to large trees. The two should not be compared and start-ups should not be expected to emulate the large organisation.
2. Start-ups do not adhere to a ‘set’ business plan — in most of the cases the challenge is to find one. As Mike Tyson famously said on his opponent’s pre-fight strategies: everyone has a plan till they get punched in the face. Business Plans are a necessary evil but for a start-up, they are nothing more than fictional plans and rarely do they survive their first contact with customers.
3. Customer Plan is much more important than the business plan. This may include customer engagement, customer stickiness, brand advocacy score, net promoter score, etc. “Your most unhappy customers are your greatest source of learning,” said Bill Gates.
4. Data is the new oil. Data undergirds everything. Period.
5. Start-ups need to fail fast, fail often, fail cheap and fail better. Constant experimentation and continuous learning is the name of the game rather than elaborate planning. Start-ups need to keep their persistence levels high. “You don’t learn to walk by following rules. You learn by doing and falling over,” as famously told by Richard Branson.
6. Iteration is the keyword for every aspect of the business. Launch and iterate. And again. Everything is changeable except the intent to give one’s best to make it big.
7. Repeatability and scalability are two pivots to search in the early life cycle stage. Investing in growth in stage 0 is almost a sure-shot pre-requisite. Mostly startups are dealing with a new concept and/or a habit change. This may initially require selling only on the strength of price (not the brand or anything else) and may call for disproportionate investments and therefore profitability may be a long way off.
8. Turmoil and chaos are integral to the existence of a start-up. Those who cannot stand the heat, need to get out of the kitchen.
9. Lastly as Jeff Bezos said — Entrepreneurs must be willing to be misunderstood for a long time.
Disclaimer: The views expressed in the article above are those of the authors’ and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.
Originally published at http://www.businessworld.in on August 26, 2020.
