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The business world is expectantly focusing on the success of start-ups and the creation of Unicorn Enterprises. Unicorn organizations are typically high growth organizations with a Billion Dollar valuation. Are all successful start-ups a result of disruptive innovation; Not actually, maybe that’s is why start-ups terminate in the first few years. With a high mortality rate, the accountability of success or failure of any start-up lies with the Founding Directors exclusively. Needless to say, there are no shortcuts, and it’s not the game for the fainthearted or entrepreneurs seeking instant gratification.
Businesses typically qualify under four categories, High Growth Companies, Family-Owned Businesses, Blue Ocean Organizations, and Social Enterprises. Each of these has specific reasons for success and failures. The world has a maximum of family-owned businesses and rare Unicorn start-up Enterprises. Social Enterprises are the most difficult to scale up yet significant. Blue ocean always has a challenge of acquisition of customers as only early adaptors favor you. The key is to harness potential customers.
The discussion below is aimed at helping start-ups succeed. I sincerely hope my experience of being a part of my own start-ups and as a Mentor shall be helpful to aspiring entrepreneurs.
- Be very sure if you want to be an entrepreneur. You must be wired to continually reinvent yourself. It essentially means you like to operate in financial uncertainty with a huge appetite for risk. It is not a venture for safety-driven stingy people. You need to exhibit the grit to withstand social and financial pressures on this journey.
- The success of your idea is correlated with the ticket size of the problems you solve. More considerable the problem higher the chances of success. There is a massive economy at the bottom of the pyramid too.
- All start-ups built on the edifice of compromises of ethics, principles, and sound fundamental processes and systems are deemed to fail. The foundation is the platform for success. Too many entrepreneurs miss this point.
- If you want to build an Enterprise never ever start with an idea of selling out. No great venture is created with this idea. It’s like your child who will take time to grow and become an asset. Persistence is the key. If you wish to exit the business fast, then be entirely clear on the plan and date of exit. Timing is critical. People only bet on a winning horse.
- Be clear about your socio-business intent and who you wish to serve and how. Only a great idea or a product alone cannot succeed unless there is clarity on how you want to transform the space around you. This is the essence of building Unicorn ventures. Organizations with a strong sense of purpose and an expansive eco-system are always built to last.
- Set aside the technocrat’s hat. A start-up requires behavioral competencies, which are more to do with the right brain as you must be a person on a mission to transform the world around you. A pure technology approach is a sure shot disaster. It requires enormous people management and strategic orientation for succeeding in business ventures. Passion is the key. An actioned dream is the essence.
- Systems and processes for all stakeholders to collectively win are very essential. I see start-ups fail because they do not focus on financial prudence and capability building in their eco-system. Co-creation is the key in today’s world.
- Create your success in a narrow niche. Don’t spread yourself too thin. Energy needs to be focussing on a single intent “one at a time.” Remember the 3-7-12-15 thumb rule. It takes three years to break even, seven to get going, twelve to consolidate, and fifteen years to make a mark. Beyond fifteen years if your fundamentals are right and ethical structure is intact success and excellence are a by-product.
- Your second line determines whether you make it big or not. Be very selective and do not compromise on the leadership capabilities of your second line. Get innovators and people managers. Ultimately you are leading & managing teams.
- Get Mentors, Advisory board, and Domain experts to support your venture. Expertise has to be collected to complement your talent. All entrepreneurs must constantly learn, as a quest for Personal Mastery is the definer of success.
- Past successes will be the creators of future failures. You’ll have to invent newer rules to win. You will experience a massive downturn at least once for sure. You have to emerge successfully out of it by refocusing your energies. Once done you shall for sure create a great enterprise and leave a legacy for people to cherish.
- Doing better with lesser is the key to building Unicorn Organizations. Most Unicorn companies are surprisingly not disruptive but value-add to the existing value chain.
They practice the elements of Design Thinking to fail early and fail cheap. Disruption is good but comes with its own challenges and struggles. They take a long time to consolidate, and the cost of customer acquisition is very high. Though disruptions also have been successful, then the pockets need to be deep.
- Scale-up through technology and artificial intelligence. Be clear on what to make and buy. All Innovative ideas already exist in some form. Mostly they have to be reinvented. Scale-up happens when you acquire customers and retain them with speed. Plugin what exists; don’t reinvent the wheel.
- Lastly, it’s all about people. Invest early in technology-based Human Resource Systems & Processes and Learning Management Systems. It is only people who create or destroy organizations. Building a winning team is an arduous process and needs considerable energy and time. It is a researched process, don’t get into trial and error. The cost of bad hires & toxicity is huge.
Start-ups cannot be a “fashion statement” or an “experiment.” It is a serious creative work of magnificent “Business Art” that contributes to improvement in the quality of life in the chosen segment. Nobody ever forgives a failure here. There is no choice but to win so do make it happen with all the grit and gusto that you can ignite within yourself. Enjoy the journey! It is a road less traveled, but indeed an adventurous one.