Category Archives: Startup Advice

There is NO money in startups, so you better enjoy what you are doing

I had covered this earlier as well, don’t built a startup but build a business so thought to extend on to that. One thing which I have seen in the last 12 months is that people think that startups are about money (I myself was guilty of this). Well, this probably comes from people associating glamour with the startups (when there is none) but the reality is, startups are very risky and poor way to make money. Let me tell you how (this is oversimplified but still it should give a good idea)

X and Y are two 26 year old guys who have put 5 lakh from their own pocket to start a logistic business in India as a backend provider for the booming(?) ecommerce, in next 3 years, they raised 25 lakh from some angel investors and then 5 crore in series A round from a VC firm. Now this is actually a very positive use case, imo 95% startups probably don’t even get 10 lakh in funding (logistics is very capital intensive work so most likely you can’t run it by yourself)

Now the founders are on payroll as an employee of the company (though they can use the fancy CXO on the visiting cards), running a business with wafer thin margins with more people coming in already crowded market and the founders are making no money!

This is very simplified version of a very complicated and layered picture but the point that I am trying to make is, There is NO money in startups, so you better enjoy what you are doing as startups are about FREEDOM, freedom of mind and freedom of thoughts, the rest is all supplementary.

Best City to launch startup in India – Bangalore, Delhi/NCR, Mumbai or Pune ?

I had written this blog post in 2011, Best Cities to Launch Startup and Business in India but thought to cover this topic again, primarily because now I have more views from others (the above post was based on my own experience). The idea of writing new post also came from a discussion in TheMorpheus mailing list where people were comparing Bangalore, Delhi/NCR, Mumbai and Pune and which is the best city to launch your startup.

Now if you are a local resident of Bangalore, NCR, Mumbai, Pune, Hyderabad or Chennai, you can stop reading the post. Moving from these cities to any of the other makes no sense as there is huge overhead involved in not only starting a startup but starting life as well (something which founders never consider). You can anyway always have a temporary base in other cities if you need for local presence and to meet clients.

Ok, so now you are someone who is not from the above cities and is looking to move to Bangalore, Delhi/NCR, Mumbai, Pune (or even Hyderabad and Chennai) but not sure which city to chose. Since I have spent some time in all these cities and have seen the startup culture, crowd, office rent, food, language problems, traffic, difficulty to hire people etc, here is the revised version of the post on which city to chose (summarizing the TM mailing list conversation too)

1. Bangalore – To me it still look the hub of startups but it is getting exponentially expensive with 1000 sq feet semi commercial offices going for 40k in rent, 2 BHK flats are going for 18k in rent and it is almost impossible to find a tech developer since everyone wants to have their own startup. After living in Bangalore for 2 years, I also realized that it also has a huge language and food problem (or is it just my weak stomach ? I am going down with food poisoning every two month now!) and the costs are only going up. Bangalore also has huge shortage of good developers and expect to see people changing job in every 6 months, expect them to be unreasonable as well (I remember one college student came to meet me for the first time and said, he wants 70k/month salary, wants stake in the company and will work in his own hours)

2. Delhi/NCR – if you are a north Indian and can get some local support, Delhi/NCR may be a better place for you, mostly for food/language reasons and because it may be easier to hire tech guys. Also I feels after some time you want to get out of startup mode and get into business mode so staying out of the startup crowd may not be a bad idea.

3. Pune – Pune with all the hype, doesn’t have the startup culture (I am not saying this! someone else said it who is living in pune). It also has some infrastructure and commuting problem. Though the weather and food is fine.

4. Mumbai – someone said Mumbai being the business center of India should means you should be here. To me, Mumbai looks to be way too costly and mechanical for someone who is looking to come from outside. People who are living there, they can manage but not someone who is not used to mumbai life. Though mumbai is indeed hub of all the media companies as well it has strong local economy so if you can get your finance numbers right, you can start from mumbai.

5. Hyderabad/Chennai – There are many startups who started/working from these cities and moved to Bangalore, you can chose them if it matches with your language/food preferences and anyway Bangalore is about 12 and 6 hours from Hyderabad/Chennai so you can always attend startup events and meet investors. I may be wrong but I do feels it is easy to find a good developer in Hyderabad and Chennai then in Bangalore and more importantly, it is easier to retain him :) In Bangalore, people are changing jobs in 6-8 months!

Feel free to put your view in comments and share your experience.

btw, you may want to read my older blog post Startups in India – Office Space: Where to Take, How to take and When to Take ? too if you are looking for office space but unsure what you should look for.

As a startup founder, be obsessed with Numbers

I am obsessed with numbers because in startups you will never have accurate idea and understanding of anything. Most of the time you will predicting and assuming things for accurate prediction and assumptions to make right decisions, you need DATA.

We are measuring WorkMonk on 29 KPI metrics and will keep on adding more metrics.

You need to know where you are going and with what pace as startups are about optimizing resources and avoiding making mistakes. Those who make least mistakes are the once with more resources (time/money/clients etc)

Why it is ALRIGHT to be a single founder

Last year I had made this blog post Pain of being a Single Founder in Indian Startup, it is almost one year since I made that post and I still strongly feels that going alone is not a smart thing as it will burn you very fast and single point of failure is never good. Startups are all about not making mistakes and as a single founder, your one mistake can set you back by 3 months (it happened with WorkMonk). There is also the cost factor, with two founders, you can share the cost (I had to put 3 Lakh from my own pocket to get the office which still hurts)

But there are some advantages too of being a single founder, and if you think you can pull it off, then go alone

1. Speed – I may be wrong but single founder certainly take much faster decision as compared to multiple founder as they never has to discuss and ask for permission. Of course this depends on how good of a chemistry is between co-founders. I know many 3 people startups who works with extreme efficiency.

2. No disputes/arguments on how to shape up the company – I think the single most biggest reason of startups failing in India at the very early stage is because founders break apart. People have their own egos, ideas and vision and after six months, when things don’t happen the way you want, one of the co-founder leaves doing some serious damage to the startup. As a single founder, you know you are pretty much on your own and get used to taking risks, making calls and understanding your limitations.

3. Single founders get better understanding of the business (at least initially) – If you are the developer, designer, marketer and sales person, you will be surprised how broad your overall understanding of your own business is as compared you doing only one part and 3 other people doing the rest.

I strongly feels that you should have a co-founder who complements your skills but if you don’t, still it is perfectly fine, don’t waste your time finding a co-founder and just start building your startup, it is your startup, you have to build it and of course in India, People only catch that bus which is moving, right ?

Our List of Mistakes and Learning while building WorkMonk

So we finally (soft) launched WorkMonk last week, it still has many bugs and design issues but we decided that no point in keep on fixing things and we should just launch the platform. I personally feels, you can do 80% development in 20% time, it is the last 20% which will take 80% of your time, so sometimes it is good to move on to next stages as per the deadlines and keep fixing/launching features as you go.

I am writing this post hoping it can help other startups and wannabe entrepreneurs.

Here are our Mistakes which we did in building WorkMonk

Mistakes
1. Hired wrong guys – this was expected (and this happens with everyone) since I am somewhat new to all this, anyway we quickly figured out the mistakes and corrected it so not much damage done.
2. Took decisions too fast specially those which involved money (I don’t have any regrets though as at that time, they looked the right decisions)
3. Tying to build things in mid air with no base. Building and creating things is fun but we didn’t realized the valuable time and resource loss. A big part of our code is now useless but it is ok as this is how you learn things, also I learnt some new ways of building things.
4. Instead of growing vertically, we started growing horizontally and started focusing on multiple markets instead of focusing on different segments of same market (ideally initially you should only focus on one segment of core market)
5. Not understanding the bandwidth – Every startup has certain bandwidth depending on the number of founders, size of core team, available resources etc, we miscalculated this though we quickly figured out the available bandwidth so not much damage done.
6. Too much focus on money and earnings rather than on technology and building platform.

Learnings
1. If you want to get something done, do it by yourself.
2. Money leaks fast.
3. Technology > People
4. Everything will take 2x-3x more time then your estimation
5. Stick to your strengths, converting your weaknesses to strengths only sounds good on paper.
6. Don’t get stuck in operations, keep building vertically
7. Don’t spread yourself too thin, specially if you are a single founder

Never hire a Sales guy as your first employee

This is something which I learned by making the mistake – “Never hire a Sales guy as your first employee

For WorkMonk, we are always looking for sales people who had startup experience so we hired someone who was a sales guy when the platform was not there, now having a sales guy when you have nothing to show to the client or to sell is a very dangerous proposition as by trying to sell non functioning product/services, you can lose early adapters and by the time you will launch it, you may not have anyone to buy your product.

I realized this mistake after few weeks and we asked him to leave and we started focusing on the development and finished the platform in 3 months and now as we are ready, we are again finding more people to join our sales team.

you can look at WorkMonk Jobs page to get the details for our sales and dev openings.

Take a Print out of this right now

Take a Print out of this right now

You fail because you let things fail. And at the end of the day you’ll blame every person you’ve ever met for your failure. You’ll give 100 reasons why it’s their fault. How that employee didn’t do his job. How that customer screwed you. How that investor didn’t invest when it was really important. How the damn developers just sat on their asses and delivered dog crap to you. Then you’ll wake up one night when it’s just you sitting there alone, and you’ll realize that you’re the entrepreneur and you’re the only one holding the bag of responsibility. That company is yours, even if you’re a 1% equity holder. Employees are as loyal as cats. Investors have lots of other deals going on. Customers always have other options, and they’re pretty good about reminding you of that. So at the end of the day, it’s just you. You and your company. Because, you see, the company is you. You are the company. You are singular zen being. That’s when the lightbulb goes on and you have to be a big boy or big girl and say: “I take absolute and total responsibility for the success or failure of this company. It will succeed in part by me, and I will get partial credit for its success. But it will fail in full by me, and I will take 100% of the responsibility for its failure.” Sorry, you only get partial credit, but 100% responsibility.

From – Quora, a must read thread

Why Choosing the Right Development Platform is so Crucial for startups

I was talking to Abhishek and Amandeep of loremate few weeks back when they were in Bangalore about the issues which they faced (and still facing) because of wrong choice of platform (and the wrong approach their developer had), Rabi/Ashish of idubba also had similar experience with a freelance developer which made me think how important it is to chose the right development platform for a startup as a wrong choice will not only make you lose precious 2 to 4 months, will also void all the time and resources invested in earlier development.

WorkMonk is built purely on PHP/Mysql and though I did thought of considering Django, CodeIgniter (a huge $100M+ site in our domain uses CI) and Yii (everyone was talking about it), eventually I decided to stick with php/mysql.

So to Summarize it from my experience, if you are looking to chose a development platform for your product/service startup, ask yourself these 6 questions -

1. How fast you can develop on it ? – you can’t spend months understanding and learning the language and platform. On web things move fast and things keep on getting outdated in every 18 months.

2. How comfortable you are (and your current core developers) with the development platform ? – if you and your developers can’t code it, don’t expect to hire someone to do it for you. It has never worked and will never work.

3. How mature the development platform is ? – Majority of the Open source project and platform offer basic features for you to build on but after that you are pretty much on your own.

4. How much code/examples are publicly available ? for rapid development, you need lot of code/modules/libraries written by others already

5. How easily you can find 5 developer on that platform in India ? – considering the best developers are already running their own startups, already working for a startup or are havng 12+ lakh jobs. Also remember, no good developer wants to work in a startup which has nothing to show.

6. How easily you can find the help on web/forums/IRC ? – again, you don’t want to reinvent the wheel and solve platform problems which should anyway be solved by core platform developers.

also it is a good idea to discuss this with as many people as possible, specially people who are using the platforms which you are looking to use. One 10 minute conversation can save months later.

Why Indian Startups should avoid Paypal (or have multiple payment options)

This I am writing from our experience of WorkMonk which we had with paypal. Most of the startup founders already know this but for those of you who don’t, there are some serious problems with using paypal as a mode of payment due to continuous change in paypal policies related to Indian accounts. You just can’t run a professional business with all the shenanigans that Paypal pulls but most of the businesses have no other option because of lack of other quality options.

If you are a startup in India who get payment from abroad, you can and should never trust paypal as the only payment option on your site and should move to Credit Card payment as soon as possible. There is heavy integration and maintenance fees involved with Credit Card payment gateways of ICICI and CITIBank but if you can, you should take it as paypal deducts about 8% on every transaction for Indian accounts (regular fees + currency conversion)

Now We have 3 payment options for our clients

1. Paypal (love or hate it, there is no choice to keep it)
2. 2Checkout (had no other option but to use it, charges 5.5% which is very high, also has keeps some money in reserve)
3. Credit Card (direct payment gateway)

all this setup costed us lot of time and money but we had put this as our highest priority as we wanted to make sure in case of any failure of one option, there are others to keep everything running smoothly.

Why as non tech Founder, you have to (learn to) Code

There are 2 kind of founders, those who can code and those who can’t!

Fortunately I belong to the first category but if you belong to the second category, start to learn to code right now. After seeing hundreds of startups, even those which are not into IT/Product/Platform verticals, I can safely say that the founder(s) who can build things will always have 3X+ advantage over to those who can’t.

The biggest mistake Marketing/MBA founders make is to think that they can find some rockstar developer, pay him good money and he will build things for us. It just don’t work. It hasn’t worked in the past, it will not work in future too.

As a non tech founder, you have to know what is going on with your product/platform so even if you can’t understand the finer details of the work, you have to sit with the developers and ask them explain why we are doing this and how we are doing this. This doesn’t mean that you have to do full time hardcore coding but spend few hours to understand the tech part of your startup, this will help a lot after 6 months, always remember, it is not your developer who will build your company, you will.