My Startup Learnings (of last 5 years)

Last Edited – 1st Feb 2015 (the list is still incomplete, I will keep on adding more to it)

I am currently running AeroLeads and InBoundio, earlier was running WorkMonk and before that worked as freelancer for few years and though I still consider myself to be beginner who is still learning, I feels I should share my experience from failures so others can learn and avoid making the same mistakes.

I am following Indian startup ecosystem for 5 years now and feels I have seen it as closely as you can see it. In this post, I am writing what I have seen and learnt from my and others mistakes. The sole purpose of putting down this is so others can see the reality of startups and the ecosystem and can avoid making mistakes which I did or normally every one do the first time. I have put it as the way I feels about. You can post it in comments if you think otherwise.

I have put my learning in following categories.

1. Startup and Business
2. Indian Startup Ecosystem
3. Building a Team, Funding, Investors, VC, Product/Service businesses
4. Life

1. Startup and Business

  1. Look to build a business instead of a startup. Successful startups often end up being successful businesses anyway. I have wasted 3 years of my life trying to build startups and those attempts never took off. The startups that I built had no business models and I was building things in thin air and I only ended up losing lot of time and money.
  2. The first 8 to 12 months are the fun part of building a startup, after that once you have people around you, and you start doing trivial things or things which you don’t like, the fun starts drying up. Those who love what they are doing they do fine and will keep growing and eventually make it big. So you better enjoy what you are doing.
  3. Building is easy, selling is not. I keeps on saying this since I am seeing this on daily basis.  Just look at producthunt and you will see 50 startups daily, most of them built in few weeks to couple of months but now when it comes to paid users, this is where startups struggle. It is getting more and more difficult to get paid users as consumer has got so used to having great products for free.
  4. Internet has got very saturated, it is getting more and more difficult to make money from it due to lot of Cannibalization and b2b getting commoditized. Now days user want everything for free. Of course this get compensated by cost of development coming down so now you just have to keep building more and more niche products.
  5. It is not easy to make money from building C2C businesses and marketplaces. I haven’t seen too many marketplaces taking off on internet and myself have a poorly executed marketplace under my name. The problem with marketplaces is they have huge overhead of running it, quality control becomes huge issue and they run on wafer thin margins. This of course doesn’t mean you shouldn’t try marketplaces and C2C businesses, just be aware of the challenges.
  6. There is no such thing as perfect business model and you can never build a perfect business.

2. Indian Startup Ecosystem

  1. There is no such thing as startup in physical world. You build startups in your head and business in real world. You decide where you want to live.
  2. Bangalore is a tough place to bootstrap a business, especially if you don’t have people to help you. This is why almost every startup has to raise money. Don’t move to Bangalore just because you think it has startup ecosystem, there is a lot more you need to build a business.
  3. Hiring right people, specially developers is the biggest challenge for every company in India.
  4. There is nothing great about going to US and registering your company there. If you are thinking it pro
  5. Indian startup ecosystem has lot of trolls. Be careful. These trolls are just for kicks, greed, ego and entertainment. None of these 4 qualities will help you.
  6. SaaS sucks for India
  7. If these are your first 3 steps of building a business, you are doing it wrong – Register a company, Take an office, find employees
  8. Employees are liabilities for first 12 months
  9. There is nothing great about building a product business and nothing wrong with services business. Go with what suits you.

3. Building a Team, Funding, Investors, VC, Product/Service businesses 

  1. VC money is just leased oxygen.
  2. VC making money, Company making money and Founder making money are three different things. Don’t confuse them.
  3. The moment you raise money, you become employee of the company.
  4. If you are asking for funding to survive, you will never get the money.

4. Life

  1. Make sure you care about family, friends, relationships and your health. I ignored this for a long time and now feels I was stupid to do that.
  2. Do not get fascinated by the glamour behind the fundings, there are very few .
  3. The success rate is so poor for startups that starting it purely to make money or for entertainment is not worth it. You can find easier ways to make money and to get kicks.
  4. Being a Single founder is suicidal, don’t do it. If you can’t find a friend who can be co-founder, find friends and family members who can help you.
  5. Sometimes it is OK to grow organically
  6. As a founder, compromise on growth but not on freedom.
  7. Success is all about not failing and avoiding mistakes. If you are not in control, make sure you know what you are doing as every mistake will null any success and you will lose time and resources.
  • rowdy

    awesome. thanks pushkar. If I don’t have much family and friends support for money. And i think that i have got a killer idea and a killer product. When should according to you i must go to VC and ask for some seed money? Like just at idea and planning stage OR after product is ready or after product and pilot is complete.

  • http://gaikwad.in Pushkar Gaikwad

    How much seed money you need ? can you build a prototype ?

    I failed to raise money just with the power point and have learnt that you do need a prototype. I will advice you to check AngelList where lot of angel investors hang out Try to get $20k to $40k as that is often disposable money for angel investors so they normally give that easily. It will be difficult to raise money more than this without product, co-founder and team.

    Check 500startups and similar groups too. Also check quora.com too for advice, there are lot of knowledgebale people haning out there.

  • rowdy

    And i think if no ivy league degree attached with profile, it would be further difficult to raise money.
    Pushkar prototype we’ll have but do we need to have an initial traction or market response as well?
    Tell me about this: If after product development, i tell them that my /month ops cost = 6.27L, for 6month = 37.62L and for 12 month = 1.28 cr. I read somewhere that thumb law for seed raising is that you raise for 12 months of ops. Going by that metric my costs are 1.28 Cr. this is some $ 200 K.
    If you look at this : http://trak.in/india-startup-funding-investment-2015/
    $200K is quite common in seed. This made me very confuse, is their seed is seed or pre series A. What is the definition of such seed? Since you had an experience of all this, I would really appreciate your view on this.
    Regards
    Akash.

  • http://gaikwad.in Pushkar Gaikwad

    I am unsure how having degrees help getting you raise money but yes, it is easy to raise angel funding of 100k through your alumni and often top tier colleges have strong alumni networks.

    Yes, $200k is very common and I feels this is how much at least anyone should raise. Anything below Rs 50 lakh is just not worth it too. There is no seed A, seed B etc, most of the time angels provide seed funding and then you move onto series A, B etc from VCs.

  • aditya

    i wish i could have read your article before stepping in the “startup” thing…