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.

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  • http://twitter.com/arunkw Arun Kumar

    True, most of the start-ups make beautiful platform. be it using CMS or DIY Code, and they keep pushing content which is valuable but not payable. They spend all their time on content creation and making buzz on social media but that is not the business. 

    Everyone is forgetting no #1. Rule of entrepreneurship – To get people open there wallet to you.