One of the most fatal, yet most popular symbols of startup success in India is funding. The moment you get funding, you start feeling more intelligent & wiser than other startups around. And then online bloggers and media agencies starts boosting the flame.
But what no one talks about is the business model viability? How many media agencies investigate or question the business model sustainability?
How many questioned the sustainability of PepperTap, TinyOwl, StayZilla, AskMe, Fashionara? And the list is quite long.
IMHO, probably in last 3-5 years in India funding zest of entrepreneurs were primarily driven by the threat of quick rise of competitors, and a will quickly outgrow them. Which also indicates that lot of these startups knew that they weren’t creating any unique business and/or a sustainable entry barrier. Two pillars of any potentially wonderful startup.
A lot of entrepreneurs confessed post shutting down, that their businesses weren’t economically viable, or they haven’t had any strong entry barrier for competitors, or they realized that building a startup take much more than mere funding.
It also raises a question on funding phenomena. What the f*ck investors were funding? And the answer is ‘Madness’. What we have witnessed in last 5 years in India was a mindless baseless curiosity of being part of something large. Will that ‘large’ survive or not? No one asked.
One of my clients, was an adventure cum gaming travel startup, which quickly realized the economics of businesses were falling apart. And even when they dropped their business with us to save cash, they took time to rethink their business, revenue model and feasibility. Recently, I was talking to her and she told me that she took an entire 180 degree turn and realigned their activities toward revenue and sustainability, and is now making more money, and burning lesser.
Any match with PepperTap which raised 350 Cr. in funding and f*cked up?
Sustainability is far crucial than scale. Cash is far more crucial than GMV.
And if you have that flirting desire to taste entrepreneurship. I have a wonderful advice for you.
Crowd funding Platforms. Wait, let me finish.
How do you plan for startup success?
- A. Solve a problem that people will pay you for
- B. Be clear how will you make money
- C. Earn, before you burn.
- D. Customer’s money is the best money.
Right? these are the characteristics of a lean startup that build its way upward, by working on each of the core pillars.
Platforms like Kickstarter, Indiegogo, and Milaap etc. gives you an opportunity to actually test the water before you jump in fully. We just didn’t see it that way.
- Setting up your Kickstarter campaign is quite similar to setting up your landing page for conversion.
- You must pitch what makes your product a must have.
- You must provide as much functional details of product as possible,
- Clearly explain product versions, and what people will get at what price.
- Set a funding goal, the amount that you need to successfully launch your product, and to run it for at least 6 months. Do your pricing well.
- A Kickstarter campaign will help you raise initial funds that you may want to launch your business (I am choosing not to call it a startup)
- Backers (investors) on Kickstarter are usually the consumers of your product too. So you get not only money, but a customer validation of your idea too.
- With it you can also test the right price points.
- Backers are usually a great source of feedback on features of your product, even before you launch it.
- And the best of all, you can get ‘Angel’ kinda funded without diluting your equity.
In fact, successful campaign on any crowdfunding platform shall be one of the core criteria of getting angel or VC funding.
Running a Kickstarter campaign is in itself running an entire business for a short time span. It’s like crash course of starting up. It prepares you pretty well in advance even before you start spending your marketing dollar on your untested idea.
Kickstarter brings you free of cost customer survey from your target audience which is small enough for pre-launch study, and big enough to mold your product for success.
What else you want to launch a successful startup?