Learn to take a risk

Suc­cess­ful en­trepreneurs keep at it. Don’t give up.

India Today - - THE IDEAS FACTORY - San­jeev Bikhchan­dani The writer is founder and ex­ec­u­tive vice-chair­man of Naukri.com

Do

Solve an un­solved prob­lem Some of the most suc­cess­ful busi­nesses in the world have been built on deep cus­tomer in­sight. Specif­i­cally, they be­gan by solv­ing an un­solved prob­lem for their cus­tomers.

Sell to cus­tomers your­self It is im­por­tant for an en­tre­pre­neur to re­ally know the pulse of the mar­ket. The best way to do that is to go out into the field and sell to cus­tomers your­self. This not only earns rev­enue for the com­pany and mo­ti­vates the sales team, but it also sharp­ens your judge­ment and gives you in­valu­able feed­back from cus­tomers di­rectly.

Be per­sis­tent Most en­trepreneurs face fi­nan­cial strug­gle for sev­eral years be­fore they suc­ceed. It goes with the ter­ri­tory, so be pre­pared to face it. Dur­ing this pe­riod your com­mit­ment will be tested and you will be tempted to throw in the towel. The best kept se­cret of most suc­cess­ful first gen­er­a­tion en­trepreneurs is that they kept at it. So don’t give up.

Be con­ser­va­tive and fru­gal Bud­get gen­er­ously for cost over­runs, time de­lays and rev­enue short­falls. They will hap­pen. Tighten your belt and make per­sonal sac­ri­fices, chances are that there will be months on end when you will not be able take a salary for your­self. Re­mem­ber you are only in con­trol of your costs, not your rev­enues.

Set the bar high for hir­ing You can­not do it alone. You need good peo­ple with you. Don’t com­pro­mise on the qual­ity of the peo­ple you bring onto your team. The sin­gle big­gest mis­take that early stage en­trepreneurs make is they hire poor qual­ity peo­ple ini­tially ei­ther be­cause they are in a hurry or be­cause they be­lieve they can­not af­ford to pay more. More of­ten than not, they re­gret this in hind­sight.

Share the wealth Early on when the com­pany is not worth much, most em­ploy­ees don’t re­ally bother about their em­ployee stock op­tions. How­ever, should the com­pany go on to be­come valu­able and then if em­ploy­ees who joined early on feel they have been treated un­fairly, then you could have a se­ri­ous prob­lem on your hands. It is re­ally im­por­tant that you treat ev­ery­one in the team fairly as far as com­pany own­er­ship is con­cerned.

Don’t

Raise money from oth­ers with­out un­der­stand­ing the re­spon­si­bil­ity While peo­ple may be tak­ing an eq­uity risk when they in­vest in your com­pany, you have to re­gard it as if they have given you a per­sonal loan. Your per­sonal rep­u­ta­tion is your great­est as­set. If peo­ple lose money by back­ing you, you can for­get about rais­ing money again from them.

Over­com­mit When rais­ing money, you will be tempted to give ag­gres­sive pro­jec­tions to get a higher val­u­a­tion. Re­mem­ber, in­vestors will make you sign an agree­ment that will give them pow­ers that are dis­pro­por­tion­ate to their share­hold­ing. If you con­sis­tently de­liver num­bers that are way be­low what you promised, this chicken could come home to roost. Un­der­com­mit and overde­liver and you will be hap­pier.

Lose good peo­ple Do what it takes to re­tain valu­able em­ploy­ees, they are worth their weight in gold.

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