Rajula Gupta lists out some home truths for youngsters waiting in the wings to float their start-ups
Launching a start-up is not for the faint hearted and the chances of you failing far exceed the chances of you achieving any kind of success. The reality is that 90% of all start-ups fail within the first three years of their existence. If you are reading this and thinking of starting up, let me give you 5 good reasons NOT to
1. Not Able to Deal with Failure: If you are like most people who hate to fail or someone who thinks that failure is not an option or someone who has never failed in their life so far, dealing with constant failure and rejection is a good reason not to start-up. A start-up founder deals with failure every single day in every aspect of their operation. Not only do you need to embrace failure and deal with its fallout, but you also need to constantly reinvent yourself and overcome failure and move forward. If this does not sound like you, it is best to stay out of the start-up world.
2. Dependent on Government Schemes: If you are someone who believe in all the announcements made by the government and their representatives about how much support is available from the government and why Goa is the ideal place to launch your start-up, think again! More than thinking, just do some research about how many start-ups have succeeded using the The government’s help. Please do not mistake that receiving grant money or funding from the government as a mark of success, rather the opposite is true. Most start-ups who have received this grant money have spent it all with no accountability and have quietly shut shop when the money has run out. The chances of you succeeding with no outside funding are far better than if you received external funding too early in your start-up and that too from the government.
3. Support from a Start-up Incubation Center: Today’s incubation centers have become their own business as the grant funding they receive is not enough for them to sustain their own operations and hence they have started charging a variety of user fees to any new start-up who wants to incubate from their center. They give you the impression that by launching training programs, bringing in “experts” to mentor you and organising pitching competitions, they are trying to help you. The reality is that 90% of all incubation center employees have no start-up
experience of their own and have never run their own business so how can you expect them to understand the needs and struggles of a start-up founder, let alone provide them with effective guidance to succeed. Just like government funds, incubation centers have a dismal track record when to comes to showcasing start-ups that have succeeded from their centers. If you honestly believe in your idea, you can launch it from your own home, garage or backyard, you don’t really need a room in an incubation center.
4. Dependent on External Funding: If you think you have a great idea and think it will be a success IF ONLY you had
some money to start-up, then I suggest you put that idea in cold storage until you have some savings to launch your startup. Research has proven time and again that start-up founders who launched using their own money have acted with a lot more wisdom and restraint when it comes to spending that money and have focused on achieving an operational profit as soon as possible, which gives them the best chance of success. Your only source of funding apart from your own savings should be your friends and family and only borrow a small amount from them that they would not mind losing if you were to fail. Please do not waste your time in pitching competitions and funding events or even chasing angel investors. If you used the same time and energy in making your start-up a success, all these angels will come knocking on your door and you will have the last laugh by simply saying NO to them.
5. Not Being the Subject Expert: I have a simple question for you – are you the subject matter expert in the field of your start-up idea? If the answer is no, then I strongly suggest you drop the idea of launching this start-up. No matter how good a team you think you have or have your best friend as your co-founder who is the “Technical Expert”, such arrangements never work for long as only you may have that burning desire and passion to make your start-up a success at all costs and only you might be willing to sacrifice everything in order to achieve success and that desire may not be truly shared by your co-founders and team members. The Bansal team is a rare exception in a world where the single start-up founder has the best chance of success. The start-up world may seem extremely attractive with the media promoting its success stories but look beyond the headlines and you will notice something interesting – big announcements are being made about getting funding or being bought over and these announcements are not about achieving profits, which in my opinion, remains the only true measure of business success.
Business exists to make a profit and if don’t think your start-up can make a profit in it’s very first year of existence, then I have just given you 5 very good reasons not to start-up!
The writer is a business coach and serial entrepreneur for the past 25 years. Email: email@example.com