Go FAQ Yourself - A Primer on Startup Ecosystem

Go FAQ Yourself 2.0 (Authored By Headstarters)

Edited By
ujjwal.trivedi@headstart.in
Licensed under Creative Commons. Feel Free to Distribute as is.
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Where do I begin?
Right here, right now. Please consider that by beginning to read this little piece of text
you’ve already taken your first real step towards starting up.
It takes 3 thingsto make a successful startup, you will need at least 2to begin your journey:
1. IDEA (To solve a real problem for real people)
2. MONEY (To support yourself and team, until business starts making money)
3. TEAM (To get things done faster and better)
If you have any two of them, the third one can be acquired. If you have only one of them,
please try to get at least one of the remaining ones. Most people have ideas and should look
for either team or money. We strongly recommend you look for team, because money is
usually required much later in the course.
I have an idea but...
...What if someone copiesit?
Nothing dies faster than a new idea in a closed mind. Write the following on a piece of paper
and read it 108 times. "Idea has no value". It is painful to accept, but it is true. Even if it
seems extremely unique and valuable, no one else will have the same passion to think through
it like you do. There is a lot that goes into building a business than just the idea. The fact is
that most likely hundreds of people around the globe are working on the same idea or a
different flavor of it. It's just that you are not aware of it.
So, best bet is to feel free in talking about itanywhere you get an opportunity to do so. You
will get a lot of feedback and ideas. The only bad thing that might happen is that someone
might tell you who else is working on that idea. You may start losing interest. It's actually
good, because a)it is a validation of your idea. and b)that would positively affect your
preparation and research and thus, increases the likeliness of your success.
So do not worry about someone stealing your idea. People are interested in stealing your idea
as much as you are interested in stealing their idea. Which is zero point zero five percent. If
you are still worried, channelize that fear to act quickly on the idea.
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...I don't have the money.
You have the money, you just don't see it yet. There are hundreds and thousands (if we
consider crowdfunding) of people waiting to give you money. You have to prove it to them
that you can earn much more and return to them. Funding should be the lowest of your
priorities during idea phase.
Focus on building the idea, validating it with prospective customers and building prototypes.
It requires more effort and creativity than money. You really do not need to create the
product itself before asking for validation.
Please know that validating idea is much different from taking feedback on product. You
don’t need to put your idea and ask for feedback. Here’s a step by step plan for you:‐
1. You have to list down all your assumptions about the problem, about prospective
customers and about the solution.
2. Select your 2 riskiest assumptions(typically these are ‘this problem exists for my target
customer segment’, ‘they are willing to pay me this much for solving this problem’,
‘the solution I have in mind solves this problem effectively’, ‘I can reach this customer
segment with the resources at hand’).
3. And then, you’ve to test those assumptions by talking to your prospective customers.
Real people. You cannot do this research with Surveys. You have to move your butt,
walk in the sun and talk to real people out there. Do this with at least 20 prospective
customers.
If your idea requires a huge investment upfront, you may want to start somewhere else. E.g.
You want to create an apparel brand, start by selling T‐shirts. Learn more about Lean Startup
(Google is your friend).
Once you have validated your idea and potentially have a 2‐3 customers willing to pay for
your solution, you can start raising money. Start with your family and friends. Tap into your
chacha‐mama network. Trust me, if you can’t convince them to bet on you, you’ll probably
never be able to convince anyone else. Don’t give them more than 10% of your business. Once
your business model has been validated and you need money to scale it up, approach angel
investors and VCs. Talk to one of Headstart volunteers, we’ll help you if you are ready.
...I am not sureabout it
That's a good state to be in. Brainstorm more about it with like minded people, Not Friends
and family(unless of course, you are raising money from them). Don’t ask them how’s the
idea. Don’t even tell them the idea. Even if people say it’s a great idea don’t give much value
to their comments. Observe what your target users/customers think about the problem. How
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big is the problem for them? What are the things they do to solve it now? Are they spending
money solving it? How your solution will change the world for them? Create your network,
look for mentors and team. Start somewhere, try a few small things. It is like walking in the
fog, if you can see two steps take them, you’d be able to see two more.
...I have a dayjob
Awesome! Nothing like it. You can be assured of your regular income. Your mind will have
enough time to focus on creative stuff than earning bread. Use off hours, vacations and
holidays. Take a few leaves if you need. You do not need to quit your job, until you want to,
or until you can’t do justice to it. In fact, it is a good way to assimilate some initial funds so
that you can survive the time till your start‐up starts earning. If you are already in a job, do
not quit your job, until you have at least six months of runway. We’d recommend a year and a
half. Remember, only 1% of new businesses get funded. Rest have to sustain on customer
money. It typically takes half to two years to break even operationally. Eventually, you’d
have to quit, but you’d know when the time has come.
...I don't have a team
It is fun finding a team. Dig into your ecosystem you'd find great people. It is not easy, but if
you look hard you'd discover the right folks. You may NOT need to hire or look for a
co‐founder initially. Everyone recommends that most ‘successful’ startups have 2 to 3
co‐founders. You may get a few interested folks in your network who can help. Just Help,
because they love your passion.
Really, a lot of stuff that you need to start doesn't need a team. If you are passionate enough
you'd attract good people. In worst case, you can get a few freelancers or outsource part of
the work that you do not want to handle. Very successful companies have outsourced
technology/marketing/sales. Understand what is CORE to your idea/business and stick to
that, rest can be outsourced.
Also remember, don’t make your spouse or best friend your co‐founder unless it’s a dream
you’ve dreamt together. 90% of the time, that doesn’t work and the relationship gets
screwed. Instead, look for co‐founders with complementary skills. If you are good at sales,
look for someone who can take care of technology and visa versa.
...I don't have the experience
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And you’d not have experience even after 10 years of job. But, probably because you’ve
never done any real business your lack of confidence is understood. There is nothing much you
can do about it. I have known people who took jobs and quit them after N years (N = 2 to 15)
and pursued their interests. I’ve also known people who jumped right in and are making good
bucks. I’ve also known people who are still in job and still thinking of starting up since last 15
years. So, there are no real answers here. You have to take a decision based on your situation
and determination. No decisions are right, you’ve to make them right.
...I don't have the skills
Do you really need the skills? This country celebrates Jugaad. You can always Jugaad your way
out. But, the best idea is to develop the needed skills. You may not need to get a degree for
it. You can learn most things yourself with the help of books, free online courses, friends and
connections. You cannot shy away from it. During the initial phase you’d be everything for
your startup. You’d be the Sweeper as well as the CEO. You’d need to be good at both.
Identify what skills are required to implement your idea and learn the skill at least so much so
that you can team‐up/hire a person with the required skills. I am assuming that the skills you
need is one of the things required, and you have the other required skills. If you have none of
the related skills and neither are you interested in learning them, you can always give the
idea to someone skilled and think of another idea.
Find and Read the Su‐Kam story in the book “Connect the dots By Rashmi Bansal”.
...I don't have a network
Really? Did you say you are from Saturn? I didn’t hear that. You may be new to a city and may
have extremely few contacts ‐ but that’s ok. All startuppers have to create their own. Read
about ‘customer discovery’ and it is a great way to build a network. There are lot of articles
and ebooks available on the internet about it.
Start exploring the meetups (read meetup.com) around you, it is a great way to build your
network in the relevant field. While networking, always focus on what how you can help.
Practice saying this small sentence ‐ “I am <myname>, and I do <stuff‐you‐are‐good‐at>. Is
there a way I can help you?”. You may exchange business cards, but it is not a must. I seldom
have them. I’d just keep my phone unlocked and quickly note down their email and some
notes that will remind me of who they are. It is the best way to make contacts with people
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you have just made acquaintance. I have tried several ways and have discovered that there
are no tricks to it. You just have to be in a position to help people out and that makes the
best connections.
...I don't have an office
This is most ridiculous of all excuses. What do you need the office for? Only to feel that you
own a company. Which product do you buy based on the office they have? Most successful
companies started in a garage. Right now, in India most interesting companies are running out
of home and out of hostel dormitories. Start under your roof, do meetings in CCDs and Chai
Points.
If you are working full time on it and having an office is very important, you can opt for
co‐working spaces. Or ask someone in your network who has an office, to share a few seats.
I’ve known so many people getting some seats just like that ‐ For free. You’ve to stick your
neck out of the shell and ask for it.
I Don't have an idea but…
I want to Startup
Do not worry, you are in good company. There are so many like you around. Keep looking for
one (an idea) by being more observant to needs and pains of people around you. Think why do
you want to startup? A good bet is to explore the startup eco‐system by going to startup
focused events. Better still is to join a startup and experience the fun and challenge first
hand. If you happen to find people with complementary skills you may also join their great
startups as co‐founders. If you are very focused on getting your own idea ‐ Do look for Ramit
Sethi’s idea generation framework. It’s a good exercise. You may get an idea, but more
importantly you’d start thinking in the right direction.
I’ve known successful startups who started up with a very vague idea of what they wanted to
do. Later they completely changed their focus and achieved a whole lot by doing something
entirely different. Whatever you choose to do, keep building your network and other
ingredients until you get the golden idea.
I want to start up BUT...
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And this is a huge BUT. Kick your own BUTT, because most wannabes use this to cover their
inaction towards achieving their goals. What they forget is that when you really want
something there is whole universe conspiring for you to get it. But, most remain unaware of
the power of universe. Before your thoughts trail towards mysticism I'd like to state that I am
pointing to the startup ecosystemthat exists around you.
Learn about Startup ecosystem in next section.
...What if I fail?
What if you will? Please write down the list of things you will lose if you fail. You’d perhaps
realize that there’s not much to lose. The cost of failure is getting lower. (Read Linchpin by
Seth Godin). All successful people and startups have failed, got embarrassed, publicly
humiliated, almost bankrupt. You have to be ready to embrace failure. Be prepared to be
wrong. You WILL fail a couple hundred times, but if you persist and leverage the ecosystem
you will eventually succeed. There are, again, a lot of things you can do about embracing and
leveraging failure. Accept that and take action. If it makes you comfortable please know that
when you fail, nobody would notice. So, if you HAVE to fail, better fail faster and rise up
quickly.
What is Startup Ecosystem?
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Ecosystem is something that supports life. Startup ecosystem helps you nurture the seed of
your idea and see it become a tree of success. And there is an awesome startup eco‐system
developing in almost all cities in India today. All you need is to find that out and leverage it.
Always remember though that in an ecosystem it is always about "Give and Take".If you can
Give, You can Take.
Startups‐ a startup is an organization formed to search for a repeatable and scalable
business model‐ Steve Blank. Startups are like wannabe businesses. Go look for Steve Blank
on Google and get your concepts clearer about what it is and why you should do it and how.
Startups obviously are central element of the startup ecosystem. There are hundreds and
thousands of startups around. Everyone from panipuriwala to Tech consultant is trying to do
business (not necessarily startups). Not only can you learn from them, there are variety of
ways in which they can be a part of your own success story. More than they need you initially
you need them to learn how to sustain in this environment. When you go to events meet as
many start‐up founders as possible. You can ask them questions and offer them help. No
question is stupid question. Assumptions are stupid. Being curious is a strength.
Talent ‐ You need people with skill sets. Your team is what determines the future of your
venture. The people you are going to need very soon are Co‐founders, Hires, Early Adopters,
End‐Users. There is no way you can buy them using facebook ads, or phone calls or
advertising. You have to build the network yourself. How? Start talking to people. Know what
they need, help them if you can. That's it. There are many ways to find great talent. There
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are job boards likehttp://hasjob.co, and events like Headstart Higher. And there are many
more channels that you’d discover when you jump in to the stream.
Funding‐I wanted to keep this the last because of it's priority (being last) but, it is also
important to talk about the money early on because that’s what most people are worried
about. You need money to create more money. In Startups ecosystem money comes from
bootstrapping (your own savings), friendly loans, Angel investors, VC Funds. A recent study
suggest 70% of the startups in India are bootstrapped. If you are at the idea stage you should
not worry about funding at all. However, if it is a hinderance you should look for Incubators in
your city. (See last section for list of incubators)
Incubators and Accelerators‐ This is something you should find out first. Find out how you
can join one. They'd help you in avoiding a lot of mistakes early on. Some of them take a
small fee and a small stake in your company. But, there is nothing fixed. It all depends on
what you’ve got, and what they think it can become. Incubators provide you with lot of
facilities like co‐working space, technology support, mentoring, connections. Accelerators are
more helpful if you are at an advanced stage and want to accelerate your growth. Keep them
handy and approach them once you have your validated idea ready for execution.
Educational Institute ‐ Educational institutes are a prime component of ecosystem because
they are the richest source of talent. Most likely they are also your future consumers. There
are the brightest and freshest minds available to you for your small projects, surveys,
branding, early adoption (unless your product is specifically for elderly). Some premier
institutes also offer incubators and mentoring. If you are keen on getting talent from
academic institutions, they’d love to hear from you.
Government ‐ The first thing you’d want to know is how to to incorporate a company. Do not
rush to form a company. It can wait until you start doing monetary transactions or employing
people. Please know that it is easy to start a company but it is practically impossible to shut
shop. Also, once incorporated there is a lot of documentation and maintenance charges
required to comply with legal requirements. When you are at a stage of incorporation, spend
some time in knowing all the compliance laws and get expert opinion before incorporation. It
is also, very important to know how you can leverage the tax and flexibility of laws in case of
clean tech, renewable energy resources, social businesses etc. If you are copying a business
model that works in a foreign country, you may want to check if it is legal in your own
country. There are several business models like Uber for example that struggled to comply
with Indian laws until recently.
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Get advanced FAQ!
How important is the nameof the company?
It will be VERY important some time in distant future. It is not something that you
should spend your days and nights of creative thinking. If you have an idea, there are
so many better things to do. But practically make a list of about ten names that you
may go with and be happy if you are able to register any of them.
How important is it to get the domain nameI am looking for?
It holds about the same importance as company name, perhaps a little more if you are
in an online business. Try out several related names and check what is available. All
you should care about is having a short and memorable brand name for easy recall. So,
it is important but you have bigger fishes to fry. Don’t fret these small stuff ‐ coalgate
doesn’t even remotely allude to healthier teeth, orkut wouldn’t sound like a social
network, flipkart may not be the best name for a ecommerce site. Keep a
name/domain name and make it win.
When is the right timeto leave your job and go Full time with your startup idea?
How about right now? The best answer I’ve received so far is leave your job if you
know you are not doing justice with it any more. Don’t do things that you wouldn’t
like your employees to do to you in future. If you are still ideating, hang on.
For the more calculating types, the probability of succeeding is very high when you
have domain expertise. This is best achieved by working whole heartedly in an industry
you are interested in. You will probably find a good problem in that industry and would
be ready to startup too. Choose a startup instead of a corporate for your job, as it will
give you greater avenues for growth. You’ll also learn a lot about handling
uncertainties, managing teams, building a culture and a brand.
How to find a mentor/ How to find the right mentor?
If you think one day you’d find a person and call them the mentor, it’s not gonna
work. You need to know what you are looking for from a mentor and that would be a
great start. A mentor, is generally a person who knows more than you, is interested in
you/your idea and wants to invest their time in helping you build on it. It is extremely
important to have a constant relationship and not just a Q&A every now and then. And
this is more likely when the relation is symbiotic ‐ which is when you also have
something to give back to the mentor. What can you give back? ‐ It may just be a great
learning experience for them. It is also important to ensure that a person’s advice is
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backed by their own success stories. You’d have to keep experimenting with a lot of
people who you feel can help you, before you can find ideal ones.Anybody who asks
for money to mentor, likely doesn’t deserve to be one.
However, if you are desperate, hire a COACH. Even the best athletes in the world need
coaching. Investing your time and money in learning is indeed a good idea. There are a
number of online, offlinecoaches and institutions available that offer professional
advice, coaching and open their network for you in exchange of some seriousness fee.
Sometimes it may be free, but don’t restrict yourself to free.
How to do low cost marketing?
Marketing is often confused with advertising. Advertising is only a part of it. Marketing
is about making relationships, knowing your customers and helping them out. You
definitely don’t need a heavy budget to do it. I found this slide presentation
particularly interesting ‐
http://www.slideshare.net/bkbirla/it‐aint‐about‐the‐money‐honey‐nasscom‐product‐e
nclave‐2014
What to do with Startup Ideas?
(This one is mostly for eCommerce and Marketplace related ideas. May not work if you
are bringing in New Tech to market.)
1. Think of your idea in the most primitive form.Keep all exceptional cases aside.
Keep only the basic cases in mind. Think how would you do it if there was no internet
or smartphones. That takes website and apps off the equation. Can it be implemented
using Phone number? Whether it is a healthcare service, or food tech or hyperlocal
they all are businesses that may be “facilitated” using technology (websites and apps)
but it’s a fallacy to think in terms of these mediums as business ideas. App is not your
business idea. It’s a medium to reach out to your customers. It’s a platform for your
customers to interact with your service. It may be mandatory to have a scalable
business, but it is not the business idea in itself. And if it is, stop reading further.
E.g. 1. Hyperlocal delivery of medicines. Can it be facilitated using an App? YES. Does
it require an app to function? NO. All it requires is Sellers (a pharmacy with drug
distribution license), Buyers (people who want specific medicines home delivered), A
platform to connect these two (doesn’t necessarily be an app or website, people can
order on phone).
E.g. 2. Food Tech for delivering Milk. Can it be facilitated using an App? YES. Does it
require an app to function? NO. All it requires is Sellers (a dairy or shop), Buyers
(people who want milk home delivered), A platform to connect these two (doesn’t
necessarily be an app or website). People can order on phone and in some cases
people just shout from their balcony and get it delivered.
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E.g. 3. Mobile Video Tutorials for Students/New Moms/Home makers/for Cooking/for
Art/for Music/Fitness etc. Can it be facilitated using an App? YES. Does it require an
app to function? NO. All it requires is Videos (and Teachers who can create videos),
Consumer (people who want tutored at home using videos), A platform to connect
these two (doesn’t necessarily be an app or website). You can send the video or links
on an email, deliver CDs etc.). Think primitive.
2. Find one provider and one user.Find one real person who wants to sell, and one
real person who wants to buy (outside your group of friends and family). Sometimes it
may be one of your friends or family but getting a stranger helps even more.
3. Think of yourself as the platform.You are The Platform. You Connect the real
users. Fulfil that one user’s demands. Buy the medicine, prepare the food, create the
video and deliver to your user. See what problems you faced, what’s the gap in
demand and supply? Could you get that one customer? Could you get that one seller?
Could you fulfil what your users were looking for? Could you deliver on time with
required quality and delight the user? Did you make any money in the process (Did you
earn revenue, was their any profit?)?
4. Do you still want to continue?Do this for 5 to 10 users before you embark on your
journey to replace yourself (you are still the platform) with a technology platform and
technology mediums like apps and website. That’s how you’d know for sure what idea
to work on and how.
5. Action. There is no real step here. If you’ve done last 4 (“done” and not just read
them), you’d know what to do next. Do it. Take action, go for it. You now have a very
high chance of creating a winning startup.
How to find jobs/internshipsat Startups?
The first thing you’d have to understand is that companies need awesome people, as
much as people need awesome companies. With that understanding you’d need is to
think from a company’s perspective why should they give you some time/opportunity/
training.
How can YOU help them? If you are from computer science you better be good at
something related to it – coding/ finding‐issues‐with‐code/ mathematical‐or‐
statistical‐ analysis/ problem‐ solving/ designing/ identifying‐patterns‐in‐data.
Assuming that coding is what you are good at, you need some proof in your kitty to
show that you are actually good at it.
How?How’d you ascertain if someone is a good painter? or a writer for instance.
Wouldn’t you ask them to show their paintings? So it is logical that a good coder codes.
Codes for the love of it. Easy stuff – learn some PHP/Ruby‐on‐rails on the web and
create some websites. Or learn some Android development and create an App or two.
What app/website? Anything. A simple thing that solves a simple problem.
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Now, what if you are NOT goodat the only expected thing you should be good at?
Well, then you’d need to find out what you are good at, or what you think you’d want
to do in future. E.g. sports/music/events/ marketing/ sales – if you think you can do
something well you should DO it OFTEN. Either it will give you confidence and
motivation to do it more often or the realization to look for something better. So keep
trying new stuff and keep doing what you love to do. Don’t wait for someone to ask
you to do it. E.g. if you like identifying problems with something or if you are good at
bringing in new ideas – take a product, any software product – an app (may be). Think
Gmail/ Facebook/ Ola /Uber/ Coupondunia/ Signeasy/ Bookmybattery. Do you think
you can improve them? If yes, how? Observe, analyse, jot down your ideas, create a
report. Send your work to those guys. They are always listening. That is your way of
telling them how useful you are.
That was just one example – I’d leave it to your imagination on how you’d come up
with your worth, your story, doing what you really love to do. Once you have that in
your kitty, reach out to these people. Most of them have career pages, write to people
on linkedin, on twitter. Tell them how you need a chance to help them. Don’t drop in
your Resume, write a letter to them and you may attach a resume if you like. Be true
and candid. Do it more often, for anyone and everyone you think you can help. Do it
because you love doing it. They’d love to have you onboard.
More resources for elaborate Faqs
How to get Ideas‐
● http://www.paulgraham.com/startupideas.html,
● http://fourhourworkweek.com/2011/09/24/how‐to‐create‐a‐million‐dollar‐bus
iness‐this‐weekend‐examples‐appsumo‐mint‐chihuahuas/
Free Online Startup Class‐ How to start a startup ‐ startupclass.samaltman.com/
BOOKS ‐ If you like reading, do checkout this list ‐
http://steveblank.com/books‐for‐startups/
Also, checkout running courses on http://Coursera.organd http://stanford.edu
particularly Gamification, Social Psychology, Technical Entrepreneurship
Startup News, Media, India specific data and trends
● iSpirit.in, Yourstory.com, NextBigWhat.com, TechInAsia.com
List of Incubatorsin India ‐
http://www.quora.com/What‐are‐some‐incubators‐for‐start‐up‐companies‐in‐India
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http://pricecheckindia.com/blog/50‐startup‐incubators‐and‐accelerators‐in‐india/
For exploring Startup Ecosystem around your place
http://Headstart.in
For registering a company and managing tax compliance
Taxmantra.com(Infact, follow their newsletters for updates on Tax compliance and
updates. 95% startups pay fines for non‐compliance, you better outsource it)

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Go FAQ Yourself - A Primer on Startup Ecosystem

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