Product validation, people management and smart fundraising are essential to script a success story.For any startup, the first year is very crucial. It is the stepping stone of a successful entrepreneurial journey, which can make or break a startup. Having a baby and having a startup have much in common. Just like a baby needs nurturing and care, a startup also needs the same level of dedication and time from day one. For a first-time entrepreneur, a host of things can go wrong while rolling out a startup. So, how do you ensure that your startup is able to survive the tough first year?

1. How to survive the first
year of starting up?

2. Introduction
• Product validation, people management and smart fundraising are essential to script a success
story.
For any startup, the first year is very crucial. It is the stepping stone of a successful
entrepreneurial journey, which can make or break a startup. Having a baby and having a
startup have much in common. Just like a baby needs nurturing and care, a startup also needs
the same level of dedication and time from day one.
For a first-time entrepreneur, a host of things can go wrong while rolling out a startup. So,
how do you ensure that your startup is able to survive the tough first year?

3. For validation, get out of your comfort zone
• Entrepreneurs need validation for their startups. Validation or market research is one of the crucial parts when it is
about laying the foundation of a startup. Interestingly, this is where a lot of entrepreneurs make their first and the
most fatal error. They create circumstances where their validation exercise will inevitably succeed. For example, in
a hyper local business they will test it in a place where they have lived for the last few years and thus know most of
the people around. With that unfair advantage, their hyper local proposition such as restaurant or food ordering will
work.
It is similar to a child asking his mother whether she is good looking. A mother will always answer in the
affirmative. Using this positive reply, they go to the investor, pitch their idea and share their promising market
research. The moment they get the money and apply it in a real situation, out of their comfort zone, they fail. It is
one of the prime reasons for the downfall of food delivering startups. So, instead they should set up their
experiments in a way where they get some initial paying customers or do some research in an area where they have
no contacts.

4. People management is the key
• A good team is the most important piece of the startup puzzle and one wrong hire can pave
the way for downfall. When a startup is trying to ramp up quickly, it is easy to fall into the
trap of hiring too many people.
In the first few months of a startup, only the founders and founding team work round the
clock as they passionately build their company from scratch. When they start hiring, they
wrongly assume that these people will also share the same vision. However, the employees
that come to them only see it as a stepping stone in their career path and thus are not likely to
produce results same as that of the owners. The founders assume that since work has
increased, they need to hire more and more people, without realizing that people management
is an enormous task.
The budding entrepreneurs learn this the hard way. That's when we hear about people getting
fired. This is a huge challenge and most founders take people management for granted.

5. Do not run after the money
• Another mistake that has become synonymous with startups has to do with money.
Entrepreneurship now has become more about raising money. Entrepreneurs start chasing
money as if that is the sole objective of their business. Since they are more inclined to chase
investors, the business suffers as they do not focus on making the startup more sustainable.
It is true that people who raise a lot of money in the early stages of a startup get a huge lead
over rivals but it creates dependency on the investors. When the investor loses confidence or
interest and if the entrepreneur has no solid economic model to sustain, the company comes
crashing down.

6. Fundraising is no piece of cake
• When it is about raising money from an angel or seed investor, the first-time founders fail to
realize how cumbersome and time-consuming the process is. The entire team puts all its
effort in raising money and thus the business suffers heavily.
This problem is so acute that it never goes away and is just pushed into the background but
can turn lethal in the first year. Flipkart's re-jig at the top with Sachin Bansal moving from the
CEO's position to the chairman's is a perfect example. With the responsibility of IPO and
other corporate actions, it was best that he did not have an operational role in Flipkart
anymore. Thus, the solution is to give one of the founders the primary responsibility of
reaching out to investors and that person can move away from the operational side. The rest
of the founding team can focus on operations.

7. Do not get swayed by what others are saying
• Getting influenced too much by their first contacts is a problem faced by first-time
entrepreneurs. Many startups constantly change their direction of work based on the
feedback they get from an investor, a startup event, etc.
When founders set up businesses primarily driven by the opportunity in the market
they get lost in the never-ending web of change. However, if the founders set up the
business based on where their passion lies, this problem would not occur.

8. Keep your house in order
• People become entrepreneurs because they are good at something or have experience or belief in something.
However, there is one thing which no entrepreneur is good at. It is related to compliance, regulation, paperwork,
accounting, book-keeping, record keeping, et al.
Most entrepreneurs find this part of a business to be a big pain area and thus steer clear of it to focus on the bigger
picture. They would love to write cheques, without having to fill up some forms. They might be under the
impression that their company is moving very fast, but on the other hand these things might come back to haunt
them in the future.
When investors are vetting your company, they ask for various pieces of information or evidence. However, if you
haven't kept any records and are not good with compliance, you might end up missing out on a lot of opportunities
that may come knocking at your door. In the last one year I have come across two companies where everything was
finalized from term sheet to shareholders agreement, but the founding team was not able to do all the compliances
and the deal fell through.

9. THANK YOU!