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5 start-up mistakes I made that you should avoid
Business graduate and serial entrepreneur Tarun Uppal started his career in a BPO. Here, he reflects upon the mistakes and the lessons learned along the way.
The journey from planning to launch a start-up, to reaching the 100th customer and beyond is both an exciting and learning experience.
I have had my set of failures and successes as an entrepreneur in my decade-long experience in the international BPO as a service provider.
This is before I decided to launch my own start-up -- the aim was to create a trusted global brand that would add value to the lives of its customers.
This time around I was sure I would do all the right things but ended up committing many blunders.
I wanted to share with you the top five silly mistakes I made.
Most of these blunders were either misunderstood advice or the result of me putting more faith on experts rather than in my gut feel.
In retrospect, here's what I should've known:
Mistake 1. Work on the business plan
I began the process of planning the start-up by validating the business idea -- simulating the business plan on an excel sheet with data and figures based upon research and assumption.
I even hired a consultant and spent substantial amount of time and money in validation and correcting them to fit in our pre-decided results.
I believe in the saying that nothing is wasted in life so I assume this exercise must have helped me understand the unseen scenarios. However, in reality things were not even close to the scenarios assumed at the pre-launch stage.
Lesson learnt: I surely should have spent less time and energy on the business plan and more on real business.
The author is founder and CEO of eonlinetutors.com.
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Mistake 2. Think big and plan big
I was guided, rather misguided by some experts to always look for a scalable venture -- to think how I can have 1000 customers in the first year, how staffing would be when my start-up grows etc.
Expert opinion says that the founder should not be fire-fighting since s/he is supposed to be doing bigger things to grow the business.
But if a founder won't do the fire-fighting initially then who will?
Moreover, unless you get your hands dirty yourself it would be very difficult to nurture a leader to take up your role.
One of the many 'Mr Experts' I hired always used to narrate Barista's expansion example -- that they had a target to open 50 stores and they started working on efficiency and profitability; I was encouraged to get more customers and not think of quality so much.
After almost a year into the business, I realised that I had acquired enough customers to break even but because they did not stay longer I was still doing the fire-fighting myself.
Lesson learnt: Think big, start and plan small.
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Mistake 3. Raising funds is as important as acquiring customers
Well, waiting for funding to come in before one starts a venture, or before one gets profitable is a sure shot recipe for self disaster unless of course you are a superstar and will get funded because of your last venture or your academic and professional backgrounds.
Surely, I was not and am not a superstar yet.
Again business presentations, elevator pitches etc must have added value to my personality but nothing to my bank account.
It is the customer himself that funds a start-up at the initial and critical level.
Lesson learnt: Do not rely on funding for your start-up to launch or survive. If funding comes it is a bonus, else your venture should be planned to be self-sufficient.
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Mistake 4. Being the cheapest is a USP
Naah! Not really.
The BPO mentality made me think like this initially and we priced and packaged our service at par with the least expensive in the world.
Though with open-minded thought, we increased the price slightly and could see no change in customer acquisition, however, it did increase our revenue.
Lesson learnt: Work on the quality and not reducing the price to get more customers.
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Mistake 5. Hiring experienced and expert advisors and consultants
It is highly advised by experts to have a board of advisors and expert consultants who would advise you on important situations and decision making.
Advices and suggestions definitely help, but one needs to keep a balance in one's self belief and an expert opinion.
When you're hands-on, raking in the muck every day, every week, all month -- you're the one who gets to know the business best.
Your brain picks up all these little infra-signals about your product or service, about your customers and your competition that others might have missed.
And this is what subliminally informs you when you are taking critical decisions.
That's gut feeling; don't ignore it!
Lesson learnt: Listen to all and act based upon your inner voice.
These are surely not unique scenarios and many start-ups may have or are facing similar situations.
The best lessons are ones which come from one's own experiences.
Hopefully some of you can take a cue out of mine and shorten your learning curve.