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6 great tips to succeed as an entrepreneur
Ten years ago when I started with my first start-up, I longed for good guidance from some experienced entrepreneur who could impart frank advice on entrepreneurship and how to become rich.
However, being a first-generation entrepreneur, at that time I was unable to find anyone around me who could steer me in the right direction.
Autobiographies of great business leaders do inspire you but do not necessarily guide you on what exactly needs to be done.
After starting two companies -- and being involved with some more -- and watching them grow to a multimillion-dollar level, I feel like sharing with you some of my learnings for those starting their career in entrepreneurship. Especially, at a time when the nation needs more job-creators.
By default, most of us are stuck with media that provide information which is superficial. So, I would like to put my learnings around a few basic points which one can think about while starting and running a business or even selecting a company to join.
A good and successful idea can often be found with deep introspection rather than by reading external sources. Only those ventures attain success whose creator is passionate about it and works on the idea in spite of the market's highs and lows.
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The author is a partner of Netz Capital, a venture capital fund and advisory focussed on global companies primarily in industries such as technology, infrastructure, real estate and green energy.
6 great tips to succeed as an entrepreneur
1. Create a product or a service that you will use yourself or even pay to use
Starting a business and running it on a day-to-day basis can be a terrible task if you do not love what you are doing. Business is not really about setting targets and chasing them, but building a business is about being able to do something on a continuous basis with total involvement.
Hence, it is very important to choose to create a product or a service that you would love using yourself or love being involved with; something that you would keep doing, even if you did not earn much money from it initially.
You are going to be successful at something only if you put positive energy into it on a daily basis. So you really have to find within yourself what you really like to create that can be used, tested and liked by not just you, but even your friends, parents, relatives and the population around you.
Creating a finished product needs a lot of iteration and creating something that you use yourself gives you both the passion and energy to create a product that is well tested.
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6 great tips to succeed as an entrepreneur
2. Create a 'backbone' business model
When you identify an area to work on, it is also important to constantly think of its business model. This is not something that you can get right at the first attempt or, in some case, even after several months or years.
If you wish to create a long-lasting business that can go big, look for a product or a service that is just not about selling and earning a margin. It needs to create a dependency on you by the people that use it. It is a very competitive world out there and any product or service can be replaced by a more powerful and smarter competition.
The core of software is its APIs, the core of traditional industry is its infrastructure. The core of Internet is servers, domains. The core of media is reach and multilingual and multi-geographic existence. The core of transactions and trading is banking.
If you study the nature of corporations throughout history, you may notice that companies that offer core infrastructure are long-term survivors.
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6 great tips to succeed as an entrepreneur
3. Build an asset around your business
The scale of assets in the financial papers of your business will matter the most when you look for an expansion of the venture a few years down the line.
Books on financial intelligence will suggest the same thing. Assets are things an investor or even a customer will want to look at in your financial records, not just the turnover. As mentioned by Robert Kiyosaki in his book Rich Dad Poor Dad, 'It is not about how much you make, but its about how much you keep.'
Time and again, look into your cash flow patterns and financial spending. Make sure, whatever money is being spent goes into filling that asset column. Everyone likes assets. How smart someone is will only be determined by the value in your asset column.
It is something that distinguishes between 'net worth' and 'not worth'.
Most common cash flow mistakes are exorbitant marketing budgets, instead of simple PR strategies, high employee costs, lack of automation and similar recurring expenses that create the same task and expense again and again.
It is also important to invest in assets that appreciate. When an asset appreciates in value, it will increase your net-worth effortlessly. It really boils down to the capability of an individual to determine what asset will appreciate and what will not.
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6 great tips to succeed as an entrepreneur
4. Go with the wave
No one can go against the flow of nature and economic cycles. The best way to figure out an upscale market or a wave is to keep your eyes open. Read about the government's Budget, find out what is the primary agenda of the government. Research the spending and behavioural patterns of people around you. Know what they are increasingly talking about or spending money on.
Every business has start, growth, maturity and end phases in a cycle. These cycles are directly influenced by spending patterns of governments and people. What smart people do is build a business along the wave, grow it in an upscale market and exit it at its maturity.
The best way to get into any business is at the start of its acceptance wave. As the business and market grows towards maturity, it with faced with stiff and smart competition.
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6 great tips to succeed as an entrepreneur
5. Bring magnets to attract masses
Magnets are smart and successful people. It is important to bring smart people into your business. It is one of the toughest jobs and a never-ending process. But convincing smart, successful and powerful people to be part of your business is worth it, no matter how difficult it is.
Once you find the right direction, it is often a better strategy to get smart people and work around their talent than to focus just on your own agenda.
6. Create a culture, not just a product
A human mind is one amazing creation. A mind can create and destroy. A mind can create a belief that eventually creates a reality. Trillion-dollar industries today like education, food chains, coffee, cheese, auto, software, real estate, aviation, etc are those which work in a culture and not just a particular product.
It is an ecosystem that closely works in tandem with its other components, creating a culture that cannot be destroyed in an instant. These businesses go deep into human behaviour and create a platform for intellectual exchange and socialising that has now become a part of our everyday life.
The author is a partner of Netz Capital, a venture capital fund and advisory focussed on global companies primarily in industries such as technology, infrastructure, real estate and green energy.