After Losing 80 Lakhs in Failed startup – 5 Lessons I Learnt

lessons-after-loosing-money

Imagine if you have to start everything from scratch after losing your hard earned money in just one year. ( Again it was hard earned Money, not VC money )

“There is something misleading happening in startup ecosystem in India. I think that some investors & VCs are putting a big amount in PR for the startup founders, they invested in. That is why everyone talks about funded startups and not startups like ZOHO.”

For now leaving those things apart, I want to share my story with you guys because I want if someone can learn from my mistakes and can avoid these if possible in their journey.

This story illustrates a pervasive and fundamental problem many small town entrepreneurs can face.

I am from a small comment. In UP with a lower middle-class family background. In 2008 after my B.Tech in CS from a local college, I decided to go to the UK for further studies. I managed all this with my father’s earned money through farming.

Back in 2012 while in the UK, doing Job with one of the well-reputed companies in IT consulting. Life was good, and I was earning around $5000 per month. Like every other Indian, I also saved my money for around three years so that I can invest that amount somewhere ( like in property or business, etc ) which will make my life easier.

Where did the Dark side start?

Entrepreneurship in India is booming, and Stories of Flipkart, InMobi or snapdeal are glamorous & inspirational. So, reading many stories on funding in startups diverted my mind form job, and I caught the startup fever. Hunger to get famous and earn money quickly also lead me to leave the job.

After dreaming for few months, At last, I quit my job and made a decision to return India and start something with small money that I had.

dark side of entrepreneurship

Image source: wikihow

That was a hard decision to take, but I also dreamed of seeing myself glamorous and cool in the society like bansals or Agarwals. So in 2014, Started an app-based food startup ( I do not really want to disclose the name here ).

Assembled a team in Noida, had a great office space ( keeping the cool thing in mind), had one of my old friends as co-founder and things were looking amazing for next six months.

Then for next one year, I played the game called “startup – startup” with just Customer acquisition and Scale in Mind.

We completely forget the first and most important rule of business: PAYING CUSTOMER

My co-founder keeps saying yes on every single stupid decision I was making in that one year. No one was there to stop me until I burnt all my cash and people started leaving me.

After such a painful experience, I learned few things which if could have done differently then there might be chances of success.

Here are things you must avoid as a startup founder in India.

Do not get Fascinated by the word startup: 

As I mentioned early about how I was diverted by glamorous part of Indian Startup community. I was just focused on scale and number of customers. What I could have done differently was to find my first paying customer before I think of scale.

Start it like a small business – means keep the thing in mind that you have to have paying customer from first month to survive in the market. If your product is not ready, do not launch it. Complete it and then launch so that you can show it to your potential customers from day 1.

” Do not have the mentality that you got an amount which can help to run your business for one year with same burn rate ” 

It is important to validate your market, and validation needs to include finding a problem which your clients will PAY FOR!

Find a problem first and then make a product using technology which can solve that issue.

Do not try to reverse the process of me ” Making fancy product and then going to market with big spend to find the customer.

Do not make something fancy for the sake of word startup or VCs. Investors want to invest in companies that have shown outstanding growth. But, if you’ve shown exceptional growth, why would you need investors?

Start Small and Grow

Rome behavior in a day – Every business naturally improves its product over time. So you can not put every functionality or every spec of your imagination in the first version of your app.

Look at the Facebook when It was launched and look at that now.

facebook first design

What I did wrong was that I kept adding the things to development without launching my first version of it. This caused me the delay of 6 months.

Things will continue to improve, people will keep advising you to add more and more things, but you must market your first version, get your first paying customer then add things with your customer’s feedback.

Its ok to have a basic version running with paying customer rather than highly fascinating with no one to pay.

The team is the backbone of any business:

One of the most important lessons I learned with my first startup is that a good team can lead you to success and other to failure.

Your team needs to be productive and efficient.

Inspired by other cool startups in Indian Ecosystem, I hired people who were willing to work in startups. I had people but was not able to work them like a strong team which caused me the failure.

To get a product or startup successful, you must work as a team with shared vision and goals.

Another mistake done was choosing my co-founder, I take one of my friends as the co-founder as he was having the same type of interest like me and I thought that we both have same vision and passion.

Later I found that it could have been better if I had selected a person with the different skill set as my founder then we could have handled two different areas more accurately.

Listen to customers:

As Steve Blank is fond of saying: There is no answer to your business challenges that will be found within the four walls of your office. You have to get out and *listen* to the customers.

That often means shutting up and not trying to sell when your potential customer raises concerns. If you listen to the customers’ problems and concerns about your offering, they are actually telling what they want to buy and how you should sell to them.

listen to customersThe first thing we need to do is to create a minimum viable product and work closely with your initial customers to understand what goes right and wrong.

you should give customer orientation top priority in your firm. We should leave an open seat in every meeting and at every company function for our customer. We must make it clear to everyone that customers have a say at the enterprise.

Highest efforts should be given to building a team who are enthusiastic to provide best customer service.

Stay Focused:

What are the most important attributes you need if you want to successfully launch a new business? If you ask me now then Focus will be no 1 choice yet I mentioned this at last.

I learned the importance and challenge of focus with my failure. We tried to do too many things at one time, changed the strategy complicated, Never stuck to plans. This caused us failure.

stay focusedNow When I sat with my team to explain the decision, I tell them it is really hard to be best in class at one thing — and it’s impossible to be best at five things.

By trying to do so many things, we were unlikely to succeed at any. The team may take some time to absorb the difficult message, but eventually, they understood and bought in.

This focused behaviour is particularly hard for particular types of entrepreneurs. Many of entrepreneurs are super-creative, get bored fast, or are comfortable juggling lots of balls.

These types of entrepreneurs need to be sure they have more focused people around them as co-founders, directors, or advisors.

At some point, it’s also important to move on from analyzing the failure to talking about what comes next.

So if you are starting something or already running a startup, try to learn from mistakes.

Hope this will help you some way through your journey, We would like to hear your experience with failure or success. Please do comment.

PS: This story is shared by an Entrepreneur based out of NCR ( name and company kept secret )

Also Read: Indian Entrepreneurs Who Started with Nothing and Made million 

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