Of course we are amazed the way teenage students in the US use their credit cards / pocket money to bootstrap their fledgeling businesses. Quite often we say “well, but then that’s in the US – where they have an excellent support system by way of Social Security and state sponsored NGO network. They won’t be out in the streets if they go bust. Out here, you’d be left to starve…”
It’s a fact that in India, you have none of these. You pay taxes if you make money. If you are in a bad shape, you’ve to fend for yourself. No matter how many millions you’ve paid as taxes earlier, you’ll not be cared for if you have some bad years later. It’s this scenario which makes us risk averse and makes us great savers….but bad investors all the while.
It’s very difficult hence for our youngsters to bootstrap their way to the top. They live on the edge always ( even most of their parents too ) and it’s almost inconceivable for our youngsters to save up enough to bootstrap a venture. But then should we not have a plan B…?
I gave it some thought and here’s my two paise on how to bootstrap in India….
Pool capital is the way to go. Form a core team of not more than 3 people who are pretty much clued in as far as Web 2.0 tech goes ( it costs less to start an online web business ) so that they can work on a nice and simple idea. Each of these members, go get at least 5 people from amongst their relatives / friends who are willing to spare any sum between Rs.100 k – Rs.300 k. If you are enterprising enough to accomplish so much, I’ll pitch in with my mite to join you as one of the founder investors and shall invest similar sums too. That’s it.
Now when you’ve managed so much so well, we are ready to get started. Just post a comment to this post leaving your e-mail ID. I’ll organize the rest.
As regards structuring your business, creating a business plan, execution of investor agreements, designing stock options, go-to-market strategies, arranging VC participation and liquidity planning thro clear exit roadmaps….well that’s something at which I am good at and don’t lose sleep over that.
Regarding the business model, a few tips….
a) It should address a simple and straight need for a community of users who will be quiet responsive and eager.
b) The user’s need to be addressed in not more than 30 seconds flat or in about a couple of clicks.
c) Give her a user experience so good that she should be viralling it at the 31st second.
Get the hang of it….? What are you waiting for….get the hell outta’ here and come back with the good news….!
Good Luck…!
Angel 4 Angels 
March 7, 2007 at 2:29 pm |
“It’s this scenario which makes us risk averse and makes us great savers….but bad investors all the while”
Well said Krish.
I am reading blogs on startups and VCs( by indian also) but most blog are americanised with little effort from the bloggers to consider the Indian context.
I guess your blog is what i am looking for,a blog for entreprenuers in India.
I like most of the entries.Most of them are very pithy and relevent.
I would like you blog more frequentely 😉
Some areas that need to be address:
a)hype and myths accociated with starting a company.
Is is that risky to start a company? do we really need MBA or Phd to start? Do we really need I rocking idea initially? what u call a class team?
If we lok into successful compnay in india they are unique in every aspect
most compnay are started by more then 4-5 people with no VC money and they were no MBAs,no Phds no bankers.If we look them as case studies all we read about startups in USA is bullshit!!!!
b)how and when to start ? What it takes to start a compnay? can i start becoz it is another trend,because your friend are starting ,becoz u are from from best MBA school or have easy assess to cheap money? how i know i am not fooling myself ??????
c)What and how are legal and financial policies effect me? what shud I know as enterprenuer in area of finance and laws?
d)Is indian ecosystem is ready to support a failed entreprenuer? how ecosystem can be utilised for benefit of individual and company?
I hope will try to answer few of my questions here .
regards
satpal
March 7, 2007 at 2:56 pm |
Satpal,
Good to know that you are an aspiring entrepreneur. Even better to note that you are willing to ask around before making mistakes.
Since I don’t know your specifics, I shall try and answer your queries in a broader sense.
No matter how supportive the ecosystem ( including your own family ), it’s always better to tread cautiously anticipating trouble at every turn. You should therefore make sure you have some basic education, knowledge of the business, risks involved and enough startup capital ( preferably your own savings and that of your team members’ ) to take the business to a beta stage. Make sure that you’ve done some basic research on competition, Market size, target audience etc.
Most importantly try and find an answer to the question “what problem faced by the market are you going to solve ? How do you differentiate yourself from competition and how long will it take for the competition to catch up ?”.
MBA is not a must, sometimes not having it is a blessing in that you’ll be driven more by cold logic and pure common sense than by irrelevant and out-of-context-theories ( badly taught or learnt ) from B-School.
All the very best in your endeavours 🙂