HARNESSING THE HALLMARKS OF ENTREPRENEURIAL PRACTICES FOR TECH STARTUPS

Author – Pankaj Mohanta | Download PDF: HARNESSING THE HALLMARKS OF ENTREPRENEURIAL PRACTICES FOR TECH STARTUPS – Pankaj Mohanta

You can never cross the ocean until you have the courage to lose sight of the shore

– Christopher Columbus

Entrepreneurial startups usually have an enormous appetite for a tendency for risk taking, experimentation & innovation. This is what attracts bigger players because investing in them gives those players an exclusive VIP access to technologies that are undergoing current/latest developmental actions that actually might have a potential to disrupt their industries. Collaboration is one way of doing it for them, many acquire & buy them out. This has a dual strategic objective, the symbiosis between the two in either ways of getting together gives the bigger players an immediate & a much direct reach to the talent pool that is actively absorbed in research & development of such disruptive products/services/practices & at the same time on the same lanes, it indirectly stimulates entrepreneurial viewpoint among their own existing crop of workforce which leads to better talent management & retention for high performers & team folks. Speaking of which, entrepreneurs want this synergistic alliance more than ever because it gives them a bullet train ride straight to entirely new markets that already have very high barriers to entry & the fast track access to some of the most expensive technologies which they can’t afford anyway [in non-VC[1] backed bootstrapped startups in capital intensive industries]. Given this surge, apart from G2B[2] platforms, some large companies meanwhile do have a formal corporate venture policy in place, including various support activities for the startups those do mentoring, actively involve their teams in joint innovation, facilitating market access, industrial training, operational coaching & business acceleration for the likes of them. All the while as they have clear rules of participation in those cooperation models for enabling such connections for further clarification in their existing frameworks for engagements for reasons largely aimed towards protecting the intellectual properties on both the sides. Many of those tech startups make extensive usage of mobile & social technologies, M2M[3] connectivity, cloud technologies & data analytics for making a realistic attempt at de-risking & expanding their ventures that actually stokes a high degree of permeability among them, their stakeholders & the governments. Technologically, we then have these following that act transformational for the startups which actively helps them mold to organizational structures that impact their businesses in profoundly positive ways:

  1. Getting point blank with B2C[4]: Today digital businesses are going far beyond their traditional business models & are actively adopting newer ways to learn more about their customers/clients. The combination of various ways including social media, web, email, apps, and location based services etc. that are refining & pushing equally as meaningful interactions with the customers & clients wherever they are & whenever they need it are changing the value creation method approaches. Aggregately speaking, the game right here is all about creating an ecosystem where the focus is marginally less on the channel costs & more on the usage of data derived from such channels to drive long term productive terms with the customers.
  1. Increasing performance bandwidth by analytics: Data is always a strategic asset which is one of the prime drivers of critical decision making. At certain instances, there is a scenario when startups no longer have the condition of lack of data but they have the condition of the lack of right data & only the right data will lead to a right decision. So, they need to create distinctively separate supply chains for the data itself all exclusive that is dedicated to new technology drivers for analyses translating those data into valuable business insights which could be leveraged for product/service/business development at any later stage. Following all this after a certain time, the compiled raw information will celestially swell to petabyte[5] proportions [however subjected to the business type & industry], all thanks to mobile & “smart” connected devices, various sensors & applications which will need big data & advanced analytics assortment to make sense out of those structured & semi-structured data & scan through millions-billions of records/second to update & analyze on it for insights.
  1. Network management through software-defined networking: Change control gets a ton easier with SDN[6] that blows a new lease of life for the ends of enterprise flexibility when it comes to networks. With this virtualization which makes it way easier for businesses to integrate cloud components that eliminates complexities & brings down the network reconfiguration costs while not changing none of the native roles.
  1. Defense mechanisms: The information & data that a company has keeps continually rising in value & size over time as the systems get multi functionally rich, dynamic & open. Striking a finely tuned balance between the real/apparent threats & the opportunities post adoption of such cutting edge technologies is an absolute challenge as they keep piling up the vast multitude of such sensitive information in their repositories. Choosing sophisticated IT security systems although may slow the agility features of the business hindering on the flexibility quotient which might sometimes be like placing a placebo on the adaptive traits for altering according to changing technological trends. So, entrepreneurs particularly the CTO[7] technopreneurs have to recognize this urgent need of protecting their digital assets from threats which stretches well beyond the actions from the prevention practices bible. Active defense technologies saves the hour by taking preemptive actions that are dead necessary for a spherical protection with surveillance, threat analysis & community intelligence.

Economies are struggling. With various successive financial, monetary & budgetary crisis, several countries are already seeing a cool down in their growth engines including China & other ASEAN countries that have been the hotbed for manufacturing for a long time. But the entities pulling them from against these odds are the entrepreneurs who often take advantage of hi tech hotspots in those faltering markets & move over. Easy as it sounds but behind the scenes goes a painstaking process for a constant uphill fight for taking their new ventures off the ground & materializing the universal vision for growth, productivity & sustenance. Most of them need initial life support system for keeping their businesses alive around some of their launching days. However, they seem to have been taking a maximal advantage of the silicon valley-like technology clusters wherein practices & culture help them grow inclusively. Many tech startups in most of the urban geographies are asset intensive in nature those that include state of the art bleeding edge technologies from the domains of micro-electronics, nanotechnology, photonics, advanced materials & manufacturing in information & communications systems which needs terrific funding for infrastructural build. Meanwhile interestingly, there has been a drop in the total number of IPOs. Plus, there also has been a steady rise in the net number of startups very recently that are giving the venture capitalists a run for their money & not to mention, the weather over the investing community have been somewhat dull a little lately with not much the same things as was the case back in 90s. So, not only there is a marked drop in the IPOs but also there is an incidental drop in the seed stage capital investments in any of the given fiscal financial quarters for a lot of startups which have taken their ideas off the ground. Many venture capitalists have scores of different parameters using which they forecast the survivability with struggle, survivability with ease & survivability with dominance of the startups with these four of the following fundamental questions they seek to have answers for:

  1. Addressing the unmet: One must thing for the CEO to get this right. The selling proposition should be catering to some needs of the customers while the value proposition has to be unique for making a compelling desire that is strong enough to be a magnet for the product/service sensation which could be powerful enough for them to switch their preferences over whichever existing solution to their needs. So, most likely the VC will like to know about all the seriously claimed charismatic characteristics of the product/service that has a high degree of certainty in the real world for a brand neutral or an already brand loyal customer to pick & or switch to the startup’s offerings over anything else for their needs [that is being addressed to].
  1. Idea feasibility: While coming up with a great idea is a novel thing to start with but apart from the founders thinking it to be great enough should also include a sizeable amount of prospective customers from the target segment who think the same. They have to empirically demonstrate that not only customers will buy it but given its nature of design or whatever problem solving/innovative approach it has, customers will pay for it way more than the cost of its production. Factual sales figures that are consistently growing at a rate go a mile establishing the viability of the idea sustenance which proves the VCs that the venture they are investing in is lucrative instead of ludicrous.
  1. Believable blueprints for ROI[8]: The elevator pitch to the VCs have to have an airtight bulletproof business plan with an ideal go-to-market strategy that distillates down a crystal idea of converting the existing opportunities into turnovers & cash flows. That mentioned, the element which is most sought after right here is the plan in place which has an undeniable odds to acquire a significant chunk of the target market that delivers the right thing to the right customers. They try to find a broad solution set of working plans that completes the business model that has a guaranteed way of the company getting compensated for every business undertaking that they make in the process since its’ a competitive market & internal actions needs to be well coordinated to outpace the competitors.
  1. Money. Anything else? : VCs aren’t just mere investors for the startup ventures. Their years & decades of experience into the industry makes them an unparalleled asset like none other for the entrepreneurs who could well guide them through or introduce the startup folks to a massive sea of other able potential partners & executives who are seasoned pro in business & operations & most of them go way back. So, in the end its’ not just the money that could serve as a turnaround chapter & while money can buy a lot of things to scale up your business but it can never buy the capabilities & value that those people could bring onto the table, for your business.

Entrepreneurs & startups are one of the major sources of innovation, economic & employment growth but those who do it face extremes of stress & moments of self-reflection throughout most of their initial timeline progress. Their lives could be a whirlpool of flexible characteristics which sometimes may seize the opportunities in a breath while stepping with caution when making calculated decisions for things at high stakes; they stay hooked to their organizational fingerprints sticking all the way with their workforce but are open too to ideas that helps them make a basis for improvement programs; they are careful & do everything in their power to prevent anti-patterns yet they positively receive failures & embrace it as an integral part of their learning curve towards the road to the ultimate accomplishment; they do it for money but mostly they do it because they simply love doing it. By any working contrast, they need a great place to live & work to fuel their culture, values & mindset that helps them progressively march ahead in their risk prone adventures but quite sadly, overall support incentives are low. Given the challenges of a chain of adversities in a lot of countries including both the advanced & emerging markets, due to various political, economical, regulatory & industrial factors & some of the most common conundrums like a lack of desired work environment, non-competitive corporate taxes, non-availability of better equipped & new infrastructure, inefficient regulatory policies that are business friendly, degrading economic stability which are only a few to name, entrepreneurs have to make way through these, all by themselves. However, there are few things that are de facto in their direct control which are enlisted down below which gives them an edge over traditional outlook which might resort to implement steps that are too short-sighted for commercialization in the longer run towards promoting a cross-generational business that transcends uniformity & strives for diversity to foster growth globally starting from few practices from within:

  1. Try excelling your startup in one industry at a time: Never lead your team to have divided attention & focus on different service offerings simultaneously. Large enterprises can afford doing this because not only they have the resources but also have the necessary pool of right people to support such product/service offerings throughout their development lifecycles. Thus, portfolio diversification as tempting as it sounds is actually great but unless done in ways that are good enough, there is an inherent risk of mistakes that will be costly in the long run.
  1. Optimize your processes to economize on transactional costs [wherever/whenever possible]: Personally putting, my brain is wired towards cost reduction so that efficiency increases by putting value generating business processes in a tight sequence & reduce deficiencies by making more resultant room for healthier budget & resource allocation. BUT, there could be numerous scenarios when, your business includes the products or services that falls in the sector trenches of few that requires a critical quality management which genuinely needs high standards & industry’s best practices without compromising on the quality & keeping the pricing just about right. It sprays assurances which instills confidence in the minds & hearts of the service recipients so as to create a lasting goodwill & [often the more difficult], maintaining it since few such services when priced too low & unbelievably affordable alongside the mean market standards, trigger anxieties in the minds of the [potential] customers. Hence, this step demands smart ways to find such processes within the value chain to make it happen.
  1. Have a vision & an extremely well defined business goals as straight as a laser beam: Not only you have to hold on to it but you also have to make triple sure that each of your current & future employees [upon recruitment] imbibe it too. This is one of those many factors why most of the startups fail to see the daylight all because of this difference. Since variable & a non unidirectional passion cannot drive inclusive growth & will never help your team achieve that strength & core competency of agility. Keep in mind, this vision is going to be your trait which will set you apart from your competitors in the same industry in the times ahead.
  1. Realize your business metrics: A ton of founders might brag about what their companies accomplished in the first 100 days of their business commencement but unless they assert and back it up by a measurable quantitative metrics, they are nothing more than talks of unrealistic calories. For really getting to know the health of a company, you will naturally look into the P&L account statements rather than self assuring yourself for the rest of the week on the fact of the number of new potential leads with whom you shook hands & rubbed shoulders. Therefore, look out for metrics like, indicators of market share, service launches, brand equity ratios, asset generations, various positive value appreciations, business volume sales per month per locality & alike values that could be measured from approximate to exact terms, so that you & your team has a fair realistic idea where you stand with what more needs to be done where and how.
  1. Have a broad situational awareness of your competitors: Know everything about them inside out that is to be known which might help you strategically position your products & services for your target segment. This awareness when combined with business intelligence capabilities produces valuable insights enabling you for making decisions like never before. Matter of fact, keep dedicated power packed minutes for discussing about some of these daily, in your morning meetings with the board or your associates/employees. Analyze on the available information, anticipate their moves & act fast to counteract such moves. Like it or not, this is a race & you don’t want to end up being number 2.
  1. Make innovation a part of your DNA: Innovating today in a digitally seamless business environment has become way easier than once what it used to be. Past calendars throughout the recent history have witnessed countless embracement of innovation as a core culture & perhaps nobody did it better than the way startups did. Large companies tend to engage in M&As or at least give it a thought because it allows them to have a chance to see the newer things which those small but nimble players have to offer. Bringing in disruptive practices that are becoming less of a trend & more of a norm are latest styles how they are changing the way incumbent players have always minded their business, since change management & change control is organically more feasible without running the risk of a scope creep in a startup which is usually expected to have a strong cohesiveness.
  1. Self-satisfaction at any point is always dangerous: Never get contended or decide to settle just because you feel that your business is doing well enough for now & has the potential to continue the way it has been smoothly moving. There might be a time when your business may hit the maturity phase but you need to consistently work upon them, sometimes to the point of insanity to jump to a next curve & keep it going without hitting the decline phase [the way you did during some of your initial days of your business commencement]. As evident from all those ever successful companies, there is no stopping & there exist no breaks. So, raise the bar for your business & try turning it into becoming a better version of business today of what it was yesterday.

Although the above mentioned discrete points are meant to ease out on the strategic & organizational speed bumps but the action plans need to be pragmatically aligned to the respective corporate objectives that they have/follow. Despite best efforts, often those actions may not bring about an unexpected windfall but regardless of however awesome gruesome story it is, they shouldn’t give up on that uphill fight because they might be only one step behind for the last push to mainstream success all the while not knowing they were standing on the brink of the next breakthrough.

 

Thanks for your time & visiting my blog. I hope you readers liked it! Do comment & drop some feedbacks.

Cover Picture Credit – Bloomberg

Elsewhere, I could be found at:

Twitter: @thatpankaj

Google+ : +PankajMohanta1

 

[1] VC [Expanded] – Venture Capital

[2] G2B [Expanded] – Government-to-Business

[3] M2M [Expanded] – Machine-to-Machine

[4] B2C [Expanded] – Business-to-Consumer

[5] 1 Petabyte = 1000 Terabytes [1 Terabyte = 1000 Gigabytes | 1 Gigabyte = 1000 Megabytes] [Precision equivalent quantities with all above mentioned units are 1024 but are usually approximated to the value of 1000 in most cases for a convenient understanding]

[6] SDN [Expanded] – Software Defined Networking

[7] CTO [Expanded] – Chief Technology Officer

[8] ROI [Expanded] – Returns Over Investment

 

 

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