Value vs Revenue for startups

Yesterday, we were having a discussion on a possible kiva-like play in India which will help connect two very disparate but mutually enriching communities and what kept us puzzled was inspite of the value being created, the revenue-generating mechanism for us was nowhere in sight. Taking any sizeable cut from either of the connecting communities would diminish the value being generated; however, without revenue mechanism there was no way we could keep surviving.

My intuition was to pursue the idea deeper mainly because:
1. It has the scope to generate immense value.
2. Can alter the dynamics of the current system, from marginal to a major extent.

Which bring us to this post…
1. Should startup entrepreneurs pursue an idea even if doesnt have a revenue generating idea now itself but creates value?
2. Occupies a niche field in an area where there is a lot left to be done and can help remove the pain points of customers.

My `opinion` is definitely a yes. Creating value creates fills a dichotomy: people who need it and people who benefit by filling up that need. Generally, a startup is expected to be the latter. However there are cases where the essential dichotomy exists between two subgroups in the former; i.e the role of a facilitator who takes care of bridging the gap between two people who need each other; but there is no way of getting to one another in the best way possible.

Google stands out as a best example of this gunning for value philosophy. They didnt have a business plan until they were about 2002. They had created an essential value of being able to bring search to unstructured data.

For all I know, if a product startup is not creating immense value, it will meet either of two fates, either getting trounced heavily by another player who does create value or will just go bankrupt.

Would love to hear your views on if value is the way to go for a startup (rest assumed that the ways for surviving till they have a business plan is chalked out). I will tackle the ways of value creation of a startup in my next essay ‘Big Guy vs Small Guy’.

Entrepreneurship for the Employed – I

[Formerly ‘Taking the Leap: Job Holder to Jobless and Beyond… – I’.]

This is the first part of a two-part article aimed at job holders who want to quit and go independent. This will be about the Why? of the question while the next part will be about the How?

For all the readers that find the heading above quite ambiguous, the same can also be read as ‘Taking the Leap: From being an Employee to being a Jobless enterpreneur and an Employer, Peon, Cleaner & Everything Else’

The article below is for job holders who want to make the leap of faith… for everyone who nurtured or nurtures the dream to start an enterprise of their own. Just follow the checklist below and maybe I’ve got to help you take the decision. However if you are already the one that has already taken the leap, all the very best maite, just chug on and just see if Ive missed something important!

The only thing that stops us from reaching the bare truth is the question, posed unambiguously, ruthlessly and to the point. So this essay contains what you can call a check list of questions that you might want to ask yourself, the more honest the better. Entrepreneurship is not a child’s play and definitely is not something you just try play and go back, it’s a deep commitment to the self to stretch your intellect, intelligence and patience to its logical limits; to create value. When looking at it from the outside, entrepreneurship looks like a very simple logical sequence of steps mastered effortlessly, like when we see a model on the ramp and never understand why they are paid so high when all they do is walk, strut and party all night long!

Know thyself a.k.a Why are you planning to take the leap?

Our hero is this bring, young, ambitious, intelligent, fun-loving, risk-taking (not to be confused with risk- mongering) young man, we call ZaCh. 6 months into his job after directly getting recruited by a famous MNC through campus placements, ZaCh’s finds himself restless & disappointed with his work. And he finds many other reasons for his feelings… Lets say you is ZaCh.

Following are the some questions that you must be ask yourself when you think of taking the entrepreneurial leap. Remember, this is not a questionnaire where Ill ask you to count your yes’s and no’s and then tell you that ‘Congrats! You are Entrepreneurial material’ if you get 10 ayes. The real intention is in asking the right questions and be totally truthful to yourself.
Though the choice of entrepreneurship is extremely personal, entrepreneurship itself is not personal, its about business, its all about the right choices, and knowing everything about yourself. The leap is generally a significant part of your life. So to the reasons…

My job is monotonous

Q. Have you tried playing around with your job profile requirements to deal with this boredom? Have you say tried doing something that’s not part of your job specification exactly? Say tried to automate some set of processes on which generally you regularly spend a lot of time just doing the task repeatedly manually? In other words have you given your current job the 100% attention it requires? Have you tried excelling in it? The power of this question doesn’t lie in the yes or no answer you give; but more specifically in the reasons you give for them. Say you say No, but if your reason also contains this clause that when you don’t like the job how can you ever give it your 100%, you may be closer to the truth than you think…

This may sound clichéd and philosophical, but your job is always as interesting as you want to make it. Its just as good as you think it is. My friend who is in a MNC in India works on a Microsoft technology product which a geek like me would love to brand as a ‘no brainer dead-end product’ and yet I’ve seen him master it so flawlessly that he’s now been moved to China to deploy this same product from scratch. And come to think of its he’s only been 1 year into this product! This however no way means everyone who’s bored with job is not giving their 100%, they are sometimes trapped in a vicious circle; the jobs so dead-end that it no way requires the 100%; once the 100% is not given, you are just plain bored.

Q.Have you tried changing your job or your job profile? If you love coding and if your current job profile doesn’t actually deal with coding; go change your job. If your boss is bad and all his bosses are bad, try changing the job [but frankly you will be disappointed ;)].

– My job is just a 9 to 7 stretch of boring meetings, frequent trips to the pantry, checking the mail every 15 minutes and some coding in between. You think, err you know that there is no point anymore in this job – working like a drone and drawing the salary.

Considering that 80% of the jobs available really require you to work at 20% your prowess; it is no wonder that restlessness creeps in quite soon, about 6 months to 1 year is the time when you start feeling restless, unused and unsatisfied. Its definitely a time when the thought of entrepreneurship enters the mind; however let not the 80-20 principle fool you. Monotony is generally a function of your current job profile, your job, your company, your team, your boss or just you. Give the job one chance, try moving to a new job or a job profile you wanted to work in. And even after this change you are restless again, go kiss the world and take your leap…

I want to be my own Boss!

Q. Because you believe you want to be your own boss and hate taking orders from anyone else other than youself? Oh boy dear! Psst… psst… let me tell you a secret. If you think your boss was the most demanding manager ever, just be content in the fact that you haven’t ever seen a pissed off customer. If you think your boss was a devil incarnate, after seeing your customers you might actually feel a great wave of thankfulness to your boss…

– Entrepreneurs are free spirits by nature, questioning the natural order of things. And so it comes as no surprise if as an entrepreneur you want to run the own show. But be forewarned when you say you want to run your own show; cause if you are you not only get to be the ringmaster (ceo), but also the lions (coder), the cleaner (QA), ticket-seller (sales), canvassing (marketing) and a host of other things. Be prepared a fresh baked apple find might also find its mark on your face one time or the other…

Peer Pressure a.k.a That loser from my class is a very successful entrepreneur now. Why cant I?

I! Do you know what sort of people get slaughtered in the capital markets time and again? It is those individual small time investors who have just read it off the newspapers or that euphoric salesman on TV who spouts eulogies of a rebounding economy and start buying the shares at highly elevated prices and before they know the prices start falling rapidly (bull market). And then there are those that sell off the shares at the exact time where the markets just are about to have a rebound Or hold onto to the stocks when the bear market is about to commence. These are the stuff capital market nightmares are made of. And peer pressure is the stuff 1/10 startup success statistic is made of. Even if you feel encouraged to make the leap because your loser friend has hit the jackpot; DON’T. Start analysis, learn as much as you can and only then decide. Let him be your mentor… But learn, understand and analyze first.

Its my dream

– Well my dear padawan, dreams are the stuff big things are made of. But is the dream a wishful fantasy or a burning need/passion? Understand that nothing less that 100% of your dedication will suffice for your enterprise.

Its all about value

– Well said my dear jedi, you are already on the right track if you are able to think in terms of value. A job is generally a linear progression of roles and responsibilities. You just get to play just one role – the developer, manager or the qa guy or anything else. An entrepreneurial career is nothing like these… its more like all of these in less than half the time combined! Yes, entrepreneurship is like living through your professional life of 20 years in a single span of 4-5 years. Just think of the hit you will take professionally, personally, socially and health-wise. And now lets just say none of them takes a hit as you must multitask. Yes dears, that is your worst office nightmare come true.

Now is my chance

– Jedi master I am humbled. Entrepreneurship is all finally about being in the right place at the right time doing the right things by making the right choices and that pinch of luck. Jumping and seizing opportunities is an important trait of an entrepreneur. Your reasons might be varied, say now you are young enough where you can afford to take risks or you have a huge life altering project coming your way through a contact you know with whom you have left your feelers with. It takes a lot of patience to wait and strike at the correct time, so just be sure its not a instinctive response you are putting in action; just an instinctive decision.

And of course there are a couple of hundred questions that you must ask yourself but be sure the crux is about the Why? That will help answer your dilemma. As I said, its not the ayes and nos that are importantly, but the reasons that you give to each of them. Just be truthful and sincere to yourself and you’ve got a winner in your hand: Yourself.

– kopos