Thursday, February 1, 2018

The Rise of the START-UP Era



It is quite interesting to watch today’s young generation struggle with fresh viable ideas, go-to-market models, financial sourcing, personnel challenges, etc.

It is opium, a drug you are reluctant to let go of- once you have worked for yourself. After that, it is next to impossible to work in a strait-jacketed employee role. The entrepreneur within will always rebel. The employee will not. Because you do not mourn the loss of what you never had.

But this piece is not about entrepreneur vs. employee. It is more about the success ratio of today’s start-ups.

Many would eulogize about the success of E-commerce marketplaces. However, do keep in mind that they are neither manufacturing, nor innovating on the product, nor selling their own packaged beliefs. Also - they are standing up for someone else’s product. Only the marketplace is their own. Rest of it is logistics. There is only so much you can embellish it with. Most of the startups today are facilitators, rather than producers. Most... not all.

Compare it with a scenario where a company, selling products or services, is set up. They invest in their product, innovate and research to keep making it better, have solid USPs, believe in their dream, and sell this vision to the buyers and stick up to their promises. Whether they fail or succeed is up to how brilliant and robust their product is, how sane their pricing, how intuitive their marketing and how consistent is their service.

The facilitator start-ups know how to bring their product to the TG’s doorstep. Even a child knows that he can bring a horse to water but cannot make him drink it.
They can talk the lingo of today’s Gen Next, but they are not selling entirely and only to Gen Next. We live in society, not in isolated silos.

So why are the food facilitators falling like nine pins? Because even if there are a lot of people, and they have to eat three times a day - eating out is an occasion, ordering in is a compulsion, and home-cooking is not always a drudgery. There are only so many cuisines available, and if you haven’t noticed, all momos from all same-class joints taste the same, as does the tandoori chicken. Well… mostly. If you don’t have quality control over the product you deliver, you end up offering sub-standard quality which will never be re-ordered. This is just one of the many things which facilitators and aggregators need to guard against.

Talking about quality, one has been reading a lot of negativity about a hotel rooms’ aggregator startup which scaled quite fast. If you know your TG, you should know that you are targeting a mid-class to the upper-middle-class frequent business traveler. Will he be happy with a room with peeling walls, stained bedsheets, and bucketed bathrooms? Well, then, why do you have such facilities listed on your portal? Who is responsible for the quality of the products you are selling to the customer? The customer will think you are! Though you may want to pass the buck, in this age, shooting the messenger is more common than you think!

In the old world order of businesses, there was the young generation who worked at the grassroots, some more youth who had grayed their hair dealing with people on Ground Zero, being handheld by experienced ones who had earned their laurels in the field the hard way and therefore respected within the organization. And then there was the leadership team, who sometimes had massive egos, and clashed, but never at the cost of the company. And finally the grey-haired patriarch kind of a CEO, who, with his wit, balance, passion, manipulation and passive aggression (pun intended!) kept all of these layers in check and kept the growth vertical. So many checks and balances – to ensure that what goes out in the field is worthy of all the man-years put behind it. There must be a reason the old world is still succeeding and continues to do so.

Now turn the model on its head.

And add in VCs for whom this would be an add-on responsibility, not their primary challenge, and probably shared with many start-ups, not one.

You need the one who can guide and step in when things escalate.

You definitely also need the one who is constantly motivating, pushing, managing hands-on and problem-solving 365X24X7 so that things do not escalate.

A lot more work and experience (in-house and at all levels) needs to be calibrated within the Start-up model, to ensure success in the markets.

Despite all statistics, human behavior and their compulsions - psychological and otherwise, should be studied before one goes ahead and unveils oneself in the marketplace. What a handful of people think inside a boardroom, with statistics on the board, could be entirely different from Ground Zero realities.

We should never believe that we are smarter than the people buying our products and services.




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