Startups are incredibly complex and they operate in an even more complex environment, yet I have seen that winning entrepreneurs like Vijay Shekhar Sharma don’t do random stuff. They have learned some best practices which they follow. Learning and following those practices is not possible for a new entrepreneur in a short time but my aim is to give a good starting point to a new entrepreneur so that he or she can at least go on the right path and learn the correct things with time.
Most startup entrepreneurs are confused like Abhimanyu (in the legendary Indian epic Mahabharat), who knew how to go in the battle but did not know the correct way of coming out. I was like Abhimanyu in 2015. Reading 200+ books, working with Mr. Vijay Shekhar Sharma in Paytm and meeting lots of successful startup investors and founders gave me access to the winning formula for growing a startup.
Startup Canvas aims to be the mentor to a budding entrepreneur in his or her quest to build a successful startup. Most posts in this blog derive directly or indirectly from Startup Canvas. Startup Canvas is intended to be a tool to understand the startup life cycle and appropriate best practices at every stage in the life cycle.
3 Focus Areas of Startup Founders
As a budding entrepreneur, you have lots of choices in spending your time and precious little resources. I have learned that the 3 most areas to focus on for a budding entrepreneur are :
- Purchasing Power
These 3 Ps are the beginning of our road towards our 3 goals. I have also seen that winning entrepreneurs are good at these 3 tasks.
The startup needs to create one or more products that solve some problems of the user. Without creating a good product which consumers want no startup can grow and become profitable.
To create the winning product or products you need to assemble a team that can execute well. Thus any successful startup requires good people inside it and successful startup founders are good recruiters and motivators.
Every startup needs money to purchase the time of its people and essential resources required to create and provide products to customers. Some startups do not buy stuff using money from investors or founders but they purchase stuff using other mechanisms like ESOPs, crowdfunding and barter. Thus I term this purchasing power instead of money.
As a founder focus most of your time on these 3 focus areas. I also call them ‘3 Steps To Startup Success’. Time and focus are bigger constraints than money. I have seen that in action in Paytm. You can get money from outside but you always have limited time and focus.
3 Stages of Startup Lifecycle
The first phase of the startup lifecycle is ‘Search’. A startup needs to find a big problem and some kind of a solution to that problem. A major reason for the failure of startups is building products that people do not want. Searching for a problem and creating a solution around that problem helps in providing a strong foundation to the startup for future success. This stage ends when the startup has found ‘Problem Solution Fit’. This stage generally requires just the co-founders to work on finding the problem and creating a rudimentary solution to solve the problem. In rare cases, 1-2 employees can be recruited but at this stage, entrepreneurs need to bootstrap and big expenses need to be curtailed.
Once the startup finds a big problem, it builds some sort of a solution to the problem. It then needs to recruit a small core team that can iteratively build a product. This stage goes on till the startup achieves ‘Product Market Fit. At this stage, some angel investors can be approached for a little bit of funding as the startup has something to showcase to them. Product market fit is a stage where the product is so good that consumers want to use the product themselves without much push. For example, once I used Uber for the first time I wanted to use it again and again. That was Uber’s product reaching product market fit. This usually takes time and may involve multiple iterations to the product.
Once the product is desired by the market it becomes easy to get money from venture capitalists and big angels and usually, it’s a good time to scale the startup. At this stage, a startup has to transform into a corporation. Many people may need to be recruited and a formal structure needs to be put into place. Uber, Paytm, etc have taken this route once they achieved the product market fit.
Thus Startup Canvas is a roadmap for creating a startup.
3 Steps To Startup Success
Blog Posts On Startup Best Practices
Blog Posts On Product Management
Blog Posts On Startup HR
Blog Posts On Startup Funding