How to find a co-founder?

With the rampant rise in start-ups over the last few years, almost everyone who is sick of his/her job is ready to take the risk of converting an idea into a business. When he/she sits down to list out the things required to get started, it soon dawns upon the entrepreneur-to-be that one person alone can't do so much.

And so we start observing posts on Facebook - 'Co-founder' wanted.

The problem is this - Very (very) rarely are you going to find a co-founder this way.

Why?

Simply because a co-founder is not a standard designation of any professional. Yes, we all understand you are looking out for the partner. Not only are you showing how desperate you are, and weakening any scope of negotiation when it comes to ownership, you are also stating that you haven't researched your requirement enough. 

While observing this sudden demand for co-founder, I commented to an acquaintance -' What you're basically saying is that I am willing to give ownership to someone whom I don't know, have absolutely no idea about previous experience, and that he/she will be thinking of the idea as passionately as I will'

This approach is usually a recipe for disaster.

What should you do then?  

Do you need someone who can take all the product management decisions? If so then hunt for a Product Manager.

Are you weak in finance and need someone good with drawing up business charts and budgeting? Look for a Finance Manager.

My point is - try to identify the most important reason why you are hiring a co-founder and put that requirement out as the designation you are looking for. Once you have hired this person, and are happy with his/her skills in the domain, test the waters to see if he/she has an inclination towards the business. And that is when you're a better judge to decide if this person is worth being a co-founder

The only metric that matters for Start-ups

Forget number of customers, forget app downloads, forget reviews on Techcrunch, Yourstory or any other review site - the only metric that will matter to your start-up from now to the rest of it's existence is
profit=revenue-expenses (over simplified).

So many start-ups keep tweaking business plans, spending marketing dollars, and hire the best talent with this weird notion that 'Initially start ups don't make money'. That is 100% pure bullshit.

If you have not figured out a way to monetize on Day 1, you'll probably find it difficult to find a way to monetize later. The problem is that because of the lack of quality incubators in India, the few that exist are just rich businessmen who have absolutely no idea about how and where to invest. The eagerness to get a higher than stock market return makes them invest in the crappiest of business ideas. They go by 'gut-intuition' and business plan projections without seeing how much money has been made by the company till date.

Face the facts

Fact 1: Money is the only tangible measurement tool. If you're hiring someone, ensure that someone gives you more revenue than what he/she costs

Fact 2: You may work really hard, but if you're not able to sell, maybe you're better enough not working at all

Fact 3: Make losses, but ensure Profits are as positive as possible. If you're already making losses, you might want to curtail that indirect marketing spend, and go talk to loyal customers to figure out how can you do more for them and thereby make more money.

The beast called Market Research

Market research can never stop.

Often, one is attracted towards an idea, and begins deliberating how this idea can be converted to a money spinning business. We quickly do a market entry analysis, research more on competitor, identify the target segment, propose a business plan, and begin working on creating the product.

Except that between the time the idea has been conceived and the product is market ready, the world has moved on. Customer tastes have changed, the underlying technology has evolved (or has completely changed) and the overall business potential (usually) has died.

Did you probably just end up wasting a lot of time? You probably did.

Here is what you can do to ensure that you don't end up with an out of fashion, technological dud!

1. Subscribe to daily alerts within your industry: Even 2-3 headlines a day about your particular industry will ensure that you at least are aware of what's going on.

2. Religiously meet your most loyal customers: One always underestimates the market insights your customers can bring you. Ensure that you have at least one weekly meeting with your customer to understand if trends are changing.

3. Ensure your product development strategy is incremental: Don't sit and develop the whole world together. Start with the most important feature, move to the lesser important ones. Ensure that the core idea/concept of your product is out there, the paraphernalia can always come later.

Is your feedback capturing mechanism, crap?

Restaurants always attach a feedback form with the bill. They think only after the transaction (customer ordering, eating and enjoying the meal) is complete, can he/she comment on the 'entire' experience. The problem is that, I would not be remembering the impeccable service, or the quality of food, but if I got the wrong bill, I'm going to perceive it negatively.

The reverse side of the argument is - Keep nudging the customer to tell you about feedback. Obviously, it gets negative as time passes by.

So what really is the right way to capture feedback? When is the right time to do so?

1. Focus on one singular issue while asking for feedback

- did you like the presentation of the food?
- Was the loading time of our product up to the mark?
- Did you enjoy the web check-in process of my airline?

Start a conversation here, because each issue has sub-issues where nuances of improvement can be detected.

2. Ask different questions to different customers

There is no point asking about the same issue to everyone because by default, your answer to any feedback will be average, when you collate your data. Create a list of processes which make up the product/service and break the processes into customer facing nuances - you'll soon realize there is a lot to talk to the customer about

3. Feedback is art, not mechanics

You need to ask yourself, how much does the  'Excellent....Poor' scale really matter to your organization. Would you want to only collate data into 5 boxes and feel happy about it, or would you rather empower your team to listen and absorb - what the customer is trying to say?

4. Do something with the feedback you have

You are not a data logger to just capture feedback. Your company must sit down often, actually discuss what customers are saying, and then ensure an engaging dialog takes place amongst your employees.

P.S - Ever thought of taking feedback within your company?

Customer retention - It's not a dog eat dog world!

Often start-ups feel that one mistake/bad experience. is enough to send the customer back to choosing another party for carrying out a particular service, or providing a particular product.Customers are not waiting to switch to the next vendor at a moment's notice. Vendor selection is also a cost to any business. The cost includes, creating a requirements list, choosing one among many, explaining in detail the task that has to be carried out, spending time answering queries and finally negotiating.

So if your start up makes a mistake (or doesn't provide a product/service that's up to the mark), the following options should be considered in descending forms of urgency

1. Replace (if not rectify) the moment you know the customer maybe right

Often, the time of deployment of your solution maybe critical to a customer's service delivery. The customer's tolerance level for crap at this point of time is the lowest. The customer usually advices you to take an alternate course of action, which you (or your team should be empowered to) must take a call on. Post the incident, involve the customer in a discussion as to why you failed. Customers appreciate that.

2. Raise flags with a what-why-what next plan

What Happened? Why it happened? What next should we do to fix it? These are the 3 questions that a customer is concerned about. The customer doesn't give two hoots about 'how it could not have happened'.

3. Call/meet client when you know something has gone horribly wrong.

If your startup processes taxes efficiently, or if your a gifting company - chances are you notice a serious issue before your customers do. In this case, don't wait for the crisis to occur. Figure out the what-why-what next , and then be proactive and visit the customer to inform them. 

Customers will turn away, not because you make mistakes, but if you do nothing about them.

Bootstrapping - is your start-up facing an early demise?

Bootstrapping- a self-sustaining process that proceeds without external help.

MBA schools always talk about 'using the least to generate the most' in their entrepreneurship classes. The idea is noble - why should you waste time trying to raise capital when you can find quick and easy 'jugaad' ways of creating a Proof of Concept or Minimum Viable Product? 

But the problem with this mentality is that one can only grow up to a certain extent with bootstrapping. Remember, when you are seeking 'help' - it need not be only in capital, but also in knowhow, expertise, markets and experience. 

Family businesses suffer from this to quite some extent. The owner driven enterprises are often run with very few decision makers, and because the founder's time is fully taken up in trivial issues, growth is arrested.

The following few scenarios are when you should really think about taking the 'risk' and seeking external help

1. The minimum viable product is ready and you have a few customers: Remember, both are necessary. You shouldn't start seeking help when your product is still in the drawing board stage. Because then you wouldn't be building it in the most efficient way. At the same time, you cannot create something without having it validated by a few paying customers.

2. Your blue ocean is suddenly getting red: If you are enjoying a monopoly in the market, and suddenly there is a threat of a competitive force, time has come to build a war chest of funds, talent and ideas and either drive out the competition or dominate it.

3. You need to team up to create something beautiful - If your product, or service depends on more factors, you need to acquire/merge/buy/JV with them and ensure the entire package is air tight. Collaboration is key. Taxi for sure, a Bangalore based taxi operating service, has managed to not only build a beautiful mobile website/app (product), but also managed to collaborate with operators, equipment companies and a solid marketing base. 

It is cool to say 'I own a start-up', but when you have to tell that to someone, (without that someone knowing it from before) clearly your startup isn't there yet!

When to say no to a client?

Saying no to clients is blasphemy! How can you event think about it?

I think a company often ends up in the grave when it obliges to whatever a customer wants. We have come across several scenarios where we have had to wonder weather it makes sense saying no - often I've been tempted to say yes to everything, but lately good sense (because now I feel saying no was the right thing) has prevailed.

The following is when one should say no to clients

1. Let's do a barter!

NO NO NO. Never say yes to a client in this scenario. Simply because
a. The value of your product/service is never appreciated. Quite often your customer is only looking to add you in 'the list of innovations I came up with'.
b. You cannot forecast the kind of publicity you will get
c. You yourself cannot really test and validate the pricing strategy of your product/service.
d. There is no metric which truly identifies the publicity given to a product or service.

2. We don't like the color, can you change the 'look and feel'
Now this is a controversial topic, and I would conclude that the real way to take a call is
a. The amount of business and potential business the client can give you. If it doesn't look promising, then don't bother. Make the client understand that the change comes at a cost, so if it can promise more business, you will look into it, and absorb the cost in the implementation of future business.
b. If many clients are suggesting the same change, then you probably should. Many a times, clients will come up with unique issues, so keep a frequency counter in your mind, that tells you that this feedback is becoming regular.

3. Can you also provide us with digital marketing, website hosting, content management, publicity relationship?
Here is where you need to take a call on whether you plan on providing this service/product as a standard option, or if it's only a one off case. If it's only a one off case, then chances are that you would be outsourcing the development/service to someone else. In that case, you are better off just forwarding the contact to your client. Remember what your running shoe (or single purpose of existence) is.