DARE - Because Entrepreneurs Do

If you have had the chance to sit down with a founder and listen to his or her idea, project or startup, you will realise that it sounds a lot like a parent - in most cases a mother - talking about her child. The truth is that, the analogy is not too far from it.

Vijay Anand

An enterprise goes through phases. There are times when you need to invest into its growth and stability, and there are times when you need to wean the organisation to optimise its resources and make it more efficient. It is a lot like raising a child: nurture it, but don’t let it cultivate habits of laziness.

There is a time for everything. A time to sow,  a time to reap, and a time - even to die.  Apply this to building enterprises, and you’d say that knowing when to invest, knowing when to water, and knowing when to expect and drive the entity towards results - all are very important.

Of course, not all organisations are created equal. There are those that can generate revenue from day one, and all costs are tied to revenues. The service and manufacturing driven models - to a large extent are like that. There are also the value-added services where there is a delay between the cost incurred and the revenue, and profit feedback to set in. Then there are organisations that generate significant intellectual property and technology, and go through a time of investments before they start seeing disproportionate returns.

Take a moment to see where your enterprise stands on the investment graph. Have you gone on far too long into the productivity curve and are not realising the returns yet? If yes, think about these:

1. Do you know who your target customer is? Have you identified, better yet, touched base with them and discussed whether they’re happy with the service and value you are creating?

2. Are you taking a step or a leap? Often, organisations want to go from zero to 100 without the trials and travails of growing their offering. What ends up happening is that you spend three years building a product with 50,000 features but by then no one wants it. Focus on the basic set of features required, build them, go meet your customers, sell, and then improve from there.

3. Have you  monetised your product too soon? There are strict laws against child labour because wrong thing at the wrong time can have disastrous effects on the subject. Build your  product and nurture the core value of the enterprise.

4. Is there clarity from the top on the timelines and what child you are raising? When the leadership isn’t totally convinced and the board and advisors  give different directions, the organisation struggles to find its optimal path.

5. Is your cash-flow managed well? While everyone measures the things that can be measured, what matters in the early stages is the attitude and vision of those who invest in its future.

Decouple yourself from the perspective of the product/offering and the overall health of the organisation. These can evolve over a period of time, but the health of the organisation has to be managed overall. Plan in such a way that when you need to invest into growth and capability building, you do - and when it has to return its strength, it also does well.

Just like raising a child.
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meet Vijay Anand
Serial entrepreneur, known as The Startup Guy. Until recently he was the vice president of New Ventures at IITM’s Incubation Centre. He is the founder of The Startup Centre, spearheads various startup initiatives, and sits on the board of a few companies. To write to the author, please send an email to dare@cybermedia.co.in with the subject line 'Vijay Anand'. Disclaimer: The views expressed here are that of the author and do not represent the magazine's.

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