Ask any investor or successful entrepreneur, and they will reiterate that the most important factor in a start-up is the quality of its founding team. A team is more important than the idea or the size of the market or the technology or the business case, or indeed any other factor that investors will review to check the investment-worthiness of a venture.
Even if – the product is great; the technology is cutting-edge; the market is large and the company has a strong chance to be a dominant player in that large market – investors will hesitate to invest in the venture if they do not get the confidence that the founding team can deliver in the market.
What investors seek is a team that is passionate about the subject, is enthusiastic about the opportunity, has a good grasp on the dynamics of ‘business’ and not just the product/service, and who can demonstrate commitment to fight it out in the market.
While it is good to have experience in the domain, that is not a must, as that will exclude a number of bright people who either do not have work experience or are from a different domain than the concept they are pursuing. However, what is important is that even without experience in the sector, the team should have studied the sector enough to understand it very well. In fact, that is also why passion and interest in the sector is critical, because that makes it easier for a person to study the sector well.
Continue reading “Guest Post – Team, the most important ingredient in a startup”
Over the years, I have had the good fortune to have a number of wise and well-meaning folks who supported me and guided me. Here’s a summary of what I learnt from their wisdom and tremendous perspective.
- My dad: Failing to plan is planning to fail. He used to tell me “If you have 10 hours to cut a tree, spend 6 hours sharpening the axe”
- Pravin Gandhi: Its very difficult to do even one thing well. Don’t attempt to do to many things. Focus on one thing and do it well.
- Raj Desai: Do not try to stir an ocean. Find an oasis and build a good eco-system around it.
- Saurabh Srivastava: Assuming that you could do it better than others because you are smarter than them is a weak and dangerous assumption to base your business on.
- Sridar Iyengar: When I had once asked him how is it possible to create differentiation in a crowded space, Sridar pointed to a ceremonial lamp with 8 – 10 wicks burning.. and said “One of these wicks will last longer than others. And it will be because something was different about it. Perhaps it was wound tighter, perhaps it was dipped in the oil differently, perhaps it was a little longer than others, perhaps it was placed differently, or perhaps it was placed shielded from the wind. In your business to, find out what that differentiation will need to be to burn the brightest and longest.”
A mentor is someone who accepts the responsibility of guiding a mentee on aspects of business, or life, that the mentor may have a longer experience on.
Thus, in the context of a startup, a mentor’s role is to provide perspective on the direction that the venture may take, and providing inputs and advice on how that idea can be converted into a venture.
This means that the mentor should not just give opinion on what he/she feels is right, but should see the venture in the context of the individual mentee’s circumstances and then help the mentee take necessary decisions.
A mentor should not enforce his/her views but provide the inputs that will help the mentee take a better informed decisions.
Apart from strategy and help in decision making, a mentor could also help in the following areas:
- Helping create a business case and business plan – in this, the biggest inputs would be to help the mentee (usually a first-time entrepreneur) understand the complexities of business, the various cost structure, the time taken by companies to stabilize (usually entrepreneurs underestimate the time taken to establish the venture in the marketplace)
- Helping with warm introductions to potential customers, potential employees, potential partners, or even investors
- Providing support during tough times – entrepreneurship can be a lonely journey. And often, the challenges faced can pull a person down. In such times, a mentor can play a crucial role in keeping the motivation level up, reassuring the entrepreneur that the challenges are part of every journey, giving the comfort that his/her support is available, etc.
- Helping take tough calls – including sometimes shutting down or doing a pivot…
- Interviewing senior employees (this is especially useful when the entrepreneurs are young * inexperienced but have to hire someone older and experienced)
Each mentor mentee relationship is unique, and it will be good to hear form you what your experiences with your mentors were.