The value which is created for users. The value could take any shape. It could be saving them time and effort, or solving a problem they’ve been experiencing and didn’t know how to solve, or supporting a cause they care about, being a family member or anything else that gives them a reason to buy from you.
If you have this value for a big problem and it is unique, customers will come to you and be loyal, and you will also have price control too. However, if many startups offer the same value, customers will never become loyal, and you will find yourself in a red ocean of fierce competition.
The value doesn’t always need to be tangible like price, more features, etc. It can be intangible as well. For example, customers of Apple do not buy Apple products just because they are good, but because they share the company’s feelings about challenging the status quo.
When we buy from Tata, it’s not always because of good service or anything visible, but because of our trust in them. They gained this trust after years of service. We believe they will give their all and will always do what is best for the country and society. This is the value they have and no one can match it.
Their tangible actions flow from their intangible thoughts and goals, not the other way around. This is what differentiates them from others.
However, if you run a food delivery service and your core value is a discount, it will be difficult to retain customers. They are with you for the discounts, and if someone else offers a better deal, they will fly there. And you are the only one who gave them this behaviour and how you got them.
This behavior is conflicting with your objectives of profitability, then why to spend millions for this behavior???
The moral of the story is simple: the higher the value and the more difficult it is to replicate, the bigger and more profitable you can become.
]]>Quick commerce is about buying any grocery or similar item and it is being delivered at your home within 10 to 20 minutes. This is what’s called quick commerce right now.
They ask you to just order whatever you want and get it delivered. They ask you to use it as many times as you can every single day. They allow you its use for even the smallest of items.
But, is this really something to make money?
If you want to make money, would you ask for many deliveries for same amount of goods, or get it done in the least number of deliveries?
They are getting users to be used to ordering multiple times with small ticket size. They are not trying to get big ticket size orders at all.
So, can this really make money?
If there was one startup, then maybe. Users would get used to it and eventually may use it properly when deliveries would get paid.
But right now, there is competition and if one charges for deliveries the others would get it’s users. Many would come up saying that free deliveries forever is their USP.
So, it’s difficult to make money this way, but what if they form cartel?
I don’t know, but you know.
Use them, they are good but have self control as well.
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Several organisations predict a severe recession. Costs must be reduced in order to prepare for bad days. And, for the overly funded startups, the simplest way to cut costs is to lay off employees.
They may not stop spending money on IPL ads, may not find efficient systems, and may continue to invest in other loss-making startups, but they will lay off employees who have given their all to them and believe in their future.
But, whether today or tomorrow, this was bound to happen and will continue to happen.
The sole advantage of tech companies over traditional businesses is that they can replace humans with technology in operations, resulting in increased efficiency and cost savings.
However, until their technology is fully prepared, they will require humans to gain momentum and become a household name. So, hiring is required.
Other reasons include the need for them to reach the tipping point and make it out. They need agents and telecallers to get users, but once they have initial testers and promoters, they no longer need them. Everyone is aware of the startup and what it does.
Aside from that, they hire based on their growth projections. However, most of the time, the requirement fades away due to slower growth, cost-cutting, or the implementation of more efficient systems in the interim.
They hire people, put them to work, and then fire them when their replacements are ready.
This would happen at large scale with various delivery companies being replaced by drones, as well as cab aggregators being replaced by self-driving cars. Other industries are included in this list as well.
And, if you think it’s too far away or that Bharat can’t do it, remember what you thought of online payments 5 years ago.
There is nothing wrong with startups expanding rapidly. However, it is incorrect if they do not include employee security in their priority list or problem statement.
Startups solve problems; they are creative individuals who solve problems. They are visionaries. They created the problem of layoffs; shouldn’t they also solve it? Shouldn’t they think about it sooner and be prepared to help them or find other roles to them in the company or outside?
Bill Gates once stated that he wanted Microsoft to have enough cash reserves to continue working on R&D and pay employees’ salaries for a year.
He was cautious about hiring at the time because he recognised that the people who came to work had responsibilities to their families, and Microsoft should be accountable to them.
Not much about Gates, but the same logic should apply to startups.
Consider your employees; otherwise, employees who see their colleagues being fired will never feel secure and may never work at their best. Give them safety and peace, and they will give you their allegiance, blood, and sweat.
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Right now, the fundings going to various startups has dropped. The reason is the predicted future recession and maybe a little bit fear of startup bubble in investors’ mind.
But the fundings have dropped. So, what’s going to be the impact of all this?
Are we going to see profitable startups?
Or, many startups shutting down?
What’s the strategy if various Startups for tackling the issue?
Let’s try to find it out.
So, if we see the steps if startups, then they may have stopped brand building marketing, and have started to advertise money making things.
In easier language, they are getting into marketing to make you take actions. Earlier, they were trying to get a place in your head, but now trying to move your hands.
Brand building marketing pays off in the long term, but these impact marketing strategies may get results in the short term.
They need money. Doesn’t matter from where but they need it. Investors ate not giving it, so they need it from customers. Now, instead of relying in others they are trying to be ‘Atmanirbhar’.
Their long term marketing has stopped because they know if they can’t sustain this dry winter, there’s going to be no future which they are working for.
Also, the startup expenditure has dropped to about 50%. They are trying to save every penny they can.
And if we talk of profitability, then the startups may be trying to make money in this period. Even if the revenue drops, they would try to make some money to invest. They need money and if investors are not giving it they need other sources.
And, some startups may not be able to make money in this brief period and may end up too. But it’s just the way things happen and we may see their replacements soon.
The time ahead looks tough for startups, and if you are a start-up founder then you should be ready for this. But the simple thing is that your company’s requirements are based on the customers you have. So, give great service to them and make them loyal customers. Don’t just go out for getting new users right now if you are not in digital products space.
And, things would be very fine.
Best of luck you can make it out.
]]>Evergrande is majorly a real estate company in China and has a few subsidiaries in soft drinks, Food, EV and etc. It has 1300 projects in 280 cities. Now it has taken $300 billion in debt, has millions of homes empty and no bail out from government. But how did it all start?
In 1980’s, most of the Chinese population lived in the countryside. But when they moved to cities, they were given free apartments by the government. Later, they were allowed to buy them at cheap rates when the government cancelled the no property right law.
Middle class could buy homes now and new homes were needed. So, then came Evergrande at the right time. Evergrande was Incorporated in 1996. It started with creating small living apartments and it was a hit.
Then more and more people kept coming to cities as they used to and the demand kept increasing forever. Evergrande rode on this wave.
The local government was also making money out of it. A third of the fiscal revenue of the local government was coming from land sales. So, real estate companies bought lands from government and then built upon.
It was fine then. The home customers needed to make complete payments before the property was built because they needed capital.
But Evergrande used those funds at other peojects as well. The Chinese government tried limiting and constraining the use of onshore debt to purchase of lands, and so, offshore debt was the other option and lenders were happy lending back then.
The reasons were the past history of real estate, the company’s record and most importantly, they felt Chinese government won’t let the company fail because it was the backbone of the country.
But later, they kept taking more and more debts that now they are in excess of $300 billion. But last year, the government brought a law that created many problems. The government put limits on raising debts in order to gain control on the companies.
It affected many companies but Evergrande the most. They could not raise further and many of their properties were semi prepared. The money taken from customers neither could not be repaid nor they were able to complete the projects. They tried repaying with discounts in apartments but could not make it. Millions of apartments are empty right now.
Their future is uncertain because they are not able to do anything. They have defaulted many interest payments, and as everyone expected the Chinese government would help, it’s not happening.
If they meltdown, it may be bigger than Lehman Brothers, may be.
They got down because of excessive lending, and Evergrande because of excessive borrowing. The reason in both places is same, more returns. They neglected the risk and just saw profits which they could make.
2008 Crisis wiped out $2 trillion from the market and was the biggest crisis since the Great Depression. But, now it may be bigger. The banks would go down too if it failed, their suppliers, lenders, other partners and a lot of companies would get affected by it.
It can surpass $2 trillion. Although, Bharat’s relations with China are not so great, but even we don’t want this to happen right now. But if it fell, global trade would be impacted and rates may again go high and even you would need to spend more on various commodities.
What do you think about all the chaos???
]]>An investor considers many factors when evaluating a startup, including industry stage, market size, market share, burn rate, and other factors. However, almost always in early stage startups, the bet is placed on the entrepreneur and not on anyone else.
So, what qualities are investors looking for?
It may differ slightly from one investor to the next, but it is generally the same for most investors.
Their role as an early stage investor is not simply to put money in and wait to see what happens. They devote their time, skills, and connections to assisting the entrepreneur. They also contribute to the startup’s success. So, they want to feel significant and useful.
The first quality they look for in an entrepreneur is coachability. It’s easy to see why. Because their money is invested in the startup. The investors are usually entrepreneurs who want to see the startup succeed through their skills.
So they want to take steps to get it on the right track, but if you are arrogant enough to ignore them, they will have no influence over their money. It would be a total bet.
They don’t like it and want to protect their money while also helping startups succeed. As a result, they seek coachable entrepreneurs.
The second quality is somewhat contradictory, but it is true. They want you to be knowledgeable in your field and thus not be a Yes Man.
It should not be as if you just accept whatever they say. If they have more domain knowledge, why should they invest in you?
You should only take what you can understand and is extremely beneficial.
But they want you to think about it and even conduct small tests. They want to play a role, but ultimately, they want to increase their wealth.
So these are the two most important characteristics they are looking for. There are other characteristics as well. They want you to be a good communicator, a simple thinker, and sometimes frugal.
But these are the most important considerations. If you have these characteristics, great; if not, you can instil them. If you don’t think you can, focus on great product and you’ll get what you want.
Just do the best whatever you do, and things would go very good.
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He failed 1,009 times before franchising his secret recipe of KFC chickens which makes millions even today. But do you know how hard life had been for him, and how he survived it all? Keep reading to know.
He was a boy in a farmer’s home. His father died when he was just 6. His mother used to goto farm then and he cooked for his siblings. He was learning about meat and cooking since then.
His mother remarried when he was 10 and got widowed by the time he turned 12. She again remarried and he didn’t like his new father so he left from there with his mother’s consent.
Then he tried many different jobs, like working in railroad construction, or selling insurance, practicing as a lawyer and a lot more. He even faked his birth certificate to get into the army when he was just 16. He even lost all his Money in this struggle, but what was left with him was his determination and belief in him.
He started a motel and started working on his secret chicken recipe. Seeing that people liked it, he tried to franchise it. But no one was interested in it. But he had immense belief in his product that he kept denying destiny. And he won.
He franchised it to a restaurant that paid him $0.04 for every chicken sold and it was a hit. People loved his chicken. And, he got into growth mode and expanded rapidly.
But, then he sold his company for around $2 million and worked as a paid ambassador to the company.
This was our Colonel who worked day and night to make it out and finally did it.
If you have the same passion for work, then let’s get together. If you are an entrepreneur who doesn’t let rejections and failures take over him then send us your pitch decks now. And, if you are an investor who wants to help and grow these entrepreneurs, come on board with us through the link.
Let’s get together and make it out.
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The company was struggling very badly when Smith took over the firm. The company was struggling. The company had a core business of coated paper which was very mediocre. The economics were also very bad. This was life and also the poison for the company.
So, Smith was made the CEO by the board in 1971. He was himself not sure whether it was a right decision or not, and one of the board members said that he was not qualified enough for the job.
If this was not enough to break someone, he was diagnosed with Nose and Throat Cancer. The doctors said that he would die within a year.
Surrounded by problems and stresses from all over, but he showed his confidence in front of the board saying, I’m not dead yet and have no plans to die anytime soon.
He kept working full time and made Kimberley Clark into the leading paper based consumer products company in the world. The firm generated cumulative stock returns 4.1 times the general market beating P&G as well.
He remained the CEO for 20 years and Cancer could not do anything to him.
It is a lot of struggle but Smith was used to it. He was a farm boy in Indiana. Used to work in the day and attend University at night.
Once he even lost a finger at work, but went to college at night and came back to work the next day.
The same dedication and risk taking he showed here. He said, Sell The Mills. The mills running the core business of the firm, or coated paper, and instead focus on customer based products.
The people called it the gutsiest move. And it was a big decision. If could not do it then everyone was to blame him only. Even if something went wrong because of the economy or shrewd tactics of competition he needed to take blame for it.
But he didn’t fear and got into it completely and made it happen.
He was a humble and dedicated man. He didn’t care for his personal image and ego but for the firm’s success. He was not a superstar CEO brought from outside the firm and who changed everything. No outsiders really do it.
He was a guy with high self belief but no arrogance. The combo for great leadership.
You can be doing the same great things if you want to, and the ways are above. So, go do it and make it out. It’s because if you want to, you can make it out.
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There are various Gurus telling you a ton of things about creating your brand, like run ads on this platform, hire this celebrity, or showcase in this sports event. This all may work out but is this the most effective way for creating your brand?
Are you creating a brand or destroying a company?
Isn’t this strategy or a total bet on investors’ money?
If this could work for all, not all funded startups have great brands?
There’s no hard and fast rule about strategy for building a brand. Spending money can get eyeballs on your product or service, and people may buy it as well.
But finally Brand is built over great quality. If you have a great product or service, then only you can have a brand.
Building a brand takes time, and you should spend it on creating products of superior quality, and communicating effectively with your customers.
You need to remember your reason for coming to the business, and showcase it effectively with all your actions and product.
This is the simplest strategy for building a brand. Keep it simple and you will make it out creating a great brand.
You can do it just believe in yourself, take steps and make it out.
]]>It is extremely difficult to have a successful startup, and the task becomes even more difficult if it is a bootstrap startup, and even more difficult if there are sharks ready to eat you with VC funding. But you can make it out.
However, many bootstrapping entrepreneurs are afraid of it.
The idea is that if they bootstrap and work on the proof of concept, and they made it out. The trial is a success, and they roll out the MVP to a larger audience within the constraints of their budget. Users begin to enjoy it, but then the real game begins.
According to them, another entrepreneur may see them and decide to build something similar with VC funds in order to gain better features and visibility. Then their hard work and money would be for naught, and he would win because of the VC money.
He would give discounts that you couldn’t and users would go there, and as you went out of business, he would raise prices and win.
This is very imaginative, like a fairy tale or a devil tale. You must overcome your fear and ask yourself these questions.
If he can start seeing you, can’t you get VC money seeing him?
Who has more data and knowledge about users and problems?
Who provides a more genuine service or product?
Won’t he get competition, or come in future if what you are doing is profitable?
VC funding can be very beneficial, and he may get a lot of people to look at his product and possibly use it. What matters is how long they stay there. How many times do they buy again? Do they become loyal customers?
You may have fewer users, but they are loyal to you because you provide excellent service. By burning money, he may gain more users, but they will come and go. However, your customers stay. Aside from that, if his users come to your platform, they will become yours due to better service, but if your users go there, their trust in you will grow.
I’m not saying you shouldn’t take VC money. Investment is required to take our business to the next level and expand all operations, but it is only your vision and product that will bring you loyalty and profitability.
Funding is great for producing more, but you have to figure out what to create on your own, and that is what makes the real difference.
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