How to Build Business Network for Your Startup

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Networking is extremely important for entrepreneurs. Most of the startupreneurs are restricted in time and resources, therefore a good network can help them access suppliers, markets, information and guidance necessary for their startup’s development. I understood the importance of networking while working as an intrapreneur at the beginning of my career and since then have been able to build a robust professional network that I leverage and get support from now as an entrepreneur.

Start your networking with people you know. Among them, look for key characteristics like competency, dependability, and helpfulness that can be useful in your entrepreneurial venture. Focus more on proactive networking and reach out to people. This will also help you in tapping into other people’s networks. Over time your network will grow through reactive networking of others in the ecosystem. Typically your start-up network should have people from your suppliers, customers, service providers, industry ecosystem including your competitors, financial services, government officials and policy makers, colleagues and key contacts from your past work places, key connects from your alumni groups, industry specific experts and professionals, among others. However, your focus should not be on building a very large network, but on the intensity of the network. You can build the intensity by selecting the right people and communicating with them regularly to keep the network alive.

While communicating with your network, remember to project your ideas as professionally as possible, be prompt in returning calls and replying to e-mails, refrain from talking bad about people, do not reveal and talk about your flaws, and don’t whine. Keep details of your network contacts handy and periodically update the key information. Remember that its not only ‘who you know’ but what really counts is ‘what they know about you’ for building and managing an effective network.

 Some best practices of effective networking are,

  • Establish a relationship with people much before you need them. People who have known you for a while will be more inclined to help you.
  • Understand what you can do for others as this will help you set your expectations right while asking for help from your network.
  • Attend conferences, trade shows, social events, lectures, etc and meet people. Making the first impression is the key here. So do not talk too much, ask smart questions and let them talk. Never forget to carry your business cards and pass it while you are introducing yourself.
  • Unless you are rock sure of your points, do not contradict others.
  • Read stuff beyond your direct professional subject, and expand your information horizon. This will help you connect with a wider audience while engaging them in intelligent conversations.

 The final tip: Grow it. Nourish it. Reap it.

The after-success story

Most entrepreneurs want one thing, and that would be being called successful. The definition of successful is highly subjective, leading from getting a lot of fame [and no money] to getting a lot of money[and little fame]. Some do manage to achieve both, we have candidates like Mark Zukerberg, Evan Williams, Jack Dorsey and quite a few in the recent past. There has never been a better time in history for nerds to achieve both fame and money at such a young age.

What intrigues me the most is the stories that get spun post the success. The prime example is that of twitter, its projection post-success is that of a broadcast model of democracy! I highly doubt the initial founders had imagined this small pet project as such a nuanced concept. Another simple case is that of Facebook, the founders wanted very human things out of it and it ended up becoming a “social graph”. It is again very clear that is not the goal they started off with.
What I am getting at is how we make our lives rather complicated by trying to model success. There are no defined models, if there were one no-one would ever fail at this game [which is clearly not the case]. You need to learn the best traits and not necessarily attempt to replicate the final assessed model. So, the best thing that Facebook taught me was the fact that you need a great initial set of users to start something of this nature. Without the initial Ivy league groups, Facebook would not have the kind of quality users it had initially. The lesson one learns from twitter is that never underestimate the capability of simple ideas, whenever the world tends to absurd complexity one twitter[or iphone] does happen and it shocks us !

The art is in creating utilities that are easy to use, so stop trying to model success. Get on the creation wagon, let the fittest survive.

Team Functionality & Conflicts

Individuals from diverse backgrounds face perpetual gaps when they come together to work as a team. Since conflict within a team exists, it must be managed. I believe that collaboration is the key to managing that conflict. The first step is to identify whether the conflict is based on task disagreements or personality related issues. Task conflicts can often be beneficial during the design and preparatory phases. Personality conflicts tend to be detrimental to the team as a whole, interfering with the project at hand, taking valuable time away from the efforts, and at times exacerbating personality differences that prevent team members from communicating at all. The goal is to minimize personality conflicts and manage it outside the start-up environment. Team building exercises through social activity is certainly a good way to build confidence and cohesiveness.

Its not important that team members need to like each other, rather they need to respect each other professionally and focus on the task to get the job done. Once the focus is on disagreements about the job at hand, collaboration can take place. Through collaboration, disagreements can be altered into joint gains. Collaboration here doesn’t mean compromise or giving-in, but more mutually beneficial results based on more effective communication. Following three techniques could be used to support collaboration at your Startup,

1. Create a group atmosphere that supports team focus, the capability to solve the problem, trust among each other, and open conflict communication channels. Trust is the critical factor here.

2. Look for and act on opportunities for promoting joint gain between the conflicting members. It is also important that team members exchange factual information, that in turn can facilitate trade-offs across different issues. Exchange of views and insights thus becomes very critical, as usually people tend to “one up” each other and the conflict get worse and more personal. They key here is to recognise that this is happening and try to respond with a new tact, a direct response that brings the conflict into the open, or a more integrative and collaborative response that might shift the process back on track.

3. Develop and build an attitude of cooperation, collaboration and openness to creative thinking that can often lead to win-win situation during conflict, which often leads to innovative, superior solutions.

 Collaboration requires interdependence on other team members. Negative emotional outbursts and attitudes such as frustration and anger tend to interfere with collaboration. These emotions need to be kept in check and resolved as personal conflict outside the work.

Oiginal versus innovation

The idea for all product builders is to build something unique, something that influences. These two do not necessarily follow each other in that order. Most of the apparently innovative things that we see today are not original at all. In a lot of ways, what we deem to be innovation is usually an exceptional integration of previously known well-tested ideas. This can be seen in so many of the products that we use today, be it what apple produces or even the cars that we drive. Truly novel ideas tend to be produced in isolation, and lack that adaptability which is so attractive in innovative ideas.

The attraction of builders to original ideas is very well documented in history, we had the Tesla versus Edison where it is highly evident that originality may actually be more of a curse than a boon. Nobody can take away anything from Edison’s achievements, though what is over-estimated is his originality and under-estimated is his marketing capability. Like every successful entrepreneur, Edison managed to keep a 360 degree view of what he wanted to build. That seems to differenciate a whole host of successful entrepreneurs from the many others we do not hear about.

If you are a builder, it is very important to see how the incremental approach to innovation eventually produces results that look like original creations. This was the case with Einstien who tied together already existing novel thoughts into a theory that changed physics. Ultimately, we end up building things that serve a particular use case.

The idea is not to force originality and for that matter innovation, it comes down to solving a problem or understanding something fundamentally better. If elegance is something that can be afforded in the context then it can look pretty. Innovation is basically incrementally getting closer to a problem by using known paradigms, making it something we can adopt and utilize as it deviates very little from our current understanding of our surroundings ! Being original however may expose you to adoption issues, that over time will erode away.

7 Value Attributes of Your Product

Breakthrough products are driven by a complex combination of value attributes that connect with people’s lifestyles. If you are conceiving a new product, you must conduct a value opportunity analysis that evaluates the current state of products against seven major attributes of value, in the market where the new product requires significant improvement. This is an essential step in any new product development. Failure to thoroughly and thoughtfully complete this phase will have a negative impact down the line.

During the period of mass marketing, good value was based on the lowest cost-maximum features combination. The goal was to keep cost low, profits moderate, and sell in mass quantities (like Big Bazaar, K-mart etc). Value in its true sense, however, is lifestyle-driven, not cost-driven. So a product is valuable if it is useful, usable, and desirable. While cost is still an issue in the times of market segmentation, the more powerful factor is the consumer’s need to connect their product purchases with their own personal values. The higher a product’s perceived value, the more people will pay for it.

The seven attributes that adds value to any product are,

1. Aesthetics that builds a positive association with the product.

  • Visual appeal
  • Products must be tactile
  • Elimination of all undesired sounds from the product
  • Agreeable smell

2. Emotion that a consumer experiences with the product. There can be several emotions that a product can bring about, and they key ones are,

  • The product promotes excitement and adventure
  • Freedom from constraints
  • Feeling of safety and stability
  • Luxurious experience
  • User’s self assurance about handling the product
  • Feeling of supremacy

3. Ergonomics of your product that chiefly focuses on ‘ease of use’, ‘safety’, and ‘comfort’ of your target customers.

4. Impact of your product through phases of development to end use. You should target your product for improving the social well-being of the stakeholders. Take care of negative environmental effect that your product might create, through green-design that focuses on minimizing negative impacts on the environment due to manufacturing, resource use and recycling.

5. Product Identity that also supports your brand identity. Your product should have the ability to fit among yet differentiate itself from its direct competition. Your product should also have a connection with the rest of the products produced by your start-up. Your product must be designed to fit into the context of use.

6. Quality in the precision and accuracy of manufacturing process, material composition, and methods of attachment. Your product should be made with sufficient tolerances to meet performance expectations over time, and must hold up to the expected life of the product.

7. Technology alone is not enough, but technology is essential. Your core technology must be appropriately advanced to provide sufficient features to your product. Remember, consumers expect technology in products to work consistently and at high level of performance over time.

Keep in mind while working on a new product that it should be aimed at fulfilling a fantasy by facilitating a more enjoyable way of doing something.

Build a Winning Team for Startup Success

A start-up’s success depends on its human capital. It’s not the numbers but the quality of your team that defines the growth path. The team members should be able to handle multiple functions, wear multiple hats, and deliver under pressure. Their skill-sets should compliment yours. Even if you are a one person Startup, you still need a lean management team with whom you can share some of the ‘hats’ for better performance of your Startup. It’s OK if you can’t afford a full time team. You can avail part-time services of domain experts while focussing your energies on key business operations. The areas/domains that you need a team for are: Accounting, Manufacturing, Sales & Business Development, customer service, and may be industry experts if you are not. You need to outline descriptions based on your Startup needs on different domain/functions and search for resources accordingly. Initially you don’t need a huge team, each heading one of the functions, but an optimum mix of people who can cover all the functions within themselves as a collective team, each complimenting the other. And therefore, it requires time, efforts and careful selection to set-up such a winning team. 

Outline skills and experience required for filling the team positions. By doing this exercise, you can actually further strengthen your B-plan and strategy. Also for a set of people to come together and work as a team, it’s of paramount importance that they share common visions and goals. Ineffective teams can be dangerous for the health of the startup. Asymmetrical teams often leads to start-up’s failure. Choose your team wisely. 

Remember, that your team composition is the differentiator among loads of business ideas, if you are looking for investment funding. If you are Startup is at idea or planning stage, you should involve your team in strategy building exercises. Use the collective talent pool of your team to create a winning Startup!

Business & IT : Project management tools

One of the most important needs of any business is to have a efficient task tracking or project management system. Over the years, many kinds of systems have come up which help an organization track project progress, most ERP systems have a part of their system dedicated for this specific purpose. Today, we will have a look at various open source and closed source system that can be used as an project management tool for your startup !

Open source

  • Codendi – From the Xerox garage, focus on software project management.
  • Redmine – Built in rails, good tool which lets you do integrated version control and ticket tracking.
  • ProjectPier – Very generic project management tool in PHP, handles fairly complex cases.
  • Trac – Ticket tracking + wiki in python which is very effective on top of available version systems[SVN,git].
  • Project HQ – Another smart PHP collaborative tool !
  • Collabtive – A basecamp clone !
  • eGroupWare – A fairly interesting open source ERP attempt, also lets you mange projects
  • KForge – A KDE based collaboration tool.
  • OpenGoo
  • ClockingIT

Recommendation !

For people who use Rails, Redmine is a really useful ticket tracking and collaboration tool. If you are the PHP guy thne you can surely try out project pier ! In any given situation, it is important to remember that you need the right tool for the problem … given the options above you will be able to locate a relevant open source solution.

Closed source / SaaS

  • Assembla – A very cool collaborative tool, it is also used by oDesk to manage projects.
  • Basecamp – Set of disconnected tools which allows effective communication in any project. Useful for remote teams.
  • Central desktop – Desktop based collaboration tool.
  • JIRA – Very comprehensive tracking application ! Must try.
  • FogBugz – Detailed time-based project tracking, very applicable to software service companies
  • Microsoft Project – From Microsoft, its been around the longest !
Recommendation !
Again, it is all down to what you can pay ! In terms of a generic project management tool, basecamp does a pretty decent job. If you are the coder shop, Fogbugz should be considered. It is an extremely well-designed and usable piece of collaboration software. It allows you to track a lot of things like time and project velocity.
If you want to have a look at more such products ! Do check out the list at wikipedia which is comprehensive.

Pricing Strategy for your Startup

Pricing your products/services is not only a key to your sales success but also for the health of your Startup.  Both high and low prices than optimum will hurt your business. High prices in the beginning may throw you out of the game, and low prices will cost you more. So you must charge enough to make a profit while being in the game. A well thought-out pricing strategy takes some effort but is worth the time spent. 

Your pricing strategy depends on the following key factors, 

  1. Your pricing should take into consideration the demographic cohort/group you are targeting with your products. So if you are targeting college students with your cool t-shirts, your price range should be lower than that of designer tees so that college kids can easily afford. It’s advisable that you do a survey so that you can keep competitive prices and still make profits. Remember ‘Client is the king’ and therefore price accordingly keeping your clientele in mind. 
  2. Prices are also dependant on the place or region. Metros and cosmopolitan cities usually have higher prices for consumer goods than rest of the country. Your pricing strategy should take in account where you want to market your products. Price discrimination is fine if you are not planning a country-wide release of your product. If you do, then you can plan on bringing out variants of the product to suit different markets with different prices. 
  3. The technology that you use for your products also is a key factor in determining your pricing and hence profits. You have to keep abreast with the latest production technologies in your industry and make a judicious choice based on your size of production, accessibility to capital, and your benefit-cost ratios. 
  4. If you get into a price war with a direct competitor whom you can’t beat, then try to value add in your existing product to differentiate and adjust your prices accordingly. 

You need to continuously monitor prices of your direct and indirect competitors to have a level playing field and for keep growing your business.

How to Do Competitive Analysis

Businesses happen in highly complex and competitive environment. It’s important to understand strengths and weaknesses your current and potential competitors.  This makes it very important for startups to understand and analyse their competitors and frame their growth strategies [both offensive and defensive] accordingly. In order to understand your competitors thoroughly, it’s impertinent that you do a systematic analysis and assessment rather than relying on informal knowledge and chunks of data that you might ‘know’.

Things that you need to know about your competitors include,

  • List of direct and potential competitors [make a list of 5 each]
  • Their strengths and weaknesses
  • What are their products/services and their USP
  • How does their product differs from your offering
  • What are their key operations strategy and how do they advertise
  • What’s the state of their business? How has been their growth in past 3 years?

In order to answer these questions, you need to develop separate competitor profile for each one of them. This kind of in-depth information will give you competitive advantage over them. You can deploy strategies through product differentiation, price discrimination, focussed advertising and sales promotions to get successful with your product offering. The competitor’s profile should include information on the, 

  • Company’s background and structure
  • Financial info on their growth
  • Complete product information comprising of array of products, rate of new products development, R & D, patents and IPs, brand strength, etc
  • Marketing strategies and their market share, alliances and geographic coverage, distribution channels, and their pricing strategies
  • Production process and operational strategies
  • Key composition in terms of human capital

You will have to get such information from both within the company and outside. Some sources for gathering information could be,

  1. Look for their website on the internet and study all the information given carefully. Also look on internet if anyone else is talking about them. Google them extensively to find info about their offerings. Check web-logs for reviews.
  2. Talk to their customers. Conduct a small survey to understand their customer satisfaction and behavior.
  3. Analyse their advertisements in different media to learn about their target audience, product features, benefits, etc
  4. Read their promotional materials and annual reports to understand their operational strategies and growth patterns.

Doing a competitive analysis can be a challenging and interesting piece of work. You’ll learn a lot about your industry, and your insights will help you position your product better and make your Startup successful.

5 Key Tips for Engaging a Startup Mentor

A business mentor has more entrepreneurial and domain expertise than you and can help in improving productivity, streamlining marketing initiatives, build better business relationships and in retaining key human capital for your Startup. Read ‘Importance of Business Mentoring’ to understand the relevance of a mentor. 

Finding the ‘right’ mentor is not always easy and requires some research and hard work to get the best fit for the founders and the Startup. Here are five tips on finding and choosing a mentor for your Startup. 

  1. Ask around for recommendations from your past & present colleagues, contractors, accountant, lawyer, and among your professional friends. The startups that I have mentored have all come through such recommendations.
  2. Mentors have a variety of expertise. To get the best out of them, you need to brainstorm the areas of guidance you need a mentor for. It can be from business structuring to helping with financial planning, or product strategies and marketing plans, to overall growth and development of your Startup.
  3. Once you have zeroed in on few choices, you need to thoroughly discuss the areas of engagement to guage their views and see if they match your work principles. Before you meet a potential mentor either physically or virtually, prepare a set of questions and topics that you will discuss during the meeting. Don’t hesitate in asking for feedback on your business idea and status.
  4.  An effective mentor helps you develop your own capacities and resources to undertake management challenges. It’s important that you and your mentor clearly understand the roles and therefore be vocal about what you want right from the beginning. This will ensure harmonious relationship with the mentor and you will achieve focussed results.
  5. Robust relationships are built on trust and honesty. Big names may not always be the best fit for you. You do have to make a judicious decision while choosing your Startup mentor. And so finally believe in your instincts when you finally have to make the mentor choice.

All the best for your search!