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The story of a start-up : Evolution after Chaos

Once we decided upon the name of the brand for our green products, and were happy with the sleek and unique name, we invited couple of our friends over momos and coffee to share our ideas and get their feedback as potential consumers. In the meantime, D had designed a brilliant logo for our brand, which further enhanced the name. M & L were our sounding board for the evening over yummy roadside momos [bootstrapping has its own unique flavors], we talked at length about our branding exercise over GreenFlip. We even talked about some tag lines, and L came up with ‘Fashion Flip to Green’, which won by 4:1 vote then and there, and we accepted and adopted the tag line. We finally had a cool brand name, brilliant logo and an excellent and tasteful tagline, all in sync.

In the next few days, we finalised the flagship product to start with. However, A was in discussion with another social enterprise making several other green products and was interested in marketing their products through our platform. Initially we discussed the products that we can market. We did a contract for promoting their green products that were not in direct collusion with our planned products.

Right from the beginning we understood clearly that an effective web presence is an absolute must for any modern business. Simply posting a website is not enough. In fact, uploading a website without marketing it is like posting ad copy only in your own living room — if your target market doesn’t see it, it might as well not exist. D & me developed the social media marketing strategy for GreenFlip, and we started to implement it over a variety of channels and started pushing the brand. We were using the regular networking sites along with blogs, and not so propular ones as well. Our web 2.0 enabled website started to get increasing traction, and our hard work was paying off with more queries pouring in from all over about our products. This also helped us in empanelling more GreenFlip Buddies to further develop the sales channel [http://www.greenflip.in/flip/greenflip-buddies/].

But soon differences among the founding team started to build our marketing ‘gag’ (the other SE) products, as D & I felt that the main idea behind GreenFlip is pushed on the back burner and we are moving towards becoming a marketing company for others products. We wanted to build and promote our brand. Our original visions for this start-up were moving in different directions.

The team had started to move towards the point where all members had differences in opinions and ideas for the start-up, right from product selection to marketing to design, and even website! It was the dark times for the start-up, and Chaos prevailed over any potential development. And eventually the team had a split in the 5th month of its existence, with A deciding to drop out of the start-up. The differences had grown so big that it didn’t seem possible to bridge it. I think that the founding team for any start-up needs to have similar personal values and professional vision beyond complimentary professional accumen. Asymmetrical teams do eventually have issues that restrict the growth of the venture.

In December 2009, we incorporated the company as GreenFlip Eco Solutions Pvt. Ltd in order to create a win-win ecosystem with matching goals and vision for the company [Read why it’s important to incorporate your start-up, http://www.stratessence.com/blog/get-incorporated-and-get-busy/]. We did a complete makeover of our website, started a green blog, did extensive business development, created a pipeline for future innovative products, recruited a smart BD & Sales head to lead the business development efforts of the start-up. In past four months we have done well, gone beyond our quarterly sales target, and do hope to keep going and innovating in coming future. Do visit us at http://greenflip.in and read more about the start-up.

Thanks for reading our story! If you want to share your start-up story, write to us at contact@stratessence.com

The 2nd biggest mistake entrepreneurs make with their Business Plan

Guest Post by: Robert Goodman

Many cost-sensitive entrepreneurs depend on number crunchers, bean counters and newly minted MBAs for their projections – just to save a few dollars.

New start up CEOs dooms their new company by pinching pennies in the wrong place. Instead, what they need are pivotal insights from experienced consultants who can provide the guidance the entrepreneur needs for producing a realistic, genuinely implementable business plan.

Your business plan is not some academic document – instead, it is your crucial road map to successful implementation of your vision for your new company.

The most important part of any business plan is the detailed financial projections that are the basis for the entire business model of every new company.  There are four sets of underlying assumptions that drive all the projections:

1. Start up costs – what will you need to spend up front to get the company going?

 2. Sales forecast – the single most important set of assumptions for your whole plan – how many of what, will you sell, for how much, at what costs, when?

 3. Personnel – how many, of what kind of employees, will you need at what cost, when?

 4. Operating costs – what will it really cost to be in business, generate sales, give necessary sales support and exemplary customer service and cover all back office expenses?

 Every part of your financial projections is just arithmetic – based on those four sets of driving assumptions.  Because it is just arithmetic, many entrepreneurs make the often fatal mistake of assuming it is trivial and can be done easily and cheaply.

 But – if you guess wrong on any of these assumptions, then most of your projections are wrong – including two of your most important projections:  your cash flow and your capital needs. If you guess wrong on your assumptions that impact these, then you will probably run out of money and your new company will fail.

Number crunchers and bean counters are great at arithmetic.  So are newly minted MBAs. And, they can be relatively cheap to hire.  But this cheap hire may be the most expensive mistake you will make as a start up CEO.

 These cheap hires almost never have any experience base or expertises that help entrepreneurs make meaningful assumptions.  So, entrepreneurs who use this approach for their business plans end up with GIGO:  garbage in, garbage out projections that are misleading at best – but more often, fatal in the end.

 As the adage goes, the only thing worse than going the wrong direction – is going the wrong direction enthusiastically. By basing your business plan on the wrong assumptions, you end up going the wrong direction – probably enthusiastically – believing your bean counter-generated plan will be the path to wealth.

 Entrepreneurs who have thought they were saving a few hundred dollars by hiring cheap number crunchers or inexperienced MBAs, end up losing everything they’ve invested in their new company – all because they were penny wise – and dollar foolish – or rather, thousands, hundreds of thousands or millions of dollars foolish.  Cash is always limited for start up companies – but this is one place you do not want to get trapped by false savings.

What’s the best way for you to avoid the second biggest mistake for your new start up company?

Hire an experienced management consultant who specializes in start up companies – particularly a consultant who has started at least a dozen of their own companies.  That way, you get insights based on real life experience that will help you end up with a genuinely implementable plan for the future – your future and the future of your new start up company.

The story of a start-up (part 3): New Partnership

15 days later after our last meeting with S, we met another potential partner, A who showed interest in the idea of Green. Over cups of cappuccinos, we began discussing the idea in detail and crunching numbers and forecasts. The idea was back on track, and it seemed that this is the partnership we have been looking for, that every member of team has set of skills that complements and will help building a strong team to build this start-up and succeed.

After we were on the same page, we were brainstorming on the name of the start-up. D took the responsibility of coming up with innovative names, and we discussed several of them over emails. The common initial vision was to produce apparel made out of natural fibers as our first product with lateral thought provoking pop-art going on them.

D came up with “GreenMaal” and it was chosen 2:1 being voted among three of us. D went ahead and registered the domain name, set up our email accounts and took the charge of sourcing vendors and managing them. He did extensive searches, shortlisted a few, initiated dialogues with them, and finally we chose one with a consensus.

In the next few days D while handling operational functions of the business idea got a partnership contract pulled out and we three signed with thus legalising the partnership over GreenMaal. A was excited, and I was thinking about strategic directions and product development. So we had several rounds of cappuccinos over the next 10 days to discuss the same.

We did extensive brainstorming on various domains of the start-up and were making elaborate strategic plans to implement them and achieve targets. We had set quarterly targets, had worked out logistical details, had started advertising using Web2.0, were on lookout for designers & their designs, had identified potential customers whom we were going to target & pitch our products. Yes, we gave good business to Barista during our entire planning phase!

However, while doing market survey the name of the brand was not getting any good responses beyond some school kids, and so I wanted another name with an appeal for both classes and masses alike. One day while barinstorming on sales numbers on a flip chart, and joking about framing the flip sheets in our new work space, A & D together came up with the idea of “GreenFlip” as the name of the brand. We all liked the name, did extensive searches to see if there’s another company by this name and after being satisfied D registed the new domain name, and we changed the name in our partnership papers. A good name for any start-up is essential [Read about naming your start-up at http://www.stratessence.com/blog/naming-your-business/].

To be contd…

The story of a start-up: Part II

Next day, armed with our ‘Green-Pop’ idea & never say die approach and enthusiasm, we met S at a coffee shop (CCD). We discussed the idea at length over several cups of coffee. We discussed the target market, pyramid marketing structure to set up the sales chain, sourcing design and in turn starting a pop-art movement in India, identifying and managing vendors, value addition, financial requirements. We were happy that we are on verge of creating something innovative, and with that we decided to meet the following day with some background research on various modalities.

Next day, prior to our meeting with S, we both sat over cappuccinos to discuss the idea further. D was chalking out strategy for setting up e-commerce platform with user design and innovative user experience. I was wondering about the $10K investment into the idea knowing that with economic recession, and art markets down, it was very improbably to convince any angel to invest in a pop-art start-up idea.

Even though S liked the idea and was willing to be a part of it, she was not convinced with the idea of bootstrapping and wanted a $10K investment to start with. We, poor cash strapped entrepreneurs had no access to such an amount and moreover we were keen to start a $60 enterprise and prove our point [Read http://www.stratessence.com/blog/the-60-wonder/]. In the end of the entire two hours meeting, we three had differing opinions about the idea. It was All-out-risk Vs Cushioned-risk. Eventually, though D & I were more with the idea, the plan to involve S came to an end. We did gain good insights through this two sessions we had with S.

To be Contd….

The story of a start-up

This is a story of a real time start-up whose genesis began in June 2009. I was bored with monotonous and boring work of being an advisor on tech project consulting for the government, and wanted to experiment. I had past ten years of international experience working in cross-functional roles in various domains [http://www.stratessence.com/team/] , had thought of several ideas for converting into businesses, but was yet to do a formal bootstrapped start-up. It was around this time I had met a brilliant and out-of-box thinker guy who was 8 years younger than I was, already few start-ups old and we used to discuss plenty of ideas over cups of cappuccinos everyday and strategy to convert them into $$$$ earning enterprises.

After thinking & thrashing several ideas, finally what came to my mind was what I have been working on for last 4 years: GREEN!

The idea was to do green start-up and make it grow over a period of time introducing new services & products.

I met my brilliant friend Dipankar and shared the idea of making green t-shirts and apparels. D was thrilled with the idea and with his interest in pop-art, he came with the idea of putting pop-art on the tees as added value and making niche ‘green-pop’ tees. We both were thrilled with the idea and willing to go forward with it. We both decided to meet S who had a deep knowledge of pop-art, and see if S could come as a partner on the venture and take care of the design segment of the venture, which was crucial for its success.

…To be continued

The 60$ wonder

Now this is a product that would serve the developing countries really well ! A startup built up at $60 investment upfront. Now one wonders whats the catch and where, there is none. This post is a small intro about The Thrid Network , a content startup that has been built up on minimal investment and maximum sweat work. All the money that was spent bought domains and servers !

This startup has focused on being agile and small from the very start. From its current financial projections this startup will break even in the first month, which sound absurd but at a micro level that mean anything that you earn after that is profit for them as operational costs are very low.  This startup owns and runs popular properties like

These are consistently growing in traffic and will eventually become great advertisement platforms for the various niches that they address. It is critical to realize that it is growing on the hard work of an exceptional content team that is self-motivated / goal-oriented. The biggest investment that one can make to their startup is maximizing their time, that probably should be in the rulebook of the startup game.

Who says that one needs to invest millions to get started ! In my belief, it takes little money, but a lot of faith and work in the right direction to get started [but money helps in accelerating the growth once the fundamentals are strong].

Write to us to learn more about how you can realize your idea into reality ! We believe that being lean and mean is what makes enterprises sustainable and profitable for all the parties involved.

Stay humble, (and) stay bullish!

Guest post by: Mandar Kulkarni

Last year while I was doing my MBA I got an opportunity to work with a for-profit online social venture. This startup was founded two years back, and the co founders had their own jobs – so basically this was a side-project which they wished to carry on (since they had started it, but now were a tad busy with their jobs).They chose a handful of us B School students to work with them. Needless to say, we were quite kicked about working on this. However, it did not quite work out as expected. From this experience in particular and a few other related experiences in general, here are a few tripping points that I believe entrepreneurs should watch out for!

·       Don’t let early success get into your head! During the first couple of months of launch you are bound to see very promising looking registrations/usage numbers. But understand that a big part of this is purely due to the affection of your family and friends, as well as the novelty factor attached to any new ‘cool’ looking business plan! It is very easy to get carried away by all the sweet talk about your product, but again take all those ‘sweets’ with a pinch of ‘salt’ ;). A positive start is by no means a validation of your business plan!

·       Launch only when ready, even if it takes time! Making your product public when you yourself are aware of major issues is like putting up an ‘in a relationship with’ status update on Facebook just because you have a crush on that person – bound to be disastrous unless the ‘crush’ (or in our case the user) is totally sold out on you (an assumption fraught with peril)

·       Make sure at least one person is working full time with the startup – else, IMHO, the momentum just gets lost somewhere. The side-project would eventually (and sadly) get pushed off the sidelines!

·       And finally, be a bit shameless in asking for feedback,  be humble enough to take the criticism, and be flexible enough to incorporate changes which you might not have thought of in your plan A!

It is the period after the first launch that I believe is the acid test for any Entrepreneur. The joy and pride should take a backseat while receptiveness and humility should do the driving!

Get incorporated and get busy

It is essential to realise that most businesses are legal and financial structures at the end of the day. Once the creativity and passion of the founders has taken a product or a service to the market, it is all about how you project your business. It is important to realise that you must formalize your entrepreneurial associations quickly and fairly early on, as it protects you legally and financially from potential problems in the future. Some mistakes that people make when they start out are

  • Weigh everything in terms of trust and their past associations
  • Neglect the legal and financial structuring of their association
  • Make emotional assumptions about future prospects and revenue sharing
  • Understate the importance of a severance / failure plan starting out

It is easy to plan for success, as it is a positive experience overall. Planning for failure and how it works is the most important thing for a start up with a product or service which is already working. If all the founders are clear about how they are positioned legally and financially within the organization, it provides a better environment for growth longer term.

The biggest reasons most companies are within families is because the above assumptions can be made safely when you know that there are social ways of policing the founders, but in most cases the only way to tackle a difficult situation within founders is legally. So, it is important that all entrepreneurs work with a CA and lawyer to work out how best their interests are protected in all their associations.

If you are someone who has seen the darker side, please feel free to write in to us. We are here to help all entrepreneurs get busy [and also incorporated if necessary]

Naming your business

Naming your business is one of the toughest things to do ! It takes a lot of iterations, talking with you closest partners to find one that truly appeals. If you look at the various companies that have succeeded, they have names which are fairly obvious in hindsight but are quite difficult to think of at that point of time. Google, Microsoft, Facebook are all very interesting names which are describe things which are not directly correlated to the products they sell, yet these are one of the biggest brands in the world today.

We @ stratessence had an equally difficult time selecting a name for our business. The name to be selected had a couple of important constraints

  • The domain and the trademark had to be available
  • No other company with the same name should exist
  • It should relate to the work and industry that we are in
  • It should have the potential to be a good brand name

Well, with the above constraints we had come up to the fact that we guys were powering people’s strategy which was essential to their growth. So here was the name STRATegy and ESSENtial combined to give us STRATESSENCE ! It fits all the above parameters fairly convincingly and the founders agree that it has the right ring to it.

Most of the startups that we work with have a similar story, it is a show of the creativity within the founding team and of course a whole lot of luck. We have come across some really good names over the last year ! So what is your story, feel free to write to us about it.

B-plan Outline

The business plan consists of a narrative and several financial worksheets.  The real value of creating a business plan is not in having the finished product in hand; rather, the value lies in the process of researching and thinking about your business in a systematic way. The act of planning helps you to think things through thoroughly, study and research if you are not sure of the facts, and look at your ideas critically. It takes time now, but avoids costly, perhaps disastrous, mistakes later. This business plan is a generic model suitable for all types of businesses. However, you should modify it to suit your particular circumstances. Also pay particular attention to your writing style. You will be judged by the quality and appearance of your work as well as by your ideas. It typically takes several weeks to complete a good plan. Most of that time is spent in research and re-thinking your ideas and assumptions. But then, that’s the value of the process. So make time to do the job properly. And finally, be sure to keep detailed notes on your sources of information and on the assumptions underlying your financial data. I will discuss detailed business plan modules in my upcoming posts.

1.0 Executive Summary Highlights
1.1 Objectives
1.2 Mission
1.3 Keys to Success

2.0 Company Summary

3.0 Product Description
3.1 Product Development

4.0 Market Opportunity
4.1 Market Segmentation
4.2 Target Market Segment Strategy
4.3 Market Needs

5.0 Strategy and Implementation Summary
5.1 Competitive Edge
5.2 Sales Strategy inc a Sales Forecast

6.0 Management Summary

7.0 Financial Plan
7.1 Break-even
7.2 Projected Profit and Loss
7.3 Projected Cash Flow