Tag Archives: Startup

Understanding the Goose Which Lays Your Golden Egg

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Last December I was speaking to a classmate from college who works for a large aerospace company here in the southeast.  As expected, we discussed what we are currently up to life. He inquired more about what iTruck is and how things were coming along with iTruck at the time.

The very fact that I am trying to create something and working an idea impressed him. But in that exchange he made a curious statement which stayed with me and which I have pondered on and off in the past few months. He said I am probably the only person he knows who is trying to build something and who did not follow the conventional college-work route.

Last month,I attended a community service session with an organization which works with kids from disadvantaged backgrounds in a part of Orlando. Part of the program involves  teaching the kids how to make business ideas reality. At the end of the session, I stayed back and had a chat with the management and those who put the program together. One of the ladies involved made another curious comment which stuck with me and even had a greater impact. She said that as someone who grew up in the suburbs you would think the concepts of business ideas curation/formation should not be strange to her. She then went on to say it was through working in such a setting that she really got any first exposure to such.

The picture given by the media and popular culture is one of millennial’s (think shows like HBO’s “Silicon Valley” and “The Social Network”) who are risk taking and entrepreneurial. But the story which is seldom told is that compared to other generations this simply is not so. Factors ranging from skyrocketing students loans which force many to put off  taking such risk so they can pay down their debt,  to the ludicrous and immoral occupational licencing laws which protect industry incumbents from new entrants, to even changes in the the culture in regards to risk taking and commerce among wide swats of millennial’s all come to play.

Yes, not everyone will be an entrepreneur or cares about business. But its in society’s self-interest to maximize the number of people who can be entrepreneurs by removing all barriers. After all, the bulk of new job creating and innovations and technical advances come from entrepreneurs and startups.  One does not really need to think hard about what the future hold for a society which is not creating opportunities fast enough to meet the hopes and expectations of the population. In fact, one only needs to pay very close attentions to a lot of out big cities to see that this dynamics is already playing itself out.

Furthermore, when society is less exposed to people who create opportunities and lack any understanding of what it takes,  it creates the potential for social instability.  Such opens the door for demagogues and opportunist to portray the actions of a few bad apples as the norm.

 

 

Means Towards an End

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Working in the tech space, I come across a lot of  ideas for using technology to solve issues which I feel overshoot and miss a point of the role of technology. Two examples off such which come to mind are proposals I have seen for using technology to solve housing shortages in some American cities and using technology to solve public sector corruption in some developing nations.

Tech startups and technology companies are no different from all businesses which have been formed in the past 2000 years. They all aim to serve some pressing consumer and social need and do this by figuring out how to use whatever resources are available at the time. Towards this end, understanding the target consumer market and bidding for the resources to create value for them is key .

Tech startups and technology companies are no different in this fundamental regard. Their success depends on their ability to identify a need, identify who their customers are and validate or invalidate all their assumptions,  and bid for and deploy societies scarce resources in meeting these needs.

But all that differs with tech startups and technology companies is the means used to meet these ends. In their case, they use cutting edge contemporary technology to meet such needs. The fact that they use advanced technology does not relieve them of the task of understanding who their customers are and figuring out how best to serve them.

Technology does not magically create market demand or conjur up consumers!

Statistically,  tech startup failure is in the 90% range. Yes, many of these ideas are more high risk than tested and known ideas and industries. Thus, a high level of failure is part of the game. But  a lot of this failure might have a lot to do with a lack of not appreciating that technology is only means towards and end.

An appreciation of this insight would help in reducing waste of resources which have alternative uses.  For example rather than investing millions of dollars into using technology to reduce housing shortages in some American cities, the solution could be as simply as repealing zoning and land use laws in some of those cities. And rather than doing the same to tackle chronic public sector corruption in developing nations, the solution could be as simple as massively reducing the size of the public sector.

Advice: Marketing and Advertising

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In almost a year of running and growing a startup along with another business, I’ve learnt one lesson very fast. That lesson is about he centrality and importance of marketing and advertising to business success.

Its not like I never knew that about these concepts and their role in businesses, rather I never appreciated how much they can make or break business success. I never really knew how much of GDP goes to marketing and advertising. I also never knew the extent to which in many businesses a great deal of the jobs have to do with marketing and advertising and not just techy stuff.

But again when you think about it, products and services are nothing if they are not placed in front of those are to use them and knowledge of them does not exist.

A key piece of advice I will give anyone starting a business is the need for learning how all these systems work and how utilizing them wisely can determine success or failure.

What’s the dirty secret of “overnight success”?

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Below is a Quora question I once answered with the title of this post being the question asked.  The answer below is unedited and just as answered

Overnight success only exist in the movies and in real life is quite rare. The Zuckerberg’s and Musk’s of this world are an exception to the rule. Even then their success did not necessarily come easy or overnight. Mark Zuckerberg has been coding since he was a kid while Elon Musk has been on the entrepreneurial journey for over 20 years. In the cast of Elon Musk, the man works harder than most and dedicates virtually his whole life to what he does even more than even Mark Zuckerberg spends working each day on Facebook.

A concept which people should learn is that for every action there is a seen part and an unseen part. Arguable the unseen part is the most decisive and determines the direction and the trust of the seen part.

Most business people which you see whom society praise as success stories probably struggled for some period of time before their burst onto the stage. But with how humans are, we don’t really bother to look at the unseen (the times of struggle and even failures along the way) but only bother about the seen (the success story everyone sees) part which is more appealing.

Really no secret exist to over night success. It takes hardwork, dedication, and showing guts where some people are too crippled with fear to show initiative. Success for some might come faster than for others. But people need to stop bothering about how their “over night success” will come and focus on what needs to get done either in their business ventures or just in life.

Is it okay to set up a business at the start of my career with my father’s money if he is ready to invest?

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Below is a Quora question I once answered with the title of this post being the question asked.  The answer below is unedited and just as answered

Separate family money/finances from business. There is so much uncertainty. You have no clue if the venture will succeed. There is so much risk and uncertainty. You don’t want to take family finances which are the product of years of hard work and sweat and blow through it in a few months. Things like that have the ability to break apart families and cause feuds. Instead focus on trying to bootstrap and even try to see if the problems you are trying to solve exist in the first place. Chances are if the problem you think exist does exist, you should be able to bring in some revenue on very little and have a massive ROI.

What are the types of startups a mechanical engineer can start?

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Below is a Quora question I once answered with the title of this post being the question asked.  The answer below is unedited and just as answered

Any! Why constrain yourself by thinking a mechanical engineer can only start a few kinds of startups? Some of the best startup stories in the past 10–15 years came from people who were not mechanical engineers or even formally trained (i.e. credentials) for the kind of startups they started.

If anything, due to the systems thinking and methodologies which mechanical engineers are trained in, they can begin startups which deal with almost any problem.

My startup idea can easily be stolen. What do I do?

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On Quora a while ago, I answered the question which forms the title for this blog post. Below is the answer I gave unedited with typos.  This question actually has the most views ever for a Quora question which I have ever answered.

You can do two things:

  1. Go ahead and begin working on the startup.
  2. Don’t start the startup or tell anyone about the concept because you fear it will be stolen.

Fear of your idea being stolen is simply a fear of something much deeper, that is a fear of rejection.

Two set of people exist: those who talk and those who act.

Far more people talk about what they want to do than those who act. Its only a few people who would take your idea and try and work on it. Even then, almost no one can have the same passion you have to make your startup idea work.

Another way to look at it is that in order to make your startup idea feasible, you must tell people so you can get feedback. No matter how much you think you have your idea refined, such refinement is usually made up of assumptions and simplifications. Its only feedback from people that can make your idea better and bring it closer to success.

Outsource and Delegate

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As we approach the end of the year and I look back and try and get as much done as I can before it ends, I look back at some of the lessons I have learnt. One of these lessons is outsourcing and delegating.

A startup is cash constrained and has no resources by nature and all which can be done to get task done at no cost and in the simplest way possible while kept things in house is of highest priority.  As much as possible, no one wants to put cash down a concept which really is not proven.

But at a point, keeping some task in house is simply not worth it and cost more than not doing so. Trying to keep things in house can lead to bad product quality and even precious time being wasted.

Looking back at this year, there are task which I wish I had began outsourcing much earlier than I eventually did. But in all no regrets, its all part of the learning process and I can say that my startup is on moving according to plan and 2018 is going to be a year of great things and massive growth. The best has not even yet began!

The Capital Delusion

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The train of though goes something like this: the only barrier standing in the way of all these great businesses being formed is scarcity of capital. If only a way can be found to overcome this obstacle, it would be all Nirvana and the world would not be deprived of all these great ideas which will usher in a new era.

Two fallacies are embed in this line of thinking. The first being that capital can be magically made abundant and the second being that businesses having access to capital guarantees success.

Just as defines the relationship between humans and any economic good (a good which is in less abundance relative to human wants), capital is inherently scarce. There can never be enough capital available to fund all ideas and projects at any one time in society. Society has to ration capital and make sure it gets to those who can put it to the most productive and value added use. The means for achieving this end is  the market economy and its price mechanism system (i.e. profit and loss calculations). But I’ll also add that many times when capital is distributed, considerations of efficiency don’t always win out and things are not very straight forward.

No matter how great a business idea might appear and sound when in business plan format, success is not guaranteed. Such plans are riddled with many assumptions and simplifications which fall apart like a deck of cards upon contact with reality. Stories abound of business and startups which had abundant access to capital and all seemed like they were about to conquer the world but burnt through their capital and failed spectacularly.

Capital can be a double edged sword. It can be a blessing and it can be curse. With capital, startups and companies can hire world class talent and scale up on a level and speed which would simply be difficult or next to impossible using means such as bootstrapping. But capital can also be a curse because with an infusion of capital,  incentive structure within startups and companies can change overnight. Rather than operating on the side of caution and rigor, overnight not too well thought out decision making can become the norm.  In a way, an artificial glut of capital in society can have the perverse effect of degrading the quality of entrepreneurs around.

All startup and business ideas are unique. But in the early stages, its wise to say that the focus should be on operating an the lowest cost possible and seeing if an actual demand exist for such business ideas. What many people fail to appreciate is how ridiculously low the bar for those who had ideas and want to test them. Depending on the funding method used (for this blog, I mostly have venture capital in mind), emphasis should be put on doing all that is possible not give away chunks of the business. In giving away equity, the stage could be set for a coup being carried out against the founder(s) by investors.

 

My Biggest Takeaway So Far

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In my 8 months of being on iTruck, the two biggest things I’ve come to learn fast are the virtues of patience and constant self learning; with constant learning being the greatest.

Naturally, I am a patient person. I went from a kid with a very hot childhood temper which many people exploited into on the most most patient people you might ever come across. This trait has helped me so far. In building a startup, things are bound to change and a lot of uncertainty and risk is inherent with no specific end dates insight.

In going the startup route, waiting for the day with the right conditions or when you will know everything is delusional. No one is ever going to perfectly have all the skills needed. Self-learning along the way is key. More than not, all my monthly personal development plans and daily plans – thought they are geared towards the startup – mostly revolve around learning new things and reading.

With how the educational system is, skills exist which people are never really thought in school. I learnt programming in a way geared towards solving engineering problems and not towards software development or app development. This is a shift I have had to make and am still making. A lot of my software work is done by people who write programs.

Since I am a business person, knowing about financial issues is key. Schools don’t teach students about financial issues, this is an area I have had to sink a lot of time into and still am sinking time into because so much exist to be known which I am trying to shrink into a short time span.

As much a running a startup is about business management, in many ways it is really about constant learning and self improvement. At the end of the day, a startup or business is as good as those who run and control it and when investors or people who take interest approach startups, their bets are being placed on those who run and manage it.