“If you can’t Listen & Learn, you can never be a good entrepreneur” was what Ms Barbara Corcoran said to one of the budding entrepreneur on Shark Tank. Even though the product had all the possibilities for a commercial success & the entrepreneur was an engineer who had developed the product, the primary limitation was- He did not LISTEN. When the sharks had suggestions for his business, he did not lend the “EAR of Understanding”.
He was so very deep rooted in his assumptions that he did not have the foresight to take in the limitations that his own mind had created. To break the barriers of the assumptions conditioned by the mind of nascent entrepreneurs taking the help of Mentors is deemed necessary in validating an idea at early stages.
Entrepreneurs are more often focused on building their products and services that they fail to concentrate on the VALUE that their business could create for their customers. Validating their ideas help them understand & deliver the VALUE that the consumers are expecting. Focusing on the real-value proposition that is much superior to the competitors adds immense value to their product in the eyes of the consumers.
Bangalore based online parenting app “Babyberry” was started with an aim to bring value to help parents of new-born infants the best possible care for their children’s holistic growth and development ranging from physical, cognitive, social to emotional growth. The application had salient features such as digital vaccination chart and reminders, health records management and access to the nearest doctors based on geolocation.
What the Start-Up failed to accomplish is bring Value to the parents who felt that the online application was just another service & didn’t bring any additional value, convenience, or comfort to their lives. Babyberry is now gone back to its drawing board to ensure that its application brings Value that its customers expect. They could have identified this bottleneck earlier if they had done enough customer interviews at the Ideation stage.
If an entrepreneur doesn’t understand his consumers pain points, then that would itself become the pain points for the business. It is imperative that there is a real connection with the target audience & the profiling of the consumers is understood explicitly. A major part for avoiding failure & succeeding in the business is understanding the target consumers to the minutest of detail & delivering beyond their expectations.
“Taskbob” a hyperlocal service start-up based out of Mumbai. Started in 2015 with a vision to create happy households by facilitating instant, high-quality home services through higher productivity by servicemen to their customers. Taskbob wanted to revolutionise home services in India by addressing 3 of the biggest customer pain points: delays, poor quality and lack of price transparency. In 2017, Taskbob shut down its services because of its inability to scale and not completely address 2 out of the 3 major pain points-appointment delays & customers complaint on the poor quality of deliverance.
It is essential that the product/service reach the target consumers in the right time & in the right way. Many exceptional products have failed to acquire customers because they did not reach the customer base. Only when there is optimisation of customer acquisition do we have a sustainable business ensuring a positive ROI on the spend.
The Start–Up cab aggregator from Gurugram “Roder” was launched in 2014 which offered inter-city cabs on demand. The business was aimed towards revolutionising the travel between cities by offering cabs at almost half the fare than market rates for one-way journeys.
Roder had to close its operations in September 2017 due to the high customer acquisition cost and low repeat rate for outstation travel despite the low tariffs. The founders failed to control customer acquisition cost & were not truly clear with their market segment & consumer behaviour patterns.
Consumers are looking for products/services that are authentic, transparent, sustainable & one that ensures trust. Businesses sustain even in the toughest of situations when the consumers have faith on the product. This kind of consumer loyalty is what an entrepreneur should aim for with his product/service that would stand the tests of time.
It is not hard to believe that Netflix services alone constitute about 15% of all the world’s internet bandwidth. Indeed, a commendable feet for a company that started by posting DVDs by snail mail that started way back in 1997. When it was first launched, Netflix was purely a movie rental service where users ordered movies on the Netflix website, and received DVDs by post. After watching the movies, they would simply post them back to Netflix in the envelopes provided which was biggest advantage to people those who did not have a video rental store nearby.
At present, Netflix streams movies and has more than 151 million paid subscribers in over 190 countries around the world. It offers a wide range of TV series, documentaries, and feature films across a wide variety of genres and languages, including original productions. For millions, Netflix is the de-facto place to go for movie and TV streaming.
The reason for Netflix long haul & sustainability is the understanding the pulse of its viewers & expanding its content based on demand & originality. Given the quality of the content offered there in no doubt that Netflix would be able to keep reinventing itself by coming up with services that hit instantaneously with the viewers.
The demands placed on an entrepreneur’s shoulder might be overwhelming for many. Its necessary that he/she has the right mentor to take him through the longevity of business success. Only with experienced hands holding the founder will he/she be able to navigate the rough terrains of entrepreneurship.
“EatFresh” a Foodtech Start-up was started in 2015 offering a daily rotating menu prepared by top chefs that consisted of Indian and international cuisine. EatFresh operated in 50 outlets together in Chennai and Bengaluru. The StartUp shut down its daily operations menu in 2017 and decided not to operate its on-demand meal delivery service.
Moreover, it decided to change its business model and cater only to party or bulk orders in the future. This example shows us that the founder needs to do his homework to the tiniest of detail in understanding the business and take in mentors who will foresee the challenges & help them learn their mistakes sooner& faster.
The founder needs to have a good sense of financial acumen or else in no time the business will be reduced to the state of a pauper. The personal money handling habits of the founder plays a pivotal role in handling of the finances. It is vital that the founder has a rein on the expenses as it would be very tempting to spend when the coffers are full and have a control on the expenses. There are many startups even after adequately funded failed because of high burn-rates.
In 2015, “Monkeybox” was started with a view to provide vegetarian meals for kids in the age group of 3-18 at schools that was based on Recommended Dietary Allowance. In 2017, the company was supplying over 1,500 meals per day to more than 85 schools in Bengaluru, with over 2K subscribers on its platform. But the Foodtech StartUp shut down its operations amid much surprise and speculation as it had failed to garner the required revenue to stay afloat amid fierce competition. On March 23, Monkeybox published a statement saying that the operation was temporarily terminated.
Monkeybox failed to cope with the B2B model and their rapid expansion plan which further led to losses. Unlike the B2C model, payments made in B2B takes over 60 days to come in. And the company had to face working capital issues due to delay in payments. Expenses, including hiring temporary staff, increased the team size to 250 in two months and decentralising kitchens across cities to maintain quality, had also become uncontrollable.
Monkeybox will be counted among rare start-ups which have made a comeback after halting operations for a long period. Going forward, it would be interesting to watch how Monkeybox and the team have learned from their past mistakes in managing their expenditures. Let’s hope that the founder has a Mentor who can help Monkeybox a splashing comeback & deliver meals to kids with cost control measures.
The above mentioned are just a few areas in which a MENTOR can help an entrepreneur validate his/her ideas. Each & every aspect concerning the business is addressed during an idea validation thathelps in achieving goals that might even seem impossible. Mentors guide not only in the journey to the mountain top but also staying there. Finding a mentor and working along with them through the entrepreneurial journey creates wealth & saves an entrepreneur from expected & unexpected pitfalls.
If a budding entrepreneur really needs to understand business, he really needs to RELEARN. RECONDITION & REAFFIRM in his/her beliefs, thoughts & patterns connected with the entire entrepreneurial eco-system. The fact that an idea or market demand doesn’t alone make for a great StartUp but also depends on its validation, execution at the right time, right place & with the right mentor makes for the success of an enterprise.