Category Archives: Growing new Business

Deciding How Much Equity to Give your Key Employees

The new trend within tech start-ups is giving offering potential talent equity shares.  Giving worthy job candidates a share of equity could be the difference of them picking your company over someone else’s.  This also motivates workers, and decreases employee turnover. Equity encourages employees to stay long-term, because they are motivated by the idea of the company enters the public stock-market, or if it is sold in the future.  Equity acts as a foreign currency, and the amount depends on timing, need, and expertise. It is also very good for attracting potential advisors to the company. Advisors can triple the value of a company, so the equity would eventually pay for itself.  Read More >>

The Science of Building Great Teams

While teamwork may have been fostered in youth, it is an incredibly useful skill in the workforce.  A study generated over five years of 19.9 million scientific papers and 2.1 patents showed that people produce more work in teams than as individuals.  Teams are more important than they used to be because there is much more to learn within a given field. When it comes to building the teams themselves, team-members’ ability to coordinate effectively trumps the individuals on the team’s respective talent.  Additionally, teams have their own level of intelligence, which is measured by a group’s ability to perform tasks. Read More >>    

Can Calculations help build a profitable startup?

 Entrepreneurs must perform certain calculations in order to evaluate their ideas against those characteristics, vision, and goals before proceeding further because every idea has different viability, validity, feasibility, capital requirement, and potential characteristics. Irrespective of the bussiness model whether it is on-demand, SaaS, e-commerce, the marketplace, subscription or others, the two most important key metrics in a startup are customer acquisition cost and customer lifetime value. Without a product, it is hard to obtain all the numbers necessary to perform calculations to validate the revenue model thus it is advisable to use figures from benchmark companies to understand the fixed costs, variable costs, how much it cost them to acquire the customers and a customers lifetime value. All these values help the founders to deduce the breakeven point after which the company will be profitable. This gives the founders an understanding of their big vision and helps them plan in advance without having much to lose. In conclusion, the objective is to estimate the viability and feasibility of the idea given your goals and resources. Better know this sooner than later in order to change execution strategy, market or idea.Read More>>

The science behind collective intelligence

A study carried on 19.9 million scientific papers and 2.1 million patents generated over 5 decades shows that teams produce more work than individuals do and the teams are getting bigger over time, It was further observed that these teams produced work that was more often cited than the work of an individual. It is strange that the team have a combined level of intelligence known as collective intelligence which is not really the sum of all intellects on the team. A study on collective was carried out on various teams by involving the members in solving visual puzzles, brainstorming and other exercises. It was concluded that teams performed better when the members were more perceptive to their teammate’s feelings and opinions, It also suggests that with more women on the team the success rate improved because woman are more perceptive and when turns were given to all the members to speak out rather than being dominated, teams performed significantly better. Thus it becomes imperial that a manager assembles and handles his team in order to reap the benefits of all the individual talents. Read More>>

Friction is essential!

“The lion that is desperate for the meal is going to be a lot more focused and smarter than the one that isn’t worried,” says Gary Hirshberg, founder of Stonyfield Farm. The above statement is a counter-argument to the advantages of the services offered by Epic Entrepreneur House in San Diego, At Epic we can see aspiring entrepreneurs working on ideas that could disrupt industries without being distracted. Here dry-erase boards line all the walls of the house and also an in house chef prepares all the meals. The prearranged social events make it possible that the friends of all those in EPIC visit them regularly. The dangerous road that was once walked alone by founders many years ago is now completely paved and lit up, this includes outsourcing of various supplementary tasks easier and with websites providing info on almost everything an entrepreneur needs such as how to pitch, what to wear and how to find VC’s makes it possible that one can start a bussiness all by himself. However, This is not welcomed by many experienced startup founders. Read More>>

When to call it quits on a business venture?

No one wants to be a quitter, But there comes a point when the founders are struggling with their startup and have to make the big decision in order to keep their reputation and sanity intact. The process of shutting down a startup is always a messy affair because it involves burning down customers,employes and investors. However, there are other ways an entrepreneur can strategically shutdown the company and bounce back from the failure. The key is to know when to give up,Although failure is a slow process and there is no way to measure how well a startup is doing, one should know that when the startup is moving sideways it is time to reflect on the direction the company is heading. It overwhelms any founder when they have to shut down their venture because they do not want let others down and  future job prospects is another factor that  makes this whole process even harder.Read More>>

Bias is abundant in the world of venture capitalists.

Recent studies based on data acquired from the USA suggests that VC’s are biased towards founders of same ethnicity irrespective of their financial behaviour, the male-dominated VC sector and the lingering gender gap further justifies the tendency of VC’s towards homophily. However, this does not mean we eliminate rationality completely because when the study was further extended to understand the 622 deals within India’s rapidly maturing VC industry. It was understood that the VC’s did not completely base their decision on the social attributes such as region, caste or language rather on the future cash flows from the deal. using measures such as the internal rate of return (IRR) as a metric the researchers could identify the number of successful deals out of the ones that were being studied. Read More>>

Lean Startup Methodology- Pros & Cons

Lean startup methodology proposes that for a startup to be successful it has to develop a framework that encourages the focus on action. The process begins when the founders of a startup fill out the business canvas model that has nine subsections dealing with concepts such as value proposition, customer relationships, revenue streams, cost structure etc. this enables the founders to answer questions on their business and also helps them put together a testable hypothesis thereby facilitating production of viable products to test the hypothesis, If the test proves wrong the canvas model is adjusted and the iterative process is repeated. Although the lean startup methodology has proven successful in most of the cases it still isn’t completely failproof and causes considerable harm at times. Read More>>

Care is the new commerce

This is a marketing strategy or mentality adopted by tech-savvy companies like Amazon, Uber, Netflix and also by companies such as Nike in order to provide their customers with a personalised service experience on multiple platforms. This method also involves reducing the response time involved in replying to a customers request or grievance call, not only does this help the companies stay relevant to their customers but also fosters new business opportunities. Read More>>

How to develop a strategy using Distant Foresight Index (DFI)

DFI helps the organisations to identify potential distant threats and also helps them devise a plan of action when the need arises. It was created in response to the question, How A few businesses detect and respond to future threats and also capitalise on vague opportunities while the others fail? another important question is why are the business leaders unprepared? the answer is that the tools or frameworks that are used mainly focus on the immediate environment of the industry such as war games, strategic planning, market trends, etc. also in many industries, the incentives are based on short term goals thus the leaders are biased towards encouraging activities that strengthen the existing domains rather than exploring new ones. thus without a reliable and structured framework such as DFI recognising and implementing distant innovation will always be a risk to the organisation. Read More>>