The Entrepreneurship Cell,IIT Bombay
E-Cell Office, Student Activity Centre, IIT Bombay, Mumbai-400076
Description: Entrepreneur’s life looks very glamorous and tempting, after all who doesn’t like to be his/her own boss. But entrepreneur’s life is not as easy as it seems. There are lot of ups and downs that an entrepreneur faces on a daily basis. Being an entrepreneur is all about going through these ups and downs and fighting the downs everyday to become successful. As you can see there are lot of myths about entrepreneurship, Here are some of them:
Entrepreneurs are born: Anyone with an idea and time and perseverance of converting that idea into a business can become an entrepreneur.
Entrepreneurs don’t have personal time: Entrepreneurs do have grilling hours of work that cuts into their personal life but many corporates also have that many hours of work the only difference is the schedule control. Entrepreneurs have control over their schedule.
To know more about life of entrepreneur and myths about entrepreneurs visit :
Description: Starting up a startup requires a lot of motivation and perseverance. Trying to solve a problem that you feel is very important, gives you the motivation to start and run that startup. Try to figure out what all problems are there in your surrounding and if you feel by starting up a company, you will be able to solve that problem, then you should start the company. There are various techniques by which you can generate ideas. Some of the major idea generation techniques are SCAMPER, Brainstorming and mind mapping, effectuation. Generating idea is only half task done. But the process of converting your idea from that piece of paper to the real world is an overwhelming task in itself. If you validate your idea and prove that it’s worth solving, it gives that extra assurance that you need to invest your time in it. A proven idea is always given preference by the investors over a idea that that is not proven by the customers. The best way to validate your idea is by talking to your customer and then reiterating your idea.
Description: We have developed a product, but which audience to target is one of the biggest question. Customer segmentation is a useful tool for a business that has many customers and a wide array of different interactions with each one of them. It allows the business to identify the different customer groups that they primarily serve and how they specifically interact with them. Identify all the customers that the business have and then start gathering more informations about the customers. Try to pick up the segments that are exclusive. While identifying customer segments, make sure that you look at current customers, your competition, your demographics, psychographics and then decide their target customers. Always have an idea on who are the early adopters, basically people who will start using your product initially.
Description : Lean canvas is one page business plan template. It has 9 basic building block. It can be used as a perfect format for brainstorming possible business model, prioritizing where to start and tracking ongoing learning. You can always reiterate your lean startup canvas.
While making a lean startup canvas, you need to brainstorm on the possible customers that might be using the service and find the problems that we solving for that customer segment. What is the unique value proposition that you are giving to the customers, how will you provide your customers the value proposition, how will the startup earn money and where will the money be spent what are the key metrics in which you will judge your startup.
Description : Every entrepreneur thinks what makes their idea different from the competition and this question leads to development of unique value proposition or unique selling proposition. In simple words, value proposition is a statement that states the number one reason why customer should buy that company’s product over his competitors’ product. Creating a perfect value proposition helps in increasing the conversion ratio and improve your marketing strategies over various channels. A good value proposition should be very specific, pain focused and exclusive to the company.
For making the a good value proposition, company use the voice of company copy. Value proposition should be clear as well and value proposition should state benefits and not hype.
While creating your value proposition, you should define the target audience of the business, you should know the competition around the market, define the needs that your product/service meets, should have a clear vision and message, and you need to make your value proposition a mark?
Some of the best value propositions
Description: While developing a product, you need to prioritize your development. There are some features that you customers feel is more important to develop then other features. Making a Minimal Viable Product (MVP) in such a case makes more sense. MVP is the product that has a core feature for a limited group of people - your initial base of customers. MVP can be used in two ways:
MVP is the first shippable product that is delivered to the customers. It is a way to gauge how the product can be received in the market. Give example.
MVP can also help validate the existence of demand for a product. It helps create interest for a particular product before the final product is ready to be published. MVP here is used as a risk mitigator. Example. Every startup is based on two hypothesis: The Value assumption and growth hypothesis. Every startup wants to validate their growth and value hypothesis as soon as possible. MVP can one of the effective ways to test their growth and value hypothesis. Before making your MVP, you need to define a clear definition of the what your target audience is and what problem you are solving. You should design your product such that it can be scaled up. Try making your product innovative so that your sales team have a very good value proposition to sell. You need to define the flow in which you want your customers to go through the product. You need to list down all the stages and features that you want to have in your product. You need to prioritize them. Make sure all the MVP are tested by the customer and the feedbacks are incorporated into the product.
The best way to test your Minimal Viable Product is by conducting interviews. Monitor your social media account. It is a very good way to gauche market willingness for a product.
We can also perform A/B Split testing . If a customer doesn’t like a particular product company needs to get to bottom of the problem . There might be only some features which the customers doesn’t like, we can test that by isolating that feature. MVPs can be of various types.
1)Wireframes - Wireframes are skeletal frames of your future projects.. They can be screen layout, element arrangement and navigation system.
2)Mockups - Mockups are ready made design which may or will integrated into the product in the future.They can be made interactive by using various softwares such as invisionapp, proto.io, etc.
3)Explainer Videos - explainer video is a video which explains the complete product to the normal audience.
4)Landing Page - If you want a software, but don’t have the money to make it fully functionally, Then people can look at the website and give the company feedback regarding to website.
Software prototype - Develop of incomplete version of the product which contains only basic and core features which may be launched and then taken feedback from initial customers.
Revenue is the income that a business have from its normal business model. Revenue is a key metric for companies. Profit is total revenue minus the total expenditure, so, usually increasing revenue results in increasing profits.
There are multiple different ways a business can go about generating revenue. Some of them are product sales, service fees, advertising sales, data access fees, licensing fees, commissions, and investments.
To identify which product or service will be used to generate revenue and the way in which it will be sold is essential to the growth of any company, and is outlined in the framework known as a Revenue Model.
There are many different types of Revenue models. Some of the ones you may have encountered in your daily life are -
Freemium Model - Examples are Autodesk and Microsoft. The products are often free to use for students with an educational license.
Retail Model - For example, Walmart. These focus on selling consumer goods.
E-Commerce Model - An example would be Flipkart. These focus on selling their goods through the internet. Rental Model - Airbnb is an example of this.
There are two subdivisions in sources of Revenue: Operational or Major sources of revenue and Financial or Minor sources of revenue.
Major sources include the sale proceeds of goods, and Minor sources include the interests, dividends, commission, discounts received etc
A distribution channels is a chain of businesses or intermediaries through which a good or a service passes until it reaches its end customers. Distribution channels include retailers, wholesalers, distributors, internet, etc. Optimizing these delivery channels, minimizes the point of production and point of consumption. Having a good delivery channels makes sure that product is available to the customers who wants that product. Make sure that the company provides a good customer service requirements. Increase the sales of the company by promoting in local media houses. These delivery channels help in taking the feedbacks from customers. These delivery channels provide you with the information regarding market. Delivery channels stabilizes the changes in price that take place. They match supply with demand. They help in pricing of products as well.
Distribution channels can be divided into direct channels and indirect channels. Direct channels means customers can buy directly from manufacturer while in indirect channel, customer buy from wholesalers or retailers who in turn buy from manufacturer. Manufacturers can also use various distribution channels to maximize his/her revenue. For identifying which distribution channel works best for your business, you need to research about exact demographics of customers of your company. Where are they from, what they do, what is the age range of the customers, etc. From the data collected, find our what are the ways by which end users can buy your product. Now find out the ways in which your can provide end users your product. You evaluate and then decide on which delivery channel you will use for the distributing your product. While deciding on the delivery channels, you can also think of some of the natural partners that exist in the ecosystem. Minimize the difference of prices that various distribution channels offers, so that all customers won’t prefer a particular distribution channel. You can improve your distribution strategy by keeping a track of the channel dealers and by doing some inventory management and tracking.
Even if we might have a very good product, without a good go to market strategy, there are high chances of your startup being failed. For having a good go to market strategy, you need to have a strong initial marketing plans. We need to consider 4Ps (Place, Price, Promotion, Product). The toughest P to decide upon is price. Price is the value that can maximize your profits on the sales of your product or service. While deciding pricing strategy, you need to consider the following factors.
Determining your business goals : We need to review how we want to make money before determining the price of the product or service.
Conduct a thorough market pricing analysis.: Having a thorough idea of the market pricing strategy giving you an idea about context of the market in which you product/service will compete.
Analysis your Target customers - Analysing the customers will give an idea of why, how and what our customers will our customers use your product/service for based on specific/urgent needs.
Profile your competitive landscape - ?
Choose a pricing strategy and executional plan.
Some of the common pricing strategy that can be used are "give examples if possible"
Premium Pricing: Business use premium pricing strategy when they are introducing a product which have a distinct competitive advantage over similar products. It is usually priced higher than its competitors. Premium pricing model is used in case of early introduction of product to a market, luxury products or when market has no substitutes for the company’s product. Some of the company who used premium pricing is Rolex and bentley. Penetration pricing: Marketer uses penetration pricing when they want to gain a significant market share by providing service/product at a prices lower than those of the competitors. Penetration pricing is used in a market that is heavily driven by customer trust and brand loyalty. Utility companies, smart phone providers, popular food items are some of the market in which penetration pricing is common. Costco and kroger are examples of company using penetration pricing.
Economy Pricing : An Economy pricing sets the price at bare minimum price to gain minimum profits. The key to profitability of such pricing strategy is selling large volumes of product at low prices. generic grocery store brands of products usually have a lower price than the name-brand items, due to the lack of advertising or out-of-store promotion.
Price skimming: it is a strategy of setting high prices when the market has few competitors. Psychological Pricing: Marketers use psychological that encourages consumers to buy products based on emotions rather than on common sense logic.
Bundle Pricing: Businesses use bundle pricing to sell multiple for a lower price than if they were purchased separately. It creates a perception among customer that he/she is getting value for his money.
After completing the business model, the next phase that comes is, to present your startup to your potential customers and investors. We need to pitch our startup in such a way, that while providing limited information, you can get the person listening the pitch excited about your company.
The first and foremost thing that you need to take care of is the audience that would be listening to your pitch. You need to sell yourself and your team. Try to show that you are the most passionate set of people that they can ever find to solve the problem that you are trying to solve. An investor knows business models can be changed, if the team is passionate to solve the problem. Showcase that your team is ready to work days and nights continuously, for making this startup fulfill its vision.
Communicate details in such a way that listeners start envisioning how they are going to use this product/service. You do it by providing them very concrete information. Give information about who will use this product and why will he use this product. Include numbers in your pitch. Statistics always attract people. It shows your credibility and creates a more long lasting impact. Show that some unique insights of the problem that you are solving. It increases the knowledge of the person that you are pitching to. A novel insight would always make them remember you. Always know your metrics on which you would be presenting your content and what that means for the presenter. Simon Sinek in one of his ted talk proposed of the famous rules of pitch, also start with why we are doing something, then how we are doing and then what we are doing.
Along with a pitch, startups have a pitch deck. Pitch deck is a brief presentation used to provide audience with a quick overview of business plan.
Money is one of the most important factors that is required for a startup. You always require money, from buying raw material to developing new technologies. Following are the ways in which startups can find money to spend. The best time to get external funding is when customer traction is proven and you want funding to scale up your business or when you feel that your growth is obstructed due to probably better funded startups.
You can fund your startups by two ways, by debt or equity or a combination of both.
Equity Funding Bootstrapping: The Business funds itself. The profits that are made by the company are thrown back for the growth of the company.
Self-funding : Many entrepreneurs raise funds from their personal savings or from friends or family. But there is a high probability of ruining friendships, hurting feelings so think twice before taking money from this part.
Angel Investor: Angel investors are people who are investing their money in return of the some equity. Nowadays angel investors have started forming groups to mitigate the risk.
Cloud Funding : There are websites in which startups are allowed to pitch online and then take funding from that source.
Venture Capital firms: These firms provide early stage funding but makes large investments and significant shares of the company.
Debt Funding Small business loans: Many organizations are interested in lending money to small businesses. These loans are short term, assured by some property and the rates are very high.
SBA Loans: There are many programs, but in general a guarantee that the loan will be repaid, to enable businesses to get loans from traditional lenders.
Banks – Traditional banks make small business loans. However, they typically require a track record and will often want the loans secured with assets.
There is one more way in which a startup can get funding, Crowdfunding. Crowdfunding can be of both types, equity crowdfunding and reward based crowdfunding.
“If you want to go fast, go alone. If you want to go far, go together.” – African Proverb
Choosing the right co-founder is an extremely important step for any start-up. In fact, stats say that, two founders instead of one significantly increase your chances of success.
The importance of a co founder manifests in multiple ways; They provide moral support, help in brainstorming and in gaining investor support.
So, the next question is, what are the qualities you should look for in a good co-founder? “Choose your cofounder the way you choose your spouse” - Danielle Newnham
The CoFounder that you choose should have complimentary skills, a shared passion for what that startup is doing, have a emotional compatibility for each other so that they can go through in times of ups and downs.
This brings us to our main point - How do you actually go about choosing your co-founder? Often, entrepreneurs describe choosing the correct co-founder to be similar to dating. It’s important to be compatible and for their vision to line up with yours. Keeping this in mind, the main avenues to meet such people are networking, finding on social media websites and going to various events in colleges to find enthusiastic students who would be willing to become co founders of the company.
Ways to stop conflict among co-founders - The facts are that, 65% of US startups fall apart due to co-founder conflicts. 20% of Y-Combinator startups have seen one of the co-founders leave.
Thus, it’s important to create a Shareholders Agreement from the very beginning. This reduces the possibilities of power struggles and exit risks, and regulates the shareholder’s relationship, IP ownership, equity shares and a framework for deciding in a deadlock situation.
Also, it is essential to talk to your co-founders regularly. Similarly important is a strategy document to discuss the future direction and vision of the company.
The success of any company depends upon the talent of the company. Finding great talents is a very tough job. Also, it require more money that retaining your team, so the best way to move forward is by retaining the talent that you have.
Following are the steps that we can follow, to retain our team
Cultivate differences, not similarities : All employees are not the same. So if we use the same approach for every kind of employee, only one kind of employee will be retained which is not a good thing for your company.
Responsibility - Every employee wants to develop himself. Taking responsibility helps in development of employee. So give them responsibility and help them grow, so that they can help you grow.
Respect - People needs to feel respected if they we want them to engage in their work. It includes offering equal opportunities and avoiding discrimination.
Reward - Give a very good reward for the work that a person has done in a company. And reward him the way he wants to get rewarded.
Give Employee choices - Dont force anything on your subordinates , give them choices and then let them take the decision.
Brand is defined as the overall perception of a company whenever a customer interact with your company. Branding links your logo, online presence, products, appeals to masses and makes your marketing efforts more effective. Making a brand increases the worth of a company. People tend to trust on a company that has a brand. Strong branding helps people to distinguish among brands. It tends to increase advocacy for the company. Branding sets expectation among the masses regarding all the new product that company releases.
While defining your brand, you need to review all the products that your companies make and what all target audience that these products cater to. Giving brand a human touch always makes the brand so much better. A brand must have vision, mission, values and principles. You should be aware of why you are doing your business, and it should be subtly portrayed in brand that is formed for your company. Try to make a long term relationship with your customer and always take feedbacks from your customers. While doing marketing make sure that you don’t send the same message over and over again. You should have a good knowledge of what your competitors are doing but your brand should creative and innovative something that your company believes in. The brand that you create should be easily distinguished from the already existing brands. The brand that you create should be memorable. It should be scalable and flexible. You need to make a logo, decide on the colour palettes decide on the typography and Iconography, Design System,Hierarchy & layout, which Data visualization elements to use, When, where and how to use photography graphics for making a brand. For making sure that your brand remains intact, you need to make sure that you make a brand style guide which will be used for all the further things that are made for the company.