·
Pitfalls in new Ventures
o
Objective evaluation-see with rose tinted glasses!
o
No real insight-not knowing their target customers
well.
o
Inadequate understanding of
technical requirements-shop floor experience not well.
o
Poor financial understanding-cash management/working capital
management
o
Legal issues ignorance-especially IPR when people go
global.
·
Why Product failure
o
Poor timing-someone opening SMS based venture
when market dying due to data growth
o
Design-product poor design(Android phones for
example-my observation)
o
Distribution-especially
for
o
Unclear business-if your strategy B2C and you target
B2B, it’s a mismatch
o
One customer dependence-my observation-Infosys/GE episode.
·
Financial Failure recipe
o
Undercapitalize-have cash for time before you can
figure out your first customer
o
Debt too early-Inmobile($500K investment, concept
of search through SMS mode-changed concept in 6months-but 3rd idea
by that time co down to last 20% and no money to execute that idea of smart
phone advertising-so the guy used his personal credit card)-success story
but risky.
o
VC relations-each get 10 bplans/day and limited
bandwidth-LP relations, investee companies etc. hence his advice is referrals
and networking
·
Typical problems
o
Cash flow most often/crucial.
o
Leverage your own network for sales
o
Social Media solution for PR issues?
o
His
view that never go for half cooked(my
view is that most can go like Google) and ensure back end(customer service etc)
o
Never
hesitate to seek help from others
for functions(making financial projections etc). Especially must for quarterly
returns under tax laws.
·
Making your business plan standout
in the clutter
o
Team
o
Define
your market
o
Demystify
your market in non technical market
o
Market
Size
o
IP
involved
o
Execution
Ability/Past record
o
BE
realistic(example 1Cr-100Cr in2yrs is ambitious)
·
Its not banks/VCs who fund your
business, it is customers. So never ignore them.
· Opening doors not only for customers,
but also vendors/marketing help..hence angel money termed as smart money can help
for B2C also.
· Business plans don’t get funded
people get funded. Don't ever forget that.
· New trends of ventures-specific verticals like education, optical,
health, finance etc, gaming, e-learning, healthcare
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