Its been more than 4 years to my entrepreneurial journey, innovating the solution to the problems and building a business around it. The journey started when I co-founded a bunch of startups while being in college with my friends. In the initial years, we didn’t even know we were gonna build a business, we were just having fun. I still remember when we met one of our contacts for potential business, she said you guys look like kids, you don’t have cards, you don’t have a company, and literally said you need to get your shit together. That was the first lesson that people, at least in India people care about who is selling the solution to the problem than what the solution is.
Then the first legit business of Virtual Reality happened in our lives right out of college, we had a private limited company, we got real clients, real business, opportunity to travel the country and world (Missed the world travel opportunities :P) and we were very happy but nieve. We didn’t know how to think long term about the business or run like with system than people. With that we raised our first capital, honestly, it was very easy, we raised our angel investment from a Pune based company, we got to work with some brilliant minds in technology, operations, strategy, and marketing. The investment turned out well and gave us 6x growth under one year, but the end was not like the start. We had this attraction to build a scalable business and we didn’t do our math right and proposed services to product pivot plan with not enough data to back it up, the investor also got off guard and the association got a tragic turn. We ended up returning the full investment back and losing out on operational capital to revive the business. That taught me that going after valuation instead of value generation got us in that position.
According to me, “The valuable business is business which generates value for its customers, employees and investors and the longevity of around 15 years and more“
Recently I read Mr. Patni commenting that today businesses are built and sold for value in 15 years. And I agree with it a lot. Today startups take the first 2 years to know what exactly to sell and 90% of startups fail in the first 5 years.
I believe, the reason its important to focus on Value instead of Valuation is that,
Less Pressure and more freedom for entrepreneurs Vs High pressure to keep getting funded
The journey of entrepreneurship is very lonely, it’s difficult for your non-entrepreneur friends to relate, you can’t offload pressure so easily, you’re always low on resources such as time and money. (Obviously, you can have more entrepreneur friends and cofounders to ease it a little :D) The valuation play creates more pressure and pressure gives less flexibility to make decisions and as money naturally comes when you focus on valuation the need to innovate decreases as money is a solution to all the problems (Startups always try to justify all the monitory loss under customer acquisition) instead building a valuable business you more time to decisions to give you time to innovate more as you have less money and gives you more freedom. The decrease in pressure and more freedom naturally increases founders willingness to keep solving the problem and innovate further.
Better work culture and higher retention Vs Daunting Work culture
As increasing valuation pushes you to to go for the scale as the funding is done for that you have to hire a lot of people in a shorter time thereby compromising on the culture and the productivity of the people in the organization. In my journey of entrepreneurship, I have often seen that people in largely funded companies always think about looking for more opportunities to increase their salary and you also talk about that a lot instead of the innovation are the problems companies trying to fix. Building a valuable business is a long term task and doesn’t require rapid hiring thereby putting in more efforts towards work culture and as there are fewer people working in the organization the value of the employees is more so does the retention.
Discipline Vs Over-ambition
I remember getting an opportunity to meet Mr. Rahul Yadav, Co-founder of housing.com, we asked him about his journey in housing which was heavily funded company versus the current startup which is more value-driven. He said the excess money makes you spoilt. Versus the money which you will earn from your business, (or Debt) you will always try to innovate more as you don’t have money to throw around the lack of word capital also makes you disciplined in your efforts to build a valuable startup and valuable company for your customers, employees, and investors.
Survival Vs Sustainability
Lot of times when I am mad entrepreneurs with funded companies I saw that they always talked about how their busy increasing the next funding round and thus of this when you are private equity funded startups because that investors make money but then in the meantime between two rounds you are always running for survival and that’s very short term view of building a business which will be more value-driven. When you trying to build a valuable business for a long term that needs you to develop a sustainability angle towards your business you will always try to build more sustainable business because that’s the only solution to achieve long term valuable business in that you are again surviving but you are surviving not to raise another round of funding but to sustain for long term and keep creating value.
Making more money Vs happiness or creation or creative index.
Mostly I have seen in a funded startups everybody is an array to close higher funding rounds or to get a required or to keep increasing the top line a lot of times described doesn’t really translate into to the happiness or a creative indexed primarily because of all the points I have mentioned above and again I feel that’s very short-lived culture. When you are trying to build a valuable business for the long term you can be happier as its more internally driven than externally you can be more creative in your business and the way you do business and that can and the same translates through the organization.
While writing the above blog I wanted to express that I am not against the hypergrowth or the funding are the unicorns that are followed I wanted to highlight the different perspective while building a business which can be more fulfilling as an entrepreneur. Businesses are always built for a long term is what we all say and I feel our approach towards building a long term valuable business will have a great impact on the world we live in.
I appreciate that you took out time to go through the points have expressed and would love to know what you think about them as well
surajsaste 