IOT start-up/Any start-up: the prerequisite. Part-2

1. Financing: 

Continuing from where I left yesterday, there are many ways to make a system  that can help you manage the start-up costs at least for some time. Please do remember that you have to finance your family as well as start-up.

a)      Look for quick ways to make revenue come your way. If a part of service offering has a market, launch it. This gives valuable feedback plus gets something going. Nothing matters more for a start-up than the first revenue. This could be in the form of getting a small outsourcing piece from someone you know to develop or launching training for some technology that you have mastered. Think out of box. Lots of people out there can use some of the things you have built. Delegate as much of the work for these revenue enablers as possible to your staff. You never know, one of this small offering might turn out to be a major branch of your business.

b)      Moonlighting is easier said than done but is possible. I have seen successful start-up owners continue to moonlight till they get financial independence. This could mean taking your boss in confidence and/or working part-time. In India specially, it is possible to launch at-least the initial part of the business while moonlighting as your initial costs are low. Having a working spouse also helps a lot in meeting household expenses.

c)       In India Fixed return deposits interest rates are very high (you get nearly 10% in fixed and guaranteed returns. If you have substantial savings, keeping a bulk portion of money initially in bonds etc. with monthly interest options and taking monthly income from them is also a viable way to manage expenses.

d)      Go for financing when you have the initial work done and have a good grasp of business. You will get a better deal from investors and everyone (including yourself) will have better visibility and confidence.

e)      DO NOT take BANK LOANS: Especially in India. Interest rates are very high and interest pile up so quickly that it will add lots of pressure. Try and look for family/friend loans if you cannot avoid it.

2.   Delegating work

For hands on technical guys who get into start-ups, getting into the delegation mode is tough. They are so used to doing things themselves, solving issues themselves that they jump into tech challenges the team faces and try and resolve the same. Definitely this is required sometimes when major bumps come in the way. Try and avoid it. Two major disadvantages of this are:

a)      Your mind gets diverted into these issues and not able to focus on huge challenges of running a business, marketing, strategizing, connecting, recruiting, planning, etc…

b)      The team starts depending on you to solve issues rather than do it themselves, and gain the required confidence and learning.

3.  Go To market strategy

How do you launch your product? How/When do you test the waters are essential questions plaguing all entrepreneur. This is also one of the major economic decisions as sales and marketing are sure to burn a whole in your pocket while being unavoidable. I will suggest if your business idea can be launched in small scale, please do that now. Do it slowly and use the feedback to continuously make improvements. Going for a bigger launch should wait till you have captured your local market first, especially when you are in your first start-up.

4.  1+1=11 and not 2:

Kept the best to last. One basic requirement for a start-up is to have a partner (Not 3 or 4 or more but just the 2 of you). Partner need not be of same wavelength but you should feel that he is reliable and honest and together you should share the vision for your start-up. This is crucial as it helps in all areas from dealing with stress, sharing workload, sharing cost, sharing connects to sharing ideas. You should have trust in each other and should have some deep, old connect (could be family, alumni, domain knowledge etc.).  Complementing each other’s strength and weaknesses is an essential part of start-up. You are almost guaranteed success in some form if you can get the above kind of partner.

Wishing all my start-up friends a very exciting and fruitful journey ahead. Best of luck.

 

IOT start-up/Any startup: the prerequisite’s

The world has woken up to the tremendous potential of IOT devices. There are literary hundreds of start-ups springing around us across the world. Some will succeed, many will fail. What is it that start-ups in General and IOT start-ups in particular should focus on to succeed? This is a million dollar question. Let me try and answer some of the things I have learnt:

1. Focus on the business problem/Use case you are trying to address. Many start-ups start making a very specific product but somehow end up making a very generic product. They want to take care of all possible scenarios and cover everything. Especially start-ups making software products put in a lot of energy and time in making generic solutions. This path is fraught with danger of delays, overspending and many end up making a product which does not fit anywhere. My suggestion is focus on your use case. Bring clarity in it. Make your solution work covering 70% of the use case requirements. Launch it ASAP, learn from the feedback and improve. This is especially true for IOT where you have several companies making generic device management platforms, very few focussing on specific use cases. Number of such platforms that will finally win will be limited, but if your use case has specific relevance, it will win in that market.

2. Focus on technology but… Define the technology you are going to use as soon as possible and do not get carried away with recent advances. Many of the recent developments are not yet stable/usable enough to be good for you. A company can lose lots of valuable time in travelling on these new unchartered paths only to realise that the technology either does not meet their ultimate need or is not mature enough. Developers might lose lots of valuable time in learning these new technologies only to get disheartened and I have seen this leading to attrition etc. Let others use them first and then you can follow at a much faster pace. IN IOT space this is critical as so many new things are happening daily. Keeping the clutter out should be clearly high in your thought process. Get that device working first, fully and make it robust.

3. There is no such thing as stud.. As a start up, already lots of pressures are there to get a good team in place. What I have seen is, getting high end tech talent is extremely difficult and is generally not needed. Especially in IOT space, everything is so new, that getting excellent people in any area is difficult. My suggestion is hire good people who have the right attitude. For the electronics side (if you are into device building) you can get good electronics background people in India who have experience in working in those 100’s of electronics companies in that are cluttered around Govt undertakings like BEL, BHEL, DRDO etc. They are good and have manageable salaries. Similarly on software side, target those thousands of MOM and POP companies having 1-2 clients that dot in Hyderabad/Bangalore/Pune etc. Make sure in the interview that they understand that in start ups, real returns will come in only after some time and lots of hard work needs to be put in. Do not hesitate to negotiate hard on salary.

4. Financing (Angel investors, crowd sourcing etc..) Recently I met a guy who was co-founder of a start-up that grew 20 times in 2 years. He has just quit. Why? Could not handle financier’s demands and growth targets pressure, direction financier wanted the company to go. Although financing might be mandatory at some point of time, In India, it’s very much possible to run the show on a very shoe string budget. DO NOT spend your live savings but develop some mechanism so that basic requirements can be met. I will speak about it more in a subsequent post.

TO BE CONTINUED….

IoT Adoption In India

We are observing a lot of buzz around Internet of Things [#IOT] and Internet of Everything in the electronic media. There is a huge wave building around connected devices and the whole concept of IOT. CISCO and Gartner have predicted that this will be a few trillion dollar business in next ten years. With around 20 Billion connected devices by 2020. That’s a huge business opportunity and China has already take a head start with the best adoption rates across the world.

In India also we are seeing a some traction building with Gecko as the most visible one. Especially because of the crowd funding they did for the start up. Though their product is also focused towards the international market. The early adopters are taking the products developed for the western markets and implementing them in India. This is a good start but does not work well in the Indian context. A few factors that are not going in the favor of such an approach are:

  1. Cost – India being a price sensitive market, products imported from Europe or from US are more like a fad being adopted by the rich and upper middle class and have not yet come in to the main stream.
  2. Environment – Most of these products in home automation and security space are not able to survive for long in the field because of different ambient conditions. Especially the heat, dust and humidity. Products imported from China are also meeting similar fate as they are also not up to the quality standards needed. Ability to service these devices and solutions is also not good because of lack of technical understanding in the service staff in India.
  3. Use cases – Since the real value of IoT comes from applying it to a real business need that is specific to a society or a culture, the products or ideas brought in are not getting much traction with the masses.

In order to make an impact and tap into the huge potential market, products need to be built for the Indian market keeping in mind the cost, environment conditions and the specific use cases. For that reason, Axelta has started work on building solutions for the Indian market and is in advanced stage of prototyping.
In order to further increase the awareness and evangelize entrepreneurship, Axelta is also launching a two day hands on workshop and training in the city of Hyderabad through its division – Axelta IoT Academy. The first batch of this will happen in the city of Hyderabad on 17th May, 2014. Those who are interested can drop a note to us at corporate@axelta.com.