How to start a Startup in India? How do even startups get established? Taking you through a very famous startup story.
“I never started this to build a company,” says Mark Zuckerberg, CEO of Facebook speaking to Freakonomics Radio as part of its six-week series called “The Secret Life of CEOs”, according to a transcript.
A simple idea that ventured it into the league of cash rich companies in the globe!
Every startup embarks on a journey like this. Successful startups in India and worldwide, operate in the nurturing phase and strive hard to earn a mark in the market through its world-class products or solutions and innovative marketing strategies. Ideally, the startups can be classified as the future of upward trends in the market, providing a headstart to the economic uproar and growth!
The Preface to your Startup Guide
Recently, The Indian political scenario has shifted towards the support and development of startups as the Government discovered a great deal of job opportunities and economic growth with entrepreneurship. This was the primary reason why the term “Start-ups” have grown immensely familiar among the people who wish to support home grown Indian products over competitive imported supplies from foreign countries.
A startup might require funding for one or many purposes. It is important that an entrepreneur or a startup enthusiast should be clear about fundraising.
Funding can be in various forms. Some of the commonly used Funding avenues available for startups are Angel Investors, Self-financing, Family and Friends, Venture Capitalists, Crowdfunding, Incubators/Accelerators.
Apart from this, Startups have also been getting ample support from the Government of India through Subsidies and Low Rate interests from Banks and Financial Institutions, through the recently launched SME MUDRA Scheme, a scheme that’s the brainchild of the Government, dedicated exclusively for the growth and funding requirements of Small and Medium Enterprises, plainly put forth Startups in India.
How did Successful Startups in India begin?
To launch a startup, one has to pay a serious attention to the following.
1.Do the best market research. What the customers require and whether they are satisfied with the current products prevailing in the market.
2. Branding decisions prove to be vital as properly worded brand name and designed logo, is sure to attract a lot of customers towards the startup.
3. Choosing the right investor for the right business is also a significant decision while beginning a startup in India.
But, before you could begin…
Know the Startup Stages
For Startups to begin it’s phase as a noticeable company, the reach and saleability of the product or service is important.
There are roughly around 5 stages a successful startup in India has to go through to be a thriving entity in the market.
- Concept and Research
The first and foremost stage is where the founders of the Start up come up with a unique concept that will be practical,as well as economically feasible. This proves to be the base for successful Startups in India. This can be said as the first aspect in the startup guide. This is als the phase where idea validation is effectively happening determining the success of the business.
- Prototyping
Rolling out your initial prototype or minimum viable product (MVP) to attract the investors is the second step. During this phase, the startup business will be able to evaluate the strengths and weaknesses of the products or services. It also gives you an opportunity to work on the lag before getting into the bigger picture.
- Introduction
Gain your first customers. They are the ones who truly try out your ideas, without a hesitation of the company being a newbie in town. This initial phase of holding and retaining your customers is the predominant aspect any startup should focus in their introduction phase. You also get to validate your startup idea and its scalability in this phase.
- Refinement
Based on the initial response from your customers, it’s time the startup begins to refine it’s products and services to cater to the needs and criticism received. Apart from this, the startup is also bound to update the products and services according to the dynamic market trend.
- Scaling up
Once the product gets a reasonable response from the market, it’s the 5th stage when the startup decides to scale up to a leap higher than the position what they are actually placed at. This scaling predominantly happens when the founders decide to pitch their future expansion to their existing investors and potential future investors for an increase in the funds invested by them in the entity.
Talking about investment and funds, anybody who ponders over How to start a startup especially in developing economies like India, the revenue models discussed below should be of great help.
Know the Revenue Models
How the startup decides to earn its revenues is one of the key decisions to be taken and followed meticulously by the founders till it reaches the 5th stage of established organization ranking.
Choosing the right model will ensure the unhampered revenue flow to the company.
1.Subscription Based Revenue Model
Software technology boom and huge increase in computer applications has paved the way to the subscription based revenue model. The advent of OTT Platforms and it’s recent spike in demand across the globe is another factor that has proven this model a reliable one.The customers can pay for over a longer period of time, usually month to month, or even year to year to use any application accessible through mobile and desktop.
2.Freemium Model
The freemium model is one in which a company’s basic services are free, yet users must pay for additional premium features, extensions, functions, etc.This model is highly popular among the software companies who are involved in developing Softwares and Games that are available for the customers at a free of cost in their smartphones for download.
3. Transactional Revenue Model
Countless companies rely on the transactional revenue model, and it has been fruitful too. This method is one of the most direct ways of generating revenue, as it entails a company providing a service or product and customers paying them for it. It is also one of the traditional business models.
4. Channel Sales (or Indirect Sales)
The channel sales model consists of agents or resellers selling your product for you and either you or the reseller delivering the product. The affiliate revenue model is a good companion model to this one, especially if your offering is a virtual product.
5. Retail Sales
Retail sales involves setting up a traditional retail store in which you offer physical goods to your customers. Keep in mind that the retail sales model will require shelf space (that you’ll have to pay for) at existing stores, and is best suited for products that require logistics to reach your customers.
Mentorship
Mentors are indispensable to founders’ success because they can provide different opinions from various perspectives, a helpful community and valuable connections.
Speaking of great mentorship, a former Columbia University football player and coach, Bill Campbell worked with and mentored some of the biggest names in tech, including Steve Jobs, Jeff Bezos, Larry Page and Eric Schmidt. But his contribution as a mentor to Jeff Bezos and his brainchild, the e commerce giant Amazon, is one of the noteworthy examples that boosted up a startup in e commerce business to one of the high profile successful companies in the world.
Adding to this, “A good mentor will want the same thing you want and back you to the hilt,” says Sagar Yarnalkar, Founder of Daily Ninja, a successful Startup company which was mentored by Kunal Shah, founder of FreeCharge.
The key benefits of getting the right mentor can be as follows:
- As they are more experienced and have a considerable hold and research about the market, it will be of immense help for you to thrive and scale up high with their quality insights
- Interaction with the mentors are always an eye opener and it instantly boosts up the confidence of the young entrepreneur which will in turn play a major role in the growth of the startup.
Sustaining in the Industry
Entering the market is easy. But sustaining in the cut throat competition is tough. Startups in India have to develop the strategies and plans in such a way that it’s not in a short run approach, rather designed by keeping a long run in mind.
Some of the key strategic approach are briefed up below:
1.Remain relevant always.
2. Adapt cheaper avenues of investments and loans.
3. Customer is the king.
To wrap up, Startups are the actual backbone of an economy as they provide the framework of entrepreneurship development for the aspiring youngsters who explore innovative and exciting ideas. Following the startup guides given by research scholars and eminent economists in the country, any potential startup in India can hit the right chord among the people ensuring its existence in the market.
Hoping that this write up has got you covered with some of the most frequently asked questions that startup enthusiasts go inquisitive about – How to start a startup or How to start a business in India?