The biggest factor that favours Manoj Agarwal’s start-up is Manoj himself. The most critical element for the success of any start-up is the individual behind it. Most investors would prefer to back an A class entrepreneur with a B class idea than a B class entrepreneur with an A class idea. This is because a good entrepreneur has the commitment to succeed and will be smart enough to change course if the original plan does not work. On the other hand, a B class entrepreneur will make a hash of the execution of even a great idea and excellent plan. Unless the entrepreneur is passionate about the venture and is willing to stay the course in spite of the inevitable initial hiccups and hurdles, no venture succeeds.
Very rarely does a start-up play out as per the plan and it is only the entrepreneur’s self-belief, passion and commitment that allow him to persist. Manoj scores a 10 on this count. In fact, he has shown incredible selfconfidence by reinvesting early revenues from this solution back into product development. What also favours the startup is that Manoj’s solution focuses on an industry and sector which is rapidly growing hence he has a high probability of attracting sufficient customers. And finally, Manoj has chosen an area which he knows exceedingly well and in which he has considerably experience and competence. He has, therefore, been able to look at competitive solutions, analyse their deficiencies and come up with what he believes customers need. It is hard to comment on how long Manoj should give himself. Obviously, he shouldn’t quit at the first sign of trouble. Many people who have failed didn’t realise how close they were to success when they decided to give up and walk away. On the other hand, there is little point in flogging a dead horse. Clearly, if Manoj cannot continue to find new customers and investors, he should quit before he goes bankrupt. But this is a decision that he and his investors would need to take.
I think Manoj should continue to invest in the product but focus heavily on an early engagement with the market. Very often we continue to build what we believe is the best solution only to find, when we start to sell, that customers want something different or something in addition. An early engagement with the market allows us to evolve our product or solution based on customer feedback. This approach is not only more robust but has the advantage of getting some initial customers who become enthusiastic and invaluable references. I think it is great that Manoj is actually following this approach.
My advice to start-ups at this stage is that self-belief is very important. Do not persist if you have doubts about what you are doing. However, if you are convinced, make sure that your conviction is based on some market feedback as well. Try to rope in some potential customers in becoming your test beds. In the process, they also end up providing valuable cash flow, giving you the freedom to wait till you raise funds from a venture capitalist (VC). This allows you to minimise the dilution of equity in your company as you would be raising money when your product has been built out and validated by some customers, allowing the VCs to properly value your enterprise.
(By Saurabh Srivastava, co-founder, BOA)
