Bangalore: “The probability of an idea reaching to venture funding, and the other way, to become a billion dollar company, and this is for the global companies largely for European and American, the probability is one from every 20,000. You can imagine what difficulties must be the Indian entrepreneurs facing in India," said Ashok Soota, Founder, Happiest Minds, an IT Services Company. What needed to be done is enforcing the idea in the correct way. An idea may be a new product, new service, a new wave addressing a market, or a new challenge. It could also be adding a new technology to the market.

So, what are some of the key factors responsible for achieving success? In competitive market places, differentiators are hard to sustain, so the first thing is to have a strong interest value, and perfect strategy in place, which defines your niche in such a way that defines you being much better against the established companies. "As long as you are clear how you are going to legally turn their weaknesses into your strength, as the large players do to transform the strategy into geo-strategy, instead the startups can take up the larger strategy rather than sticking to the geo strategy for success," said Soota.

Another important factor that should be in place and concrete is strong organizational build. “The first step in organizational build is building a strong team, which is aligned along with the same shared vision and values, must create a setup of shared wealth, and creations to bind the team together. It is also important to have the feedback flowing from both the directions to make the team stronger,” said Soota. Compensation is yet another concern for startups. A startup cannot pay a high salary in its initial struggling years to bring in experienced persons from big organizations. Rather it can compensate them with other benefits and incentives such as time flexibility, conveyance allowances and others.  

Third thing is to make a core competency in decision making. This may be in lines to profit making, discussions about your cash flow for daily work and payment of salaries, and others. Being a startup, it is important to focus on the cash flow which should be flowing in more than going out. During the initial years of a startup, especially the first year, the entrepreneur pumps in the entire available cash towards creating the company, but in the journey he forget that he needs cash reserve for paying the employees from his own pocket until he gets the first client and make the first delivery.

“As a startup company, we do not know the right method to present our proposal to the venture capitalists or angel investors, thus loosing the chance to raise fund. It is better to take the assistance of the financial advisors to help build a plan and make a proposal for the VCs and Angel Investors. They are a daily doers of the task and knows better what, when and how to present,” added Soota. For a startup, it is better to bootstrap the company and after getting their first client, go for funding. This provides them with additional valuation for their idea in terms of their existence and acceptance in the market.

“The right to share the equity of the company should be in the hands of the startup entrepreneur rather than the investors. To attain this position, a startup needs to come up with great idea and create credibility in the market not only through good product, but good brand and branding of the company and the team,” added Soota.