The start-up culture has arrived in earnest in India. New ideas, new technologies and new concepts are being explored at a mind-blowing speed. New businesses, variations of existing businesses and entirely new sectors are being discovered. Venture capital is freely available if you have an idea. But what if your venture doesn’t get funding? As it happens, it’s not the end of the road. In fact, an absence of funding means you have full stake in your company. And if you believe in what you’re doing why would you want to give control to anyone else? A self-financed venture gives you the freedom to execute your vision without interference.
At Pay1 we collected data from our retailers, distributors and other micro-entrepreneurs. One thing that is common among all of them is that they are bootstrappers. One thing that we learnt was common among all the bootstrapping businessmen in our vast network was one thing. And that is:
A kirana store runs on the principle of sell now, pay later. The owner knows how to squeeze the last drop of liquidity in an already constrained budget. For a start-up, it would mean focusing on profit from day 1, refraining from price undercutting as customer acquisition strategy and creating a product that solves real world problems and not just on paper. Above all, in a start-up, liquidity is the engine of innovation. Preserve it.
To be continued next week…