The 3 Common Problems Faced By Startups

Learn from the common problems faced by startups in India – and avoid the mistakes these startups have made!

By  Aparna V. Singh

The first year of starting a new business is like a roller-coaster ride. Being your own boss with ultimate responsibility for everything that goes right (or wrong) can be exhilarating. At the same time, the realization that the buck stops with you can be terrifying. The problems faced by startups in India tend to be similiar across industry, even if each sector has its specifics.

Women entrepreneurs in India? Stop being modest!

One issue that women entrepreneurs in particular talk about is the difficulty of promoting oneself. As an employee, you may have depended on the annual appraisal session to highlight your achievements. As a business owner, there is no such space to tout your achievements. Women have an added disadvantage in that we are often taught to be modest and let our work speak for itself.

Rashmi Vallabhajosyula, Founder, Altius, a Bangalore-based marketing consulting firm says, “…being raised in a middle class family, I am hardwired to speak defensively about what I am capable of, but in the field I work in, people expect a lot of bombast.” 

Prospective customers may dislike aggressive salesmanship; there is however a middle path between ‘in-your-face’ selling and downplaying yourself. It helps to document one’s strengths and speak realistically about them.

Promoting your business upfront can help not only in winning clients or orders, but also in other ways. As Rashmi says, “…being hardwired to work harder and underplay your strengths means you end up doing a lot more than you are paid for…and expectations are that you will continue to do so!” 

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This can be a cycle very hard to break. You may not even realize that your problem is under-selling. Rashmi realized it only when she got a trusted older entrepreneur to evaluate her marketing methods and offer objective feedback.

Startup trouble: Deviating from strengths

In the first year of business, a common problem faced by startups is that you have an unlimited number of things to do with very few resources. Identifying and using your strengths conserves your energy.

Deepa Chikarmane owns Pret Interpret, a Bangalore-based apparel design firm catering to the contemporary ready-to-wear sportswear market. The company’s strengths lie in creativity and developing exclusive designs for its discerning overseas clientele. In the early days, much of the manufacturing was outsourced, and finding it difficult to get suppliers to meet quality and time requirements, Deepa decided to bring many processes in-house.

Contrary to expectations, this did not work for Pret Interpret. Manufacturing was not the company’s core strength and handling multiple activities in-house made it more complicated. Finally, Deepa decided to move back to the original arrangement and design, the company’s strongest point, received the attention it deserved. She says, “Never dilute your core skills. As you expand, even if you add other departments, do it smartly. Today, we may be smaller, but it is a happier factory, with employees doing what they love to do.”

Priyanka Chaturvedi, Director, MPower Consultants, a Mumbai-based recruitment firm says, “When I started my recruitment firm, instead of targeting my core competency in media (I worked in media prior to starting my firm), I tried to go all out and get business from all sectors possible without doing enough research before approaching the client. I realised later that while the company was doing exceedingly well in placing candidates in various media houses we were severely lagging in recruiting and placing people in other fields.”

Priyanka realised that by focusing on industries where she had little strengths yet, she could not offer the in-depth understanding of their needs that clients wanted. She says, “…the lesson I learnt was – always start out with something you are absolutely certain of – in my case media recruitment. Once you have achieved the much needed confidence in yourself and your company, then start exploring other options.”

Wrong hiring by startups

Even if the skills required for a particular role are the same, the attitude needed by a start-up may be very different from that needed by a larger company. The vision behind the business must be compelling to the newcomer.

Hiring for start-ups is even more critical, because of the difference each individual makes to a small team. Identify the skills and attitudes that you want in any new entrant to the team. Meera.K, Co-Founder, Citizen Matters, a community newsmagazine and citizen interaction platform says, “Never hire people in a rush, especially when the position needs to be filled urgently. We made this mistake once and had to let the person go….it takes time for the right kind of people to get drawn into what you are doing. Every person including the office assistant needs to be in sync with the start-ups’s agenda.” It can be tempting to hire quickly, when the workload is high and you’re stretched to the limit. Consider alternatives such as outsourcing specific activities on a contract basis, until you find the right employee.

If you’re building a labour-intensive business, not investing in training can be a big mistake too. Dr. Latha Isloor, CEO, Uniscribe Solutions, a Bangalore-based medical transcription and documentation firm says that “not having given enough importance to training new candidates and providing on-job-training” was one of the biggest mistakes they made early on, considering that Uniscribe operates in a labour-based, high-attrition industry.

She adds, “When the attrition started, staff number decreased and we could not handle volumes, business trended down; add to that the cost of rehiring, replacing, and it took longer than expected time to re-build.”

The first year in a start-up’s life requires intense focus on bringing an idea to fruition. Respecting your strengths, communicating them and finding the right people to help you do that are essential to a good start and a long innings.

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