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JAINA CONVENTION 2017
Entrepreneurship ~ A Journey of Noller Coasters
by Mukesh Chatter
Entrepreneurship is exhilarating just like roller coasters. It has its ups and downs, but for sure no dull moment! While each start-up is different, there are some common characteristics worth paying attention to maximize the odds of success.
Behind every successful start-up is a problem to be solved, and at the core of this problem is identifying a burning need requiring solution. This first ingredient for a start-up will separate the "need" products from the "wish" products. To increase the chances of success it is imperative to identify a "need" problem as opposed to a "wish" problem. Other consideration is the size of the market, a small market with few large customers is a more difficult one to penetrate than a large market that includes small and mid-size businesses. While consumer markets often dwarf many other markets, often they are the most difficult to capture.
The start-up must provide a unique solution to the problem addressed. If the solution is merely yet another marginally better solution, (ie. a better mousetrap) then it reduces the chance of success. What one needs is a truly outstanding solution that has the potential of making the start-up the king of the hill. SnapChat and Quicken are both great examples of products that addressed a burning need and captured a market that was previously untapped. Ideally, one should have a strong barrier to entry such as patented technology. Although sometimes being first to market may be sufficient.
Once you develop the idea, a company or team can't form without investment. Chances of raising money go higher if you have already lined up some early adapter customers for your product. This is typically the best evidence that your idea is indeed needed in the market place and is novel. It's important to realize that more comfortable you can make an investor, higher the likelihood of raising funds at a good valuation - meaning more equity for you. A typical VC investor is looking to make at least 10X on the investments as early stage ventures have high risk of failures. So, it's important to demonstrate the potential reward while making presentations. While money is necessary, the quality of the money is like the icing on the cake. The quality includes the willingness of the investors to devote time and energy, their experiences in the field and in the start-up industry, and the knowledge and network of the board and advisors. Inves
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