BASICS OF BUSINESS : WORTH THE TIME
SPENT ON THEM
Startups…
one of the buzzwords today. This has been said before, and will doubtless be
said countless times again; including how they are different from larger
entities, and how the startups scene will have an impact on the economy. Well,
while the impact on the economy is a matter best left to the vestiges of time –
the first two can be examined. I have said earlier- a startup is no different
from a large established organisation; at least – not substantially different.
After getting exposed to several startups – I can now state that with greater
confidence. Sure, there are major differences, but the core of the business
basics are the precise same for the most part.
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| Image Source : Pixabay |
THE MYTH OF THE RESOURCE CRUNCH
Perhaps
the biggest single theme startup enthusiasts like to point out is the resource
crunch that is present only in a startup; well, I beg to differ. It is hardly any
different in larger organisations; whatever be its size, any organized business
enterprise has to operate from a basic assumption that the required resources
will be greater than the available resources. The company that fails in this, lands in
trouble, without exception. The moment you fall prey to the feeling “I have
loads of resources” – you are opening wide the door for wasteful expenditure. Point
being – regardless of the size of your war chest, or your company, ask some
HARD questions before spending each and every single dime.
THE
RESULT OF THE ABOVE CRUNCH
This is
due to a simple reason – as the business enterprise expands into a comfortable
resource situation – so do its opportunities, challenges and more importantly its
teams’ ambitions. The pressure of competition, market share and indeed
survival, the ego of not losing ground all combine to create an artificial
resource pressure. Add to this the propensity of giving needless perks, and
comforts- which if unbridled, leads to added pressures on the resources of the
organisation. Net result is that despite the more comfortable resource
situation – one lands in a scenario where you don’t have enough resources to
execute all your plans : this artificial pressure is no different than in a
startup. Only difference: in a startup, you have one plan, maybe two –
certainly not eleven! Any number of real
examples are present of resource crunch in large organisations that have even
shut them down…
BUSINESS
BASICS
Thus, the
point I am trying to make is that Business operates on some basics, and some
assumptions that are present in the Business case. Whatever be the size and age
of your organisation – the basics of the business enterprise remain the same; and
it is the these basics, when ignored, bring your organisation to a grinding
halt, or to losses, or to missed targets. These basics are spread across the
spectrum of Business – Marketing, HR, Operations, Finance etc.
As a
Business Head, you need to drill down deep into these basics, understand the specific Business Case for each Basic
element, and ensure it remains within acceptable parameters. This is detailed,
and cannot be justifiably attended to in one big post – so, this indicative
logic will have to suffice for now.What I can do is give a few real case
studies that I was lucky enough to run into at the Bhau Institite, COEP and their
Pune Startup Fest, as well as executed
by myself in the course of my career. {Enclosed snaps are from both these excellent events} This requires work, and a little time – but
it is always worth it. For example, the month we spent on the plan validating
each assumption contained in the Business Case in Varanasi gave us 112% on
targets. The nearly 60 days we focused on
understanding the technicalities of the product directly led to us getting
159.5% in terms of achievement. Spend time on the basics; don’t rush. The trick
is balance speed with thoroughness in the approach. We need both!
CASES :
THE TARGET MARKET
Now the
one element I am choosing to deal with in this short blog is the element of
Business Planning – specifically, understanding your target market. This shall
be presented through two companies – as heard from their top management in a lecture
session. These two lectures {Startups – you really ought to sit in these sessions
–they are educational} – provided a nice in-depth look at how these startups
went on to becomes comfortably performing organisations. The first- Yewale Amrut-tulya was a session given
by its founder on the sidelines of PSF ’19, and the other was Payod Industries, an interaction of
Mentors with Startups, a BYSR initiative through COEP-Bhau Institute. The 3rd – a nice teeny tiny company
called Reliance Jio, which did
thorough market mapping for months before launch.
In both
cases, the founders took extraordinary pains to be clear of their target
market, their product offering, target customer profile, and the why of going
into that line of business. They took months & years studying the target
market in all its parameters. They understood the market, the products on
offer; they took an year and more getting perfection in the product or the
product mix before they walked into the market; did sampling / test marketing –
they went to the absolute basics. That is the level of basic focus we need in
any business, regardless of size.
Payod
Industries’ founder even worked at the shopfloor of a Japanese Firm to understand
the manufacturing process; the Tea Firm
was already in the business of / related to the business of making Tea – yet even
they spent an year analysing and preparing their now unique taste. Both
organisations were sure of their market – the Tea vendor was looking for a
specific working-class customer; Payod Industries, an Industrial Glove
manufacturer was fixated on international clientele, specifically starting with
the Japanese market. Note the level of detailing in both – Jio went into
another direction, with detailed & specific mapping of the channel, and
where the customer purchases.
IN
CONCLUSION
How many
of the startups AND the large companies go to this level of specific detailing?
Almost none; the number by my reckoning is in the low 30s as a percentage of
total in my work experience – spanning MNCs, Indian Large Organisations, MSMEs
and Startups. A similar point can be made for each process area in each
industry; the level of initial detailing needed for success. It does happen in
select organisations; I once did a pre-launch exercise for eastern UP & Chhattisgarh
state at this level of detail for 2 large Indian Companies. These are the lessons
we need to learn – startup or large company, processes + basics + validated assumptions + execution + proper detailing planning is what ensures success. And
wherever these come together – Market Success follows.
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