Some common queries of beginners
How to get startup fundding?
Explain Your Idea Early
Inability to describe the business idea early is the biggest mistake startups make while meeting an Angel Investor. While you are passionate about your business and want to give them a gist of your journey so far, most Angels would lose interest in your presentation or talk after a few odd minutes. They meet hundreds of entrepreneurs every year and all presentations seem the same and hence the decision is made in the first few minutes. So grab them by the hook early if you want to seal a deal.
Highlight The Problem & Offer Solutions
Most startup businesses are centred on certain problems that customers have with existing products and services and how their idea offers a solution to those. This core idea in your business plan about solving problems is something that the Angels are really interested in. You should keep the plan ‘short and sweet’ as your plan is likely to undergo many changes as the Angel would definitely add his/her ideas to the plan if the deal materialises. Long and detailed plans often confuse investors and prove to be counterproductive. In fact what is really important is a strong executive summary as that is often what the investors would have the time to read.
Pick A Lead Investor
Early on it is common for you to knock several doors to raise capital for your business. By doing so entrepreneurs often circumvent the importance of choosing a lead investor and this affects business operations. To start with if you are presenting your business plan to dozens of investors and doing the same odd job each time it can be frustrating and leave little time to focus on your business and improve it. Here picking a lead investor (need not be your biggest investor) saves your day. The lead investor would act as a magnet for other investors and raise the necessary capital while you focus on your business.some other ways are
- Bootstrapping :- Bootstrapping in business means starting a business without external help or capital. Such startups fund the development of their company through internal cash flow and are cautious with their expenses. This is the oldest and the most preferred form of financing your startup. The local kirana (grocery) shop in your neighbourhood was always bootstrapped by an enterprising banya (merchant). Entrepreneurs, till today, prefer bootstrapping over any form of external financing as it results in no equity dilution. Experts recommend bootstrapping your startup as long as you can. so its also good way to raise money for startup in India.
- Friends and Family : – The best option for a startup is friends and family. you can raise the funds from them easily for giving equity stake in the company. if you know anyone your friends who want to join your startup or want to invest then just give them equity and raise the funds. so its also good way to raise money for startup in India.
- Startup competitions :- These days due to lot of competitions many colleges and startup incubators or accelerators launch startup competitions. in that you can win the prize money for your startup so its a best way to fund your startup, its also good way to raise money for startup in India.
- CrowdFunding Websites :- These days culture of crowdfunding website is also on treading. if you need small amount of money and you wanna use for a your NGO Project and some nicely project which helps to people to solving any major problem then you can take the help from crowd funding websites throughout the running a campaign. even some big projects is funded by crowdfunding website. so its also good way to raise money for startup in India.
- High Networth Individual person or businessman :- There are lot of High networth individual persons in India who want to invest in new venture and expected the high rate of return for their investment. its not a angel investors but you can called these persons for your startup. so its a best way to find any individual who’s interested in your idea and want to given money for your its also good way to raise money for startup in India.
- Impact Investors :- There is are lot of impact investors also in India. these type investor are incorporate a origination who’s invest in social entrepreneurship venture and expected very low return from the investment. so its a best way to raise the money for your startup in India.
- Accelerators :- Accelerators is like a teacher which guide to you on your startup so its like a college university which provide you mentorship , funding and there are lot of things. they have fixed tenure and terms. Startups have to give a small equity to these accelerators from 2 % to 10%.
how to build your own software company
Thinking business means thinking differently. Of course your talent counts. Here is a solid formula to help you set up a money-earning business of your own.
1. Focus Right Software Product or Software Services?
The software industry has fantastic potential for those with the right talent and understanding of how to run a business.
As a business owner, you need to first decide an area of focus in the industry. There are mainly two sectors in the software industry:
Software products or programs are a set of applications developed for particular tasks. Software products can target individual business or home users. Software products are also developed to target a particular market segment. For example, there is a suite of programs that helps users take care of all their office paperwork including writing letters, preparing charts, invoices etc.
Then, there can be a software package for a particular car manufacturing company to generate Order Management, Procurement, Forecasting, Delivery Management, stock inventory etc. An organization can also hire your software company to tailor-make special software products for their staff. For example, a magazine company may ask you to re-design an existing word processing package to suit their translation needs for English and Spanish.
On the other hand, software services cover marketing or maintaining software products that might have been developed by your company or someone else. It can also include custom software migration like helping a company move its existing records to a new system. It can also include book-keeping, maintaining records, a subscription list, salary accounts etc.
When you start a business you should carefully evaluate your initial investment capacity and human resource available to you. Conduct a survey of the market and see how other companies in the same area as yours are functioning.
2. Balancing Hiring Technical Team First or Sourcing Software Projects First
Clients are crucial. So is your team that will do the job. Obtaining contracts and then hiring a technical team makes more sense. You could hire specifically according to the requirements of the project.
As your company grows you could keep a multi-talented team working on different projects at the same time.
The trick is in having a team that can complete a project successfully according to the client’s requirement. This will help you build a good brand image. A good brand image means more projects and more profits. Once your confidence in your team, you can hire more people to expand the expertise area of your company.
Hiring a team when your company still has to look for projects would mean keeping staff idle and paying salary without work. It would also demoralize your team.
3. Having a Business Partner or Not To Have Partner
Let’s face it. It takes two to tango. But if both people tango to different tunes you’ve got one miserable situation before you.
Deciding to launch a company by yourself or having a business partner is a question you alone can answer. But either way, one thing that has to be clear at all times is to decide who is in charge. Just because someone makes a great friend, neighbor or spouse does not mean that they would do an equal great job at being business partners.
List your reasons for choosing a business partner. If it is for access to bigger investment capacity, technical help etc. then it makes sense. Do not choose a business partner for emotional reasons ever unless you want to sink your ship.
4. Customer Target Location, Location & Location
If you want to stencil something on the walls of your office make it: Customer target location. You can have the best product on the planet but if your clients don’t need the product what use would it be?
The Internet has made the global market accessible to smaller companies. The flip side is that the Internet has also made competition tougher. Therefore, it is essential to focus on a small group in a particular location.
For example, you are developing a software package for a school. The software package has to keep track of the attendance of the school’s teachers. It is very important to begin by focusing on that individual school. Figure out how other schools are functioning in the city. That ways you can have both a micro and macro view of how your team could develop the project that would eventually have potential beyond a single client.
Conduct a comprehensive market research. Start small. Mark out a local area first and see how best you can tap it. Try to understand the very basic local needs that you can take care of through your software company. Once you start small and focus on a core location you can build profits and client base.
Can i open my own company?
There is nothing that limits you as such in registering a company. You might even want to start with a sole proprietorship (cheapest) and then later on incorporate with a Pvt.Ltd. once you know the full scope of your activities and the degree of liability you have in your business operations. But that is up to you. If you want to start a Pvt. Ltd then do it.
However, what you want to do is study your employment contract. Some have terms that allow you to do some side work, or some contracts have also stiff clauses regarding competition that once you leave the company and do work that these clauses might hinder you for the first 6 months or longer. I doubt you have it, but just so you know in case you plan to take clients with you. Also, anything which is not regulated in a contract, standard Indian law applies. So you might want to look up on the internet if there are any peculiars regarding employment in India that we Europeans don't know about.
Also, anything in terms of intellectual property and what you learn in the company is owned by your previous employer. So you might want to be careful and keep things separate. Your employer cannot stop what is stored in your brain, but simply the direct use of intellectual property or previous knowledge that could come to a direct disadvantage to your employer from you leaving the company is a sensitive area where you need to be careful.
1. Yes you can start a company and do whatever you want in your free time.
2. Check for any clauses in your contract.
Problem comes only when you do something on company time.
As long as you keep everything separate, you should be fine! Once you leave the company, try to do it on good terms by giving them notice and helping them.
Some things that can be kept in mind
Following are the steps that I can think of on top of my head:
- What will my venture do? (Product/Service): First decide what type of venture will you be starting? Will it be a product that you will launch? ex: mobile phone cases. Will you be offering services? ex: driving school
- What problem am I trying to solve?: I say this because your idea maybe innovative however, if there is no demand for that in the market then there is absolutely no point in doing that.
- Are there any competitors?: Answering this is a very important step because, if you are a sole player in the market, you do not need to set apart but, if there are competitors then you will have to convince your prospective customer why they should choose you. Ex: Say you wanted to start a soda company, but the market is monopolized by big names such as Coca Cola/ Pepsi. You will be at a serious disadvantage in this case.
- Do I have enough capital?: This is crucial because you can't start a venture without it.
How does twitter earn money?
Twitter could increase earnings by an order of magnitude, but it would require out of the box thinking...leveraging the hidden value of the network they have developed.
Facebook and Yahoo and Google could do the same thing. I expect Twitter lacks a compelling effort to identify and evaluate alternative revenue sources. Management of such large businesses find it so easy to say, "but we aren't in that business." I suggest they are in the business of making money and should have a mechanism for considering new addon approaches.
The most agile minds at developing alternatives are unlikely to be working at those companies, because their work is so often off the beaten path and unformed. Those types of revolutionary/evolutionary concepts are not likely from employees, management, or VCs.
Essentially, this would entail Twitter parsing over the Tweets of a given user, as well as the Tweets of the users he/she is following. Common keywords, themes, and phrases are then pulled from this data and associated with that user. As a result, highly-targeted ads can be displayed based on the user's network of content ("web design", for example). These simple text ads would look very similar to regular Tweets, but would be clearly marked as "Sponsored Content". Facebook employs a comparable strategy through their News Feed, although ads are based on demographic information as opposed to context. These Twitter ads would appear every 20 or so Tweets depending on the frequency chosen by the company.
Integrating ads into the content stream is a delicate process. Caution must be exercised and full notification must be provided. One wrong step may prove costly. Nonetheless, if ad integration can be accomplished in a seamless, unobtrusive manner, it can be extremely effective.
The ads would be generated via a proprietary auction system developed by Twitter. Advertisers would bid on desired keywords and phrases, somewhat akin to Google AdWords. These specified terms, or bundles of terms, would ultimately be assigned to the highest bidder each month (as an example). The ads would run until the advertiser budget runs dry or the month ends. If the former is the case, excess inventory would be allocated to the second highest bidder. If no bidders are left, superfluous ad space can either be filled with Google ads, ads from partner networks, or house ads.
Obviously, most of the ads would be tech-centric -- after all, Twitter has yet to break into the mainstream. Its user base is filled with bleeding-edge tech enthusiasts. Armed with this knowledge, advertisers can directly target tech innovators, influencers, and early adopters while Twitter is able to command premium ad dollars.
This strategy paves the way for a two-tiered "freemium" model. Any users that choose not to view the ads could be charged a small, yearly fee that would create an additional revenue stream. Ad-free account could be combined with premium features and added functionality beyond the basic offering to give users more value.
The combination of highly-targeted, contextual ads and a premium subscription should suit the needs of most users. Those who don't want to pay for the service don't have to. Those who don't want to view the ads don't have to either. At the end of the day, creating a flexible revenue model that doesn't cause a user backlash is the ultimate goal. If personalized, contextual ads appeal to the user, I have no doubt that users will not only accept this new model, but embrace it.