Everyone talks about this magical place called ‘valley’ to start a company, so what does this magical place contain?
#1 Focus
Startups are lonely, tough and very hard to build. It’s also highly unlikely that you might hit off with your very first product/idea. I’ve seen a lot of YC companies that have pivoted 2-3 times from start to demo day. In such a harsh state, the only way to maximize your chances of succeeding is to spend most (all) your waking hours focusing on the product to get to market fit. In other words, it means you shouldn’t worry about things like
a. Incorporating a company: It takes roughly 90 days to get a Pvt Ltd done (vs) 4 days in the US to register as an Inc.
b. Integrating payment gateway: I had to fill up a zillion forms, get attestations from branch managers, etc. to get my CCAvenue account up (vs) inserting a 2-line javascript at your footer and you can start accepting payments.
c. Snail mail hard copy of invoices to approve it (vs) everything being done completely online and many more..
Though these may sound trivial, the fact that these miscellaneous tasks still remain on your whiteboard makes that thread silently run in the background all the time. There should be nothing in your head apart from your product & the metrics to see if things are actually working.
#2 Funding
“Building web Software is cheap in this era” whoever said that, I’d love to meet him because he doesn’t understand the difference between a server and a software. Servers are cheap, yes, softwares aren’t. Ironically, building a good software is a function of programmers & designers which are possibly the most expensive resources (I hate calling people as resources, still) today. Building a good web product is very expensive.
One thing I’ve noticed about investors in the valley is their decision to invest on is a function of team, product & traction in the same order with the highest weightage given to the team. Because, everything that changes in a startup (competition, traction, etc.) is fixable but founders aren’t. When you’ve investors betting on you more than the idea, it helps you to raise money at an early stage as well as gives the comfort that it’s you who’s being backed and not the idea. Hence, building a product becomes more enjoyable and you focus on the right things instead of worrying about infrastructure costs, the extra $100 spent on travel (which saved you 6 hrs), etc. You begin to optimize for the right things. And again, building a goodweb product is expensive.
#3 Equity
Building a team is hard and the early employees really set the culture and the DNA of the company. They’ve to be in to build a wonderful company and should ideally optimize more for the equity they own/hold than the pay. It’s a great feeling to have people around you like that who own a part of the company and want to make it big. Agreed, not a lot of people have made money in India with the stocks they’ve held, because of which the term ‘equity’ itself is extremely underrated, but there needs to be some starting point.
#4 Advisors
This is critical too, but the fact that you’d find great advisors only in valley, etc is exaggerated. If you really want to, you can find great advisors everywhere.**
Please don’t start a hate-India/hate-me thread, the reason I wrote this article was we often blame/ask ourselves ‘Why can’t we create more Zuckerbergs or Steve Jobs?’ and then immediately resort the blame to our education system (btw, they were dropouts) or the general attitude of Indians being conservative, etc. BS. The programmers working/worked at Interviewstreet are every bit capable of getting a job in Dropbox or Quora, so it’s really has nothing to do with the education system and one of the guys dropped out of college to work with us temporarily, so it has nothing to with being conservative as well – the problem is something else. I’m definitely not ruining the possibility of building a great global startup, in fact I’m a huge fan of VWO and Paras, but you’ve to accept it’s very hard and is an exception. If we get awed by billion dollar valuations happening in the US, we should also track how many startups actually come out every year (most of them fail) to get a few startups valued $Bn.