Ravi Saxena’s Post

Transcript

Hi, I'm Ravi Saxena, founder and managing director of Wonder Chef. And I'm talking to you about entrepreneurship, unveiled today. I'm going to speak about something very exciting, which is how do you actually do a startup? This is a question a lot of people ask me. How do we go about it? We have an idea, We have some funding promises, We want to do something on our own. We have passion. But what do we do? What are the steps? Is there a toolkit? Well, I can share my experiences and some of the wisdom I have garnered over the years. And then everybody will have their own. To me, But let me take some of the highlights which are important. The most important thing while doing a startup is first of all your clarity of mind. A lot of people want to do a startup because they believe they will have independence. They will have freedom. They would not need to report to anybody. They would not need to go to office on time. They would not need to report to a boss every day. They will be able to do something which they are not being allowed to do. These are all good reasons, but not the right reasons. Because if you want to do a startup as a means to escape hard work or escape accountability, it won't work. Because as a startup person, as a founder, as we say you are dormant to chairman, you will have to do everything. The buck will stop at your table and you would not have any escape. So please don't run away from real life and do a startup because startup is more real than anything else. Do a startup if you are very clear about what you want to do. You have a very clear cut idea that you want to follow. You have a passion for something. You have a skill set which is uniquely your own. You have a technology which is unique and which can be expanded and sold. So now you have an idea. Which is your own. Which you believe in, which you are passionate about and now what? Test it out. This is an extremely important step, because sometimes we fall in love with our ideas. I get one idea a day, which I think is the best in the world. What I do, I come to office, I talk to my team, I tell them to tell me the truth, what they think of it. A lot of people say great idea, very nice, it should work and that I sleep over it for a week. I talked to a few other people and this is when I already have a large organization. But when you are doing a startup, it means that you are putting everything that you have into your passion, into your idea. You have to be even more careful. What is the best way? Talk to people. Talk to a lot of relevant people. Talk to your mentors, talk to your ex bosses, talk to your colleagues and ask them what do they really think of this idea. You know what, sometimes, despite living in the world of Google. We do not realize that somebody else has already cracked this idea, which means it may become difficult for you to do it or to scale it up, or there will be a lot of competition. But also, and more importantly, you may not find competition because somebody has done this idea and has failed at it. And maybe the idea does not have legs. There can be other reasons for failure. They may not have executed it well. So yes, you will have to do all the thinking and figure out whether your idea has the legs to get into a scaled up business. The most important person who can tell you about whether your idea is good or not is your potential client or your customer. Let me clarify what is client, What is customer? A lot of people use this term interchangeably, but since you are going to start a business, let me clarify it for you. Typically in a B2B setup it's called a client and in a B2C process it is called a consumer or a customer. So if I am selling my products to Reliance or Demart, then Reliance or Demart are my clients, but the person who is buying my product from my website. Or from a Reliance or D Mart outlet is called a customer or a consumer. The input of both your client and potential customers is critical for you because these are people who will have to spend actual money to buy your product or service and they are the ones who will give you actual feedback. Not only that, they are also people who use a lot of services or products like the one you are planning to launch. So they have a perspective. Let me give you an example. On my own journey, so when? We were founding Wonder Chef. I thought we must improve upon the mixer grinder because mixer is the most penetrated appliance in the Indian kitchen. About 42% of the Indian kitchens have a mixer. 58% do not use any appliance, which is a good thing because the market continues to expand. Now these 42% households, they are being serviced by dozens of plants. There are at least 40 to 50 brands of mixers in India. Every large appliance company launches a mixer first. So I thought to myself, what can I do better? Because with my small Bunny, if I come and I try to compete with the big players who are already established incumbents, how would I make a success? What did I do? I did the same thing that I'm talking about. I went to my potential customers. Now who are the potential customers of under Chef? They are homemakers I personally visited because I didn't have a large team at that time. We were just. About four or five of us, I personally visited 200 homes across India. And you know what they told me? Well mixer is a mixer. How can you differentiate? We are OK. We are not totally happy. I asked them why are you not happy? Just dream it and tell me what would you like. So the homemakers told me, look, the mixer comes with three steel jars and we cannot see what is happening inside. But what to do? We need steel jar because the glass jar will break and in steel you cannot see inside. Secondly, we are now getting more and more appliances into our household, into our kitchen, which is a limited space. We are getting a toaster, we're getting griller. We are getting a mixer, a stand mixer. Cooktops are becoming bigger. We have more kinds of cookware. So can it be something more compact and simple? They said OK and third thing, the most exciting thing they talked about is that when we run a mixer, we have to stand by the mixer and put our hand on the lid, otherwise it can fly off. Now these were the three highlights out of the hundreds of responses I received from my customers. We filtered them out, We ran excel sheets, we ran programs to see what are the highlights and these three were the filtered highlights. We went to the drawing board and started working on the. Concept of a totally new mixer idea and we came up with our famous product which is called Nutri Blend. Let me show you how it looks. This is the device we came up with which we call New Triblend and it answered all the needs of our customers. It is compact. It is transparent, made of unbreakable polycarbonate. So the fear that the Indian homemakers had that the glass will break and they would not be able to find a replacement easily has been satisfied. Plus this is how a jar works. So there is no lid on which you have to keep your hand while the mixer is working. It is a screw type thing. OK, so here are the blades which you can clean more easily, which is also one of the things that people highlighted that you know they have to put their hand into the jar and clean the blades and it becomes dangerous. So we have the blades are exposed, but that was a distant fourth. Thing The first three things were addressed. So you screwed the jar tightly, There's no way it can open, there is 0 leakage and then you just fix it, rotate it and it starts working. There is no button, there is no 123 and back. So it's much more compact, but it also lasts longer. There are fewer problems. And this, I can tell you, has become a household device. It is replacing the big mixers in the Indian homes we sell. More than six lack mixers every year. The highest selling single design of mixer grinder in India accounts for more than 25% of ownership sales. So the idea here is to explain to you with this example that by listening to the consumers we could launch a competition beating #1 product. So let's say now you have the right idea. You have tested it out with your mentors, with your teachers, with your bosses, with your family. And with your consumers and everything is tick mark, now what? Well, now you make a business plan. A lot of founders, I see they work for years and years, but they do not make a business plan in an Excel sheet. They do not know how much they want to achieve this year and how much they want to achieve in the next three years. And they're just living their life in the excitement of doing a startup, burning cash, looking for funding, diluting themselves in the process. But with no clear business plan. It may sound surprising but one out of two entrepreneurs that I meet are working like this. I advise you strongly to make an Excel business plan even before launching the business. Don't think that you will make it after you launch the business. I made my business plan for Sodexo 2 years before launching Sodexo in India. I made the business plan for Bokoni 2 years before these cute came up for Wonder Chef. I made the business. Than one year before I actually launched the first product and I was clear about the next five years business plan that this is how we will grow the company. Things change, you pervert in between. There are surprises, there is competition which forces you to look at your pricing, your product offer. So I'm not saying you have to live by that business plan that you made on day one, but that business plan is your milestone. Only by comparing with your business plan you will know whether you are working in the right direction. Or not. And more importantly, what do you need to do day-to-day to go forward? The next thing is funding. Well, you are doing a startup because probably you have some source of funds, your own savings, your family savings. But remember, money is always precious before you know it will burn out and you will be looking for funding. The trick is not to look for funding too soon, because if you burn out your cash very quickly and you just go. In the market to look for funding from angels or venture capital funds, you will be diluted so badly before you know it that you would even lose interest in the business. Because if you are reduced to 510% you will say why am I doing all this? OK, yes, you can get reduced to five or 10% if the company has become very large, but not in the beginning itself and it happens to a lot of founders. So use your money very frugally. Continue to work day after day with your business plan. Go for funding in drip feed mode, little funding. Run it for one year. Little more funding run it for two years and in four to five years go for large scale funding which will not dilute you so much. Life is long. In one of my earlier episodes I said that you have to start at the right time when you still have a runway of at least 2530 years to build your business to scale your business. So. Four or five years is nothing in the life of an entrepreneur who has runway but builds solidity because it takes three to five years for the business to take roots. That is when the universe starts to believe in you. That is when the investors start to believe in you and they will value your company and more importantly, you will know what to do every single day to make a success.