Startups & Ad Hoc Projects: How Not To Get Lost In The Woods
Published on 16 Mar, 2016 Published under Valuation
The need to survive often suppresses the desire to pursue dreams. It can’t be truer for most of the startups we see. When rubber hits the road, quite a few startups pounce at every business opportunity that would help them stay afloat. Such opportunity is largely a job that keeps the stove burning but is rarely the service that the venture was launched to offer.
Our experience suggests that most of the startups—especially the tech ones—could never escape the temptation to run body shops for their clients. Quite obviously, such a move lends stability to the venture and helps it to better prepare itself to eventually do what it always intended to do. However, continuing long on this path may put the venture at a risk of losing its way in the woods. And, eventually its very own character.
Acknowledging that such a scenario is largely inevitable is the first good step for entrepreneurs. Many serial entrepreneurs know this well; however, first timers are susceptible to temptation of quick bucks, at the cost of focus on long-term goal.
A successful business clearly defines the proposition it has to offer to the market. This proposition is based on the strengths of the business. Growth of a successful business comes from doing what it does the best in larger volumes instead of jumping at any random opportunity.
When a venture choses its path, it can build systems and practices to do its business more efficiently and profitability. The path it chooses has long-winding implications—from talent recruitment to brand positioning, and to customer service.
While focusing on its clearly defined business proposition, a venture may grab random opportunities by carefully avoiding any unwanted impact on its core business, and striking the optimum balance of resource utilization.
Such calculated moves eventually impact the venture when it reaches the inevitable stage where it needs to change its behavior and choose the definitive path to a mature business. This change clearly means focusing on long-term vision of the business and letting go the short-term, quick benefits that helped the venture to survive initially.
However, ventures need to be cognizant of the fact that such a change may come at the risk of survival of the business in longer run, in the absence of sufficient resources. Therefore, this is the very phase where ventures need to understand that lack of adequate support may prove quite detrimental, and should seek professional VC investors to back them up to better endure the change-over.
That’s why it is of prime importance to ensure that ventures have invested their time and energy sufficiently to evolve their fundamental business ideas, while working on ad-hoc projects to help survive. This is the only way to win confidence of VC investors, before deciding to find the way back to the core business and saying no to odd jobs full time.