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5 characteristics of a successful startup

Daya Prakash, CEO, ADP Infosystems Pvt Ltd, and CIO Angel Network investor, on the essentials that will help a startup surge ahead of the crowd. By Shweta Gandhi

“When you enter the entrepreneurship industry, you get to meet people with great energy levels and brilliant ideas, which pushes you and keeps your energy levels high,” says Daya Prakash, CEO, ADP Infosystems Pvt Ltd, who was earlier CIO at LG, India. With over two decades of experience in the IT industry, Daya is keen to utilise his knowledge to help startups get on their feet and on the road to success. He has been an angel investor for more than year, with investments in PayTunes and Anakage.

“The current startup scenario couldn’t have been more exhilarating as there are already quite a few ‘unicorns’ who represent the startup world in India, and a lot of them are in the making,” he says. Moreover, the industry is maturing at a significant pace and the focus is equally shifting to small, new startups. “The success of any startup depends on their products and services and how well they are meeting the needs of the end consumer,” he says. “But there are some other vital traits necessary to sustain the business and make it profitable.”

1. Good relationship with investors
“By committing money into a startup angel investors are proclaiming that they have conviction and belief in the startup’s ability to perform. Entrepreneurs should use this opportunity to form the right connections and the right mentorship. They should build a relationship with investors, have them act as devil’s advocates and provide intangible services—like guidance and expertise. Entrepreneurs should include investors in their project aggregation strategies and investors should make sure their level of engagement does not end at the financial part. Investors should nurture startups just like raising their family.”

2. Team’s ability to execute with excellence
“This is the most important criterion, perhaps way more critical than the main idea of the startup. For example, TCS is the number one SI in India, but that didn’t affect Wipro, Infosys, HCL and others from being in same industry and having their own share of the pie. There are so many companies that could be following the same idea, but what truly matters is the team’s integration and their execution. The idea does matter a lot, but not above the team, which is supposed to execute it. In a nutshell, a team with great commitment and skills, high on ethics and integrity, and an ability to execute with excellence has far higher probabilities of emerging as a true winner.”

3. A unique selling point
“Uniqueness is what sets a company apart, and in today’s age of ideas being too even, it’s the only aspect that can differentiate the company. The company’s USP could be in a niche area or it could be in the concept, the execution strategy, the market aimed at or the targeted audience—something has to be there. Otherwise, an entrepreneur risks not being a game changer and the startup won’t go a long way.”

4. Effective business model
“If we are to look at the whole fundamental idea of founders, their main intent is to become self-sufficient. Also, quite unabashedly, the main intent of investors is to earn Return on Investment (RoI). Now, there is an urgent need for founders, investors and stakeholders to have a common understanding so that they are on the same page, which is needed for the startup’s product or service to have a strong monetary base. No startup can survive without being profitable. Thus, being profitable should be their core philosophy, and it shouldn’t be something that entrepreneurs should shy away from.”

5. Inherent possibility of scalability
“If a startup aims to address a certain pain point or introduce a customer delight, unless they reach out to the masses their whole purpose would not be fulfilled. The startup has to be growth oriented and entrepreneurs need to scale if they want to be part of the future. A word of caution here for entrepreneurs who think that scaling implies increasing the work staff—as long they have made it a point to understand the whole business and due diligence is given to growing the business, it doesn’t matter if it’s a small team or a large team that’s deployed to achieve that. All that’s required is a calculated move and scalability.” 

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