What if lions were startup founders? What if they followed the same modus operandi?
Whenever a lion would feel hungry, he would prepare a questionnaire. He would survey all potential stake holders and forest veterans to identify most suitable target market. Efforts involved in hunting a buffalo VS a deer? Is hunting the goat a problem worth solving? Rabbits!! They are in abundance but the meat margin is too low. Do you really want to play the volumes game?
In the far off forest of SunderWan valley, two young lions tried hunting deers, they are dead now. Do you still want to go after the deers?
What’s the vision? I want to become the cobra of the cat world, said lion confidently.
What do you think makes you different from the young breed of tigers who are hungrier and have less facial hair?
Go after giraffes the old elephant said (who by the way is a herbivore), the population of giraffes in the forest is growing 53% YOY. But then the entry barrier is very high (20 feet) and there is neck to neck competition.
Finally, it is decided! Buffaloes it is!! There are many buffaloes in the forest and they all have sufficient amount of meat on them. Plus, as the number of water bodies increases, the number of buffaloes is only going to rise. Recently, two buffalo hunters got funded and are doing pretty good, so the investors are very bullish about this space.
Now its the time to raise capital. The lion would spend countless nights struggling with PPTs (Lions being lazy and unkempt are usually Windows users, unlike tigers). There would be long hunting plans and proceeds allocations (Every thing only on pulp, of course).
The plan is ready. Lion would raise $5 million from institutional investors. The investor profiles need to be diverse so that they can properly evaluate the passion and hunger the lion has and advise him on key strategic issues. One of the investors had done post puberty diploma in hunting from a premium institute in Pacific ocean. Though he was never involved in hunting, his degree from Pacific ocean makes him truly capable of judging the lion (The fish and meat market are totally different BTW, but local prey understanding should not matter).
Then there is another investor who will be going through the presentation. Being a wolf, he pulled the sledge for multinational hunting parties led by humans across multiple continents. Years of watching successful hunts has made him a lot of money and developed his deep interest in hunting.
There are other investors too. A whale who would suggest the lion to diversify and get into the fishing business as well. And another who had killed two rabbits earlier before donning the role of prey analyst.
The day would finally come when the lion would give his presentation. Well suited and his claws covered with shoes. He would even spend 300 bucks on a hair cut to look like the more acceptable tigers. The proposal goes like this:
Buy grass worth $3 million to attract the buffaloes. The $3 million grass would come from different sources like FB, Adwords, affiliates and mainstream media. Every penny would be optimized to get maximum number of buffaloes to visit the forest in minimum span to time. Rest two million would be spent in managing this inventory of grass, having a fancy tree house and hiring big shot wolves.
That’s a hell of a plan.
Thank you slide: Let’s go for the kill!!
Investment received! The world rejoices. Saraswathi, Jubin and Ashish do a full story on the development.
Fast forward 18 months:
Lion: We have too many buffaloes around us and we need more staff to hunt. We need additional $5 million to hire more wolves and have offices all around the forest. Near every water body. Approved!!
Now finally everybody gets to hunting after 24 months. And congrats, the wolves are doing a real good job. (predictably, lion is busy doing the reporting to the whale). But no, investors want them to hunt more buffaloes, doesn’t matter what your appetite is, kill more buffaloes and kill them fast. And the story continues. The exit?? Well wait for another post.
Fortunately, lions are not entrepreneurs. When they get hungry, they go out and kill.
Moral of the story: Go out and sell.
PS: No offense to anyone. Founders do much better than the above said lion. And whales, well they have money! BTW I wrote GMAT too. Saraswathi, Ashish and Jubin are fictitious characters. Againn too did the crazy market surveys. But built their beta in 15 days, got the first client in next 15.
About the Author:
Nukul is the founder of Againn.in which provides coalition loyalty program to e-commerce players. Prior to Againn he has worked for strategic consulting firms and investment banks in and outside India. Againn is his second venture.