If you are an Indian working in an MNC drawing a fat pay check, then throughout your career you have been advised about how starting up is the right thing to do. I will tell you when you should think twice, maybe thrice before you start a startup.
When you are cash trapped
I know several brilliant people in my network who are happy to work for others at a cost but do not take the risk by starting up themselves. I was speaking to a IIM graduate recently and he had a very good startup idea but succumbed to an average job at a leading bank. His reasoning was that he came from a small town and had taken an educational loan. His top priority at the moment was repaying the education loan. When you dig deeper in this psyche, you realize that people are burdened by the cost of a high end lifestyle. They have student loans, car loans, and home loans to pay on top of the need to buy the latest iPhone or Macbook which is financed by a fat corporate salary. It’s sometimes complimented by some freelance work money if there is a cash crunch. Your startup idea in most cases will not start making profit immediately and there will be times when you will have to survive on ramen noodle. Running a startup itself comes with its own stress. If you are already cash trapped, it might be best to postpone your decision.
When you starting a new relationship
It is fair to say that a startup requires no less commitment than a marriage and that once you startup, your business is going to be your better half. If you are at a stage when you are going to go pursue that highly coveted masters program, think twice about starting up. While most highly successful startups seem to have started inside campus, know that the founders dropped out of campus to pursue their dreams. In a battle between your startup and any other relationship – a masters program, a serious relationship, marriage, a child, or any other major life event, your startup will take the larger pie and you will be doing injustice to your other commitments. If you are not comfortable with the idea of your startup taking precedence over everything else, think twice before starting up.
When you are afraid of failure
Starting up is not for the faint hearted. Wall Street Journal published in 2012, reports that three out of four funded startups fail. The startups had raised atleast $ 1 million.
Out of the 10 business that have started:
3 startups failed – they went bankrupt or the business was closed
3 startups are returning less than the invested capital, but they are still active
3 startups are returning just the invested capital. They weren’t acquired yet and are still active.
1 highly successful startup had an IPO or was acquired for a large sum.
When you want a peaceful life
Startup life for the lack of a better word is chaotic. You will find yourself working more than 12 hours a day, chasing people to join you, convincing investors to invest in you all at the same time. That’s not all, you have to work on your product, do growth hacking, show proof of concept, maintain a high growth rate and put it all together to create a fantastic deck, participate in startup contests to acquire that much anticipated seed capital, get media recognition and a lots more. Well you get the drift… Startup life is chaotic and if you are a person who loves a peaceful life, think twice before starting up.
Starting up is a high risk high reward game and if you love the adrenal rush, if you enjoy uncertainty and chaos and have the appetite for failure you should definitely go ahead. If not, think twice!
About the Author
Kartik Raichura is a seasoned entrepreneur well known in the start-up circuit. Kartik founded ManagementParadise.com in 2004 with a hope to extend a helping hand to management students and has been enabling e-learning through collaborative community based learning ever since.