Monthly Archives: May 2016

Make Money and Sell else Sell and Make money!!!

Consolidation

Flipkart cannot be a yardstick or trendsetter to be worried. Flipkart is one such operational failure and not idea failure. So don’t take Flipkart “alone” as a yardstick and worry.

As I mentioned in my earlier blog, goo.gl/EPF6vQ there are many reasons for a startup to fail. Also, it is not true that every startup will fail because of nonavailability of funds.

It’s been almost 5 years the funding fever has started and it was in real peak during 2012-14. After 2014, the slowness in funding has started and now it is taking a different course from the concept of ‘funding”

Before taking any further step, just sit back and evaluate whatever you have done to your startup till date and take the correct course correction. But you should try to do this exercise only if you are ready to accept your mistakes and more than that ready to correct yourself.

Else this exercise will not yield any expected result. The foremost action to be taken is to cut down the unwanted salary paid to people who are really not required for your company.

They may be very good in their respective subject. But they may not be required at this stage in your company. So do the evaluation properly. Don’t send out any required resource from your organization.

We have done this exercise and we were able to increase the efficiency by 23% in the last 2 quarters. This has given a ray of hope for us. We have started seeing a direct increase in our profitability.

So before running behind “funding” just look back, evaluate, and redo your math and see what exactly is your financial situation now and if it really matters then go for funding. Else increase your sale by deploying good sales professionals and sales methodologies.

In spite of this, funding is not going to happen as how it was earlier. So I close my company then? No. After every trend change in the business Industry, there will be a new trend taking birth. Take the track record from 1986 if you have the data. There was a paradigm shift in the global business line happening after every slowdown.

If you don’t do the course correction within that time, you will end up in failure. If you evaluate 1M as your requirement and compromise with 250K you are already screwed. You cannot hold your breath and sail until next set of funding. 

What is the new trend then?

It is called Consolidation. Yes, don’t just go for the funding. You could have seen the real scenario by this time going behind the funding.

The new trend is, take Flipkart and Snapdeal as an example. They are now in a real bad shape on their revenue. But do you think that they will wait for another round of funding or just go ahead and shut the business? Neither, they will go for strategic purchases.

In the year end 31 March 2015, there was 69 technology M&A happened in India and this fiscal year ending 31 March 2016 it has doubled to 146. That means 146 startups had already taken a wise decision to make the required profit by taking the course of M&A rather than waiting for funding or next level of funding.

Of course, those large giants are not going to give premium value for the forthcoming acquisitions. They will make you settle for much lesser price.

End of the day, the trend is, nobody is ready to spend much cash as transaction and wants to take the path of stock transactions only.

Make Money and Sell else Sell and Make money!!!

 

 

 

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