Start-up Founder Litmus Test – Are you going to suck or win as an entrepreneur?

Back in school, you must have learned about litmus test. A simple test to determine if a liquid is acid or base. When dipped in the liquid, blue litmus paper would turn red if the liquid is acidic (and vice-a-versa if the liquid is basic).

Today I want to share a similar test to see if you can fight-it-out as an entrepreneur.

First go ahead and take the test. Answer each question in Yes or No.

  1. You spend at least 75% of what you earn.
  2. You are shy to ask for money for your services.
  3. You want to do everything yourself.
  4. You think you can outsource everything
  5. Your idea of success is yachts, beaches, cars, drinking & lavish life.
  6. You think earning $1 million is easier than borrowing $1 mn.
  7. You do not believe in yourself.
  8. You are waiting for the perfect idea to start your company.

If you have answered 5 or more with YES, your life as an entrepreneur is going to be tough. If you answered 2 or fewer questions with YES, then you have right mindset to become an entrepreneur one day.

How did I fare in this test, back when I started (in late 2009):

1. You spend at least 75% of what you earn:

No. I used to make Rs 40,000 per month after taxes. That is about $1000. Jo (my wife) used to make another $1000. Total earnings: Rs 80,000. We used to spend Rs 20,000 per month –

  • Rent: 8,000
  • Groceries: 4,000
  • Utilities (electric, maid, water, cable, phone, internet): 3,000
  • Petrol (gas): 1,000
  • Everything else (eating out, movies, travel etc.): 4,000

So that is 25% of expenses.

Note: The expense ratio is higher when we traveled aboard for work – mainly because other countries are costlier compared to India.

Why this is important:

Running a family is much like running a business. If you are not able to manage income & expenses in your family (and leave balance profit) then you cannot manage a company. I am not saying all start-up founders need to be frugal. But you need to be wise when it comes to money.

2. You are shy to ask for money for your services

Yes & No. Initially I was shy to charge money for my services. But during 2008, I became confident. This helped me launch my first product in 2009.

Why this is important:

Starting something is like going against a tide. Unless you value yourself & ready to ask, no one will give you anything.

3. You want to do everything yourself

Yes & No. As you may know, I used to do all aspects of my business in 2009 & 2010. That is content creation, marketing, customer service, product development, website maintenance, email, phone support – everything. This has 2 reasons – 1) I did not want to spend money on things 2) I liked doing most of these tasks.

But my approach changed drastically once the business grew. In 2010, when I quit my job to work full-time on, I already knew that I will be hiring my first employee very soon.

Why this is important:

If you want to do everything yourself, that is an indication that you are a control freak. Sooner or later your employees will hate you for that and your start-up will have troubles. A successful start-up must have good collaboration between all the employees & make them happy.

4. You think you can outsource everything

No. I did not consider outsourcing until 2011. Even today, I do not think I can outsource all aspects of my company.

Why this is important:

If you think you can outsource or hire others to do everything, then you become a free-rider. Someone who enjoys the benefits, but does not contribute much. No matter how brilliant your idea is, unless you fold your sleeves and work on it yourself, you will not get respect from your team. Also, as a founder it is important to understand all facets of your company by working in all areas at least a few times an year. A good example is Zappos, which requires that all employees must work in customer service for sometime before doing their actual work. Imagine how different an accountant, software engineer, production manager will be once they talk to customers on phone for a week.

Related: my thoughts on outsourcing

5. Your idea of success is yachts, beaches, cars, drinking & lavish life

Never. My idea of success is freedom, happiness, family, comfortable life, wanting less & health. I do not mean all the founders should be like saints and say no to luxuries. But, if your sole ambition is to life a lavish life, then starting a company might be a poor idea.

Why this is important:

Focus on specific items or luxuries can yield to poor decisions when running a company. Instead start something because you want to help others or create value.

Related: Follow your passion, but manage poop too

6. You think earning $1 million is easier than borrowing $1 million

No. I think the opposite is true.

Why this is important:

Understanding the concept of leverage and using it is very important for a start-up founder. If you have a great idea and execute it well, then $1 million in your hand can become $10 mn in no time. All good bankers and investors know this. That is why borrowing a million is easier than earning one. It becomes easier when your company spends less that what it earns (ie profitable) and you are not shy of asking for money.

7. You do not believe in yourself.

No. Einstein said, “Everybody is a genius. But if you judge a fish by its ability to climb trees, then it will live its whole life believing that it is stupid.” Although there are various things at which I suck (sports, social gatherings, dancing etc.), that is no way stopped me from starting my company.

Why this is important:

As I mentioned earlier, staring a company is like going against tide. You have to fight everyday with competitors, peers, society & more to earn recognition & your place. Unless you have confidence in you, you cannot do it.

8. You are waiting for the perfect idea to start

Never. When I was doing MBA, I thought to succeed a start-up must have a killer idea. But that belief died once I started working and spoke to more people. I now believe that any decent idea can become a successful startup, as long as we execute it well.

Why this is important:

In many fields like physics, brilliant ideas are important. But not in the field of making money. You need guts more than brains to succeed as an entrepreneur.


The best thing about this litmus test

Once tested as an acid, the liquid remains acidic no matter how many times you test.  The best thing about our test is, you can pass it once you change your mind-set & hobbies. You will also notice that I have not included any questions about risk taking. This is because, I think having a full-time job is just as risky as starting something on your own. So go ahead and clear the litmus test. Start something and leave your mark on this world.

How did you fare in this test?

Please share your results and ideas. Do you agree with this test? Leave comment to share your opinions and ideas.

Is your startup = you? Time to separate!

One of the turning points in my startup life is the time I spent in Sweden / Denmark. I was employed with TCS (TATA Consultancy Services) in 2009, when they sent me Sweden (and eventually to Denmark) to help a large insurance company in their IT program.

While I was in the beautiful town of Malmo, I met my mentor,Mr. S. He ran a couple of companies for 2 decades and has a wealth of experience, practical wisdom when it came to running a company in India. Naturally, I discussed my plans for starting a company with him at length, often on our train rides from Copenhagen to Malmo. I still remember clearly what he said on a bright evening when we were taking a bus from Malmo Syd station to his home.

Chandoo, Do not make your company depend on you for everything!

Malmo Town (you can see the opera center)

[Image from La Citta Vitta on flickr]

Do not make your company depend on You! – but why?

In many start-ups, there is no separation between founder(s) and the company. Its like the founder = company. We have all read the stories of Bill Gates, Page & Brin, Steve Jobs, Narayana Murthy etc. They all played vital role in shaping their companies.

But wait!?!

Microsoft, Google, Apple, Infosys  became such world class companies because their founders let the company grow, by accepting that company is not them.

But wait?!?

Many of us are not here to run next Microsoft or Infosys. We just want to run a small, successful enterprise and live happily.

Even, in that case, distancing yourself from your company is a great idea. And today, I want to tell you how I followed Mr. S’ advice and did that.

5 Reasons why you need to make your company not dependent on you

You may be wondering why the heck take the trouble of making my company not depend on me.

Well, here are 5 reasons.

  1. You can enjoy life: Remember, for many of us the reason we start is simple. We want to get away from the hectic 60 hour workweeks and do things that we love & enjoy (like playing with your kids, taking walks with your spouse, watching a movie, reading a book, learning a new sport …) If your company is a big part of your life, you cannot do this.
  2. Your company can grow: Your company is just like plant. When it is small, it needs your support – regular watering, top soil, prevention from pests etc. But once your company is of a good size, the support you give should be different. You need to let it grow.
  3. You work on what you love, not what you have to: No matter how exciting the area of work is, every company has things that you dont want to do. In my case, I do not want to do work related to accounting, taxes, administering my web-server, designing websites, organize my email or do followups. What I really like to do is learn new things, share my ideas, create new products, polish existing ones, connect with customers and help them. By letting the company not depend on me for everything, I can choose to work on what I love and find others to work on the remaining areas.
  4. Your company makes fewer mistakes: A direct consequence of playing a large role in your company is that you are part of every decision. While this gives you some sense of control, it comes with a huge price. You are going to make mistakes. Why? Because, you are not an expert in everything.
  5. Makes selling or closing your business easy: Not that I have any immediate plans for either. But every startup owner thinks about the question, What is going to happen to my company in long-term? While not everyone can get a $100 Bn IPO like Facebook, we all want to prepare for the eventuality – merger, acquisition, IPO or closure of your company. In any case, a company that is independent makes this whole process smoother and gets you better valuation. Imagine how much Facebook would sell for, had Zuckerberg been their only coder.

Making your Company Not Depend on you – The process

For me, the process of making my company independent has 2 steps

  1. Preparation
  2. Execution

In the preparation stage, I have identified all the areas of work that involve my presence and figured out ways to reduce, automate or outsource them.

In the execution stage, I just packed my bags, left with my family to Bangkok for 8 weeks. Even though I am available on phone & email to address the work needs, I tried to minimize the time spent on running business myself.

Step 1 – Preparing to make your company independant

This is the difficult part. In my case Preparation began around Jan 2010. And it took one whole year.

Hire your first employee:

As my business grew, there were areas of work which I could not give as much time as they need. So I hired someone to help me with that. I was worried if the person can do as good a job as I did. But my worries vanished in first week itself. Come to think of it. We are not doing cutting edge research in Physics or Biology. There are 100s (if not thousands) of people who can replace us.

Note of caution – Dont hire too many people before you are making profit

Often, I see startup founders trying to hire a few employees using the seed money (or investor money). While this may work in some cases, it is going to backfire in many. Especially, if you have not become profitable. Your first (and most important goal) should always be to make your company survive on its own. And becoming profitable is a the proven way for it. (You can also constantly borrow money with the promise of gold pot at then end, but you would not find many takers)

Make Revenues (and profits) not depend on your time

In service business (ex: saloon, IT consultancy, clinics, coaching etc.), your revenue is proportional to the time you spend providing the service. If the consultant is on holiday in Hawaii, you can be sure that he is not making any money.

One reason why starting a consulting or service intensive business is a bad idea.

On the other hand, in product business (ex: iPad cases, software, websites etc.), your revenue is proportional to your marketing & your customer reach. So if you are on holiday in Hawaii, still customers are purchasing what you made.

While many startups begin with a service orientation, at sometime, you want to switch to product side.

From beginning I have product orientation in my mind, thanks to Mr. S’ advice. But there are still some areas where my time determines our revenue potential.

Here are a few things I did to minimize that.

  • Emails: Replying to customer emails and connecting with them is an important part of my business. I did not want to let go of this. But then, I tested my beliefs by giving my assistant access to my email account for a month. And I was proved wrong. He did just as good a job as I do. Plus, he highlighted important emails that need my attention. Customers are happy, I have more time on my hands. Problem solved.
  • Consulting: As I mentioned earlier, consulting is a good way to boost your revenues & get valuable real-world knowledge. But over time, I realized that I am not able to fulfill all consulting requests that came our way. So I did 2 things.
    1. Partner with another company: so that they can take up any large consulting requests that came my way (and pay me some commission)
    2. Hire someone to help me in consulting: so that they can do the consulting work.
    Note: In both cases, it is important to make sure they can delivery high quality of work, otherwise, your company will get bad name.
  • Product Creation: Even though majority of our revenues depend on product sales, still I created these products. So I experimented by hiring someone to create the product (based on the vision I had). The end result – others can do just as good a job as I did. Customers are able to get what they want, We made more money – problem solved.
  • Writing Content: Our website content serves 3 purposes (1) It makes people awesome in Excel, which is our goal (2) It helps us in promoting our products (3) It generates some revenue thru advertisements. While I continue to enjoy writing for the site (and here on Startup Desi), it is unreasonable to expect that I can write every week for next few years. What if something were to happen to me (touch wood) or what if I had to be away for a few weeks. So I have asked some of our regular member to become guest authors. I am so glad they choose to join us. Now we have diverse content, perspectives. Also, I realized that a major part of making people awesome in Excel relies on our past content. So, even if we do not write something new for a week or two, no harm done. 🙂 The same applies for advertising revenues too. A good portion of the ad revenues come from past articles.

That said, not everything is separated. There are still a few things that require my time. But these are the things I love to do and want to do. As my company grows, I may decide to delegate a few of them as well.

Set up processes

In large corporations, processes and guidelines often slow things down and stifle any creative work. So many startup founders tend to hate it. But even to keep things simple, you must follow some rules. This is what I did. I defined a set of guidelines, values so that we (my colleagues and I) can make best decisions at any time.


  • Help customers at the earliest and easiest way possible.
  • Issue refunds with out questions.
  • When having to choose an option between awesome and something else, go with awesome, always.

Test your Beliefs

Many times we continue to do something because we believe in it. As a startup owner, a big part of my work involves doing new things. So I applied the same to my beliefs and tested my beliefs. For example,

I believed that I must update my site 3 or more times a week to keep my customers happy: Once I tested this by not updating the site, I realized I was wrong. Also, I found that I need not update the site. Other experts can update it too.

Step 2 – Making your company independent

or in other words, cutting the umbilical cord!

Well, provided you have done all the preparation, the next is simple. Just do it. I did this by making a family trip to Bangkok. As you are reading this post, I am in Bangkok enjoying food, sights & foreign experience. We came here on Jan 18th (almost a month ago). I did not have internet access for first 3 days, then my laptop crashed. After 2 weeks, I got a notice from my web hosting company saying my site should be moved to a new server. And guess what? My business is still running and thriving.

Even though I am out of picture from many activities, everything is running as smoothly as it could. To give you a sample, while I am in Bangkok,

  • A new employee joined us in India.
  • Some one optimized our site, improved the security and setup mirror site etc.
  • We had more than 200 customers
  • We paid advanced taxes and payroll taxes
  • We had 14 new articles on the site, 9 of which are not written by me.

Are you making your startup independent ?

How are you running your business? Does it still depend on you for everything or have you made it a separate functioning entity? what are your thoughts in this? Please share using comments.

Related Reading:

If you want to learn more from my experience, read the following too.

Quick update + an Interesting Podcast Link

Sorry for staying away from Startup Desi for long. As you can guess, I am busy – with a product launch. Today, we have launched a new training program, called as VBA Classes to teach VBA to Excel beginners & intermediate level users.

I will be back on Wednesday with a juicy post on running start-ups. But until then I have a podcast interview link for you. This is an interview by Pat Flynn & Yaro Starak – two of my favorite start-up bloggers.

Click here to listen to How Pat Flynn Lost His Job Then Made $203,219.04 In His First Year Online

The interview is for about 45 minutes and packed with lots of insights and info on creating your own web-based start-up.

Follow your Passion, but Manage Poop too…

There is an interesting discussion going on at Unicorn Free. In the article, Don’t follow your passion, Amy says,

So. You’re in love with a thing. Let’s say it’s coffee, books, design, code or solving interesting problems. You decide to open up a café to follow your passion for coffee. Or a used book shop, because you’re passionate about books. Or, because you’re passionate about solving interesting problems through code or visuals, you hang out your shingle as a freelance developer or designer.

Six months to a year later, and guess what?

Turns out that you hate running a café (or book store, or…). Turns out that running a café is as much about the coffee as raising a child is about snuggles. Yes, the coffee happens — and so do snuggles — but what really makes up the typical day is very little sleep and lots and lots of poop.

Sounds indigestible for start-ups right? Afterall, if not for passion (and millions of $s), what else would motivate us to go thru the risk and separation?!?

If I was writing this post 2 years ago, I would have totally gone against Amy’s point. But after running a mildly successful start-up for 2 years, now I can see the point about poop.

In year 2009, I would have definitely said, “follow your passion”. After 2 years, I now say, “yes, follow your passion, but manage poop too.”

Let me tell you the most satisfying parts of my business:

  • I enjoy teaching MS Excel: I enjoyed the process of teaching MS Excel using blog posts, tutorials, short videos and products thru my sites. I can do the same for next 8-10 years.
  • I enjoy helping people: I felt great pleasure helping a commenter about a question she was struggling with or a person who emailed me his problem.
  • Running a website is fun: Running a reasonably popular website and connecting to world-wide community of Excel users & experts is so much fun.
  • I enjoy making money: I like the challenge of making a living out of my business. I enjoy the process behind successfully marketing my products, testing variations, learning from my mistakes and keeping my costs low.

Lets talk about the poop, which is a lot:

  • I hate manual steps in sales process: No matter how much automation I do, there are still a few things that must be done manually – like enrollment of students, setting news-letters, discount codes, product campaigns etc. etc. They seemed pretty exciting at the beginning, but after a while, I feel bored setting up or doing same things.
  • I hate email overlaod: As my site and business grew, so did the email and phone volume. These days, I get at least 40 emails from customers, prospects, strangers and fans. While reading and replying to the emails is fun, it also means I never get a break. Thankfully, I have learned to cut my email time and effectively manage the email load. But I have no idea what to do when the volume goes up 10x or 100x.
  • I hate legal / administrative procedures: Just as an example, I am in the process of setting up a payment gateway to accept credit / debit card payments from my Indian customers. This process is so ridiculous that if I start explaining it, it would be Christmas by the time I am done. For eg. They want me to read, agree, sign and legally notarize agreements on at least 20 different documents.
    The process is same whenever I deal with government approvals or documentation.
  • Website maintenance is a pain: Then there is site maintenance. From time to time, I have to take backups, upgrade software on all my sites, setup caching, content delivery networks, speed up my pages, optimize my content for search engines, give warnings to sites duplicating my content, deal with advertisers & sponsors, update affiliate links, create and edit PHP/HTML/Javascript code, test in a dozen different browsers, monitor site downtime, email deliverability, site bandwidth, data base connectivity and a slew of things that I do not even remember. And there is no particular timeframe for these activities, some of them can happen even when I am sleeping and I need to attend or else… [related: how I maintain my website cheaply]

You get the drift. In simple words, running a business is not just about what you are passionate about, but also 1000 little things that can annoy you or reduce your attention.

Thankfully there is a workaround:

Just like everything else in life, in business too, you should optimize the portions that you enjoy most and minimize or avoid the ones you hate.

Remove things that are not necessary for your business

This is the most effective but very difficult part. Whenever you hate a particular aspect of your business, ask yourself if that task is really required to run your business.

For eg. I used to have search filters on Twitter for certain keywords (like excel formula) and then I would monitor these results once or twice a day and see if there is a question that someone is asking that I can answer or replying. While this worked quite well to acquire new members to my site, I figured that this is not really necessary. So I just stopped doing it. There are many other examples like this.


Your next best option should be automate all the activities that you do not enjoy doing. Once you automate by installing some software or setting up a process, you will have more free time to focus on things that you enjoy.

Outsource poop work

This is the simplest way to get rid of poop. Just outsource it to someone who is efficient at this. The only downside: it will cost you money. [related: my experience outsourcing work using oDesk]

Batch together poop work

There are some things that you can neither automate nor outsource. The best way to tackle them is to batch them. Just let the poop accumulate and do the cleanup work once a day or week. For eg. I must manually withdraw money from my payment processor to bank account. Instead of doing this every day I just let the money accumulate and when the balance reaches $3000 (usually once a week), I give the withdrawal instructions by logging in to their site.

Appreciate poop

This is important. Many of you might get in to business under the illusion that passion can help you coast thru all the boring tasks. That is never the case. No matter how much we love our kids, there is a point when you start hating the nappy changing routine. Instead, learn to appreciate all the little things that go in your business. Try to make them fun and always look for opportunities to remove or automate tasks.

What is your experience with following passion

I think passion is very much over-rated. While passion is a must have ingredient to run a fulfilling business, you also need to have doses of reality. Any meaningful business must deal with lots of little things and not all of them will be enjoyable.

I want to know what your experience has been in running a small business. How much do you agree with the views presented by Amy or myself?

Please share your views using comments.

Why you should do consulting work (despite making huge money from product sales)

Many startups go thru this, Once they start something and launch a few products, they will get offers to provide some consulting service (for eg. customization of their product, development of a similar product for diff. uses etc.). Now what should the startup do? Should they dilute the energy in to consulting work? Or should they focus on their core products and march ahead?

I was in the same dilemma and I choose to offer my services on consulting basis. And in this post, I will share with you why doing consulting work is a good idea for start-ups.

1. Consulting work keeps you hooked to real world

Many startups run from garages or study rooms (or in my case, from a bedroom).  Startup founders strive to keep expenses low and minimize un-necessary clutter. That means, less social interaction and attending fewer conferences / trade shows. If you do this for a few months, you will grow apart from real world and get obsessed with your product vision. And this is where you will distance yourself from end customers.

A good business always stays close to their customers and leads them. If you work in isolation, you cannot do this. That is why consulting work is good. By doing few consulting jobs every month, you can interact with customers alot, understand their problems, challenge your mind with new situations and altogether improve your perspective on various things in the industry.

2. Consulting work leads to new products / upgrades

Quite a few of my project management template customers have asked me to modify the dashboard template to include tracking for multiple projects. After doing this work on consulting basis for 4th customer, I knew I had to upgrade my product to include a project portfolio dashboard template. Right now, I am working on that so it can be included in next product upgrade.

3. Consulting work brings fun & randomness back to your life

Start-up work involves ample amounts of product development, launches, marketing & selling, customer service. If you have done these for a few cycles, you will have developed a process to do them better. That means, they get monotonous.

This is where consulting can help you. It brings certain amount of randomness to your work. Since each customer has their own problems, the solutions can teach you new things and keep you mentally occupied.

4. Consulting brings extra money

When you are starting out, every extra dollar you make helps. The money you make from consulting may not be as much as you make from product sales. But it gives you confidence and it can meet urgent cashflow needs. That said, you should not be lured in to consulting just for money alone. Consider the above 3 benefits too. Otherwise you may be tempted to become a full time consultant alone.

If Consulting is so good, why not become a full time consultant?

Of course, if consulting is what you enjoy most, you should certainly become a freelance consultant. But I think doing consulting alone is a dead-end game. The reasons?

  • Consulting is not scalable: If you need extra income or more free time, you have to hire someone exactly like you. And we all know how difficult that is.
  • Consulting is time consuming: Based on my experience, for every one hour of billed consulting work, you will spend 30 minutes on unbillable work. This includes doing research, finding alternative solutions, optimizing your code / models, customer support, invoicing, time tracking, emails, phone calls etc.
  • You can only make so much with Consulting: Even if you charge top dollar for your services, it is unlikely that you will make a lot of money by doing consulting work alone. Also, the ability to find customers goes down significantly as you increase the rates.

What about you? Do you offer your services on Consulting basis?

Do you do consulting work? What is your experience like? Please share your experiences & ideas using comments.

Do you want to become a consultant?

If you want to become a consultant read up this excellent advice.

Also, if you want to test the waters, sign-up at oDesk as a provider. You can immediately meet several prospective customers and see how this works.

Its not Rocket Surgery, Make your First $ already!!!

Many people who dream of starting their own companies (including me) go thru the illusion,

My idea need to be unique, world changing and Google / Facebook / Apple big!!! Otherwise, it is worthless to start.

While, ambition is a good thing to have, I think we should mix it with ample doses of reality. I always remember an inspirational quotation I read somewhere,

Your head should be in the sky, but your feet should be on ground.

I made the same mistake of waiting for that one idea, one light bulb moment for good part of my college life and first job. Then, I realized that even to change the world with a big idea, I must start small.

And then, things moved rapidly and I could create my own business.

So, today I am inviting you to do the same. Go ahead and figure out a small business idea and generate your first dollar online (or offline). Come back and share your experience with us.

You feel awesome and uplifted when a stranger becomes your customer and pays you for your skill / product.

Here is an inspiration video by David Heinemeier of 37Signals fame encouraging start-up owners to make money.

Watch live video from HackerTV on

PS: the phrase “its not rocket surgery” is from David’s talk.

PPS: 37Signals blog is a good source of inspiration and knowledge if you want to start a business.

7 Things Startups can do that Big Businesses Struggle to get right

One of the big fears when you want to start a company is that, “What if Google / Microsoft / < your favorite big company > implements same idea, but better?”

Well, the sad news is that there is nothing that you can do about company X implementing your idea better.

But there is good news. You, as a start-up can do things differently that a big business will really struggle to do.

Growing a Small Business & Differentiating from Big Businesses

[original image from Robert S Donovan]

In my experience these things are,

1. You can Email immediately:

Here is what I do. I get about 30-50 emails out of which at least 10 are from people who are either customers or members of my community. I generally star such mails (in gmail, press s while reading the mail to star it). Once every 1-2 days I view all the starred mails and reply to them with information they asked, thank for the mail, provide solution to their problems. And if the email is simple question or thank you note, I usually reply on same day, sometimes in the same minute.

While my system is not fool proof, and often I forget to email back, I try to send replies to almost everyone emailing me.

You too can do the same, and create a stunning impression to your customers.

2. List your personal phone number on your website:

Here is one thing most of us hate in big businesses. If you have trouble using their product, you have to call a helpline (typical 1800-CALL-NOW) and wait impatiently for someone as clueless as you to pick up the phone and express the problem only to get a half-witted response.

Well, as a small business owner, you are at advantage. You can just list your own personal number on your site, product brochures or sales receipts so that customers can call you and get a quick fix instead of waiting in agony. And best of all, if my experience is anything to go by you hardly get any calls.

3. Choose whom you want to sell to:

Big businesses have no control over who their customers are. Any one can buy Windows, AdWords or iPod and bitch about them openly and publicly or create a huge support PITA. As a small business owner, you are at an advantage here.

I have personally refused clients that I think are difficult to work with or refunded full money to customers who bought my products but not satisfied with what they got.

4. Service instead of sell:

Traditional model of business is that you should focus on selling and give only a reasonable amount of service. The logic behind this is simple. Sales is what gets you money, service costs you.

But this logic fails when you are running a small business. I try to keep my sales efforts as minimum as possible and instead focus on service. This includes,

  • Making minor changes to my products for customers for free of cost
  • Giving free upgrades to everyone who bought the product
  • Allowing customers / prospects to ask questions directly by commenting on relevant posts (and then replying to them)

5. Collaborate instead of Compete:

We all knew that Apple has a killer phone, Microsoft has a killer Office application set, Google has a killer search engine. But instead of collaborating, they choose to compete, and now we have,

  • A killer phone and almost mediocre office app from Apple
  • A killer office app, ok search and mediocre phones from MS
  • A killer search, ok phone OS and mediocre online office apps from Google

See, it is in the blood of big businesses to compete. But small businesses can be very different. They can collaborate.

For eg. many of my customers, students and web-site visitors asked me to do an online course on financial modeling. Now, I am not an expert in that area, but I can kick ass in Excel. So I collaborate with another small company, called Pristine and we are doing a course on Financial Modeling using Excel. It is a win-win for everyone.

6. Keeping things really simple

Decision making is a pain in many big businesses. Front line employees are often not empowered to do anything more than what their job description says. This is not so in a small biz. You can choose to keep almost eevery aspect of your business really simple. For eg. I choose to keep refunds dead simple. Anyone not liking my products have to just ask and they will get a refund. Some ideas for you,

  • Allow customers to get in touch with you thru email or phone. Dont list generic email ids like instead give id like chandoo.d @ so customers know that there is a real human being at the other end.
  • Keep sales process really simple: Deliver goods almost immediately or at least do it in the promised time lines. Don’t try to oversell or hard sell.
  • Do surveys when working on new products: do a simple survey like “are you interested in buying x?” and use the feedback to decide whether or not to work on a product.
  • Accept mistakes and move on: when you mess up, just say so and then move on. Life is too busy to worry over split milk.

[related: simplicity and other values for a startup]

7. Doing the right thing instead of doing the profitable thing

A big business must always have profit as its goal, even when they say “don’t be evil”. But as a small biz owner, you can do what is right, even if it costs you more. Most of the time, the extra cost is always extra time you work on x. So it doesn’t effect cash-flow as such.

For eg.

  • I could improve my revenues by 25% just by placing one more ad on my website’s article pages. But I dont do that because it would hamper my visitor’s reading experience.
  • Few of my students couldn’t finish my online course in time and asked me if they can stay back few more weeks to finish the course. I gave them an option to join 2nd batch at 75% discount. That is right 75%!!! and many of them joined batch 2. Now, I could very well have asked to pay them full fee or 50%, but I choose to cover only half of my costs because that is right thing to do.

What do you do to distinguish your small business from others?

Related info: That is a not a competitive advantage and Real unfair advantages both from excellent A Smart Bear blog.

Do not treat customers like kings, instead make them heros

Here is an age old wisdom that can break your back when you are starting. We always hear this

“Customer is king”

Well, I want to  break that notion.

First lets understand what king means.

In my view,

  • King has attention and respect of you at his beck and call
  • King can get things done, by forcing you to do
  • King can walk out and tarnish your image if he chooses to
  • King wants things to be done to him and not want to be part of building the stuff.

While the King view might work in industries where supply outstrips demand, in the world of internet / web based start-ups, it may not work.

I think, instead of approaching customers as Kings, if you approach them as Heros, you might build a lasting product and sell more.

Here is why,

  • Hero feels awesome about the products (s)he uses
  • Hero feels wanted and gifted because (s)he knows how best to use your product
  • Hero feels proud to showcase his / her talents while using your products
  • Hero wants to work with you to make him more awesome. (S)he does not want you to work for him / her.

How to make your customers heros?

Very simple. Design a product whose USP (Unique Selling Proposition) is “Our product <name> should be bought because it makes you rock / awesome / fly / cool“.

For example, Apple iPod (or iPhone) has this USP. We want to purchase an iPod not because it is the best music player in the world. It is because, iPod can make you cool. You feel awesome the moment you flick fingers to browse songs or tap the screen to make a call.

iPod or iPhone are from a company with zillion dollars in marketing and product design budgets. But what about a tiny teeny startup like mine or yours?

Again very simple. At the heart of hero approach is passion.

  • So be genuinely passionate about your customers. Always think, “how can this idea / product / article / image / whatever make my customers awesome / cool / rock”.
  • Instead of focusing on features and benefits alone, think in terms of how your customers will be able to use your product to become awesome in front of their colleagues / boss.
  • Instead of saying “Our product can do x”, say, “you can do x better /cooler / faster / with our product” and work your ass off to mean it.

If you make your customers heros, you have a rocking future ahead.

So who are you making heros? Please share using comments.

Inspiration for this article:

PS: Image credit from yosoyjulito

The easiest way to start your own company – start a blog!

Every once in a while, I get an email from someone who wants to make a living without working for the man. The emails go something like this,

I like doing x. In my free time I help my colleagues / friends become better at x. How can I become like you and start my own venture?

So, today I want to address the burning question all the 3 readers of this blog have. How to plant seeds for your company?

Simple. Start a blog.

I do not mean “start a blog” as in “start a blog to get rich quick”. I think starting a blog can be a very effective and low cost way to understand your target market and test your products. Here are my top 5 reasons,

  1. Blogs help you solve real problems of real people (in other words, customers)
  2. Blogs help you test your product ideas without huge launch or testing expenses
  3. Blogs help you keep your passion alive and kicking while you are stuck in the cubicle
  4. Blogs help you meet competition, understand their technique and collaborate better
  5. Blogs help you communicate better with your prospects, customers and investors

Of course, not any blog would do. You have to start a blog in the area where you eventually want to set up your venture. Writing about anything and everything is not good. Instead select a niche or narrowly defined area and use your blog to communicate with people having needs in that area.

For eg. if you want to do financial planning for living, you can write about money matters in a blog. But that will not be so helpful. Instead if you narrow down your scope to a specific set of people or a type of financial planning your chances of meeting real customers goes up. So, instead of you blog about “financial planning for call center employees” or “financial planning for child education” you will have clear focus.

Go ahead, plant that seed now. Go!

Resources for starting a blog and writing:

  • Problogger – for all things blogging. Darren Rowse writes about blogging, blog platforms, techniques etc. Add to your daily reading list to get inspiration and ideas.
  • Copy Blogger – contains helpful articles on how to write and how to sell.
  •, – To start your own free blog and to host a blog on your servers