Good Enough Never Is

“Good enough never is,” says Fields. “Set your standards so high that even the flaws are considered excellent.”*

“Good enough never is”, a business philosophy closely associated with Mrs. Debbi Fields, is one of my favourite quotes. When you are out there in the market providing a service or a product, what do you think defines “good enough” for your product or service? Nothing! “Good enough” is just a milestone or a stage in the continuous process of improving the quality of your service or product. So it keeps moving further and it is difficult to capture it [for your business] within the bounds of a definition for a long time-period or for that matter, even for the moment when you try to define it!

There can be two viewpoints here – one, that you can reach near-excellence, but can never actually achieve excellence. If you follow this tenet then you will always work for improvement - unless it is "good enough"! Two, that no matter how much you work to make something excellent, there will always be someone somewhere in time and space who would not be a satisfied customer - who will not find your product/service "good enough". So, you judge the "fit-for-the-purpose" state of your product/service for that time and go to the market.

What do these two viewpoints mean for Entrepreneurs? If you choose the second viewpoint, then the startup runs a risk of getting beaten down because of lack of excellence. But if you choose the first viewpoint then, for an entrepreneur who plans to launch his/her start-up, this may sound extremely unpractical and daunting. After all, if that were the case [that good enough never is] then a start-up can never take off. 

The point that should be appreciated here is that “good enough never is” should always be applied in relativity; it should be a mantra for a continuous effort towards the detail to quality. From an entrepreneur’s point of view, it is better to look at it in this way. Let us assume that you are either addressing a niche or new market with a product. For example, if you are providing a software product then you must see which features you can do with just being ‘good enough” and which features need nothing less than excellence [or close to it]. Your validation stage of Entrepreneurial Process would have helped you in adjusting the requirements and features that you have planned to finally roll out your product with. You should keep listening to your customers and judging the future trends to meet the new expectation levels of “good enough”. This way you will see your product evolve into what the market needs. Seek for perfections that could make a difference to your startup at that stage. Anything secondary could be “fit for the purpose”. But if you are venturing into a crowded market with a 'me-too' model, then the “good enough” should be nothing less than excellence - ever.

Since good enough never is, hence there is always a spark for innovative thinking and it brings out better value propositions. Open markets, globalization, efficient flow of information and business philosophies like “good enough never is” are the important factors that propagate  Entrepreneurship.

http://www.evancarmichael.com/Famous-Entrepreneurs/1558/Lesson-4-Good-Enough-Never-Is.html

How Can Failure Benefit Entrepreneurs?

Once the man arrived at a certain stage of evolution where he has been called ‘ civilized’ the biggest fear in his life has been the fear of failure. In our civilized societies, which are driven by defined patterns of activities bound by cultures, everyone wants to be successful as per the defined parameters of the society. Speaking specifically in the Indian context, in our generation we [people in their early thirties and forties] are considered successful if we get a ‘job’ and if we are constantly getting promotions and salary hike every year. Any college graduate who has not secured a job on campus faces the humiliation of not ‘getting accepted’ in his family, friends and even in the corporate world. That’s how ‘getting a job’ [after your studies] is wired into our minds. We fail to consider anything else as a possibility as that is not the preferred metrics for success in our current societal mindset.

Since nobody wants to fail, hence nobody wants to risk into venturing out differently. Entrepreneurship also gets the same treatment. Entrepreneurship is fairly a new ideology yet to be absorbed by the parents so that they can show it as an alternative or preferred career to their children. Entrepreneurship is equal to taking high risk and of course implies high risk of failure where your start-up may not even survive beyond a year! All the seminars, magazines, blogs etc., talk about successes to show the positives of entrepreneurship and hence make it an attractive discipline to follow. But here I would like to emphasize on the Benefits of Failure for an Entrepreneur to be actually successful.

Though failure by itself is relative but when measured by the metrics laid down by our society and culture, there are a few common threads which define success or failure of people in that society. Anyone who has not tasted failure lives in constant denial that he/she is invincible. But the fact of life is that everyone has to fail and would have failed at least once in his or her life - either in personal life or in professional life or some times in both. So it is wise to accept that failure is a part of life. As an Entrepreneur this will be extremely helpful because possibility of failing is much much higher than the possibility succeeding.

Failure teaches many lessons which success does not teach. Failure teaches perseverance, brings out the fortitude to correct the mistakes and try again, removes the fear of failure itself, instills higher self-confidence to bounce back, gives you a chance of honest introspection of your strengths and weaknesses and teaches you astute ability to analyse situations. At the rock bottom that the failure brings you to, you are very likely to put all your energy and mind into building your dream as at the rock bottom you lose the fear of losing anymore. And when such a situation happens, success becomes inevitable.

So as an entrepreneur you should not fear failure. Most likely you will fail in your first venture. But then you will have gained experience which will be unparalleled, and you will be able to judge the best of what ‘to do’ and what ‘not to do’. The world of entrepreneurship talks about success stories. But seldom do people talk about failures. There are many entrepreneurs whose success stories we all read but we do not know about their failed ventures. All of such entrepreneurs have had the taste of failure and have bounced back only to emerge as successful entrepreneurs.

Front Cover of the Book

Funding - The Supply Side Constraint of Indian Entrepreneurial Ecosystem

Looking at the India growth story, there are many underlying economic factors that support the contention that India will be the next economic power house. And this directly implies explosive growth to our cities. By 2008, India’s urban population was estimated close to 340 million people*, which was about 30% of the total population of India. It is estimated that by 2030 the population in urban cities of India will together reach 590 million people*. Needless to point out here that unlike other developed nations which have aging population, India has young population with a healthy growth rate. Over the next two decades over 180 million* people are expected to join the work force – as many analysts would call this phenomenon, a potential demographic dividend. And this dividend can pay off too.

If statistics has any credence, it implies that there will be an increase in the total available market across the industries such as healthcare, education, retail, concierge services, waste management, housing (real estate and services related to the interiors of the houses), generation and channelizing clean energy and many more. Simultaneously there will also be churning of niche segments requiring much specialised needs too.

Indian Entrepreneurship Ecosystem has taken some concrete shape in the last decade. There are about 40 incubation centres, over 275 VC’s, an estimated 275 angels and about 10 to 12 corporate VC funds operating to support start-ups in India. Though these numbers are still way below than what they are in the United States, UK, other parts of Europe and even those in China, there is something to look forward - that the Indian Entrepreneurial Ecosystem is evolving. But the real problem still lies with the fact that India has less of seed fund investors, who can drive the entrepreneurship to next level where the VCs can pitch-in or the start-ups get acquired. Our need for expanded Ecosystem for Entrepreneurship is evident. Given that the economic factors suggest entrepreneurial opportunities almost in every sector and a large potential market, most of the start-ups will have a good market share, provided they get funded at an early stage.

*Some data has been collected from the MGI report from McKinsey.

Sources of Funds for Start-Ups

Bootstrapping

The first type of funding option that a start-up should look for is Bootstrapping. A start-up can be bootstrapped either by investing own funds or by introducing a consulting model, which can feed the development of a product. Though this is a very typical model used by software product development companies, it can be used by entrepreneurs from any other industry who have substantial experience to offer consultancy in their respective fields.

Family and Friends

Next best option is to borrow funds from friends and family. If you are lucky you may have uncles [or in-laws] loaded with wealth either from business itself or because of ancestral property. This option makes sense as it can get you interest free loan and [most likely] not dilute your share in the company! If at all you may be able to negotiate with minimal interest share.

Angel Investors

As the name suggests, angel investors are angels because they come at a time when the risk is highest. You may have sounded out your idea to sensible people and you may have even validated your idea at a significant scale. You may even have a ‘Proof of Concept’ to showcase, but you may still not be generating revenues. Angel investors are such investors who invest usually at this stage of a start-up's journey.

Seed Funding

Seed firms provide seed funding at the very early stage, just like the angel investors or the angel groups - probably at the idea stage. The difference here though is that usually angel investors are single entities. Seed firms are companies. Usually seed firms also provide “incubation” also which includes mentoring and providing office space to the start-ups. They play a significant role in getting the processes and functions in place for a start-up.

Crowd Funding

Crowd funding is a very tried and tested concept of raising funds for usually for a cause like forming a relief fund, selling a piece of art or, as recently film maker Onir did, for funding the production of a movie. [Read my article on Crowd Funding – A New and Tactical Method of Funding for Start-ups, to know more on crowd funding]. Whenever there has been an offbeat creation, crowd funding has come as an option. The reason has to be strong and compelling for sourcing a crowd fund. Now extend the same philosophy to the start-up drive that has presently taken some concrete shape in India.

VCs

VCs or Venture Capitalist firms are the companies who usually come in at a later stage when there is a proof of concept, revenue, profits and there is a vast potential for scalability of the model. There is better information about the total available market and the target customer(s), and hence a better predictability of the return on investments. When VCs invest it is usually a stage where seed investors would like to exit. VCs typically invest large sums of money which may start from 1 crore and above. When the VCs invest usually the founders have to dilute a big part of their stake.

The whole funding process comes at different stages and comes with its own pros and cons. It is a progressive process with one type of investor exiting and the other type coming on board. Many times there is a thin line between sources of funds like Friends & Family /Angel Investors/Seed Funds. There is no hard and fast rule to approach any type of investor, but references do matter when you try and approach VCs and the Angel Groups. Typically it is advisable to approach VCs only after there are some profits to show and that you would like to take your start-up to the next level – to the expansion stage.

Figure 1

Progression of Funding /Investment through the Stages of a Start-Up.