Year 2016 is going to be of the Cockroach startup – the startup who can adapt and keep moving forward in spite of the changing market, changing environment or investment scenario, in contrast to last year which saw investors throwing money on Unicorns.

Cockroaches are said to be most adaptable creature on Earth. That’s the reason they have been able to survive for 280 million years on this planet. Taking a cue from them, startups in India are looking to go the Cockroach way in 2016.

Problem

It’s not a secret that startups are going to have a hard time getting the investors and moreover being funded with the amount necessary. Last year investors threw money at the Unicorns (companies that are valued at $1 bn or more) but this year they have become more cautious and aware of the market, hence are careful with the money they will be spending on startups.

The Solution

Be like Cockroach. No matter what, always keep moving forward even if your head is cut off (Fact: Cockroaches can live for weeks even with their head cut off).

While a Unicorn startup grows exponentially when backed with VC money, a Cockroach startup is a business that grows slowly and steadily which helps them test waters and hence helps in reducing risks for the investors. Cockroaches with this characteristic have outlived Dinosaur extinction and asteroids doomsday. That’s why investor would prefer investing in a startup that can survive even the nuclear war!

How can you build a Cockroach startup?

There are no 101 rules to be followed for running a Cockroach startup, but there sure are indicators that lets you know that you have a healthy, sustainable startup. Some of the indicators that can help you decide are discussed below:

Sell your mission, vision and enthusiasm to your prospective employees in contrast to buying them with hefty packages

Last year I interviewed with few startups. One thing I found common in them (the ones who are bootstrapping their way) was that they always started the interview by telling me their story. Even though I had researched the company, read about the founders but hearing their story from them made me re-think about the company and its vision.

Don’t spend on fixed asset (for e.g. laptops). BYOD could be a great solution for you here

During MBA, I interned with a not-so-startup startup but still I was asked to use my laptop during the period of the internship. It was not just me who had had this experience, most of my batchmates who interned were in the same situation! This helped the companies we interned with have a resource without having to spent more on fixed assets such as laptop or desktop.

Spend on good internet and hosting servers. You wouldn’t want a bad server to be the reason for losing whatever you had acquired in the initial weeks when the traffic suddenly surges in

Think about this. The app you downloaded and using it suddenly crashes because the server it is on cannot take on the traffic surge.

If this situation does happen to your startup, it would surely waste all the efforts that you had put in to get all those downloads. Do not take that risk. Invest in good internet and hosting servers.

Always, always build your startup around your product/service. Funds should never be the center point

Value creation has always been the core focus of a startup. But over time, this has changed to funding generation, where all a startup cares about is raising funds. In the race to raise funding do not forget the destination you are aiming to reach. Your product/service should never take a backseat when you start thinking about fund raising.

Word of mouth should be the way for customer acquisition

Word of mouth will not just bring you new customers/users but it also brings in the trust in your product/service because it was recommended to them by the ones they know and trust

You can even take a cue from Pradeep Soundararajan and become an Uber driver to fund your startup

Lastly, with Jeff Bezos taking interest in Cockroach startups, this would be an excellent opportunities for the ones who have waited in the shadows of the Unicorns for a long time.

How are you making your startup a Cockroach startup? Let us know in the comment below.

Comments

comments

LEAVE A REPLY

Please enter your comment!
Please enter your name here