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Global Perspective Helps Founders Solve Local Problems

Global Perspective Helps Founders Solve Local Problems

Global Perspective Helps Founders Solve Local Problems

  July 23, 2019
 

When Manohar Lal Tandon formed Tandon Magnetics, the manufacturing arm of Tandon Computers, in 1979, he was determined to improve the lives of many in India. After studying and working in the United States for several years, he returned to India and used the knowledge, expertise and experience he cultivated in the U.S. to make the local market better. Founders who are open to new ideas, solutions and challenging the status quo open their companies up to new opportunities, exactly what Manohar was able to do with Tandon Magnetics, and later, Tandon Group.

Changing Business as Usual in 1970s India

Combining a global perspective with a deep understanding of local needs is just as powerful for modern-day startups in India as it was for Manohar at dawn of the personal computing age in the 1970s. As Manohar grew one of the most influential manufacturing companies in India at the time, the company helped solve local issues related to the economy, workforce, and leadership at the time including:

  • Encouraging the creation of “tax-free zones” throughout India, which increased production and foreign investment that ultimately has driven India into the top 10 of the world’s biggest economies
  • Becoming the largest employer of women in the tech sector from 1984 to 2000
  • Adopting IBM’s “open door” leadership policy at Tandon Magnetics, which was uncommon for Indian companies in the 1970s

 Partnering with Today’s Problem-Solving Startups

Today, India has the third largest startup ecosystem behind Silicon Valley and the United Kingdom. As a major participant in India’s startup environment, Tandon Group continues to help solve local problems as the company provides financial and managerial assistance to modern-day startups in India working to improve the country’s education, employment, finance, healthcare, and transportation challenges. Successful startups include:

  • Providing a progressive workplace for women and improving India’s economy (Syrma)
  • Helping healthcare providers preserve reimbursements from patient care and maximize collections from unpaid claims with technology (Infinx)
  • Saving people time by providing on-demand transportation and lifestyle services (GOJEK)
  • Changing the way education is delivered and consumed in India (Genius)
  • Revolutionizing the mobile economy in India by making it easier to pay for everyday items and tasks (FreeCharge)

If you’re a startup looking for resources to help you succeed, Tandon Group has provided numerous startups with business advice and funding support for more than four decades. 

To learn more about our company, please contact us.

Tandon GroupGlobal Perspective Helps Founders Solve Local Problems

U.S Tech Giants & their Indian Counterparts

Global Perspective Helps Founders Solve Local Problems

U.S Tech Giants & their Indian Counterparts

  June 30, 2019
 

In the United States, the media religiously covers American businesses, partially because of national favor and partially because of the sheer economic size of established U.S. tech giants. Not to be outdone, India has quickly mobilized their workforce to compete with these tech giants who are working their way into India. They’ve steadily accomplished their goal with impressive results, such as the number of households with a disposable income of more than $10,000 has leapt from around 2.5 million in 1990 to nearly 50 million in 2015. Thanks to this massive growth, India has developed their own tech giants who are quickly rivaling U.S. firms. [1]

Ola vs. Uber

These two giants have been battling head-to-head for years now. Both companies have been battling in the court trenches with Ola fighting accusations of creating false accounts and cancelling them on their drivers. Uber itself is currently facing massive harassment charges which caused the CEO to exit the company ungracefully. Let’s start with Uber, which recently posted a $6.5 billion net revenue for 2016. They currently have over 40 million monthly active users and are operating in 450 cities. They also posted 160,000 Uber drivers and have close to 87% of the ride hailing market. Ola for itself is currently in 102 cities and has nearly 70% of the Indian market. They’ve posted impressive stats of 450,000 drivers with 5.9 million monthly active users. Ola says they generated $4.21 billion in revenue in 2015.

 Flipkart vs. Amazon

It’s the battle of ecommerce, and there are only two horses in the race for first. Each is posting mind-blowing numbers, and each are looking to outdo one another. Let’s begin with Flipkart, which is currently in rumors of merging with Snapdeal, and is positioned to move Amazon India out of their home market. Flipkart has 100 million registered users and currently controls roughly 43% of the Indian ecommerce market. They recently said they have 100,000 sellars and are doing roughly 8 million shipments monthly. Flipkart is valued at $11.6 billion and it is unknown what their revenues are currently.

On the other side is Amazon who is tough to beat. They currently have 304 million registered users, or roughly the entire population of the United States, and control 43% of the online retail sales in the U.S. Amazon had $136 Billion in 2016 net sales with $857 million in profit. Here’s something which will make every Amazon investor smile: In 2016, Amazon made just over ⅓ of total sales for black friday. In other words, Amazon is in a league of its own for ecommerce companies.

Paytm vs. PayPal

The mobile payment giants are next in line as these two firms face off to attract users into their sphere. PayPal was founded in 1998 in the U.S by the infamous “PayPal Mafia” which included the likes of Elon Musk, Reid Hoffman, etc. Paytm was founded in 2010 and has grown at lightning quick pace compared to PayPal, which is mainly due to the boom in spending India is currently going through, and the ability to raise capital so quickly. Let’s look at the statistics. We’ll start with Paythm, which currently has over 200 million registered users, 80 million of which are active monthly sending transactions. They’re accepted by 850,000 offline merchants, not to mention the additional million plus online merchants who use Paytm.

They posted 1 billion in transactions just last year, and account for 26% of all digital transactions in India and, in the cut-throat field of online wallets, this is impressive to say the least. PayPal on the other hand only has 169 million registered users, by has processed 4 billion in transactions in 2016. This is due to the overall wealth of the United States, and PayPal cannot complain because they had a net income of $384 million in 2016. Add to these numbers the fact that PayPal has 16 million merchant accounts and processes 18% of all ecommerce transactions.

Are you next?

These three technology giants are just the beginning of a long competition between the United States and India for tech supremacy. As the world becomes more globalized, from increased internet usage and improved communication, we’ll begin to see greater competition for market share. Luckily, each country has a savvy population who prefers to use their native companies, but only time will tell if this continues to stay the same.

If you’re a startup founder looking for resources to help you succeed, Tandon Group has provided numerous startups with business advice and funding support for more than four decades.

To learn more about our company, please contact us.

Tandon GroupU.S Tech Giants & their Indian Counterparts

Should Startups Focus on Growth or Profitability?

Global Perspective Helps Founders Solve Local Problems

Should Startups Focus on Growth or Profitability?

  May 23, 2019
 

This question has been asked in every major business on the planet. From concrete manufacturing companies in the 1950s to PayPal in the 1990s, and now the Facebook and Uber empires of today. They created a great product, have started to gain traction, recently got funding, and now they must ask, does the company focus on growth, or profitability? A point needs to be made from the outset: It’s mathematically impossible to maximize growth and profitability at exactly the same time. You’re either doing one or the other, and often it’s these decisions which will ultimately determine the success of your company.

Questions to Consider

First ask this question: “When should my company start worrying about making money?” This isn’t simple to answer because there are many subtle distinctions which need to be made for a right answer to appear. Are you a business-to-business (B2B) company? What is the economy like? Are you a first mover? Have you already achieved funding and is it easy to get additional funding? What are your personal goals with this business- are you trying to run a global company or a niche money-making side business?

Based on the above, if your company is business to consumer (B2C) than it’s smart to focus purely on growth. Reason being is the consumer behaviour is notoriously fickle while corporate behavior is relatively static. This means a B2C company needs to pour money into advertising spending while locking down their user base. Let’s look at Facebook as a case study.

When Facebook initially started they didn’t have a clear revenue model but the executives did know they had something groundbreaking on their hands. They reasoned it was critical to gain the user’s first, in massive spending sprees for growth, and would figure out the revenue model second. Thus, the Facebook advertising platform was born, and out of it a multi-billion dollar revenue stream.

Money for Growth

Let’s look at this problem from a different angle. We already asked if there was easy access to capital, either in the form of private equity or venture capital. Now, let’s assume you decide to pursue an investment from a private equity fund. If you do this they’ll most likely lay down the business with debt in long or short-term loans. Now, if you’re a tech company it’s not smart to go down this route, because tech companies generally need to focus on user growth. However, if you’re company is building a physical product, then going through a private equity firm might make sense.

Rules of Thumb

If you’re a technology company that requires user interaction for viability, than obtaining users should be your primary goal because the greater volume of users you have, the greater amount of time people will spend using your product. Thus, it’s in your interest to focus on rapid growth from the outset with plans to weather unprofitability. Eventually you’ll have to monetize but it can be unwise if done too soon or before critical mass adoption.

Second, if your company is developing physical products which are capital intensive and growth is achievable, but at a slower rate than profitability will be your best option. Reason being is that your company’s main goal will be reducing costs of production for goods sold, which inevitably leads to greater margins. Your massive growth will come from an initial public offering (IPO) which infuses the company with liquid capital which can then be used for greater growth down the line.

If you’re a startup looking for resources to help you succeed, Tandon Group has provided numerous startups with business advice and funding support for over four decades.

To learn more about our company, please contact us.

Tandon GroupShould Startups Focus on Growth or Profitability?

How Startups Can Generate Low Cost Leads

Global Perspective Helps Founders Solve Local Problems

How Startups Can Generate Low Cost Leads

  April 13, 2019
 

It’s the age old problem of business: How can my company or startup generate leads to bring in new clients without breaking the bank? If you’re a startup founder, or a marketing manager, we’re positive you’ve asked this question many times, and we’re sure you have the same problem many other startup founders have also. You’re on a shoestring budget, and running a major advertising campaign won’t work for you. Luckily, companies have solved this problem before, and if you follow these three tips below you’ll have a starting point for your lead generation machine.

1. Build a Social Media & Blog Presence

Having a solid social media presence from Facebook fans to Twitter followers is a great way to generate leads. There are a couple ways to build your online sphere of influence. First, start doing massive amounts of keyword research which follows the search queries your customers ask, and create a list of the top 30-40 searches you can find. You’ll need this because one way to build trust with potential customers is by creating a blog where you answer these questions with in-depth analysis. Doing this will leverage your company as the authority figures in the space.

Second, create infographics which visually explain the search queries you researched, which is also a great idea for generating B2B leads. The brain processes visual content 60,000 times faster than text, and in a fast paced world this means quicker understanding by your audience.

Third, set up Google Alerts, which notifes you anytime a person online is asking questions related to your startups field of expertise. You can then go and manually answer questions with a comment or post. This is a hidden growth hacker tactic which will improve your website’s SEO presence with the amount of backlinks you build over time. In addition to this, answer questions on Quora. You’ll not believe the amazing response you’ll receive by providing well thought out answers to a person’s problem.

2. Retarget, Retarget, Retarget

If you don’t know what this is then you need to learn about it right now. It’s slowly becoming the most effective advertising method on the internet to generate leads. Retargeting works by keeping track of people who visit your site and displaying your retargeting ads to them as they visit other sites online. It converts window-shoppers into buyers. Generally, 2% of shoppers convert on the first visit to an online store. Retargeting brings back the other 98%.

Here’s a quick way to make the most of your retargeted ads. First, segment your website visitors by preference. Next, create customized ads for each group of people. Finally, and most importantly, put the ads up in a positive way which means don’t stalk your website visitors. Only show the ad up to 12 times in a 30 day period. People can get intimidated if you immediately follow them around constantly blasting them with advertisements for something they just viewed.

3. Partner with Affiliates & Joint Venture Partners

Affiliate marketing, sometimes known as performance marketing, can be one of the most effective tools for promotion on the internet. An affiliate program lets you use a talented and savvy sales force that’s only paid when they sell a product. You decide how much the commissions will be for those sales, and your company only pays out when you get paid. This does mean you’ll not receive the full profit on your sales because you’ll need to deduct the commision from your payout, but it also means you’re not spending any money on advertising because there are other smart people willing to promote your startup!

Working in tandem with another entrepreneur is another strategy which can be used to leverage low cost leads. A joint venture (JV) is when two firms/people unite to achieve a marketplace goal that neither could achieve alone. This works best when you partner with a company/person in a similar but non-competitive marketplace. Your JV partner would ideally be targeting or have customers who are identical to the ones you’re looking to market to. It’s a low cost strategy which will quickly boost both of your reputations.

To learn more about our company, please contact us

Tandon GroupHow Startups Can Generate Low Cost Leads

Entrepreneur’s Checklist for Hiring New Employees

Global Perspective Helps Founders Solve Local Problems

Entrepreneur’s Checklist for Hiring New Employees

  March 6, 2019
 

Startups that succeed start lean and it’s a mindset you need to have because the wrong employee is incredibly expensive. The U.S. Department of Labor estimates that the average cost of a bad hiring decision can equal 30% of the individual’s first year potential earning. If you’re a startup with little to no sustainable income then a wrong employee ranges from disastrous to fatal. Not only does a wrong hire waste productivity, it can actually cause surrounding employees to lose effectiveness. [1]

Below is a good checklist for hiring new employees:

1. Make your job description clear: Often the determining factor when hiring the wrong employee is an unclear job description. It’s crucial you’re crystal clear about what exactly the job entails, with a detailed description of how the employee is expected to perform. In addition, you must know exactly what type of person fits the job description well. Every employee is just as important as your technology.

2. Keep record of potential employees: You need to track each candidate, including their strengths, weaknesses, expectations and interview notes. Throughout the hiring process this information becomes valuable when you begin to cross names off your list.

3. Run background checks: It’s highly recommended you run a background check on every employee. Ensure you have a consistent policy in place so every employee knows what is being checked. For instance, as the founder you’ll want to run a background check that reviews criminal records, driving records, and any watch lists. It’s also recommended to run a check of credentials and/or credit score.

4. Know your EIN: Once you’re ready to hire employees you will need an Employer Identification Number (EIN) from the IRS. An EIN is required to pay business taxes based on the number of employees you have. You only need 1 EIN number which covers the entire business.

5. Have your taxes in order: Every business in the U.S. must keep records of their taxes. Each business is required to withhold money from every employee’s paycheck to ensure taxes are paid correctly. There are two forms which must be completed: W-4 and W-2. The W-4 form is used for every employee and it must fill out before they begin work. This provides you with the correct information for taxes. The W-2 form is sent to the employee and IRS. It shows all taxable income including retirement contributions and benefits.

6. Have a proper payroll system: There are two options for this. Do payroll internally or outsource to a company like Workday or ADP. Either way, make sure you’re addressing your business’s payroll needs.

7. Obtain business insurance: All businesses with employees are required to have workers compensation insurance. You can do this through a couple of ways, the most common are to have a broker, self-insure, or through your state’s Workers Comp Insurance Program. Many startup founders neglect to buy insurance until it’s too late, and they’re forced to pay out of pocket for issues which will eventually happen. Don’t let that happen to you.

8. Keep a file on every employee: It’s vital to keep information on file for all employees. This provides the company with a barrier for any problems which could or could not occur. For instance, some of the data you’ll want to keep is full name, address, emergency contact, a copy of signed contract, and any reprimands or accolades within the company.

This checklist provides you with all the necessary steps to onboard a new employee. Your staff are crucial to the company’s success. Nobody can run a business in a vacuum, and now you’ll know what to look for and what to avoid. Good people are difficult to find, but if you’re at this stage then luckily you already know what you’re doing.

To learn more about our company, please contact us.

Tandon GroupEntrepreneur’s Checklist for Hiring New Employees

Syrma Technology Carries On Tandon Group’s Award-Winning Legacy

Global Perspective Helps Founders Solve Local Problems

Syrma Technology Carries On Tandon Group’s Award-Winning Legacy

  September 28, 2018
 

Among India’s tight-knit electronics community, industry awards are a big thing. Beginning with Tandon Group Chairman M.L. Tandon’s fledgling Tandon Corporation in the 1970’s—which would quickly become a major exporter of components for IBM’s original personal computers­—Tandon companies have garnered a substantial total of plaques and trophies from national trade organizations and regional industry groups, reflecting both quality of manufacturing and quantity of successful exports. These awards are often bestowed at elaborate gala ceremonies, with attendees in full Indian formal dress, as well as appearances by senior government officials.

Our latest award, presented to Tandon Group’s primary manufacturing wing, Syrma Technology, represents one of India’s most prestigious electronics industry honors, the 43rd annual ELCINA-EFY Awards. Created by the Electronic Industries Association of India (ELCINA) in 1976, these awards are widely considered benchmarks for India’s electronics leadership, with categories spanning contributions to innovation, entrepreneurism, quality, exports, research and development and environmental stewardship. After capturing last year’s 1st Prize for Quality in the SME segment, ELCINA-EFY judges lauded Syrma as 1st Prize in Exports – Medium Scale in 2017-18, outpacing similar-sized India manufacturers in volume and efficiency of global logistics.

Quality Determines Quantity

“We consider bottom-line exports as actually a culmination of the other award categories,” said Syrma CEO Sreeram Srinivasan. “By securing long-term customer relationships and delivering world class end-to-end design, manufacturing and logistics services, we’re proud to carry on the high standards of excellence established by the original Tandon ventures.”

A Tradition of Excellence

Visitors to the lobby of Syrma’s Chennai headquarters are immediately struck by the company’s impressive trophy case, holding over 50 gleaming awards received by Tandon electronics companies over the past four decades. Today, Syrma ranks among India’s leaders in development, manufacturing and global export of precision electronics, including printed circuit board assemblies (PCBA), custom magnetic and memory components, and leading-edge hardware and software solutions such as RFID tracking and next-generation Internet of Things (IoT) applications.

Advantages of India

Taking full advantage of locations within India’s Special Economic Zones (SEZs), a recently revamped Goods and Service Tax (GST) structure and other generous government incentives, Syrma represents a leading example of Prime Minister Narendra Modi’s 2014 ‘Make in India’ initiative, promoting the country as a worldwide manufacturing hub across multiple industries.

Srinivasan and other senior Syrma managers gratefully accepted their latest ELCINA-EFY Award at this year’s awards presentation, held this past September 14th in New Delhi.

Learn more about Syrma Technology at www.syrmatech.com.

Tandon GroupSyrma Technology Carries On Tandon Group’s Award-Winning Legacy

What You Should Do If You Can’t Raise Startup Capital.

Global Perspective Helps Founders Solve Local Problems

What You Should Do If You Can’t Raise Startup Capital.

  June 26, 2018
 

What if you can’t raise startup capital?

Raising startup capital can be crucial if your business requires a certain critical mass to survive.
Unfortunately, more companies fail to raise capital than those who successfully do. The good news is that there’s a million ways to raise money and you only need one of them to work. Today, we’re going to talk about what to do if you’re having trouble raising startup capital.

Firstly, we need to address the fact that most people go out looking for funding far too early. If you’re serious about raising money, and don’t have a successful acquisition under your belt, then there’s a few things you need to accomplish before you ever reach out to investors. For starters, you at least need some sort of initial version of your product/service and ideally a concrete proof of concept. Your proof of concept doesn’t need to be a million people using your product but it does need to be some people using your product, giving you regular feedback. This shows investors that there’s actual demand for what you’re offering.

Stay Close to Home

One thing we see all the time is hopeful entrepreneurs never actually tapping the full potential of their network. Most people don’t realize it but they almost invariably have a group of people around them who want to back their ideas and believe in them. Think about it… If your family and friends aren’t willing to invest in your idea, why would a professional investor? Jeff Bezos’ parents mortgaged their home and invested over $200,000 into Amazon while it was still nothing but a pipedream. If you haven’t already tapped your network and asked your friends and “friends of friends” then it’s too early to be going to investors. Also, if you haven’t gone to your family then it’s definitely too early to be going to investors. Keep in mind you don’t have to ask for a lot of money but, in most all cases, you can get enough to at least show proof of concept.

Get Creative

If your friends and family have already helped you and you still can’t get investors behind you then now it’s time to get creative. What do we mean by get creative? Well, let’s look at a great example. Back around the 2008 presidential election Airbnb was nothing more than a fledgling startup that was struggling to stay alive. The founders had already raised money from their family and racked up thousands of dollars of credit card debt in order to get their proof-of-concept off the ground. Even after doing all of that, they weren’t able to raise money from professional investors. So what did they do? With the election right around the corner the founders thought fast and devised a money-making strategy completely unrelated to Airbnb’s business. Brian Chesky and his co-founders created special label cereal called “Obama O’s” and “Cap’n McCain’s” and sold nearly $30,000 worth around the time of the election. They used this money to keep Airbnb alive until they could convince investors to join.

Crowdfunding

Speaking of getting creative, crowdfunding is one of the most creative things you can do. Up until the last 10 to 20 years, if you had a great idea you had to go through industry gatekeepers to get your idea funded. The advent of the internet change all that. Never before in human history have normal people been able to get their message out to millions, without spending much money. Crowdfunding isn’t just for small projects anymore either. Over the last 10 years, crowdfunding has helped raise billions of dollars for promising startups and business ideas. If you thought your company wasn’t a good idea for crowdfunding you might want to reconsider. This can be the basis for a multi-billion dollar company. Sites like IndieGoGo, Kickstarter, and many others now make it ridiculously easy to set up a campaign. Even if you don’t hit your target, it’s worth a shot.

Persevere

The next thing you may want to consider is that you just haven’t tried enough times yet. There are countless stories of brilliant entrepreneurs who had to try many more times than they thought to get their idea across. For example, Tim Ferriss was turned down by twenty-six publishers before one picked up his book The Four Hour Work Week, which went on to be a global phenomenon. How could so many publishers miss out on a homerun opportunity? It’s hard to know, but the one thing that’s for sure is that if Tim would have gave up on his twenty-fifth publisher no one would probably know who he is. How many pitches have you made? …Probably not enough. Even if you pitched a hundred investors, the hundred and first might say yes. So our advice is to simply persevere and never give up. Failure is only permanent if you let it be.

“Why?”

This is one tactic we can promise you not many entrepreneurs use. After every single investment decision you get you need to be asking investors, “Why did you say no? What can we do to improve?” These two questions can unlock the sea of doubts that investors are thinking about when they’re reviewing your opportunity. Once you’re able to understand why they’re saying no, you can go back, adjust your messaging, and then knock the next pitch out of the park. While it might seem obvious, most entrepreneurs don’t do this. They make the same pitch over and over hoping one investor will just say yes. However, if you improve after every single pitch, you’ll eventually land in a meeting where everything goes perfectly, you address every concern, and investors are nipping at your heels to get involved.

Know when to pack it up

Last but not least, unless you want to spend the rest of your life pursuing this idea, have the courage to know when to call it quits. This doesn’t mean you’re giving up on your entrepreneurial aspirations, it simply means that is this idea, at this particular time, isn’t going to work out. If you can make that distinction and then act quickly on it you could save yourself years of pointless work and move on to your next venture. Don’t get this confused with someone who simply jumps from idea to idea but understand that if two-hundred investors have told you “No,” even after improving your pitch every time, then there might be a fundamental flaw in your plan. Chalk it up as a learning experience and move on to the next. Your odds of success will be dramatically higher, after all you’ve learned.

Do you have one more pitch in you?

At the Tandon Group we’ve invested in dozens of successful companies in the Consumer, Wireless, Defense, and IT industries. We’re always looking for the next big opportunity and can especially help emerging startups expand into the Indian marketplace. With offices in Silicon Valley and multiple offices across India we are truly a global investment partner. If you think you have what it takes to be the next big success, reach out to us. We’d love to be your partner for the road ahead.

Tandon GroupWhat You Should Do If You Can’t Raise Startup Capital.

Must Know Terms For Startup Founders

Global Perspective Helps Founders Solve Local Problems

Must Know Terms For Startup Founders

  June 18, 2018
 

If you’re an aspiring entrepreneur, at one point, you may need funding. You will need an amazing pitch to obtain seed through series B investments. To do this you must know the language every venture capitalist uses. Below are the most common terms every startup founder should understand. Who knows, maybe knowing this words going into your next pitch will get you the funding to launch the next big thing!

 

Accelerator (“Incubator”) — A center where startups are mentored by other successful entrepreneurs who guide the founders through development of an idea to launch, and sometimes beyond!

 

Burn Rate (Runway) — A term to describe how quickly you are spending money in comparison to how soon you believe the startup will break even, or more importantly, generate a profit. Normally the burn rate is a financial projection based on current spending and applied probability decision making.

 

Early Adopters — A savvy person in your marketplace who will use the newest and greatest product or service available. Read the highly recommended “1,000 True Fans” blog post for a clear meaning of early adopters.

 

Exit Strategy — A term EVERY startup founder needs to know. This is an explanation of how, and when, you plan to sell the company. Who is going to buy your company, and why? Your investors are in the game to make money, and you will increase your odds of funding by having the exit strategy thought through.

 

FMA (First Mover Advantage) — First mover advantage means you have a product which will create a new market or industry. It takes incredible innovation to get the first mover advantage, but if you have this then point it out immediately.

 

Freemium Business Model — This is a business model pioneered by applications and software. The business releases most of their product for free to the public in order to gain market traction. They then upsell the customers who want the updated or more advanced version.

 

IP (Intellectual Property) — This is anything from a patent to a trade secret — like the formula for Coca-Cola — and can be a vital asset to your startup. For instance, Google has IP in the form of their search algorithm.

 

Loss Leader Pricing — Selling a product at a loss with the expectation of getting repeat business from the initial customers. Normally this would be recorded as a marketing expense when doing the financials.

 

Market Penetration — This answers the question: “How much of the market can you acquire in _____ (period of time)?” Every venture capitalist require startup founders to understand the market thoroughly enough to make this prediction.

 

MVP (Minimum Viable Product) — First coined by Frank Robinson, and then popularized by Eric Ries, MVP is the bare-bones version of a product you think will provide a proof of concept. The MVP will generally give you an answer to whether your idea is going to work or not.

 

Pivoting — Generally means a move from one market segment to another. Say from early adopters to mass market.

 

Responsive Design — A term used for software development. It means your web app is responsive to desktop, tablet, and most importantly mobile screen sizes.

 

ROI (Return On Investment) — A performance measure used to evaluate the efficiency of an investment. ROI measures the return in relation to investment. To calculate ROI, the benefit (or return) of an investment is divided by the cost of the investment, and the result is expressed as a percentage or a ratio.

 

Split Testing (A/B Testing) — A way of conducting controlled experiments with the goal of improvement. Optimizely says: “This marketing methodology is frequently used to test changes to signup forms, registration pages, calls to action, or any other parts of a website where a measurable goal can be improved.”

 

Term Sheet — A document which outlines what investors are going to receive for providing an investment in your startup. If you get this congratulations, you’re well on your way!

 

Valuation — This measures the total value of your start up it. For instance, say you get an investment for $2 million for 20% of your startup. The startup’s valuation would be a total of $10 million.

 

Value Proposition — The elements of your product or service consumers would be attracted to compared to your competition.

 

Hopefully these terms help you better understand the startup culture, and the language venture capitalists use. If you have a startup, Tandon Group wants to work with you! We’ve had successful exits and helped grow companies to millions of users. Reach out to us if you think your company is the next big thing!

Tandon GroupMust Know Terms For Startup Founders

Is Your Business Idea Feasible? A Checklist For Entrepreneurs.

Global Perspective Helps Founders Solve Local Problems

Is Your Business Idea Feasible? A Checklist For Entrepreneurs.

  June 8, 2018
 

Do you watch Shark Tank? If you do, have you ever noticed when an aspiring entrepreneur pitches an idea and you think: “Hmmm, I don’t think that’s a very good idea.” And the next thing you know every shark is saying: “No Deal.” Well, if you’ve ever seen that, imagine how bad it must feel for the entrepreneur to hear those words. With that in mind we’re going to show you a set of rules many VC firms use when considering an investment. How many check marks does your idea have?

1. Does Your Company Solve A Real Problem?

The greatest sin entrepreneurs make is inventing a solution before solving a problem. We get it, you have the hustle and persistence, but at the end of the day… Are you really helping your customer solve a tough problem? If you can answer with a resounding “YES!” then you’re well on your way.

2. What Is Your WHY For Launching This Idea?

Another way to phrase this question is… Are you capable of doing this business idea? Simon Sinek is an author who asks one simple question: “Why are you doing this?” The reason is simple. What is your motivation to launch this idea, and will it keep you going when “the going gets tough”? Here’s a sad reality, if you think entrepreneurship is easy than you have it completely wrong. Running a business can be harder than you imagine, and if you want to make it through those rough patches you need a why which deeply motivates you.

3. How Fast Can You Execute?

In the world of business there’s a simple motto. Execute, Execute, Execute. VC’s need to know how quickly your idea can become reality. Additionally, they have to trust that you have the chops for pivoting when needed, and can make adjustments as the data comes pouring in. The questions to ask are: “Is this a R&D project which will need funding to get the technology just right? Is this idea easily tested by the marketplace? What resources will I need to get my first version going? How long will it take to get my first sale?”

4. Do You Have Competitors In The Market? If So, What Are They Doing?

Business Insider wrote a fascinating article back in 2010 about the overrated myth of “First Mover Advantage.” In the article he said: “First Mover Advantage — Great Bad Idea” and “Fast Follower — A Better Idea.” In the article he also cited a studied that showed 47% of First Mover Businesses failed and only 8% of Fast Follower Businesses failed over the long term. Here’s why: if you have competitors the solution is validated because there are people who are already paying for that very solution! This is great news for you, because now you have an addressable market to sell your product. However there is a caveat, you need to know everything about your competitors because you’ll need to carve out a niche for your business to be successful.

5. Can The Business Be Described Simply?

If you need 2 hours and 100 slides to explain your business idea to somebody, than your idea is too complex. People thrive on simplicity, and like the famous quote goes: “If you cannot explain it simply, you don’t understand it well enough.” The rule of thumb is this: If you were in a stadium crowd of your perfect customer audience, what would your businesses headline be to grab their attention? Normally this means concentrating the idea into 25 words or less, breaking it down to it’s bare essentials. If this is next to impossible for you, it may reveal a fatal flaw in the idea.

6. How Quickly Can You Monetize This Idea?

It’s interesting that the above question isn’t asked by many new entrepreneurs, but it’s the one every venture capitalist investor is thinking about. How quickly will I see my money back? This is where you need to get technical and deeply think through this problem. It’s important to have an accurate runway of your business idea so you can convey to potential investors that choosing your idea is a win-win for all.

The Bottom Line

As an entrepreneur your dreams probably reach well over the $1 billion mark, and we hope it happens! However, remember that proper planning could mean the difference between a successful business, and an embarrassing failure. Use the above checklist to exponentially increase your chances of hitting a homerun! If you’re working towards being an influential entrepreneur then contact The Tandon Group. We’ve invested in the dozens of high-growth startups in the wireless, consumer, defense, and information technology sectors, across the globe. We’ve had successful exits and helped grow companies to millions of users, and you could be the next shining star.

Tandon GroupIs Your Business Idea Feasible? A Checklist For Entrepreneurs.

How to expand your business into the Indian Marketplace

Global Perspective Helps Founders Solve Local Problems

How to expand your business into the Indian Marketplace

  May 31, 2018
 

“Going global” are two words every entrepreneur wants to say about their business. For small startups and emerging businesses, expanding globally brings unprecedented challenges which will tax the entire organization from the top down. The business must continue operations in their home country, while somehow diverting resources to expanding without any interruptions. The costs are high, but the rewards in terms of revenue, global awareness, and business glory are delightfully sweet. Below are tips to expanding your business into the Indian marketplace, which will give you valuable insight about what to expect as your business expands.

1. Do Your Homework!

To be successful with expansion you will need to know your audience inside and out. For expanding your business into India, this means understanding the nuances of the Indian culture. You need to perform a market segmentation analysis to determine how your product or service will fit into the local market. For instance, you need to know approximately 38% of the people in India live on less than $1/day. There are still obstacles with social and cultural acceptance of Western products, and penetration into rural areas can be difficult because of slow infrastructure growth. This also means you need to perform a SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats analysis). It’s vital you understand the customer because mistakes can be unforgiving.

2. Develop a Plan of Action.

It’s recommended to not think of India as a single entity comprised of a homogenous people like Germany, or Australia. India’s constitution recognizes over 22 different languages, all with regional dialects and slang. It’s best to think of India as a collection of region states, each with their own customs and cultures which determine their perception of the world. Yes, communication has greatly increased the similarities between the different regions, but there are still many differences the people of India recognize. It’s recommended to develop a plan of action for each specific region of India in relation to the market segment you choose to approach. This means finding the appropriate partners and agents within each region who will best represent your company, and provide insight into the hidden etiquettes and practices of the locality.

3. Research a Headquarters In India.

We’re adding this because you may not want foreigners to run the Indian branch. As we mentioned in the previous point, there are many unspoken rules and practices for somebody outside the country to understand. This means it’s highly recommended to not launch a global expansion with only executives from the parent company leading the way. It’s also highly inadvisable to build a local team from scratch. We recommend finding an executive who has deep domain experience in the market to help build and mentor the leader who will operate in the Indian headquarters. Allowing your business to hit the ground running, quickly validate any assumptions, fail fast, and push through any last minute unforeseen obstacles. By building a headquarters in India you will promote local brand knowledge, goodwill with the Indian government (because you’re creating jobs for their populace), and a deep understanding of the marketplace which will inevitably help with future product launches.

4. Understand India Can Be Tough On Businesses.

This isn’t to say you shouldn’t try and expand into India, because the rewards for capturing market share can be in the billions, but know- India is ranked 130 of 189 countries in terms of ease of doing business by the World Bank. There are many reasons, but we’re going to give you the main obstacles to pay attention to. First, India has high tariffs and protectionist policies for foreign companies. In an effort to promote business from within, India has made it difficult for exporters and foreign investors with non-transparent tariffs and unpredictable regulations. India also values domestically manufactured goods with fears of American takeover. Second, India has decentralized power with decision making being done at the state level. Each state has different tastes of how much foreign business they will accept, and often you will need to lobby many politicians to get any progress made. This means a different strategy is necessary for every state in India.

This information will put you on the right path towards tapping into the vast Indian market place. It will not be easy, and you have serious work ahead in order to utilize the rising wealthy middle class, but the rewards will be well worth the effort. Remember to always do your due diligence, develop a plan of action, and execute, execute, execute! If you believe your startup is poised to be the next Indian household name, reach out to us. At the Tandon Group we’ve partnered with and invested in dozens of companies over the last two decades and have met with massive success along the way. We’d love to be your partner for the road ahead.

Tandon GroupHow to expand your business into the Indian Marketplace