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Most Common Issues We See In Startups Today

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Most Common Issues We See In Startups Today

  July 19, 2017
 

At the Tandon Group we’ve heard at least two startup investment pitches a week over the course of the last 40+ years. We’ve invested in promising startups and passed on countless pitches that didn’t convince us of likely success. In that time we’ve come to recognize common issues that many companies face. Our hope is that by divulging these issues future startup founders can avoid them.

Knowing what not to do can sometimes be just as important as knowing what to do. The issues we’re going to discuss are a major enemy to any startup’s success. In his classic The Art of War, Sun Tzu remarked, “If you know the enemy and know yourself you need not fear the results of a hundred battles.” As a startup founder you’ll be forced to face hundreds of “battles” in the pursuit of growing your company. Remember this fact before you start and it will save you a lot of stress over the course of your career.

If you can avoid the common issues outlined below, you too might build the next million (or billion) dollar company…

Issue #1: Doesn’t solve a problem or address a real need

By far, the number one mistake startups make is building a product or service nobody needs or wants. “Cool” and “quirky” ideas may be fun and even attract notoriety but if that same idea doesn’t solve a problem or make someone’s life better, the novelty will eventually wear off. All successful businesses either solve a problem, improve an existing solution, or create a new market all by themselves.

Issue #2: Lack of sales

Tandon Group Most Common Issues We See In Startups Today

Some startup founders think that a large user base is all they need to be successful. Unfortunately, that isn’t true. While a large, million person user base can result in a large startup valuation, it isn’t until the company finds a way to extract money out of users that the company produces a profit. Great startups always have an end-goal for producing revenue from their users. If you have an awesome product or service you deserve to charge for it in some way.

Issue #3: Under capitalization

This point is tied directly to the previous issue. A startup being under capitalized (not enough money) is the direct result of not enough sales. If a company is always producing sales in excess of their lost customers they would never go out of business. Most startups need to solidify their revenue generation strategy before they try to expand further. We see this problem even in popular services like Soundcloud which, according to recent reports, only has enough cash to survive 50 days.

Issue #4: No true leader

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When multiple co-foundes are involved in a startup things can get tricky. Miscommunications, disagreements and large egos can all get in the way of running a successful business. Defining a single leader and true CEO is the only way to structure a company so that decisions (and progress) can be made. This can be one of the hardest conversations you need to have but it can also be the most beneficial.

Issue #5: “Copycat” business

“We’re the Uber of…”, “We’re the next Facebook…” , “We have the same business model as…” are phrases used all too often in the startup world. If you define your business in terms of how it relates to another business, you don’t have a unique selling proposition. Why is your business different? Why are you unique? You need to be able to answer these questions without even thinking about it. The live streaming app Meerkat was a perfect example of a company that raised a lot of money, was not truly unique and ultimately went out of business.

Issue #6: Poor customer service

The customer is not always right… but that doesn’t mean you should ignore them. The purpose of a business is to gain and keep paying customers. Some startup founders believe that customer service is somehow beneath them when, in fact, it’s one of the most important things they could be doing. Upset customers will tell you everything you need to fix, what they don’t like, and what you could improve in your product or service. Happy customers can provide invaluable testimonials that help sell your product to more people. Either way, you can’t ignore feedback.

If you’re able to successfully avoid these major pitfalls within your startup, your chances of success will dramatically increase. The Tandon Group is always interested in helping growing companies get to the next level. If you’re looking to raise capital for your business or expand your offerings within the Indian market please reach out to us. We’d love to learn more about your company and see how we can help.

Tandon GroupMost Common Issues We See In Startups Today

7 Enterprising Lessons from Tandon Group on Tackling Staffing Woes

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7 Enterprising Lessons from Tandon Group on Tackling Staffing Woes

  June 20, 2017
 

Before Tandon could become the preferred supplier for IBM’s floppy disk drives, M.L. Tandon had to solve an urgent problem.

Finding reliable workers.

When M.L. opened Tandon’s first plant in 1978, he faced three significant staffing challenges:

  1. Indian engineers and workers at the time had no knowledge of the technology standards to manufacture floppy recording heads and drives
  2. Because the men who typically filled assembly positions in India could find jobs anywhere, they weren’t loyal to one company
  3. Training this existing labor pool proved costly due to the high turnover and the workers’ lack of experience with international production standards

In a bold move, M.L. Tandon decided to create a skilled workforce from scratch.

“I wouldn’t hire men,” he says. “Women on the other hand were an untapped pool of industrial talent. They have a strong work ethic, loyalty and superior manual dexterity for high-precision electronics.”

Tandon also recruited high school graduates and dropouts. Since they did not have prior experience, they were easier to train and eager to learn higher production standards from the outset.

While today’s startup ecosystem in India is dramatically different from Tandon’s early days, hiring the right talent and staff for your business is still one of the biggest challenges founders face today. Whether you’re recruiting workers or acquiring talent, the people you bring in can make or break your business. To ensure you’re building a solid foundation, consider taking a page from the Tandon Group when it comes to hiring employees.

  1. Don’t compromise
    Like many startup founders, Tandon needed workers fast. M.L. was able to hire the former IBM India employees when he took over the plant after IBM was forced to close in 1977. It would have been fast and easy for Tandon to hire the men who were already filling entry-level assembly positions at the time, but in the long-term it would’ve cost the company significantly in terms of time, money, energy and morale.
  2. Search for employees beyond the usual sources
    In today’s world we have no shortage of sources to find people — career portals, job boards, recruiter websites. But you may find the best people where you least expect it. While technology, recruiters and staffing firms make it easier to connect with candidates, be open to workforce or cultural trends and look for opportunities to tap into different talent pools.
  3. Hire for trainability, passion and positivity in addition to skill
    Not only were the young women that Tandon hired open and eager to learn, they too valued the opportunity and took pride in their work. During one of Tandon’s annual employee art exhibitions, a female employee displayed a picture of a sick man lying on a cot, surrounded by three starving children and the words “I wish I had a son” (to earn money for the family) on the portrait. She made another picture that showed the same man and children, this time happy and with a platter full of food. The words on her second picture said “I don’t need a son because my daughter works at Tandon.”
  4. Have a set of cultural values to hire for
    Some people are so set in their ways, they won’t get behind your values. So be clear about what your values are so you can evaluate candidates for a cultural fit in addition to their skills and expertise. Respect for individuals was a guiding value that M.L. Tandon took away from IBM and integrated into his own company culture. It was also quite uncommon in India at that time since many of the companies treated workers differently than managers. India also had a reputation for producing poor quality goods. Not in Tandon’s plant though. M.L. saw first-hand how corporate efficiency and flawless quality put IBM at the top of the global market and he wanted that for Tandon too. Instead of the typical “chalta hai” philosophy of “good enough”, M.L. would tell workers “chalta hai, nehi” — chalta hai is not okay — whenever he walked the production floor.
  5. Hire people you like, but who aren’t necessarily like you
    Hiring people you like to work with goes along way toward creating the right kind of company culture. But many business owners make the mistake of hiring their clone. When you’re growing a business, keeping conflict to a minimum is a logical instinct. However, hiring people with different but  complimentary skills, strengths, perceptions and even personality will be better for your business in the long run.
  6. Be accessible
    For M.L., quality means continuous improvement. He believes the best way to accomplish that is to instill a sense of empowerment and respect at all levels. By instituting an open door policy for any employee and working in collaboration with employees to solve problems together, M.L. has made it clear that everyone at Tandon is important.“I want my workers to feel like Tandon is just as much their company as mine,” he says.
  7. Foster opportunities for creative and critical thinking
    Hire resourceful people who enjoy tackling tricky problems, then give them the opportunity to do so. Critical and creative thinking forces employees and managers to look at situations in different ways, evaluate solutions that may not have been thought of by an individual alone and come up with the best solution. By fostering opportunities for creativity and critical thinking, Tandon has been inventing, innovating and finding solutions to problems since its inception. Encouraging entrepreneurship among its employees and mentoring talent for the future remains Tandon Group’s passion.
Tandon Group7 Enterprising Lessons from Tandon Group on Tackling Staffing Woes

Quality and Success Through Progressive Workplace Empowerment: How The Tandon Group Led The Way

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Quality and Success Through Progressive Workplace Empowerment: How The Tandon Group Led The Way

When we talk with OEM customer prospects about our world-class EMS facilities, the initial feedback we often receive is a wariness about India’s dubious quality standards. This stems from India’s long-held cultural reputation for chalta hai–loosely translated as “it’s okay” or settling for the status quo–often interpreted as an inattention to detail. For nearly four decades, the Tandon Group has worked tirelessly to dispel that stereotype, providing top quality products at reasonable costs.

When M.L. Tandon returned to India in 1967 after completing his MBA at Santa Clara University, he spent  six years as an engineering manager at IBM India,where he observed firsthand the day-to-day corporate efficiency and flawless quality which positioned “Big Blue” atop the global computer market. When he envisioned eventually starting his own electronics manufacturing company, he knew striving to meet those benchmarks would set his company far ahead of the rest of the pack.

When Tandon’s original Mumbai facility in opened for business in 1978,  the top priority would be establishing a pervasive company culture which would represent the absolute antithesis of chalta hai. As his workforce rapidly expanded, M.L.’s favorite slogan on the production floor was “Chalta hai, nehi!”–or, chalta hai is not okay! Quality meant constantly trying to improve upon the status quo. And the best way to inspire such continual progress was to instill a sense of empowerment in his workers–that this was more than just a 9-to-5 job, but their company. And the company’s success would reflect favorably upon their character as well.

Do it Different, Doing It Better: Every Worker Matters

Tandon’s IBM model revered the value of the individual, rejecting the rigid British-inspired corporate structure that dominated most Indian companies. There were no separate lunchrooms for executives, managers and employees. From the bottom upward, every role was recognized for its contribution to the overall organization.

When a line employee fell short in their tasks, it became their manager’s responsibility to improve communication and clear up misunderstandings rather than “crack the whip” with harsh discipline. M.L. Tandon was among the first top executives of an Indian company  to maintain an open door policy, allowing any employee to share ideas or voice concerns directly to him. Such progressive business practices were far ahead of their time in Indian culture–and they quickly brought about a noticeably different workplace.

True Commitment vs. “On the Clock”

From the Tandon factory, product shipments for international destinations had to be dropped-off at the shipper’s facility no later than 4:00pm every business day. M.L. observed his employees–thanks to their new-found empowerment–began skipping their breaks and lunchtimes in order to meet their daily shipping deadlines. Where other companies would literally drop everything and go home at quitting time, the Tandon workforce’s company pride and strong work ethic focussed on doing whatever was necessary to get the job done right. At Tandon, chalta hai became little more than a quaint anachronism.

As the Tandon Group expanded into other electronics manufacturing, including power supplies, motors, and their landmark floppy drives, to their current state-of-the-art EMS facilities at Syrma Technology, M.L. Tandon’s original“Chalta hai, nehi!” philosophy has remained the cornerstone of their success.

Tandon GroupQuality and Success Through Progressive Workplace Empowerment: How The Tandon Group Led The Way

How FreeCharge Went From An Incubated Idea To The Biggest Acquisition in India’s Internet History to Date

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How FreeCharge Went From An Incubated Idea To The Biggest Acquisition in India’s Internet History to Date

  June 24, 2015

In April 2015, online marketplace, Snapdeal, bought Tandon Group portfolio company, mobile recharge app FreeCharge, further strengthening its position as a long term power player in the consumer internet space in India. FreeCharge is Snapdeal’s biggest acquisition to date, and projects to add substantial volume of transactions occurring through its platform by the end of the fiscal year.

Incubated by Tandon Group

Encouraging entrepreneurship amongst its employees, and mentoring talent for the future is Tandon Group’s passion and in the case of FreeCharge, the Tandon team nurtured the idea since inception.  FreeCharge co-founder, Kunal Shah, was running Tandon Group’s business process outsourcing company in Mumbai and he became fascinated with customer behavior after reading a book given to him by U.S. based director Jaideep Tandon – The Psychology of Persuasion by Robert Cialdini.

Kunal then approached head of Tandon Group, Sandeep Tandon, with an innovative idea built around customer loyalty – a rebate program for the Indian consumer called PaisaBack. It was designed to drive foot traffic to the growing organized retail segment in India.  The program was successful but scaling operations was not easy. This drove Kunal to pivot and build a program on the backbone of the rapidly growing mobile phone market in India. This became FreeCharge.

“I knew that over 90% of all Indians using a cellphone had a prepaid plan that constantly needing refilling….I was always a postpaid consumer and never knew that recharges were that big,” said Kunal.

Incubated by Tandon Group, and later funded by leading venture capital firm Sequoia Capital, Kunal and Sandeep began building out a platform to allow for online recharge in 2010, encouraging users to participate by offering coupons of equal value for each recharge.

Launch and Early Struggles

FreeCharge launched its recharging platform on August 15, 2011. Sandeep was able to leverage his extensive network and bring on McDonald’s as the launch partner merchant. The company built up a large customer base very quickly. Before too long they were handling over 10 thousand transactions every day. This early success brought with it some challenges.

“The technology platform was built in a hurry. Our users were experiencing failed transactions as we tried to grow faster,” says Shailendra Singh, a managing director at Sequoia Capital India that served on FreeCharge’s board.

The company was still attracting new users, but it couldn’t grow because it simply didn’t have the technology to handle a higher transaction volume. It spent several months in this stalled state until it rearchitectured the whole platform and moved a substantial portion of its operations to Bengaluru to be closer to young, talented engineers.

Scaling for Rapid Growth

Sandeep and Kunal quickly realized the need to bring in the right talent to scale. Freecharge rounded out its executive team bringing on industry veterans to serve in key positions of COO and CEO. Among them, Alok Goel, former COO of RedBus. With the reengineered platform and Alok at the helm, FreeCharge started to really take off in late 2013. The company began to market more aggressively and achieve wider brand recognition around the country.

In January 2014, FreeCharge launched its mobile app. At first, the app only accounted for 10% of transactions, but it grew exponentially throughout the year and now accounts for over 70% of total volume. After a new round of funding, FreeCharge was preparing a multi-year growth strategy to double or even triple its user base of 20 million people.

It had quickly become India’s most transactive e-commerce site with close to 500,000 transactions a day.

Snapdeal Acquisition

Around the same time as the new investment deals closed, Kunal received a call from Snapdeal CEO, Kunal Bahl. Kunal B. met with Kunal S., Sandeep, and Alok at the Sahara Star Hotel in Mumbai, and the subject of an acquisition came up almost immediately. The company leaders focused on the fit between the two companies.

“The first question that came to our mind was of synergy between the two firms,” says Alok. “We did not want one plus one to be two but 11.”

On the other side of the table, Kunal B. and Snapdeal were thinking not just about FreeCharge’s current user base, but also its potential to grow and expand into new categories. They viewed it as as critical tool to drive long term user growth and engagement.

While FreeCharge is now part of Snapdeal, it will retain its name, brand identity, and leadership.

To Tandon Group, the acquisition of FreeCharge represents another kind of success: that of vision, incubation, mentoring and fostering next-generation innovation and entrepreneurial spirit within its own ranks.

Tandon GroupHow FreeCharge Went From An Incubated Idea To The Biggest Acquisition in India’s Internet History to Date

Continuous Ground Breaking Innovation Year After Year

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Continuous Ground Breaking Innovation Year After Year

  May 20, 2014
 

The Tandon Group has been inventing, innovating and finding solutions to problems since its inception.  Formed in 1978, the company’s first success was the design and production of the first floppy drive for the IBM PC.  By outsourcing and investing in talent overseas, Tandon were able to scale up production while cutting prices, making the floppy drive and affordable PCs more accessible to a wider market. Fueled by a drive for innovation, the Tandon Group became the world’s largest manufacturer of disc drives for PCs and word processors by 1983.

Since then, the Tandon Group has continued to take products and find ways to manufacture them in the most efficient manner possible. They continue to outpace competitors through their understanding of outsourcing and experience in innovation. A more recent success involved decreasing the cost of telecommunication infrastructure products by over 30%. Taking existing technology, and redesigning it to be cheaper and better for the competitive Indian market enabled Tandon’s customers to expand mobile telephony access across the country. This served as a key driving factor to make India the fastest growing mobile phone market in the world.

Today, the Tandon Group has a diverse portfolio, creating high impact products in a wide variety of fields. This includes developing and supporting a widespread Radio Frequency Identification (RFID) based urban bicycle sharing system implemented in cities across the world. Cities are able to reduce traffic congestion while providing a healthy and convenient transportation option to its citizens.

Tandon Group companies have been behind developing cutting-edge parking meter technology that enables acceptance of a range of alternate payment options, including credit cards, ATM cards and mobile phones. This makes it more convenient for residents and increases compliances for cities that deploy them. As with this, and many other products, the Tandon Group drew on its history as an innovator and inventor to find an economically viable solution to a common problem.

Tandon GroupContinuous Ground Breaking Innovation Year After Year

Tandon Group’s Global Impact Since 1978

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Tandon Group’s Global Impact Since 1978

  May 20, 2014

Founded in 1978 by M.L. Tandon, the Tandon Group has grown to become one of the most influential and important companies in India. The zeal for technological and social innovation found at the heart of the Tandon Group is a product of its beginnings and the personality of its founder.

In 1960 M.L. Tandon arrived in the U.S. with just $12 to his name, determined to attend university and forge a career to help his family. Despite his limited resources, he gained admission into Howard and paid his own way through college by working in the service industry before joining IBM after graduating. It was these early successes born of hard work and determination that taught him to tenaciously pursue success at every level of his career.

After a successful career in the American tech sector he decided to return to India, determined to use his hard-won knowledge and expertise to improve the lives of his family and others in India. Tandon Magnetics was formed in 1978 with the help of his brothers and the support of the rest of his family, soon finding success manufacturing the first floppy drive for the IBM PC.

Since then the Tandon Group has gone from strength to strength, partnering with global brands and developing strong partnerships to support new business expansion in the emerging Indian market. Working with a zeal for innovation born in its founder, Tandon today works towards social innovation as well as technical with a legacy that includes helping grow India’s technology sector and to help increase the acceptance of women employees within the industry.

Tandon GroupTandon Group’s Global Impact Since 1978

Unprecedented Opportunities for Women in India

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Unprecedented Opportunities for Women in India

The Tandon Group strongly believes that social innovation is just as important as technical innovation and has a long history of taking the lead in social responsibility on a range of issues. By developing and applying new ideas about what social values we have and should have, Tandon has not only become a leader in India economically but also politically, using its influence to encourage the country’s growth to the best benefit of all its citizens. From 1984 to 2000, the Tandon Group became the largest employer of women in the tech sector. Not only did this pave the way for other tech companies to start employing more women, but the social innovation led to technical innovations and an economic advantage for both India and Tandon.

By employing more women, Tandon gained access to a previously untapped source of potential and expertise and this move helped fuel India’s growth into one of the top tech producing companies in the world. Additionally, through positively influencing the Indian Supreme Court, Tandon helped gain women in the technology industry the right to work at night, increasing women’s freedom in the workplace and indirectly improving their living conditions as a whole.

Tandon also used its political influence to help encourage the creation of “tax free zones” throughout India. These have proved to have had an incredible impact on the growth rate of the Indian economy, increasing production and foreign investment and ultimately driving India into the top ten of the world’s biggest economies.

Time and again, social innovation has proven to be not just the right thing to do, but a key indicator of economic success; by innovating socially as well as technically, the Tandon Group continues to find success and make a difference in a variety of impactful fields. Looking at a problem with innovation and tenacity, both economically and socially, has been a key driver behind Tandon’s past and present successes and continues to push them towards ever greater growth and influence.

Tandon GroupUnprecedented Opportunities for Women in India