Ideation and Investment Basics in Entrepreneurship

Entrepreneurial success is very much related to right idea and investment at the right time and place. While there are many more factors besides the above two, such as founding team, work culture, economic factors and other external factors, I would like to dwell on the right ideation and investment parts at the most basic level.

Recently while scrolling through LinkedIn, I came across a post from fellow LinkedIn member about a startup with the headline around the startups annual turnover or revenue from its main operations and the funding that it has secured so far. The startup had reported an annual turnover or revenue from its main operations of approximately Rupees Fourteen Lakhs or in other words Rupees Fourteen Million and it had raised approximately Rupees Two Hundred Crore or in other words Rupees Two Billion.

The immediate thought I had towards the founders and the said startup was of disgust. The next thought was to comment in the thread, but I refrained in doing so, as I saw quite a few hundred comments on the thread and a brief scroll into the comments validated my thoughts. Most users pointed out that even a basic food kart vendor or a basic fast-food joint would be doing more business annually than this startup. And honestly that is true.

The Ideation Basics

I had heard of this startup as a social media app for the Indian market, but never felt the need to download it and become a user. I never inquired if it was specifically for the Indian market, but does the Indian market need an exclusive platform. A quick google search now, and I see that the app is for connecting millions of people, celebrities, and topics. Is this a new idea, and a new space to create an online platform for? Aren’t there quite a few platforms that engage millions of people, celebrities and topics in different forms, such as micro blogging, pictures, posts etc….? An online platform can be accessed by anyone anywhere in the world, so why create a new platform, when there are a handful of them already existing for over a decade and with quite a large userbase on them?

The Investment Basics

I have read articles, heard stories and seen videos or shows, that highlight the difficulties founders face in raising funding or external investment for their ideas, the high attention to detail orientation of the investors that ensures them investing across a set of startups out of which at least two investments will give blockbuster returns. And then I was puzzled with this startups funding story. Was it a unique idea that these investors had found? Was the startup profitable even before the investment? Couldn’t they find the global platforms that are doing the same thing, and then analyse their finances, before investing in this particular startup? Wouldn’t the global platforms be quick enough capture the unique features of the startups product or service? Do the users really need the unique feature offered by the product or service of the startup? Don’t the users have access to alternative tools online that could solve their problem, if at all any?  

Conclusion

In the digital and information age, it is of utmost importance that Entrepreneurs and Investors are diligent and mindful of their workings. Starting up is not easy and not for everyone. Getting funded is also not easy. The entrepreneurial ecosystem does take a note of the happenings in the system, and such stories while they provide for a lot of learnings on one side, it also leaves a bad taste, as someone more worthy could have succeeded and done better with that right support.  

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