Dear Startup: Don’t try to Change User Behaviour.

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When I am talking to a startup team and they tell me that they are going to “change behaviour”, it sends red signals all the way.

I didn’t know how to explain it till i thought about it a bit. Truth is, a young startup (a fledgling and not the flipkart types calling itself a startup) has ridiculously limited resources. Assume you don’t have bucket loads of funding, don’t come from a filthy rich background, or have a pedigree and reputation that people will throw money at (I am talking about you 98 percentile population), then by defacto you have to go after the low hanging fruits.

The minute i say low hanging to anyone, they immediately assume two keywords – ecommerce, and hyperlocal. Shocking. But neither of those two spaces are low hanging.

While trends come and go, a good way to define low hanging would be, any opportunity where resources are least spent convincing your target audience that they need your solution.

There are three fundamental costs to a business – getting customers, delivering on what you promised and delivering on support. (2) and (3) are hard, but they are covered by the revenue that you receive. If you have to spend an awful lot of work on (1), that usually doesn’t end well. I’m being nice. It almost always never ends well.

So you want to find opportunities where all you have to do is show up and let people know that you understand the problem they have (and it better be as essential as their pants being on fire) and let them know you have the solution ( a fire extinguisher). They’ll do the rest – they’ll run over you to grab it with both hands.

So technically speaking, if you find a problem statement, that is really a problem and can solve it. Voila, you should be good to go.

The second aspect that you need to keep in mind is margins. If your target customer is all about pinching pennies and saving etc etc you wont be able to hang on to them for too long. One time solutions – Yes. But recurring, perhaps not. So the key would be to find out opportunities where there is a healthy (i didn’t say obnoxious) operating margin.

If you don’t know what that word means, its time to drop everything and go google on it and read up on some related words. Because all said and done, as my uncle taught me – if you decide to run a business, you really cant outrun the fundamental logic of every business – that revenue minus cost has to add up to profitability.

If you find spotting problems difficult, take a look at this platform that we’ve put together called Ideaspace. We are building a platform and a framework to build startups that solve real problems.

Disclaimer: It is only for the 98% of you.

 
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One Response to “Dear Startup: Don’t try to Change User Behaviour.”

  1. Mitesh Sanghvi

    Hey Vijay, you’ve shared some great insights here which startups definitely miss out, due to lack of experience. I’ve been asked similar questions multiple times, as I run a dedicated business to help out startups. Maintaining the margin is necessary, as one should know the cost of his/her efforts. :) Would love to read your blog again and will recommend it.

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