If Darwin’s theory is to be held true, startup survival is something that every entrepreneur, founder and CXO should be worried about. It’s no secret that investors are hell bent on making the best use of their capital. They are willing to throw their money at you but eager enough to go down and dirty to get what they want. Who survives the startup rat race and who doesn’t?
Cockroaches and Unicorns
Contrary to what cockroaches normally mean to people, in the world of startup survival, they portray versatile, gritty creatures ready to take on any challenge and willfully emerge victorious. They have had bad times and worse times and would probably have come back from the brink at least once. For them startup survival is a matter of life and death, and they are ready to batten down and the hatches and survive any storm.
Unicorns on the other hand represents the more opulent and well settled bunch having the good fortune of being endlessly funded. No storms or brinks for these fortunate ones, just a bottomless cash reservoir to keep them afloat during hard times and good.
Applying the adage of “slow and steady wins the race”, cockroaches tend to keep their eyes open, spend as and when required and take measures to see that they stay afloat even under shabby times. Meanwhile unicorn startups tend to climb the growth ladder first and strategize to scale their business before paving the way for profits.
Lean comes from Lean Manufacturing and is a set of principles for achieving quality, speed & customer alignment. In a nutshell, lean startups relentlessly try to eliminate anything that isn’t adding value and only work on what absolutely needs to be done at a particular moment in time.
Along those lines, Lean startups respect that the people doing the work are the ones that best know how to do it. Give them what they need to be effective and then trust them to do it. Lean startup principles measure ongoing results but then challenge those requirements as needed, as part of a build-measure-learn loop.
A true picture of success or failure starts to emerge–and a true picture of failure may induce even the most intractable project sponsors to make significant changes before things go off the rails.
The Seven Commandments for Startup Survival
Check out these 7 basic principles for an ideally lean startup:
1. Eliminate Waste
Add nothing but value. Just because a practice adds value doesn’t mean it’s the right place for your particular team to start. Daily Scrums, for example, are intended to help the team. If the team finds them a waste of time, that should be a red flag. Maybe the Daily Scrums are being run incorrectly.
2. Build Quality In
You can’t test quality in at the end. Does your practice help ensure the team has what they need to build features right the first time? Test-Driven Development, for example, captures the customer’s requirements as executable tests that the team can use to validate the features as they build them.
3. Create Knowledge
Practices that are intended to provide the team with frequent and regular feedback to learn from, makes a huge impact on the overall pace . This includes customer’s feedback and regular retrospectives to get the team’s feedbacks.
4. Defer Commitment
The best time to make decisions is ‘just in time’. Decisions that allow the team to capture the features to be implemented, while deferring the specifics of how to implement them gives a lot of elbow room for creativity and thought flow. Big Up Front Design, where all the architectural details are fleshed out and built up front often results in rework.
5. Deliver Fast
Speed is the absence of waste. There are two ways to achieve high quality. Slow down and be careful, or develop people who continually improve their processes, and reliably respond to their customers many times faster than their competitors.
6. Respect People
Centering on the people who add value means upgrading the skills of your team, through training and apprenticeships. It means forming teams that design their own processes and address complete problems. It means that staff groups and managers exist to support your team members and not to tell them what to do.
7. Optimize The Whole
When we optimize for a subset of the whole, we almost always end up sub-optimizing the whole. So, in layman’s terms, for the best end results, always keep the larger picture in mind. Teams featuring cross-functional assets, that include all the skills required to provide the required business value can not only optimize the process of developing and delivering each feature, but will also create a rounded up solution that will have minimal reworks and deficiencies for future adaptations.
The Agile methodology is an approach to project management, that has become an indispensable part of startup survival. It helps teams respond to the unpredictability of building a product through incremental, iterative sprints. Below is a diagram showing the various components of the agile method.
The agile methodology can be summed up in the following 5 step process that can be iterated till the perfect product is realized.
1. Requirement Analysis
This is equivalent to researching and brainstorming what the product requires. Examples can include general features, architecture discussions, workflow discussions and general product discovery.
2. Design Document & Prototype
This is the SOW (Scope of work), which will have all the requirements defined for the product.
3. Iterations, Demo & Feedback
During the development, iterations are needed to test the code as well as get feedback from the customer on progress. Feedback from the customer can include: mockups, front-end designs, and usability.
4. Identify defects & Resolve Bugs
Bugs and defects are always a constant in the software development process. It is important that there are good Quality Assurance standards to eliminate general issues.
5. Production & Technical Support
The software application is finally deployed and live. Once this occurs, a support plan needs to be in place for maintenance and general support on potential future issues.
Last Rat Standing
Analyzing the trends that are visible it is pretty evident that unicorns are soon going to be out dated. With increased limelight being thrown on bringing forward sectors like education and healthcare, cockroaches are generally preferred.
This is probably due to the fact that these areas are too vast and have wide margins of errors. Hence they tend to be huddled under cockroach start-ups. This is primarily because of their ever growing demand and need for sustainability. This also includes risk factors, and undertaking such ventures are right up cockroach alley. Their agility and flexibility gives them the edge to contain any crisis.
Another factor that will be a major decider is the style of function. Following the agile methodology and converting your venture into a lean startup promises to yield definitive results.
With 2016 being avidly anticipated as “the year” for the resilient cockroaches, venture capitalists are keen to see how their decisions pan out.
Adding to this rage is the fact that huge companies namely e-commerce giants like Flipkart and Snapdeal are slowly losing their momentum and struggling to maintain their ranking.
Industry experts say that it isn’t about the funding anymore, but the valuation. Either you generate income to match your valuation or you lose.
Well one thing’s for sure – it’s high time that we open those doors and welcome the agile cockroaches for good!