Monday, March 24, 2014

Startup Lessons

We had a great chance to meet the people behind Thread on Monday. We met with Ian Rosenberger, the CEO and Jenna Knapp, the Director of Production. Thread is what you would call a great example of social innovation. They essentially make jobs in Haiti by recycling plastic bottles in landfills there and converting it into reusable plastic thread. That thread is what they sell to companies in the US to make consumer products by various companies. Its like taking unused plastic from one part of the world to make it useful plastic in another part of the world. This got me thinking that what if we could find other things like that around the world which are less valuable someplace but are very valuable somewhere else. For example, the leftover products in corn processing could be used as a fuel in another country where they don't have any.

Lets move back to what Ian told us the other day. He gave us invaluable lessons on startups and how to be grounded. There are just 3 simple rules of the startup - 1. Youre not as creative as you think. Do Better. This basically means don't think you have the best idea in the world and keep improving on the idea you have. 2. Show me the MONEY. This is telling us to remember that your investors need to know that the idea can make money. If the product cannot make money then it is just that, a product and not something out of which a company can be made. 3. Novelty doesn't count, But it matters. You might make a very cool product but if you can't scale it to a bigger market its pointless. Basically if only your 10 best friends actually buy it, it makes no sense.

Ian said the best advice he ever received was from a person who made eco friendly jeans who said "Their (the customers) ass has to look good first". I found this hilarious at first but very very intriguing later. So this person wants to make eco friendly jeans but no one is really going to buy jeans just based on the fact that its eco friendly. You need to compete with giants like Levis, GAP etc. to make jeans that look and feel better and plus giving the added benefit to the customer that those jeans are eco friendly. With LUVwater too, I need to make sure that the product is actually usable by anyone rather than just making something and sending it out there.

Another aspect of the talk was teams. As someone part of a startup you should always put your team ahead of yourself and always hire smarter people than you. Also you should be able to create a safe space to fight where people aren't judged and its okay to be wrong. You should always write everything down and make sure things are documented, something which I have not been doing to well regarding LUVwater.  And finally, get a lawyer.

He also spoke about how everything takes longer than you think it does. You may have predicted that you would be cash positive in about a year but it could easily stretch to 3 years. Also, you almost always need more money than you think you do. There will definitely be a point where you suddenly feel that the money you currently have isn't enough and its not going to work this way. Last but not least its passion that drives a startup and You HAVE to WANT it very badly for it to succeed.

I was looking at other people who have done great work in developing cheap affordable solutions for the masses and I came across a TED talk by Amy Smith who is the founder and co-director of D-Lab at MIT which makes cheap affordable but amazing solutions to common problems faced by people in developing nations. Its a great example of identifying a need for a problem and then developing iterative concepts to solve them and finally coming up with the best solution.



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