More On Start Up

A Startup is the largest group of people you can convince of a plan to build a different future. A new company's most important strength is new thinking, even more important than nimbleness, small size affords space to think. A lone genius might create a classic work of art or literature, but he could never create an entire industry. Startup operates on the principle that you need to work with other people to get stuff done, but you also need to stay small enough so that you actually can.

Every Startup is small at the start. Every monopoly dominates a large share of its market, therefore every startup should start with a very small market. Starting with a small market can help in creating monopoly and dominate the market. Monopoly here doesn't necessarily mean to be the only player, but also to be the strong enough that it will not be easy for others to affect the market or your working. Like during demonetisation in INDIA in 2016, Paytm (online payment platform) was major player for online payment.

How a Startup can create a monopoly in a market?

 It is usually difficult for a startup to create a monopoly, every monopoly is unique, but they usually share some combinations of the following characteristics: proprietary technology, network effects, economies of scale and branding. So every startup should try to create a unique combination of these characteristics to create a monopoly in market. 

1. Proprietary Technology

Proprietary technology is the most authentic advantage a company can have because it makes the product difficult or impossible to be cloned. A proprietary technology must be 10 times better than its closest substitute available to lead a real monopolistic advantage. The clearest way to make a 10 times improvement is to invent something completely new, once you're 10 times better you escape competition.

2. Network Effects 

Network Effects make a product more useful as more people use it. It can be powerful, but you'll never realize them unless your product is valuable to its first users, when the network is necessarily small. Network Effect business must start with small market.

3. Economies Of Scale

A monopoly business gets stronger as it get bigger. The fixed cost of creating a product can be spread over the large quantities of sales, & variable cost varies directly with the quantity of production. A good startup should have the potential for great scale built-in its first design.

4. Branding

A company has a monopoly on its own brand by definition, so creating a strong brand is a powerful way to claim a monopoly. But no company can be built on branding alone. Its products must be 10 times better than its competition. For example, when Steve Jobs returned to apple in 1997, he focused on making all the apple products 10 times better than its competitors, and he was successful in doing so and re-established apple as a luxurious brand.

SOME USEFUL TIPS

1. Find Secrets

Every one of today's most famous and familiar ideas were once unknown and unexpected. Today, most people think as if there are no secrets left to be found. But those people who don't think so have proved this wrong and found secrets. 
For example, a person found a secret of how to connect people on internet and found Facebook, a person found a secret of how to make conveyance easy and found Uber, a person found a secret of how to transfer money without going to bank and found PayPal and there are many such stories of founding different secrets but what is common is they broke the convention thinking that there are no secrets left to be found. So to be a start-up founder you must search for a secret which no one is looking for.

2. Foundations

Beginnings are special. Bad decisions made in the beginning days, for example choosing wrong partner or hiring wrong persons, are very hard to correct after they are made, as a founder the first job is to get the first things right because you cannot build a great company on a flawed foundation.

When you start something the first and most crucial decision you make is whom to start with, choosing a co-founder is a critical task. Founders should share a pre history before they start a company together, otherwise they're just rolling dice.
But it's not just about founders who need to get along, everyone in your company needs to work well together.

3. Sales and Advertisements

Even though sales is everywhere, most people underrate its importance. People like engineers, developers, innovators are biased towards building cool stuffs rather than selling it. 
But customers will not buy because you build it, you have to persuade them to buy, and it's harder than it looks. That's why advertisements matters because it works. 
People may think that they are exceptions; their preferences are authentic and advertisements works on other people, It's easy to resist the sales pitches. But advertisements doesn't exist to make people buy a product right away. It exists to embed a subtle impression that will drive sales later.
The engineers' aim is a product great enough that "it sells itself". But people buy product because of sales pitches and offers made to them. It's better to think of distribution as something essential to the design of a product. If you've created a great product and haven't found an effective way to sell it, then you're doing a bad business.