A founder must highlight his start-up’s strengths
Clients can be cheerleaders too; highlight your start-up’s strengths
Arjun Chatterjee, 37, had the perfect mix of educational and professional qualifications to become a successful corporate leader—a bachelor’s degree in economics from Presidency College, Kolkata, a Masters in Business Administration from XLRI, Jamshedpur, and a campus recruitment as a Tata Administrative Services officer in 2004. But that was not satisfying enough for someone like Chatterjee who had an urge to do something independently. He took up a new role in 2007 with Network18, where, within a couple of years, he became the business head of the newly set-up web services team.
By 2009, while at Network18, Chatterjee had considered and rejected several startup ideas, including for a pet spa and car wash business, and decided to focus on what he knew best: digital marketing. In 2010, he launched a 360-degree digital marketing and innovation company, Runtime Solutions.
Business-wise: In its first year, the start-up won an industry award for creating a Facebook application, MTV Woodland Ecolution. “That filled us with the belief that not only could we compete with the big boys, we could also come out on top,” he says. In spite of that, investors weren’t exactly lining up for Runtime. “Access to finance was always a challenge during the initial years. This is the time when I really got tested. Cash flow, at times, was a challenge and the fear of unsustainability cropped up,” Chatterjee adds. So, he kept exploring business in areas where value creation was more effective and margins were better. Another important decision he took was to keep Runtime a self-funded organization—which it remains till date. “I realized after the first few meetings with investors and VCs that there are two kinds of start-ups. Something like a Flipkart, which, on paper, has a potential 1.3 billion customers and another like mine, which is in the service sector and has a small client base. The investor will always go for a firm that is stronger on paper over a small digital marketing firm. Eventually, I stopped looking for investment.”
The learning curve: Explore new revenue generating areas; self-fund if you have no investors to begin with.
Personal shift: Within the first year of operations, Chatterjee realized business development takes time and one has to adapt at every stage to overcome challenges. He also learned that unlike big companies, that have specialized teams to work on every aspect of a project, a new firm has to create an eco-system that guarantees access to a diverse talent pool till it has the resources to put them on the payroll.
The learning curve: Hire people with multiple talents.
People Management: As a high-ranking executive at Network18, Chatterjee never faced much trouble whenever he wanted new people for his team. The hard reality of leading a start-up hit him again when he tried getting people on-board for Runtime Solutions. In 2010, the start-up buzz was muted and he was competing with MNCs, the Big 4 consulting firms and tech giants. Finally, a colleague from Network18, Deepak Somawanshi, took a leap of faith, becoming Runtime’s first hire. “In a corporate set-up, one only functions at 20% of his/her abilities. The rest is taken care of by organizational processes. To get people from this lot to join me, I had to portray the bigger picture and show them how joining a start-up would be much more challenging and exciting.” Now, Chatterjee finds attitudes have changed. There is a new breed of “a start-up employee” who prefers the smaller set-up, the uncertainty and the new environment to secure, old fashioned workplaces.
Besides, Chatterjee made full use of the help he got from his friends and family, and found mentors and supporters in the unlikeliest of places— clients. Runtime’s first client, P.S. Vignesh, the founder of social networking site YouthMash, was an early supporter. “I was also given a lot of guidance by the senior team at Mastek, one of my first big customers. All of their collective belief spurred me to push on and make the dreams a reality,” says Chatterjee.
The learning curve: Clients can be cheerleaders too; highlight your start-up’s strengths.
Managing money: In the initial days of Runtime Solutions, Chatterjee independently consulted on a few projects to sustain cash flow, effectively working two jobs. He also cut back on his expenses for the first nine months as his new venture required all the resources he had.
The learning curve: Do two jobs if the need arises; cut back on expenses.
The good, the bad and the ugly: “Making the transition from an employee to entrepreneur was incredibly hard—don’t let anyone tell you otherwise,” he says. “The security of a well-ordered career, the reassuring ping of the monthly salary text, several taken-for-granted social and economic perks are missed sorely when one enters an uncharted territory full of frustrating traps. No one quite prepares you for it.”
Looking back at his old avatar, Chatterjee feels the biggest change in his professional life has been the freedom that has come with his own venture. “Being in a larger system often restricts your ability to view a situation in totality; sometimes processes hinder effective and immediate decision-making,” he says. “I was always a big-picture thinker, so the ability to take a fully-informed decision was a refreshing change from when I was employed.”
Executive to Entrepreneur is a series that looks at the lessons learnt by 9am-5pm employees who set up their own business. Shrenik Avlani is co-author of The Shivfit Way, a book on functional fitness
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