Here’s a true story: Once upon a time, there lived a couple. They were entrepreneurs themselves and made a decent living. They had great respect for fellow entrepreneurs.
A taxi startup approached the couple and offered a deal. Buy a car on loan and give it to us for rent. We will give you Rs 40,000 every month, they said.
That covers the loan cost easily and you’ll still have money left, the young entrepreneurs who wanted to “disrupt” the taxi business promised. They shook on it and the couple kept their end of the bargain.
Two months passed and there was no sign of the money. The startup treated them as a “vendor” and started behaving like a big corporation already. Calls were never returned. Everybody seemed to be busy while nothing seemed to be working.
Soon enough, the couple took their car and went to another taxi service provider last month. This one was an old school no nonsense businessman. The old man’s business isn’t big or disruptive.He didn’t make any grand promises or go out of the way to make the deal attractive.
But he promised to do his best. Its just been a few days but they would call and keep the couple posted about how much their cab was running and such.
Now this whole episode has a few big lessons for new startups. Let me explain.
1. The Swanky Office Can Wait
The startup had a swanky office. Pretty receptionists, computers to keep records and GPS to track the cabs. But when the couple called, it would take the company hours to respond or find an answer to simple questions. Of course if the computer wasn’t working, it would take longer.
In contrast, the old businessman had a modest office and an old lady for an accountant. The woman was a human computer and knew everyone by name. Everything was a lot more organized and they kept good old trip sheets. It inspired a whole lot of confidence, although not nearly flashy as the startup.
If you are a startup, that pretty office and receptionist and the bells and whistles can wait. Otherwise you’d be burning through your startup money faster than rocket fuel at the time of take off. Your partners & your customers come first.
2. Empathise & Always Be Responsive
The founders kept shifting responsibilities and didn’t own issues. Quickly, the duo lost faith in the founders. They had no value for their customers. For instance, they’d promise to call back in 5 minutes but would never call back till they got yelled at. Now that’s not done at all in business. Of course you are busy. So is everybody else.
If you don’t return someone’s calls, you are making them feel like shit whereas they have a few lakhs of Rupees as loan to pay now.
“People will forget what you said. People will forget what you did. But people will never forget how you made them feel.”– Maya Angelou
3. Make Promises You Can Keep
Promises are good. But as always, make promises that you can keep. The couple were constantly told that they would make an easy Rs 40,000 a month, although the math was a little logic defying. And sure enough, the money never came. It probably went to pay rent for the glass fronted office and the office staff.
In contrast, the old businessman said, lets run it for a month and see how it goes. “We’ll have a better idea of how much the vehicle will run by then,” he said. This, is a more sustainable approach where no one has to feel guilty (or not pick up calls because you have some explaining to do). If things don’t work out, everyone is better prepared.
4. Hustling != Lying: White Lies Are Unacceptable
Businesses run on trust. Once you lose that, no contract can fix it. The couple were excited about working with the startup in the beginning. They even offered to train the staff free of cost and help the company from time to time. But they would soon discover that they’ve been lied to.
They were told that the startup would launch with a fleet of 30 cars. That never happened. The date of launch was shifted a couple of times. They also said they’d advertise and made a whole lot of promises. Perhaps at the time when they were made, it was genuine. But in hindsight, it looks like small white lies.
Startups are full of chaos and uncertainty. In our hurry to change the world, let’s not forget to show some integrity and level with everyone.