Start-Ups Get to Right Unit Economics Within 3-4 Years Incorporation, Says Vidur Vyas of NorthSide
Last three years have changed a lot of things for start-ups. These three years turned many of the start-ups into unicorn while many more were forced to shut. Some people say money is the issue, behind failure of start-ups, lack of planning say others. Apart from these, a number of things like proper guidance, credibility of ideas and proper marketing are some largely accepted things responsible for making or breaking any business.
As the number start-ups have been seen rising, government has started a number of incubator programmes to help them. Various business have also came in this sector while help another businesses to grow. To understand how this realme has been transforming, we talked Vidur Vyas, Founder and Chief Executive Officer of NorthSide.
- How can NorthSide help in taking an idea to execution?
NorthSide has a venture incubator where ideas are taken to the launch stage by providing insights, market mapping, positioning development, creative asset development, D2C and e-commerce scale-up, all under one roof.
The NorthSide venture incubator is run by an expert team with over 20+ years of experience in scaling brands and launching successful innovations. The team is a mix of entrepreneurs and former CXOs of large corporations, creative directors, and digital and e-commerce experts that work with software-based solutions that help in taking the idea to the launch stage, and if needed, scale it up further.
- What are the Dos and Don'ts in a startup culture or MSMEs?
Startups and MSMEs need to be careful with their capital and put it to good use.
One of the most important things is developing your customer value proposition using experts. At a broad level, the product or service offered by the startup can be better, cheaper or faster. Identifying the winning value proposition is the most important investment a startup can make.
At NorthSide, we believe in validating the proposition with a small investment first, before making more investment. This prevents pivoting later, which is more expensive and does not help the company in the long run.
- What are the must-haves to run a startup or MSMEs?
The startup must think in terms of building expertise & using a validated viable product or service to raise capital.
While capital is easier to get, startups need to invest behind expertise by hiring the right talent or using consultants in the initial stages to set up the right processes and systems.
- How to run a profitable startup or MSME?
Start-up companies need to think about their business model and profitability from day zero. Many companies make the mistake of thinking that the business model will improve with scale even when the unit economics are not right. Good start-ups are usually able to get to the right unit economics within 3-4 years of starting up. Another important thing is to invest behind marketing- building and communicating your value proposition to acquire and retain customers. For this companies should think behind investing in technology and using it to scale up their proposition.
NorthSide’s Brand Builder program helps in finding the right customer value proposition and positioning the brand in a competitive context. In the last 4 years, two companies that have worked with NorthSide have won the National Start-up award, some have got funded with investment rounds and many have experienced revenue growth of up to 40X.
- How to keep thriving in the competitive marketplace and what are the key learnings you should be mindful of?
At NorthSide, we encourage brands to do three things well to win in the marketplace
- Get the price benefit segment of your brand right and try and maximise customer acquisition within the segment.
Often brands try and play with discounts to get to a customer segment, which is unsustainable in the long run. Instead of doing that, investing behind various forms of advertising and developing is always a connected strategy.
- Build your brand image by responding to customer feedback
Responding to customer feedback is vital. It shows that a company cares and is also an important tool to get insights. Often brands do not have processes in place where they listen effectively as a result they miss out on opportunities to earn consumer respect and opportunities to innovate.
- Winning in the marketplace model in the long run is difficult unless the MRP of the brand is above Rs. 300/-.
This is because of the margins and cost of delivery. Brands should therefore build out their own D2C model alongside and think in terms of a hybrid model to reach selected stores offline.
- How and when to expand your start-up?
Start-up brands need to find the right time to expand. Expanding early, without establishing the core proposition, results in dilution while expanding late can leave revenue opportunities on the table.
At NorthSide, we believe that brands should expand once their repeat customer rate crosses a quantified threshold and the unit economics from their first geography is favourable. Expanding before achieving both is dilutive.
- How should a brand position itself in different channels?
Using consistent brand visuals across channels is important to get consistent brand positioning. At NorthSide, we do this by developing one key visual, which helps position the product in a competitive context and then adapt that image for use across channels.
- How far the startup culture has come and what does it need to succeed?
Any business is about the final consumer. A startup culture must capture this fully and we therefore believe that a startup must have consumer -centricity at the core of its culture. Another important thing is to have a culture where investors' money is treated like your own money- ethics and integrity are a must.