ePaatashala

27/11/2019

After a hiatus we are back with platform trainings. Stay tuned for the demo dates !!!

15/06/2016

# Startups Fail
5 Reasons Startups Fail

Reason 1: Market Problems

A major reason why companies fail, is that they run into the problem of their being little or no market for the product that they have built. Here are some common symptoms:

There is not a compelling enough value proposition, or compelling event, to cause the buyer to actually commit to purchasing. Good sales reps will tell you that to get an order in today’s tough conditions, you have to find buyers that have their “hair on fire”, or are “in extreme pain”. You also hear people talking about whether a product is a Vitamin (nice to have), or an Aspirin (must have).

The market timing is wrong. You could be ahead of your market by a few years, and they are not ready for your particular solution at this stage. For example when EqualLogic first launched their product, iSCSI was still very early, and it needed the arrival of VMWare which required a storage area network to do VMotion to really kick their market into gear. Fortunately they had the funding to last through the early years.

The market size of people that have pain, and have funds is simply not large enough

Reason 2: Business Model Failure

As outlined in the introduction to Business Models section, after spending time with hundreds of startups, I realized that one of the most common causes of failure in the startup world is that entrepreneurs are too optimistic about how easy it will be to acquire customers. They assume that because they will build an interesting web site, product, or service, that customers will beat a path to their door. That may happen with the first few customers, but after that, it rapidly becomes an expensive task to attract and win customers, and in many cases the cost of acquiring the customer (CAC) is actually higher than the lifetime value of that customer (LTV).

The observation that you have to be able to acquire your customers for less money than they will generate in value of the lifetime of your relationship with them is stunningly obvious. Yet despite that, I see the vast majority of entrepreneurs failing to pay adequate attention to figuring out a realistic cost of customer acquisition. A very large number of the business plans that I see as a venture capitalist have no thought given to this critical number, and as I work through the topic with the entrepreneur, they often begin to realize that their business model may not work because CAC will be greater than LTV.

The Essence of a Business Model

As outlined in the Business Models introduction, a simple way to focus on what matters in your business model is look at these two questions:

Can you find a scalable way to acquire customers

Can you then monetize those customers at a significantly higher level than your cost of acquisition

Thinking about things in such simple terms can be very helpful. I have also developed two “rules” around the business model, which are less hard and fast “rules, but more guidelines. These are outlined below:

The CAC / LTV “Rule”

The rule is extremely simple:

CAC must be less than LTV

CAC = Cost of Acquiring a Customer

LTV = Lifetime Value of a Customer

To compute CAC, you should take the entire cost of your sales and marketing functions, (including salaries, marketing programs, lead generation, travel, etc.) and divide it by the number of customers that you closed during that period of time. So for example, if your total sales and marketing spend in Q1 was $1m, and you closed 1000 customers, then your average cost to acquire a customer (CAC) is $1,000.

To compute LTV, you will want to look at the gross margin associated with the customer (net of all installation, support, and operational expenses) over their lifetime. For businesses with one time fees, this is pretty simple. For businesses that have recurring subscription revenue, this is computed by taking the monthly recurring revenue, and dividing that by the monthly churn rate.

Because most businesses have a series of other functions such as G&A, and Product Development that are additional expenses beyond sales and marketing, and delivering the product, for a profitable business, you will want CAC to be less than LTV by some significant multiple. For SaaS businesses, it seems that to break even, that multiple is around three, and that to be really profitable and generate the cash needed to grow, the number may need to be closer to five. But here I am interested in getting feedback from the community on their experiences to test these numbers.

The Capital Efficiency “Rule”

If you would like to have a capital efficient business, I believe it is also important to recover the cost of acquiring your customers in under 12 months. Wireless carriers and banks break this rule, but they have the luxury of access to cheap capital. So stated simply, the “rule” is:

Recover CAC in less than 12 months

Reason 3: Poor Management Team

An incredibly common problem that causes startups to fail is a weak management team. A good management team will be smart enough to avoid Reasons 2, 4, and 5. Weak management teams make mistakes in multiple areas:

They are often weak on strategy, building a product that no-one wants to buy as they failed to do enough work to validate the ideas before and during development. This can carry through to poorly thought through go-to-market strategies.

They are usually poor at ex*****on, which leads to issues with the product not getting built correctly or on time, and the go-to market ex*****on will be poorly implemented.

They will build weak teams below them. There is the well proven saying: A players hire A players, and B players only get to hire C players (because B players don’t want to work for other B players). So the rest of the company will end up as weak, and poor ex*****on will be rampant.

etc.

Reason 4: Running out of Cash

A fourth major reason that startups fail is because they ran out of cash. A key job of the CEO is to understand how much cash is left and whether that will carry the company to a milestone that can lead to a successful financing, or to cash flow positive.

Milestones for Raising Cash

The valuations of a startup don’t change in a linear fashion over time. Simply because it was twelve months since you raised your Series A round, does not mean that you are now worth more money. To reach an increase in valuation, a company must achieve certain key milestones. For a software company, these might look something like the following (these are not hard and fast rules):

Progress from Seed round valuation: goal is to remove some major element of risk. That could be hiring a key team member, proving that some technical obstacle can be overcome, or building a prototype and getting some customer reaction.

Product in Beta test, and have customer validation. Note that if the product is finished, but there is not yet any customer validation, valuation will not likely increase much. The customer validation part is far more important.

Product is shipping, and some early customers have paid for it, and are using it in production, and reporting positive feedback.

Product/Market fit issues that are normal with a first release (some features are missing that prove to be required in most sales situations, etc.) have been mostly eliminated. There are early indications of the business starting to ramp.

Business model is proven. It is now known how to acquire customers, and it has been proven that this process can be scaled. The cost of acquiring customers is acceptably low, and it is clear that the business can be profitable, as monetization from each customer exceeds this cost.

Business has scaled well, but needs additional funding to further accelerate expansion. This capital might be to expand internationally, or to accelerate expansion in a land grab market situation, or could be to fund working capital needs as the business grows.

What goes wrong

What frequently goes wrong, and leads to a company running out of cash, and unable to raise more, is that management failed to achieve the next milestone before cash ran out. Many times it is still possible to raise cash, but the valuation will be significantly lower.

When to hit Accelerator Pedal

One of a CEO’s most important jobs is knowing how to regulate the accelerator pedal. In the early stages of a business, while the product is being developed, and the business model refined, the pedal needs to be set very lightly to conserve cash. There is no point hiring lots of sales and marketing people if the company is still in the process of finishing the product to the point where it really meets the market need. This is a really common mistake, and will just result in a fast burn, and lots of frustration.

However, on the flip side of this coin, there comes a time when it finally becomes apparent that the business model has been proven, and that is the time when the accelerator pedal should be pressed down hard. As hard as the capital resources available to the company permit. By “business model has been proven”, I mean that the data is available that conclusively shows the cost to acquire a customer, (and that this cost can be maintained as you scale), and that you are able to monetize those customers at a rate which is significantly higher than CAC (as a rough starting point, three times higher). And that CAC can be recovered in under 12 months.

For first time CEOs, knowing how to react when they reach this point can be tough. Up until now they have maniacally guarded every penny of the company’s cash, and held back spending. Suddenly they need to throw a switch, and start investing aggressively ahead of revenue. This may involve hiring multiple sales people per month, or spending considerable sums on SEM. That switch can be very counterintuitive.

Reason 5: Product Problems

Another reason that companies fail is because they fail to develop a product that meets the market need. This can either be due to simple ex*****on. Or it can be a far more strategic problem, which is a failure to achieve Product/Market fit.

Most of the time the first product that a startup brings to market won’t meet the market need. In the best cases, it will take a few revisions to get the product/market fit right. In the worst cases, the product will be way off base, and a complete re-think is required. If this happens it is a clear indication of a team that didn’t do the work to get out and validate their ideas with customers before, and during, development.

13/06/2016

Five things you need to know about Bluetooth 5

TIMES OF INDIA1 day ago | Posted By: abhinav UPADHYAY
NEW DELHI: The next version of Bluetooth is set to launch on June 16. Bluetooth SIG (the governing body of Bluetooth standards) executive director Mark Powell confirmed that the next version, called Bluetooth 5, will be more powerful than the existing 4.2 version.
"I'm pleased to tell you that on 16 June, we will formally announce that the next version of Bluetooth will be marketed as Bluetooth 5. Veterans of the SIG will note that with this name we have dropped reference to both the version and point number in our marketing messaging. Our new naming approach is focused on simplifying our marketing, communicating user benefits more effectively and making it easier to signal significant technology updates to the market," said Powell in an email .

End users are mostly unaware of the importance of a new Bluetooth version, and see it simply as another feature in mobile phones which enables file transfer and connection to accessories wirelessly. However, Bluetooth 5 promises to be much more than that. Here are five things you need to know about it.
1) Double range: Bluetooth 5 claims to have double the range of existing version. While the maximum range depends more on the device, Bluetooth 4.0 devices should ideally offer a minimum of 200 feet. Powell has announced that the upcoming Bluetooth 5 will offer a range that's double of this, thus bringing the new version closer to the range offered by Wi-Fi Direct.

2) 4X speed: Earlier Bluetooth versions are no match for the speeds offered by Wi-Fi Direct. For those unaware, Wi-Fi Direct promises speeds of up to 250Mbps, as opposed to Bluetooth 4.0's 25Mbps. Bluetooth 5 promises to have more than four times the speed of the current 4.2 version.
3) Detailed advertising packet: No, it doesn't mean more ads. Advertising has a whole new meaning in the world of Bluetooth. It helps users identify, detect and connect to other Bluetooth devices. Current packet size is 47 bytes and includes details like name and type of device. Bluetooth 5 will have larger sized packets, enabling more information to be shared among Bluetooth devices.
4) Location information: Bluetooth 5 will offer new functionalities for connectionless services. These will mostly be related to location information and navigation. "By adding significantly more capacity to advertising transmissions, Bluetooth 5 will further propel the adoption and deployment of beacons and location-based services to users around the world," said Powell.
5) New hardware: There is no word on whether Bluetooth 5 will be backward compatible with older Bluetooth devices or not. Bluetooth 4.0 devices can be updated to version 4.1 and some even to version 4.2. However, the new Bluetooth 5.0 version might need new hardware. This means that new Bluetooth 5-enabled devices might appear later this year or early next year.
June 16. Bluetooth SIG (the governing body of Bluetooth standards) executive director Mark Powell confirmed that the next version, called Bluetooth 5, will be more powerful than the existing 4.2 version.

"I'm pleased to tell you that on 16 June, we will formally announce that the next version of Bluetooth will be marketed as Bluetooth 5. Veterans of the SIG will note that with this name we have dropped reference to both the version and point number in our marketing messaging. Our new naming approach is focused on simplifying our marketing, communicating user benefits more effectively and making it easier to signal significant technology updates to the market," said Powell in an email .

23/09/2015

Google introduces Android Developer Nanodegree Courses

27/12/2014

"C Programming and Linux Basics" classes starts soon. Book your slot now.

Call us on : 8500860934.

Do not miss this opportunity, act now!! .Limited Seats per batch.

27/12/2014

Websphere Application Server or IBM's WAS batches by Real Time experts are going to start again from 4th of Jan 2015.

For more information please call us on : 8500860934.

Very Limited Seats. Hurry Up!!!

16/07/2014

Is Hiring A Team Of All-Star Hackers To Fix The Internet

Earlier this year, a massive internet vulnerability known as Heartbleed claimed to be the biggest bug the internet has seen in years.
Now, Google is taking another measure to make sure hidden internet vulnerabilities don't get out of hand with an effort known as Project Zero,according to Wired.
Project Zero is dedicated to finding the most severe security flaws in software around the world and fixing them, no matter how difficult they are to find.
Google plans to publicly unveil its elite new team of security researchers on Tuesday, but Wired got an early look at the project.
The initiative gets its name from the term "zero-day," which refers to an attack or threat that targets a software issue that was previously unknown. Heartbleed is a perfect example of a zero-day attack, since it was a problem that went unnoticed for a long time before Google fixed it.
Project Zero isn't restricted to finding bugs in Google's products, however. The team will be free to roam the entire web to find vulnerabilities in any product. Earlier this week, for example, the Project Zero team reportedly fixed bugs in recent updates for Apple's Mac and iPhone software, according to eWeek.
The goal, according to Wired's report, would be to keep the general internet safe by exposing bugs. The project would also spread awareness to other companies that may not be as vigilant when it comes to scouting for malware.

06/05/2014

iOS demo class on this friday.. Book your space now at Epaatashala which also can book a space in a better company for you.. Act Now!!!

ePaatashala offers on-demand online training customized to your needs ranging from various niche technologies to soft skill training by leading experts