Another day and another startup founder pens why it did not work out. I frequently come across such articles filled with clichéd quotes and valiant stories of heroic struggle. As I join this list of ‘failed entrepreneurs’ I must confess: I’m awfully tempted to write something similar.
By Start-Up Chile Alumni Shiv Rajendran, Founder & CEO – Totus Power
My startup Totus Power (Startup Chile – Generation 7) worked on reusing old electric vehicle batteries in developing countries. After 4.5 years of work we concluded that it was not economically viable (the underlying factors are analyzed here). As I start the process to put this behind me to work on my next venture, I wrote down some of the lessons I learnt the hard way. I share some of those lessons with you.
#1 Start with enough money to build an MVP
Since 2013, I had spent the majority of my time in search of funds to build a Minimum Viable Product (MVP). Building a hardware startup is expensive and difficult. I further stacked the deck to my disadvantage, by starting Totus Power with less than $2,000 and prior to moving to Chile, I literally lived at my former office at the NASA Ames Research Center. This thriftiness was a lifesaver at the beginning, but I ended up chasing my own tail in a quest to survive as cheaply as possible. Now, I don’t regret doing so. It was just do or die at the time. But in the long run, this lifestyle was supremely unproductive, and I had nothing concrete to use for market validation. It took more than 3 years to raise the $300,000 or so needed to really build the guts of our MVP. For my next startup, I will start with enough money to build an MVP and validate the customer’s desire to pay.
#2: Applying to grants (Or competitions or incubators)
To get our funding, I’ve applied close to a hundred programs (grants/competitions/incubators etc.), which netted 20 finalist selections, 5 of which resulted in actual funding. The total pool of applicants just for those 5 successful competitions was over 7,000! This shows you how ridiculously small the odds are. However, the real benefit of applying is that I found the application process a helpful tool to think through the different aspects of implementing my idea.
Chances are at some point I will have to look for external funding for my next startup. For this purpose, I created a list of all the funding sources I came across. A friend and co-founder at a Canadian startup first passed this list on to me to which I have made additions. You can view a copy of this list here. Should you use or add on to this list, I do humbly request you share it with your circle of entrepreneurs. How to effectively apply to these competitions and use all the resources available is a whole other topic, which I’m happy to teach/write about should there be some interest.
#3 Work with a full-time team
This one wasn’t very apparent to me when I first started. Since day one of my professional life I always worked on single person projects, even within large corporations like TATA or Ernst & Young. I prided in my ability to go solo. But no matter how hard I worked, or how well I knew my subject matter not having a fulltime team was a significant liability. Now, by no means was I alone. My teams of contractors were phenomenally talented, comprising Ex-Tesla researchers, engineers with 30+ patents, and companies such as Simplexity, and DMO Designs. They helped significantly transform the originally idea, and infinitely improve it. The best days of Totus Power came working alongside them. I only wonder how much farther could this have gone, IF Totus Power had a full-time team for me to work with. For my next startup, getting a full-time team together will be my first order of business.
There’s a lot more to write than time or space would permit. Looking back, coming to Chile was one of the best decisions I made, both professionally and personally. Startup Chile gave me the ability to put some real substance into what was just an idea in 2013. I hope one of my next ventures will address some of the environmental and societal challenges facing my new home, Santiago.
Shiv Rajendran, Founder & CEO – Totus Power