3Ps – The Sweet Spot of Entrepreneurship

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3Ps – The Sweet Spot of Entrepreneurship

 

Failure is almost inevitable for an entrepreneur. And I know about failure, having been one. I have made many mistakes that have cost me, but at the same time, I’ve been fortunate enough to succeed a few times. As they say, 90% of all startups go bust. I don’t know about the 90 per cent itself but, most of my ventures - four out of six have gone sour.

The success of an enterprise depends on the entrepreneur. I wanted to figure out how some startups managed to outlive their short lifespan. I wanted to understand the fundamental elements that were required in building a successful business. I had opportunities to meet with many startup founders in the Kathmandu valley and lo and behold, the ingredients of success have always been the same. The successful startups had a sweet spot which included a combination of passion, purpose and payout – the 3Ps. Passion and purpose are terms that many entrepreneurs occasionally make references to, but the third P, payout is just as important.

 

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Passion

I am sure you have been told countless of times to follow your passion. It is vital for the success of an entrepreneur. The passion will keep you going when circumstances are unpleasant, the revenue isn’t coming in, and you are worn out from exhaustion. It will help you give your best day in and day out. It can be the one thing that earns the trust of your team members and customers. It will fuel your business when the economy gets tight and the competition gets fierce. That’s the magic of passion. Without passion you’ll run out of energy long before your actions yield the desired result. Passion is a hallmark for any leader.

 

Purpose

If passion is how you keep on going forward, purpose shows you the light at the end of a tunnel. One of the most important questions that an entrepreneur can ask is ‘Why?’. This will allow you to understand the bigger picture. The purpose will make the effort that goes into the venture fulfilling and it goes beyond the profits. The purpose is difficult to figure out. If you can answer – what makes you happy, you'll be that much closer to figuring out your why.

 

Payout not just Profit

As an entrepreneur, you not only need to look after the profit of your organization, but you also need to look after yourself. I have seen many founders who fail to pay themselves with the belief of paying themselves in the future when the business does well. The money can be a good motivator to keep you moving forward. From Day One, you need to pay yourself for your time and effort that you have put into the company. This needs to be formally adjusted as salary like an employee or you need to record sweat capital that can be converted to cash or equity in the future.

 

Successful organizations are not built overnight -- they evolve over time, thanks to passionate, purposeful and profit-motivated entrepreneur. I believe these are the ingredients for building a successful company.

 

Ruchin Singh is the co-founder of Edushala

 

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Guest Saturday, 30 May 2020