FROM THE LAUNCHPAD - Narottam Aryal

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FROM THE LAUNCHPAD - Narottam Aryal

Narottam Aryal, a dedicated and passionate educator, entrepreneur and mentor, is the executive director of King’s College. He believes in educating youth in a manner that encourages them to make the best of what they have—their talents, skills and passion. In his role of a mentor at NEXT Launchpad, Aryal plans to draw on his knowledge and experiences of being an educator and an entrepreneur to help participants understand how to understand and make use of concepts such as value creation, SWOT, lean thinking, lean startup and Business Model Canvas. This paraphrased version of Aryal’s interview with VMAG’s Sharad KC summarises Aryal’s explanations of these frequently used terms and reasons for how he believes the concepts can be used by entrepreneurs to find success.

 

Demystifying startups

There is a common misunderstanding about startups in Nepal. Startups are regarded as something fancy—they’re often described with the use of business jargon and complex words that actually mean very little. It doesn’t have to be so. Startups are simply companies focused on creating value by using innovative technologies. You can create value by either reducing pain or enhancing pleasure related to any activity—eating, communicating, travelling, working, educating or anything else you can think of. What startups do is basically this: they select an activity or activities that people do, analyse them further and see if there are any problems with how the activity in question is being carried out and then come up with changes to how the activity is being done—they find ways to do it better. They try using tools or techniques or technology and develop a repeatable solution for the activity. That’s basically a startup.

 

Mentoring at Launchpad

The problem with startups is not to start itself but to take it forward. And this is where a little bit of guidance or mentorship comes in handy. In my role as a mentor at Launchpad, I plan to help my mentees understand how to think like an entrepreneur by teaching them how to use validated tools and techniques of the business world. SWOT, lean thinking, lean startups and Business Model Canvas are some of the main themes I shall be covering.

Sweating over SWOT

SWOT is a simple idea: the letters in the acronym stand for strength, weakness, opportunities and threats. Still, even though the idea is simple, people do tend to misunderstand it. A business graduate, for instance, might think strengths and weaknesses only have to do with internal factors, while opportunities and threats are a result of external factors. When you hear vague terms like, “team, passion and love of work” outlined as company strengths in presentations, you’ll know the presenter has not internalised what SWOT really means. Thing is, while each of those qualities may be your strength, the question here is: “How do they add value to your bottom line?”. Here’s a simple way to think about how to think with SWOT: A hardworking team of passionate app developers will obviously not add value to the national cricket team. While passionate app developers should add value to an IT company that produces software. You should look at each SWOT term in relation to your industry, nature of business, and most importantly, your core business.

 

Thinking lean

Lean thinking, as the term suggests, means trying to think of your startup as an exceedingly small entity. It’s about trying to focus exactly on what is important and doing just that. A big problem with many aspiring entrepreneurs has to do with the way they think about their business as a do-it-all and be-it-all organisation at the very beginning. For instance, I have talked to a few entrepreneurs who think of setting up an office even before figuring out what business they want to do. While there is no problem with having a large vision, you must realise that it is not possible to do everything—you will have resource constraints. Hence, focus on what you can do and start with that. If your core strength is selling and you want to, say, sell bananas, then just think of getting bananas and selling them. You do not need to think of buying a piece of land, harvesting bananas and then selling them. Focus only on what you need for your startup. This helps you to reduce risks and focus on your core strengths. Even big companies like Apple employ lean thinking in order to become more efficient. Their ‘Designed in California and Manufactured in China’ idea is a product of lean thinking.    

 

Starting lean

A lean startup is the applied result of lean thinking. Although the term ‘lean’ is of recent coinage, lean business practices have long been employed—in Nepal as well—by entrepreneurs. All of these are representative of lean business practices: a person selling tea in a thermos in Basantapur; writers freelancing out of their homes; designers conducting their business through their laptops. Lean startups are companies that have a big vision but start out as small as possible. These businesses try to look for ways to earn revenue from the very outset and use them to grow their business. Facebook starting in a dorm room, Apple in a garage, Google and Wikipedia sourcing information from their users are all examples of lean thinking applied by companies.

Conceptualising your business through BMC

A Business Model Canvas (BMC) is a framework for conceptualising your business. A BMC is a canvas on which you can organise your business idea in terms of revenue and costs associated with turning your idea into a business. It all starts with you visualising revenue by identifying your customers, developing your value proposition for them, refining your way of interacting with them and forming an adequate relationship with them. All these things let you focus on whom to sell to, what to sell and how to sell, in that order. Then, there is a revenue-stream block, which helps you analyse and summarise how much you can charge for your product or service. Next, BMC helps you visualise your cost in terms of key activities, key resources and key partnerships. Again, these tools are there to help you identify what needs to be done, what assets you need to do that and whose help you need—and all these things when summarised provides you the cost of making your product or service available. Finally, it gives you a simple comparative look of your cost structure and revenue structure, and using it you can decide whether your business is worth pursuing or not.

 

Connecting the dots

Many entrepreneurs, even management graduates who are familiar with these concepts, fail to view them as parts of combinations. But if you can connect the dots, you’ll be able to hone your entrepreneurial abilities. If you have a business model that’s been developed with a keen focus on creation of value that’s based on your business’s actual strengths, weaknesses, opportunities and threats and if that model has been informed by lean thinking, then you can create a startup that succeeds.  

*First Published by the author on M&S VMAG.

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Guest Friday, 18 August 2017