Posted on : 2022-07-01 03:38:11
Article : Good evening, Friday Management TASK 197- Avanth and Karunakaran have progressed on their startup on ERP to schools as Education is a billion market but they had to close their startup within a year…
Enthused by reading shiny stories of Flipkart and Zomato etc, Mr. Avanth thought that he too could make big money by starting his own enterprise. Growing with this thought he was feeling discomfort able in his job and losing interest in his work and happiness of job. He returned to India with an idea of a startup but he didn’t have the courage to start. He discussed with his friend Mr karunakran on his desire to start a startup, and Karunakaran showed interest to be a co-founder. After a series of discussions both had decided to work on solving problems of schools as education is a billion market. They wanted to offer ERP software solutions to schools helping in administration, syllabus, students’ progress and communication to parents.
Convinced with their thought they have invested around Rs 5,00,000 each (USD$ 7500) and registered a company. They could secure a place in a basement of a complex in Gurgoan and set up their office with required infrastructure. They prepared their hiring policy with required and encouraging benefits to the employees and looked for hiring. Since Mr Karunakaran has 10 years of recruiting experience they thought that they could easily hire and met few persons whom they were interested to hire, but none of them showed interest to join this startup. Finally, they could recruit a fresher and another one with some capable skills. Avanth’s part is developing of this software product with more features than the competitor’s product while karunakaran shall take care of marketing this software product to the schools.
Avanth as architect of the product with two developers started coding without the front-end design. Avanth and Karunakaran were excited as their product was taking shape. Finally, they could recruit a designer compromising on his skills and attitude. Meanwhile Karunakaran has started meeting schools’ principals with the details of their ERP product, initially they had liked the idea but put them on hold for want of purchase clearances from their promoters.
At this juncture their problems have started. At this time, they found that junior developer was not much of use with lack of skills and asked him to leave. By the end of First Six months 80% of their initial capital was spent out on office expenses. On other side sale opportunities are not coming forth. They decided to cut their expenditure and accordingly Avanth relocated himself to Chandigarh his home town to avoid living expenses, office rental and travel and Karunakaran started working from his home in Gurgoan meeting big schools with references and influences but still none has confirmed order.
This time they had a big shock as their designer left and to fill the gap Avanth struggled to learn the basics of web designing and completed the design with a better look as they are in hurry to market their product. In spite of all these efforts karunakaran is unable to bring sales and he feels that to attract big schools they should have more features and corporate look while Avanth argues that it is better to concentrate on the smaller schools on the outskirts of the cities though the revenues are small. Here their thoughts are not aligning but differences are widening, as the entire capital is spent out they have invested more into the project and appointed a sales trainer as Avanth and karunakaran are not having any sales back ground, but even after a month they could not progress with any sales except two small buyers. At this point Karunakaran has to join his job and he left, Avanth with this situation had to close his First startup within a year.
Post your perceptive comments on why this startup failed and how Mr. Avanth could join another startup and made good. We will post our perceptive solution on our regular Good Morning Monday Solution for Management TASK 197 on 4th July 22.
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