In the last couple of years I’ve advised multiple aspiring DTC founders on priorities and pitfalls. Business is Fight Club 🥊🥊, so let's make it interesting:
The first rule is to know which risk you are taking - product or brand. Product risk is creating a new category, often with innovative formulation/packaging. Brand risk is creating a new brand within an existing category. Product risk doesn't eliminate brand risk, it precedes it.
Taking on product risk is smart if you have identified a large, underserved market . Unfortunately, this is a minefield. Many underserved spaces exist, but many are not worth going after. The existence of a white space in your 2x2 doesn’t indicate depth. Competition is validation
The second rule is PMF. To paraphrase Paul Graham (who said this about growth), PMF is the answer to all problems and the lack of PMF can only be solved by PMF.
A corollary to the second rule is to not lie to yourself about PMF. When your product has PMF, it becomes easy to sell. Your problems shift away from finding new customers to scaling production, plugging leaks, hiring people who can help open new channels/geographies.
The third rule is don’t ignore price. PMF for India should be PPMF - Price Product Market Fit. Discounting works. Undercutting competition works. Bata pricing works.
The fourth rule is to know your market. India is #5 on GDP but #139 on GDP per capita, sandwiched between Ghana and B'desh. We have a lot of poor people, a middle class, an affluent class that thinks it’s middle class, and a tiny number of rich people who consume like rich people
The fifth rule is to get comfortable with not being your customer. Privilege blinds us to the market we inhabit (benignly) and sell to (critically). Starting a company to solve a problem you encountered when you returned to India? Likely a limited market. Niches are shallow here.
The sixth rule is obvious to understand but hard to live - solve for the business, NOT for investors (present or prospective). Building a good business is hard enough, but building a business while second-guessing VCs (who are second-guessing bigger VCs and so on) is 10x harder.
The seventh rule is to manage yourself. Invest in your health, spend time with family, take holidays, compartmentalize. No one forces anyone to start a company. Part of the reason to do it is to have fun. We should all be tap dancing to work.
The eighth and last rule is to not read so damn much. Reading the latest founder biographies, industry reports, blogs by A16Z and YC (yes, including Paul Graham) etc won’t help you. Thinking like the customer will. <End>
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