Two Paths to Startup Success

So is ERPNext successful? After five years, we are still grappling with the question.

 · 3 min read

"Why am I feeling lost", Nabin asks me after lunch "I feel that things are not moving fast enough. Why don't we raise funds or hire new people"

This is year 5 of startup number 2 and Nabin has seen it all. I am more circumspect. I tell him that I think the product needs more polish. The people whom we pitched for funds are not very interested. And yet, we have doubled our revenue in the past 2 years, twice, so we are doing okay even though the number is still not big enough. But I can understand where he is coming from. I have harboured these same feelings for the past few  years. These days I realize the kind of path we are on and am circumspect about exponential type growth. Here is a very abstracted thought on how and why.

Firstly let us inquire into the nature of success. Success is momentum, success is getting large number of users or revenue quickly, success is about raising funds, getting written about and being noticed. Some parts of society are in motion, i.e. have momentum and some parts move, but slowly. Some parts of society are shrinking. Now if someone wants to get success quickly, it is better they become a part of an existing momentum in society rather than create new motion. Creating new motion is extremely hard and takes a lot of effort. Its like ploughing a land for the first time or taking a path that is not yet formed.

Startup centers like Silicon Valley and Stanford University have momentum. People who have momentum form networks so that they can share each others momentum, and as more people join them, their momentum increases. Venture Capitalists and Angels are centers of such momentum, so teams that want to get success quickly should try to join them. Leaders in momentum networks in turn have to realize that they cannot pick losers, because if they pick losers, then not only will they not succeed, the momentum of the entire group or network will fall. Such networks are often based on past associations like, people who went to the same school or the same league of schools. In earlier times, these used to be based on community. 

Momentum network also share cultural traits, like aggressiveness or polish or a taste that gets copied by all the members. Members benefit from these traits and are immediately tagged as successful. Members are also the first ones to have access to privileged information which is shared as a currency in such networks. Members are also highly skilled in different skill sets and everything put together, increases their success rate. And this becomes a virtuous cycle.

On the other hand are teams that are not directly plugged into any such networks. Teams like ours, who depend on "excellence" to create momentum. This excellence does not come by copying someone else's behaviour, but by introspective and analysis. Patterns are discovered by repeatedly doing the same thing unless it feels right. Information is not shared, but assimilated in oneself and one must be tuned to find this out. Such teams rarely do something great in a very short period of time and their best bet to success is to stay put for the long run. The focus has to be on survival and excellence at the same time.

Obviously, there is no right way. There are two very different ways and often the second one does not get written about. The conflict arises when the team is not clear about the path. Everyone wants to take Path A, but it is not always that you get to be part of the momentum network. Also by being a part of the network, may involve compromising on some of core values. So Path A is not always the best. Path B is is harder to discover. The external environment, specially since ubiquitous communications favours the aggressive, will push everyone towards Path A. You have to allow Path B to come to you.

I think we have almost discovered Path B, though sometimes we get astray and fall into the seduction of Path A and feel lost. I don't think there is anything wrong in that because thats how we keep discovering.

Rushabh Mehta

Rushabh is a software developer and founder of ERPNext. He usually writes about the startup experience, open source and the technologies he is working on.

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Rushabh Mehta 10 years ago

Thanks @Mehul and @Manish for your comments. @Manish you have an interesting product, maybe we can c

manish 10 years ago

Interesting... and I can resonate with my experience...

Mehul 10 years ago

Thought provoking

Rushabh Mehta 10 years ago

Thanks Gautham!

Gautham 10 years ago

Excellent article