Episode 16 3 Mistakes We Made – From the Entrepreneurs Guidebook

In the newest episode of Thoughtcast by Onething, Divanshu and Manik, co-founders at Onething, sit down for a walk down memory lane! This podcast revolves around the 3 biggest mistakes they made in starting their business, but encapsulates so much more! Be it lessons on delegation, trusting others, and punctuality, to culture, scaling, and more. Lastly, Divanshu and Manik also unlock what they would do differently today, and how they realized how to change their ways from just half a decade back! Don’t miss this nostalgic episode of Thoughtcast by Onething!

Episode Transcript

[DIVANSHU]

Hey guys, welcome to a new episode of Thoughtcast. I’m Divanshu Thakral, your host. I have with me today my partner in crime, Manik Arora. 

[MANIK]

Hey!

[DIVANSHU]

This is more like a marriage that we have, and we are today coming out with all the things that we have had in the last five, six years.

[MANIK]

The crimes we did.

[DIVANSHU]

The crimes we did. And if from our learnings, from the things that we did, if you know, new entrepreneurs or people who are starting their companies can learn, this is what we want to give back as. We will share three mistakes of sorts that we did, and we obviously overcame them, and we’ll be very friendly and very candid about them.

I mean, we don’t want to, you know, sugar-lace it. It’ll be actually how it happened and how we kind of came out of it. So Manik welcome, and thank you for doing this with me. I always pull you in things that you don’t like.

[MANIK]

No, that’s not it actually.

[DIVANSHU]

But let’s be honest, man. I mean, I’ll be honest. Like last six years have been a roller coaster ride.

I mean, we have fucked up.

[MANIK]

Mostly fucked up.

[DIVANSHU]

Yeah. But what we did well, right. So we, we continue to do, well, I mean. I still say that, every day is day zero for us. We begin every day with new challenges, but yeah, but now we built a good foundation and that’s very important for any business or any company to grow.

And, you know, one, one mistake that I want Manik to start off with, that we did initially, is delegation, 

[MANIK]

Absolutely.

[DIVANSHU]

When you are two co-founders or three co-founders or whatever it is, whatever that combination is, you get very possessive about just one name, you know, that, that brand, that just took birth. And you get so possessive that you don’t trust people initially, and you try to do everything on your own.

Delegation is something that is very important to grow, to let that trust transfer onto other people.

[MANIK]

Absolutely.

[DIVANSHU]

And Manik, your two cents on it?

[MANIK]

I think it’s non-sustainable if you try to do everything yourself.

[DIVANSHU]

Yep.

[MANIK]

Obviously, I mean, as we did also, right, until 2017, 18, it was a smaller team with three, four designers, and everything was, I was involved in everything.

You were involved in every deal coming in. 

How did we scale? Right? We could not, we restricted ourselves to what? 10, 12, 13, 14 people team, till 2018. And that’s when we realized our mistake. That it’s not sustainable. We cannot have everything on ourselves. We’ve got to trust people. We got to give them the responsibilities.

Even if they’re not ready for that today, let them make mistakes, let them fall. We’re there for them. That’s what they should feel.

[DIVANSHU]

And that is something that we now inculcate and our value system; that you are free to make mistakes. Don’t make small mistakes. 

[MANIK]

Don’t be careless about it.

[DIVANSHU]

We’ll back you if you make big mistakes.

But if you don’t try. If you, if we don’t throw you in that, you know, in for to swim. I don’t think so anybody would learn. And I think it was 2018 once when we changed gears and we thought if we have to go to the next level.

[MANIK]

And I think that’s, that has been one of the primary reasons for us, why we could scale and scale this fast.

[DIVANSHU]

It’s so funny. We didn’t have money to pay people’s salaries. We didn’t know how to, how we will, because we didn’t have as many projects or as many clients. But we still did it I said we’ll figure it out.

I remember them well, we were short on cash to pay salaries and it was 28th or something and we didn’t get payments from clients.

[MANIK]

It was like most months.

[DIVANSHU]

And I saw my car standing and I called Manik. I was leaving my place and I said, ‘Manik, yahi bacha hai’. I’ve called somebody and he’s ready to give me X-Lakhs.

And Manik said, are you a mad person or what? 

[MANIK]

See, today we don’t think about how and where salaries would go from.

But that was the biggest tension, 2018, right. Or 17,  I don’t remember right now. But, yeah, it was a huge problem. And every month I had to figure out where the money would come from, how would you pay people? So the whole point in being that. You got to trust people, right? Even if they’re not ready, give them the responsibilities, let them feel the ownership of the company.

Imagine the two of us applying our brains for the growth of the company compared to 50 of us supplying their brains for the growth of the company. 

[DIVANSHU]

Absolutely.

[MANIK]

We would be running, or flying.

[DIVANSHU]

There’s one reason we’re growing so fast because everybody here at Onething is inclusively having that feeling that you’re in that ship together, you know, it’s not like one ship and then the boats separately, it’s just one mega ship.

[MANIK]

The bigger learning from this. If I put it in one statement, is that. 

I don’t want to use the word employees. I don’t like it, but yeah. 

I mean, they’re not working for us. They’re working with us.

[DIVANSHU]

From salaries, I think the second biggest mistake that we did was not managing our cashflow properly.

I think, I mean, I don’t want to state the reasons.

[MANIK]

I think it’s a very common mistake. 

[DIVANSHU]

It’s a common mistake, you know, you’ll see when you’re working, at a company, your salaries would have been thousands of, probably in lakhs and all suddenly when you see a shift of, you know, you get your billing, your billing for four or five lakhs or whatever that number is, you’ll see over there so much money, but actually it’s not money.

It’s just something in books and you have to realize, that’s not the cash that you can spend. Right. And we did that mistake early in the day, we thought, okay, that will come some day in the account and we’ll, but by the time it comes in the account, you’ve actually incurred more expenses.

Right. So that’s what I think cashflow is something that we, you know, realize is something that we have to manage. Once we understood it, we were very particular about how to handle our finances. We, brought in an accounts person on board and had a software as well to kind of manage it. In fact, we made pretty sure that how our contracting should be, that the client should pay us in time.

You know, there’s always a delay. So you have to buffer that in. So if you’re bootstrapping, cashflow is so critical that you don’t realize that you could have to shut shop, if you don’t get the money on time. 

[MANIK]

And I personally feel that the primary reason for this is because we are not being taught finance education when we were growing up. And even when we were working with other companies.

So, what do you care for generally, right? It’s your salary, which is your income and then your expenses, nothing else. Right? But when you start a company, you have to take care of a hundred other things, taxes, a lot of things you have to learn yourself.

[DIVANSHU]

Yeah, totally. I remember were in such a bad state once that, you know, there are so many compliances that happens in a company when you’re mildewing. I mean, you don’t know, there’s so many compliances, you know, back in the day of service tax, TDS or XYZ, and  if you don’t have an account person on board, you don’t get to know about it till the end of the year. 

We didn’t have money to pay for. Our service tax or DO or something. And we’re like, shit, what to do. And it was, I think some good 7, 8, 10 lakhs. 

[MANIK]

We dragged it for a long time.

[DIVANSHU]

I mean, but then we kind of did a biggest mistake attached to that. I mean, we use the credit card limits to draw out cash from it and, you know, use that capital to, but that’s the, that’s the only capital that was available for us.

I think it was 18% interest or something.

[MANIK]

At times I think you have to, you will have to be wise about it. Like you cannot just take it out because it’s lying there.

[DIVANSHU]

Understand your cost of capital. It’s a slightly more technical topic, probably, you know, it needs another conversation, but cost of capital is something that you really have to understand, when you’re bootstrapping, every money that you have in your account or your borrow, or comes from a plan, anything has a cost attached to it.

Our purview of money has changed, the way we look at money has changed. It doesn’t matter how much revenue we have or, you know, but now what matters is, what that money can do.

[MANIK]

And how can it help us to take ahead?

[DIVANSHU]

Correct. That’s how we see money now.

[MANIK]

I think that brings us to the third point, the ‘going ahead’.

[DIVANSHU]

A lot of companies start with that ‘Hey, we’ll become this in five years or six years’ and all that.

We also did it. We thought we’ll be, I think, the biggest design company in, probably five years. I think we’re growing rapidly, but back in the day it was a wrong thought to have.

And you see all this, you know, in news and social media that. ‘Hey, you know, I envisioned this’ and you know, that’s something that’s not the true story, true story is focusing on short term goals as well.

How and what are you going to do the next month and a month after that? A month after that? Start with a month go on to a quarter. Keep growing on that.

[MANIK]

Yeah. There is a difference between vision and goal. You can have a long-term vision. You can have a five year, 10 year vision for yourself, but goals have to be shorter.

One year goal to start with would not take you anywhere. You’ve got to have a monthly goal or maybe a weekly goal to start with.

[DIVANSHU]

Go micr. You should have your month, sorted out your things planned. I would say, I mean, things don’t go as per plan, but at least have 40% of your things sorted out. There would be 60% that you won’t know how it will happen.

[MANIK]

Yup. See, again, coming to the point like where this mindset comes from and most entrepreneurs start their own thing after doing a job for some time learning how big companies function and all. But as a startup, you cannot function like them. You have to define your own rules, understand what works for you and what works for them.

I see a lot of things which worked for them and did not work for us. A lot of it.

One of which is this. They can have your yearly goals, 5-year-goals. We cannot, not today.

[DIVANSHU]

You need to have that headway, that runway, which is the capital, to actually live through those years. Right? Absolutely. So, yeah, I mean, short term goals are important, focus on them,  build on them.

[MANIK]

And we work very differently from these big companies, the way they work. The way they work is that most information decisions are in the hands of senior people leading the company ahead. Right. But the way we are working is being involved, we are small, right, right now we are trying to involve everyone to have a lot of brains into the decisions.

And that’s, I think, that’s the reason why they’re growing at the speed at which we are growing at.

[DIVANSHU]

Hierarchy is something that doesn’t define an ecosystem for us at least. I mean, yeah, there are levels, but that’s only to, you know, reduce chaos because otherwise it’ll be chaos. 

[MANIK]

Hierarchy is a good thing. It’s a boon if used wisely.

Otherwise, I mean, it shouldn’t be there.

[DIVANSHU]

No management book is going to teach you that.

[MANIK]

One of the reasons that we establish hierarchy at Onething in 2019. We did not have it before that. We didn’t know. It doesn’t make sense. I still don’t know actually, but yeah, so it’s so true.

[DIVANSHU]

It’s a combination that you have to find out that works out for you.

It’s like a joint family. Lot of people and it doesn’t stop growing and they wouldn’t be like small infants coming in as new members, that’ll be grown-up people, they have their own expectations.

They have their own goals. They have their own, you know, a path that they have in their head.

Align with them. You know, let them align with your company only then they’ll grow with you. I mean, if they don’t see growth with you, they will leave.

[MANIK]

And freedom. I mean, everybody loves to work in an environment where they’re not being micromanaged and their true potential can only come out when you give them a free hand and let them make mistakes, let them fall, but be there for them.

So, yeah, I think those are the few things which we think worked for us.

[DIVANSHU]

I think that that’s great. I think three things are good. We probably have another such podcast to share three more things that absolutely worked for us, you know, and that will be a different podcast.

So thank you, Manik, for joining me. Thank you for listening. To us guys, it’s always great to share some good thoughts and some good content with each one of you. And we’ll keep coming back, subscribe to Thoughtcast, and stay well!

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