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A Simple Guide To Starting A Business



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It is often easy to think about an idea and not wonder if you can turn it in to a business model.  However, it is easier said than done, as starting a business is no easy job. Having an idea is fine, but the real work lies in building a sustainable model capable of generating revenue.  This is where a lot of ideas just become what they are i.e., ‘just ideas.’ Here is a simple guide which may help you convert your idea into a business.

1. Take the dive:

A lot of successful  startups were not founded on something new.  The founders just identified a problem which could be solved and just began working on it.  Starting a business is as simple as just taking the plunge. Jan Koum and Brian Acton, the founders of the popular texting app WhatsApp, left their Jobs at Yahoo! and applied at Facebook, but were rejected.  They then developed WhatsApp, which revolutionised the way messages were sent. Had Jan Koum and Brian Acton not taken this risk, the way the world communicates today would be extremely different.

2. Evaluate the idea:

The business idea needs to be evaluated by assigning goals, targets, revenue and capital investment.  A lot of initial brainstorming is necessary in order to lay the groundwork which will let the idea become a business model.  Try to identify the demand for your idea so that you can be sure to convert the idea into a realistic business model.

3. Do market research:

It is important to set aside a dedicated budget for just marketing the idea.  This will help out a lot in the long run by helping a business identify their target audience.  Market research provides a ton of data which can be crunched to establish key result areas (KRAs) and key performance indicators (KPIs.)  If there are any potential competitors or existing competitors, it is important to research about them as well. Digital marketing, offline marketing and surveys are just some of the things which can be done.  Market research is important in estimating the value for the product, which in turn will provide you with the necessary data to develop a revenue model. An interesting example of how market research is vital would be the story of when beverage giant Coca-Cola decided to rebrand the Cola to New Coke, along with a change in the product formula.  It caused outrage amongst consumers which led to them boycotting the product. Coca-Cola then realised its mistake and went back to its original name and formula. During initial research surveys, it was found that the new flavour would be received positively. However, the outcome was completely different. Perhaps, had the Company done extensive market research, there are chances the outcome may have been avoided.

4. Making it official:

Once the initial market research is finished and goals are assigned, the business can be made official.  This can be done by legalisation, by establishing a business name and business structure. This may help in eliminating the chance of someone else stealing your idea.

5. Hiring your workforce:

Offering jobs on a contract basis can help you out with getting a team to work with you.  This will help out in allaying any hesitation with regards to working for a startup, where security is important.  Finances can be stringent and it is not easy to get the talent you need nearby, therefore it is helpful if you can hire remote workers.  

6. Find a co founder:

Finding a co founder is not an easy job as it begins with self reflection and evaluation of your own strengths and weaknesses.  Selling the idea to another person who can complement your weaknesses and allows you to work with each others’ strengths will help out a great deal in managing the business.  Apple was founded by Steve Jobs and Steve Wozniak. Wozniak was responsible for the design and development of Apple I, while Steve Jobs took on marketing the product and the rest, as we know, is history.  This highlights how a co founder who can add value to the skills lacking in a founder helps build a good business.

7. Building infrastructure:

A lot of infrastructure needs to be in place to be able to run a business, like a building, IT framework and software, amongst many others.  Identifying and establishing the necessary infrastructure can help in streamlining your business. A little bit of research can also be done to identify vendors who can take up the burden of starting up.  Identifying the right vendor is vital as they may have access to sensitive company or product information. Indian food delivery unicorn Swiggy believed in having a strong infrastructure in place and spent considerable resources in developing their logistics and infrastructure, which contributed immensely to their growth.  This led its competitor Zomato to take note and start doing the same in order to catch up.

8. Generating sales:

Once your business is established, it is time to start putting in the work to generate your sales.  The future of a business is dependent on the sales it generates. Always be on the lookout for problems which arise during a sale conversion, brainstorm a solution and apply it.  Regular feedback on every sale will offer a great deal of insight into establishing an efficient workflow. When Indian e commerce giant Flipkart acquired online fashion brand Myntra, they decided to make Myntra an app only platform.  This was a move which did not sit well with the consumers. It reflected on the sales by showing a 10 % dip in revenues, forcing Flipkart to get the website back on. Learning from customer feedback is important in order to keep the sales regular.

READ MORE: How To Pitch To Investors

It is not easy to convert your idea into a business, however, begin by utilising these strategies and investing in marketing and customer satisfaction.  If you keep doing your market research on a regular basis, there is a higher probability of your business taking off to a good start. A lot of businesses or successful startups took off by following these simple steps.  While there are many other things different businesses do when they are starting up, almost all of them may have the same guidelines mentioned above at their core.

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Reddit Soars After Strong Earnings and Upbeat Outlook



Reddit, the social media platform known for its online communities and meme culture, saw its stock price jump significantly after releasing its first earnings report since going public in March. Investors were impressed by the company’s strong financial performance and optimistic forecasts for the future.

The report highlighted a surge in user engagement, with daily active users increasing by 37% to 82.7 million in the first quarter. This growth was accompanied by an 8% rise in average revenue per user, indicating Reddit’s success in monetizing its platform. 

Perhaps the most significant factor driving the stock price increase was Reddit’s forecast for the second quarter. The company projected revenue to fall between $240 million and $255 million, exceeding analyst expectations. Additionally, Reddit anticipates achieving break-even status or even generating a profit, surpassing predictions of a loss.

This positive outlook can be attributed in part to Reddit’s flourishing advertising business. The company is also capitalizing on a new revenue stream: content licensing deals with artificial intelligence (AI) firms. Reddit’s vast collection of user-generated content provides valuable data for training AI models, attracting companies like Google.

Analysts believe Reddit is still in its early stages of monetization and predict continued growth in the coming quarters, fueled by advancements in ad targeting and measurement tools. This optimism is reflected in the stock price surge, which has climbed roughly 70% since Reddit’s IPO.

Overall, Reddit’s first earnings report paints a bright picture for the company’s future. With a thriving user base, increasing revenue opportunities, and a promising outlook, Reddit appears well-positioned for continued success in the ever-evolving social media landscape.

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How Does Investment Startup Robinhood Make Money?



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If you are an avid follower of news on the social media platform Twitter, chances are you might have read about GameStop and how a group of Redditors took on Wall Street hedge fund billionaires.  It all started when a Reddit user found Melvin Capital, a hedge fund company was shorting the GameStop stocks.  An analogy would be if a person x wants to buy 5 bananas which are being sold at INR 10 in the market,  and another person y already purchased 5 bananas.  X could borrow y’s bananas for a while and sell them with the hope the price will go down below INR 10.  Then x will purchase 5 bananas for a lesser price than INR 10 and give back the bananas to y thereby making a profit, in the difference of buying price.  A group of Redditers noticed what hedge funds were doing with GameStop stock and decided to buy all the available shares in the market which in turn led to stock value soaring through the roof.  Now imagine the bananas as GameStop stock and x is the hedge fund.  Now hedge funds have to return the borrowed shares but since they already sold, they had to buy it for a larger price than they hoped.  This in turn led to more than $ 5 billion in losses for hedge funds because they were shorting the GameStop stock.  

However, Robinhood, the zero commission investment and trading startup found itself in the midst of the storm.  This is because thousands of normal small investors wanted to purchase the GameStop stock and they did it via Robinhood.  Wall Street was not happy with the way a group of Redditors held hedge funds by their collars and lobbied to have the stocks delisted.

Mounting pressure from the Government and Wall Street forced Robinhood to delist GameStop, AMC and Nokia stocks from their trading roster which in turn led to huge customer backlash and lakhs of 1 star reviews on app stores of Apple and Android.  


Robinhood was founded by Stanford University graduates Baiju Bhatt and Vlad Tenev co-founded the company in 2013, with the aim of democratizing finance and making it more accessible to young and less affluent investors.  This was due to trading being carried on commission based platforms like ETrade and TD Ameritrade and by a very small set of people. What made the app so attractive to the normal public was the ease of using the platform and its zero commission slogan.   More importantly, Robinhood made the appeal of trading fun and interactive for the general public and the working class.  Investment applications normally charge a nominal fee or commission on the execution of any successful trade.

However, the app gained huge traction in 2019 just when the COVID-19 pandemic hit the world.  Stock markets crashed suddenly, wiping out billions of dollars in investor wealth.  However, this phase saw the rise of a new kind of investor.  Americans were given $ 1200 stimulus cheques to protect them from the economic fallout of COVID-19 pandemic.  Armed with these cheques, millions of trading novices began investing in the stock market via Robinhood.  

ALSO READ: How Does WhatsApp Generate Revenue

Revenue model

How does a startup which calls itself a zero commission brokerage earn revenue and manage to be profitable?  Robinhood was designed to make profits by selling the customer trading data to several investment firms on Wall Street.  This practice is known as high volume order flow.  In financial markets, payment for order flow refers to the compensation that a broker receives, not from its client, but from a third party that wants to influence how the broker routes client orders for fulfillment.  It is not illegal but it is often frowned upon, to use this strategy as it is also called a ‘kickback.’   This accounts for a lion’s share of revenue for Robinhood.

The second revenue generator is through interests.  Robinhood makes money from interest made by lending out investor’s idle cash.  Robinhood lends out uninvested cash sitting idle in customer accounts.

The third revenue generator is Robinhood Gold, the company’s premium account, allows investors up to $1000 of margin thereby allowing them to trade with more than they have in their cash balance on the app. 

While Robinhood has been caught in the middle of a nasty war between Wall Street and retail investors, there is no denying the fact that it changed the way people invest in the stock market.  

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How Do IPL Franchises Make Money



How Do IPL Franchises Make Money

If there is one thing that every Indian and every cricket fan waits for all year, it is the Indian Premier League, which is the world’s biggest cricketing league.  Professional cricket players from all over the world vie to get selected by one of the eight franchises which compete in the league.  The entire league is a star studded affair and Indians manage to forget their differences and band together for all the time the league is aired.  Each franchise boasts of a loyal fan following who have supported their teams through thick and thin ever since IPL was inaugurated in 2008.  While the entire league is a melting pot of entertainment and competition, have you ever wondered how the franchises make money in IPL?  In this article we will decode the business models behind the IPL teams and how they earn money.

Franchises need to bid for players every year before the start of the IPL season in an auction.  Each franchise has a maximum spend limit of Rs. 80 crores to buy players in the auction.  Apart from buying players each franchise also needs to bear the cost of travel, support staff and logistics.  The following are the different avenues from which franchises earn money.

1) Sponsorships

Franchises earn a major chunk of their revenue from sponsorships, but they do not get the money from sponsorships directly.  The IPL governing council gets money from sponsors and in the case of this year it is from Dream 11, which is the title sponsor while VIVO was the title sponsor last year.  All the money which is earned from sponsorships is divided into a ratio of 60:40 with the Board of Control for Cricket in India (BCCI) retaining 40% of the sponsorships.  The remaining 60% is distributed among the ten franchises.  BCCI owns and operates the IPL in India.  The ratio of distribution might change in the coming years depending on the decisions taken by the BCCI.

2)  Media rights

Broadcasting companies bid for the media rights and the winning bid will get to air the IPL on their channel.  Star India bagged the media rights for IPL with a bid of Rs. 16,345 crores for five years (2018-2022.)  The money from media rights are also distributed in the 60:40 ratio with BCCI keeping 40% and the franchises getting an equal distribution from the remaining 60%.

3) Franchise sponsors

Each franchise has its own dedicated sponsors which pay a huge amount of money to the franchise.  The logos and names of the companies which you can see on the sporting attire of every IPL team are actually the dedicated sponsors of their respective franchises.  The profit from dedicated sponsors depends on the deal the franchise has made with their sponsor. The income generated from dedicated sponsors might differ from team to team.

ALSO READ: 5 Cricketers Who Are Entrepreneurs

4) Sale of tickets

Each franchise can choose a home ground from the available venues in the BCCI roster like Sunrisers Hyderabad, choosing Hyderabad and Kolkata Knight Riders choosing Kolkata.  Only the home franchise can fix the price of tickets for the matches happening in their home ground.  Bigger stadiums with large seating capacity earn the most from ticket sales.  Kolkata Knight Riders home ground Eden Gardens has the highest seating capacity in India and therefore KKR earns the most from ticket sales.  

5) Merchandising

Each franchise makes some money by selling official jerseys, caps, wrist watches, souvenirs etcetera.  The merchandise is sold through the official franchise websites.

6) Prize money

Franchises battle it out in a long season to become the winner of the IPL season.  The winning team also wins a hefty prize money which is an additional source of revenue.  In 2019, the winning franchise won Rs. 15 crores while the runner up won Rs. 10 crores.

IPL is a big stage for franchise owners to earn their revenues as well as the perfect opportunity for players to make their mark and win big auctions.  This is how franchises earn their revenues from the IPL.  As this year’s edition is off to a flying start, IPL has been a blessing in disguise for millions of Indians in the gloomy times we currently are experiencing.  


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