07
- June
2017
Posted By : Badri
Why KYC is absolutely critical for your startup’s success!!

Last evening, an entrepreneur who has been in business for over a decade, was responding to my blog on the importance of getting to Know Your Customer (KYC).   He said that it sounds like a very rigid framework and a lot of work.  He was also concerned that it might rob the entire journey as an entrepreneur of spontaneity.

Considering the resistance I have faced on this aspect from other entrepreneurs, I thought it would be useful to address this concern using a live example. It might be a long story and I request you to bear with me and go through it.

A couple of years back, a close relative of mine was suffering from intense shortness of breath that left him panting even when climbing a few stairs.  So we approached a neighborhood doctor who suspected it could be the heart and asked him to get it examined by a cardiologist and also take a treadmill test.  The cardiologist, after due examination, concluded that his heart was perfectly alright and considering his advanced age, my relative did not go in for a treadmill.  Having checked out the condition of the heart, we were back in square one.

Our doctor then suggested getting a 24 slice scan done as it may reveal some abnormality that was undetected by x-ray and physical examination by the cardiologist.  When we were about to get that done, I spoke to a well-wisher who is a specialist in child health and he cautioned me against getting these kind of tests done on a whim.

He instead got us an appointment with a leading heart specialist in a reputed hospital for a second opinion.  The specialist also did not find anything suspicious and even supported my relative on his interest to go on a long tour.  During the trip, he developed severe shortness of breath and couldn’t wait to come to Chennai.  Again we went to the heart specialist who after a battery of tests suggested we do another diagnosis to check out the electro-physiology aspect.  But given his sudden change in demeanour and the exorbitant amount that this new course was taking, we decided not to go that way.

Back at home, I did some research of possible causes of shortness of breath and saw two other potential reasons.  We checked them out quickly and one of the doctors who did the examination casually mentioned if we had checked the hemoglobin content, an area that we had not considered.

And when we did the test in a lab, we found that it was abnormally low and we took some action in terms of blood transfusion and after a week, he was feeling better.  Another transfusion a couple of weeks later and he was able to do his activities without feeling any shortness of breath.

I then approached the doctor who had initially suggested the 24 slice scan and shared with him the entire episode.  He then told me :”Mr Badri, I had a nagging suspicion it could be related to the heart and hence it slipped my mind to rule out the obvious cause of panting being low hemoglobin levels”

How is this relevant to the subject being discussed in the post?

If only the doctor had gone through the basics, he could have saved the patient and the entire family of weeks of trauma and costs of diagnosis.

And as you would have seen in my post of yesterday, if the startup founder had validated his idea before investing time and money in developing the product, he could have saved himself a lot of frustration.

A key part of the validation is some clarity on who the customer is because the idea is actually intended to solve a specific problem of a particular type of customer.  What is the relevance of the idea without the context of a customer?

And why is this entrepreneur who asked the question about the relevance of being clear about the customer, unwilling to make an investment of time to do so?

He is, like many other entrepreneurs, perhaps of the opinion that by defining a customer clearly, he is going out to leave out other potential customers and that would mean potential loss of business.  Unfortunately, he is not considering the reality that as a startup founder, he has very limited resources of people & money and hence doesn’t have the bandwidth to go after everybody.

Thank you my friend for inadvertently sparking this discussion and this post.

If you have an idea and wanting to get into business to translate that into a product or service, save yourself valuable time and money by getting your idea validated by VoIS even before you take the plunge into the startup journey.

But if you have already done so without validation, then work with us on ExSell to get your fundamentals like defining the target customer, specifying the critical unmet problem and positioning your offering as solving that problem right.

And if you personally know any entrepreneur who is about to or already embarked on a startup journey, I request you to kindly share this post as an early warning signal and save that person from going under.

Comments

  • This is an excellent example of unconscious persuasion, verbalised very effectively and put across in the right spirit !

    Thus Spake the New Age Sage !

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