‘Startups Need To Consider Businesses With Strong Entry Barriers’: Lead Angels Network Director

Lead Angels Network Director Dhruv Nath on Saturday said startups need to consider businesses that have high entry barriers.

Speaking at the IBLF 2022, Nath emphasised that one of the things that startups make a mistake with is trying to compete with giants. He said startup founders need to identify businesses that have a strong entry barrier which prevents other companies from copying a business model and taking away their business.

The angel investor also warned against founders trying to implement use cases from a foreign land in India without taking into account cultural differences. Recounting an experience with a startup looking to bring the concept of a ‘wedding gift registry’ to India and its failure to find traction, Nath said cultural barriers play a significant role across international boundaries for startups and businesses.

“Cultural barriers have been there for thousands of years and they will continue to exist. Don’t think that a huge amount of marketing spend will take care of the problem,” he said.

Elaborating on the parameters angel investors look at while considering investing in a startup, Nath said it's important for founders to realise that they need to be on the same page as investors. He said that angel investors look at potentially successful, fast-growing companies, which can define a path to profitability and have businesses with entry barriers to keep competition at bay.

Nath also spoke briefly on the need of learning from startup failures despite the huge attention the success stories receive in the entrepreneurship ecosystem and media.