By Azuan Muda
A startup is created to solve a problem. It is in tackling the problem that generates the ideas for the founders. Grab started by trying to solve the problem of getting a taxi ride at cheaper rates. Airbnb solves the shortage of affordable lodging and other platforms allow communities to showcase their works.
In commercial operations, the availability of current technologies has replaced human processes. Using drones, monitoring and valuing land grids are cost-effective, saves time and resources. You could easily purchase products and services online using an electronic wallet (e-wallet) just one click away.
Those ideas are innovative in that they simplify traditional ways of doing business. However, it is not easy as it sounds, especially in getting the right founding partners who aren’t afraid to fail, who are passionate and are driven to risk their livelihoods to roam uncertainties in turning an idea into a possible business.
It is essential to get it right, perhaps to rope in a technical wizard, business thinkers and rule-breaking executioners – for a start. Ideally, two or three partners with a diverse background could do pretty much everything.
Equally important, founding members should make it clear about the ownership of the idea from the beginning. If necessary, put everything in black and white such as who owns the ideas, the roles and the percentage of share ownership.
Or else, you would end up like Facebook’s Mark Zuckerberg against Eduardo Saverin. Suffice to say that a limited partnership (enterprise or private partnership) setup would be cost-effective for a startup.
A private limited corporation or PLC, on the other hand, comes with various statutory obligations and fees – company secretarial and auditors – and these are the least of problems you will have. You may form a PLC at the later fundraising stage of your startup journey.
To get a startup off and running is to start from scratch, putting risk-taking and yet equally passionate founders under one roof with zero cash. Be clear with the setup by defining everybody’s roles and share ownership.
Operate with minimal cost, and don’t be embarrassed to use a free WiFi connection at your local coffee shops. The point not to forget in the initial stage is to get the right partners who will not flinch or dispute the ownership of the ideas.