(Ecomonic Times, The (India) (KRT) Via Acquire Media NewsEdge) Jun. 27--Youth is often criticised for its contempt for rules. Which is why young startups tend to do away with a lot of the processes and formalities larger companies have. But merely being different for the sake of it can be ounterproductive. An early stage startup may often lack the discipline needed to convert an idea into a successful venture. The best example of this was the dotcom boom of 1999-2000 where flamboyant techies with 'revolutionary' ideas started companies that eventually went bust a couple of years down the line.

Today, things have changed a little. The tee shirt-and-jeans brigade is very much still here and so are new-generation startups that seek to redefine work culture. But they're not making the same mistakes as their predecessors. The lessons of the past have taught fresh entrepreneurs how to combine style with substance. "People who visit our stores are often surprised to learn that we're the owners," says Rajat Tuli. Incredulity is something the 33-year-old Tuli and the 34-year-old Rahul Anand get a lot of, and not without good reason. Everything about the company screams 'unconventional'.

The logo on the website of their 2002 startup, Happily Unmarried, is a partially-crushed green can of beer that sort of sets the tone for your shopping experience. The company sells mugs, shirts, glasses, coasters and the kind of paraphernalia usually coveted by party-loving yuppies, single or not. Add to that their own irreverent brand of self-promotion and what you get is a cool company with some pretty unorthodox ideas. "It's a culture we decided to consciously build because our target audience is used to being spoken to like that.

But when customers meet us in person, they just see two ordinary guys instead of the hippie-like characters they may have been expecting," says Tuli. The duo realised that while having fun was important, so were their responsibilities towards the company. "Things like financial agreements, cash flow analysis and quality control are part of the job and we take that seriously," says Tuli.

Mahesh Murthy, managing partner at early stage funding company Seed Fund and founder of Pinstorm says, "Compared to the last startup wave, today's young entrepreneurs are far more committed. They know that they have to be strong on business fundamentals if they are to survive. And there is a lot of learning and maturity that the survivors of the IT bubble bust have infused into the market." Kanwaljit Singh, co-founder of Helion Ventures, echoes Murthy's views: "Since young startups are inherently risk-taking, they have the ability to question the obvious and explore new solutions, new ways of doing things etc. In short, the 'innovation' quotient is very high."

It is often companies in the business of creativity that feel the pinch of maintaining the balance between discipline and informality. But a little ingenuity helps Vishal Singh and Vandan Chopra, the founders of Delhi-based Adept Media, get along. When the duo has disagreements related to work, they don't get into a business huddle. They don't even get mad. They get even-over coffee at the Nirula's outlet downstairs. "We have some great brawls there," Singh says candidly. "That's how we resolve many of our issues. So when our colleagues see us going to Nirula's, they know what's going to happen next."

The company, which started in 2006, was the result of a chance meeting between Singh and Chopra at a friend's party. Singh was a fashion graduate and Vandan had done his economics honours. Neither had any experience in the advertising profession. They were, in fact, surprised when clients actually began hiring them. "They used to stare at our clothes and beards and see two college kids asking for their business. But we survived because we laid down some very strict rules about not goofing off, always reporting to work on time and expressing our opinions frankly to each other."

However, according to Vineet Rai, CEO of Aavishkaar India Micro Venture Capital Fund, the main problem startups have is getting the right skill sets on board. "You may decide that you can do just fine without a specialist, but that will hurt the company's survival chances. It is always advisable to isolate and assign responsibilities to people with the right skills."

Agrees Akhil Bansal, IIT alumnus and co-founder of Khelostocks.com, a website that seeks to educate people about the stock market through a free virtual stock trading game, "When a team has this exclusivity of the roles, it is easier to become hard-nosed business associates as you can set expectations and outputs from each other. You know if you don't do it, no one else will." Khelostocks was founded by IIT alumni and classmates, Akhil and Vivek Goel, last year and already has 14,000 registered members. For the two, the venture is still a passion more than anything else as they have regular jobs that they hold. "That makes it even more important for us to give it the attention it needs. So we treat it pretty seriously. We get back from work in the evenings, sit down and chat about the day's events. That helps us unwind and mentally prepares us to work on the website."

The one thing that differentiates an older, established firm from a smaller one is the fact that things are more structured. So while in a startup, you have the benefit of choosing your work, sometimes you end up working even harder. Being flexible is the key to surviving a stressful situation. Web advertising solutions company Phonethics, for example, has a policy of working on alternate Saturdays. "These Saturdays are typically used for team building, fun learning/training and ends in a showcase of a democratically selected film on a projector in office," says Jaideep Bir, head-marketing at Phonethics.

Another good reason for an entrepreneur to ensure that his firm doesn't lose out by being too laid back is the fact that venture capitalists (VCs) are getting much more discerning these days. Even today, venture funds are hard to get for early stage companies as many VCs got their fingers burnt after the bottom fell out of the market in 2003-04 and are still reluctant to invest in companies without proven business models. As Rai says, "You have to stick your neck out too much."

Singh adds, "We see a more cautious investment approach from the investor community to back 'real' businesses and entrepreneurs who can either build scale businesses or have the ability/willingness to bring in scale managers in the future." But even with the much-hyped economic slowdown, the fact that startups are starting to regain investor confidence and making some serious money, should come as an encouraging sign. "I meet several young, enthusiastic investors every month and what I find gratifying about them is that despite their passion, they know what they want. The answer is money. And they know how to get there," says Murthy.

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