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Start-up lessons from Masayoshi Son, Softbank: For first 5-10 years, profit or balance sheet not important

Founder and CEO of Softbank that has invested in several Indian start-ups was speaking at the Start-Up India launch.

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Son said, "For the first five to ten years from the start-up, profit or balance sheet is not the most important."
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Masayoshi Son, Founder of SoftBank, has invested nearly $2 billion in India in the last one year. In 2014, the premier investor in start-ups had said that his company would invest $10 billion into Indian companies in the next ten years, a level that he is confident will only go higher.

Speaking at the day-long Start-up India initiative launch happening today, he shared some important knick-knacks for start-ups to keep in mind when they go about building their company.

There has been increasing talk about start-ups burning investor money for customer acquisition, even by the way of dishing out massive discounts around the year. This has often come at the cost of breaking even or even losses that start-ups have borne.

Highlighting the importance of customer acquisition in the first few years of establishment, Son said, "For the first five to ten years from the start-up, profit or balance sheet is not the most important."

Rather, "It is customer acquisition, the business model, customer satisfaction, the system, and the overall business model that should be created to get  the momentum."

"When you get the momentum, when you get enough scale, active user base, then it starts to make sense about profitability."

However, he also stressed the importance of having a long-term plan and vision about the business model that the entrepreneur wants to create by the end of the first ten years of the company. 

"Of course, you should have in mind from the beginning, what would be my end result business model. you cannot just run to burn the money.

"Ten years from now when we have the business scale, how would be the business model, how do we make the returns. These business models should be created from the beginning."

"If you hurry too much, it is like catching fish, if you jump too quickly, then the fish goes away," he said.

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