Why getting the basics right is absolutely essential for fintech startups?

"Get your basics right", yes it is well said. And it may be highly relevant for math, science, economics etc the entire list that you have mentioned above. But is it still applicable for the new Fintech and (startup) compaines? How the astronomical valuations are justified? are they follow any basic business economics? how the revenue streams are valued? How we can follow the "basics right" paradigm when the valuations are made during funding round? and not by market.  

Hi Aparty - Thanks for reading. what I mean is the "business fundamentals" within the startup.. Not the valuations game or external perceptions. In my view, you will survive based on what you know, and they don't know! 

I recently read an article about young tycoons of India. The first thing that struck me at the time was how some people have made it to this list, with their wealth and stature compared with that of traditional billionaires, by building businesses that make virtually zero revenues, suffer huge losses and operate on the fringes of the law. Some of these startups have also been named as leading startups of the year in a leading startup contest earlier. Not sure what you call "business fundamentals" but I was always told that making revenues and profits in a legal manner was the most important business fundamental of them all. Maybe it's only me. 

On another note, there's this story about Albert Einstein that busted the myth of immutability of what constitutes basic even in hard sciences: When he was a professor at a Berlin college, Prof. Einstein distributed question papers for an exam. After noticing that virtually all questions were repeated from the previous year, many students asked if the absent-minded professor had distributed the previous year's question paper by mistake. Assuring them that he had not, Einstein quipped, "the questions are the same, but the answers are different this year".

Thanks Nischala for your reply, By thumb rule business fundamentals always validated by the test of time and I believe banking or even investment principles always abides by it and any deviation or short-cut brings catastrophe which were seen in recent past. But how you evaluate disruption by using basic principles? conceptually they are self-annihilating by nature. I think they are only driven by perception and no one would like to mis the bus. The way we experience a bull/bear run in the market. But any way this is the reality now.

Blog remindes me of 'Stay Hungary Stay Foolish' by Rashmi Bansal. Startups in Fintech need to take out of lot of learning pages from it.

Ketharam - Thanks for reading.. The point I am driving is that it is key to think through these questions sooner than later, Answers may evolve.

Thanks Hitesh for stopping by.. I hope we move from foolish to wise soon :)

@NischalaMurthyKaushik: Sorry but I think the key is to IGNORE these questions, at least in the short / medium term. Had the founders of some of these startups bothered to think through questions of revenue, profit, legal soundness and other business fundamentals, their companies wouldn't be around today, let alone win awards and confer the honor of their founders' wealth being ranked alongside traditional billionaires. Times have changed. New ways have emerged. While they may fly in the face of conventional business fundamentals, they've succeeded in building companies and wealth. Not all these ways might be sustainable for very long. But, as John Maynard Keynes once said, in the long term we're all dead anyway. PS: BTW, it's "Ketharaman"!

Ketharaman - Apologies for the typo in name... Yes, to each his own.. Depends on the stakes and the risk appetite and scale of disruption / innovation... Agreed that sometimes "doing it fast" is more important than "analysis paralysis / impaired decision making" - But for every successful startup which takes the podium there are a hundred who never see the light of the day because they didn't have these answers / thinking.. I find the startup ecosystem similar to the movie business - No guarantees despites the best starcast, And there is no winning formula to win the Oscars / Bollywood awards.. 

Thanks again for this engaging conversation. Lots of food for thought

@NischalaMurthyKaushik: Despite all the books written on the subject, to some extent, there's no guaranteed recipe for success for any type of business, let alone one that's patterned after the startup ecosystem. I totally agree that "for every successful startup which takes the podium there are a hundred who never see the light of the day".

An interesting article from Vinod Khosla:

_http://economictimes.indiatimes.com/small-biz/startups/bad-ideas-copycats-chasing-money-making-opportunities-is-creating-startup-valuation-bubble-vinod-khosla/articleshow/49038017.cms