My answer to the question on Quora: “I’m a high school junior. What kinds of activities can I engage myself in to prove myself in youth entrepreneurship?”

If you are a student – either in school or college – and if you are clear that you want to become an entrepreneur some day, below are some suggestions that you may find useful:

  • Volunteer in the sponsorships committee at college events. The process of approaching people and companies for sponsorships will teach you a thing or two about selling and convincing people. It makes you comfortable with pitching.
  • If you have the chance, intern in a role that requires you to sell. Anything. A sales role helps you understand how difficult it is to sell something, and helps you calibrate your assumptions when you start your own venture. A sales role also helps you become comfortable with failure and rejection. This will help you become more persistent and resilient in your own venture.
  • Restrict your lifestyle to a very low cash requirement. Even if you do take up a job after college, try to restrict your lifestyle as that will give you much more flexibility to bootstrap and start something that you wish to pursue.
  • Be observant. Even when you volunteer or intern or take up a job, observe how different aspects of a business are managed. Some of these things will teach you how to do things, and some will teach you how not to do certain things.

Overall, whether you want to start something of your own, or want to take up a job, be entrepreneurial in your approach. Being entrepreneurial means being driven by something that excites you, thinking through all aspects of executing that idea, being responsible and committed to making it a success. And overall taking ownership of that concept.

Wish you all the best. Go win. In whatever you choose to do.

“I made a really bad investment in a startup. How can I recover my losses?”

This was my response to the above question on Quora

The only way to make money as an investor in startups is to have a portfolio of investments. If you invest only in one and hope that it works out well, well, the chance are rather slim.

Startups by design are experiments … a set of assumptions that are being tested in the market by someone who has the conviction about a concept. Sometimes the experiment works, often it does not. But that is the only way new ventures get created… by testing many ideas.

So, if you want to make money by being an investor in startups, think of investing (or better co-investing with other angel investors) in 15–20 startups over a 3–4 year period. Some of the companies you invest in will shut down. Some will struggle to keep afloat, but will amble along. Some will become good businesses for the entrepreneur, but will not give any return (exit) to investors. Only a very few of these investments will give multi-bagger returns making up for the losses incurred in those who did not do well in the market.

What makes a good mentor-mentee relationship

A good mentor-mentee relationship can be game-changing for a startup, and therefore it is important that both – mentor and mentee – understand how they can make the engagement meaningful, productive, rewarding and fulfilling.

A good mentor can make significant contribution in not just the success of a startup, but also in the personal and professional growth of an entrepreneur. And therefore, I advise entrepreneurs to not give the tag of a ‘mentor’ loosely to anyone whose advice you seek regularly.

Mentoring is way beyond business advice and expertise sharing, and hence entrepreneurs and experts should be very, very careful when initiating a mentor-mentee relationship.

Who is a good mentor for your venture? Continue reading “What makes a good mentor-mentee relationship”

What Makes an Entrepreneur? A Look at Their 5 Die-Hard Traits!

Startup Stock Photos

Think carefully before you answer. Because, this question is not about distinguishing good entrepreneurs from the bad ones. It’s also not about who among them has a Midas touch and who doesn’t.

Continue reading “What Makes an Entrepreneur? A Look at Their 5 Die-Hard Traits!”

Guest Post – Digital Marketing Tips for Bootstrapped Startups

THE BEST WAYS TO GET YOUR BOOTSTRAP BRAND OFF THE GROUND

You are ready to get your brand off the ground. It’s an exciting time. There are going to be lots of challenges in order to get your voice out there. You are basically competing in two categories. You are competing with those who are already in your industry brand. You are also going up against the other messages that people are sending.

Continue reading “Guest Post – Digital Marketing Tips for Bootstrapped Startups”

Some Tips For Startups Presenting In B-Plan Competitions

I was part of the jury at Conquest 2015, the annual startup fest and B-Plan competition of BITS Pilani. Conquest is perhaps, one of the most meaningful Business Plan competitions in the country. The Conquest team makes efforts to provide mentoring support to shortlisted teams, so that their plans are refined by the time they get to the finals. The program is designed and executed entirely by students.

Continue reading “Some Tips For Startups Presenting In B-Plan Competitions”

Angel investors, VCs and other funding options for startups

While most entrepreneurs think of VC funding as the most obvious way of funding their startups, there are actually many different ways in which you can fund your startup.

AAEAAQAAAAAAAAUYAAAAJDBkODc0NTM5LWRhMTgtNDY1NS1hZGEzLWRiYWM0NDgyYjhjMw

Getting Risk Capital I.E. Angel Investors Or Venture Capitalist – VCs

Angel investors or VCs are investors who give you capital in exchange of equity in the company.

Continue reading “Angel investors, VCs and other funding options for startups”

11 components that make up a good business plan

Investors will be interested because you have a plan to address an opportunity well, not just because you have identified an opportunity that is interesting. That’s why, while having a good idea is certainly a good starting point, it is not enough for investors to invest.

bizplan

Most entrepreneurs make the mistake of detailing out their product or service or concept. What most investors are looking for is your plan for building a strong, profitable, scalable, defensible business around that product or concept.

The success of an entrepreneurial venture depends entirely on the quality of execution. Many companies fail to implement their ideas well. Hence what investors seek in the plans they review is evidence that this team will be able to execute well on a concept that appears to address a potentially large market.

What should a business plan cover?

Continue reading “11 components that make up a good business plan”

Starting Your Entrepreneurial Journey – Some Food For Thought

In my view, easier availability of early-stage capital than ever before, public celebration & adulation of entrepreneurial heroes, a well-deserved respect for entrepreneurism and also society’s willingness to accept failures in entrepreneurial ventures make it easier for younger people to consider entrepreneurship as a career.

I share below some observations that will hopefully provide some food for thought before you embark on your entrepreneurial journey.

77979722-87e3-430f-b0a1-29933dfa2782

A great idea of concept is not the same thing as a great business. Once you identify aconcept that has a meaningful value proposition to your potential customers, you have to think of how you can build a strong, sustainable business around that conceptThink hard about concepts like revenue streams, business model, go-to-market strategy, resource requirements, etc.

Don’t ignore challenges. Think hard about all possible challenges and then find a way to mitigate themEntrepreneurs tend to overlook the challenges when they are driven either by a desire to be an entrepreneur or when a concept stokes their interest.

Write a business plan. It is YOUR plan for YOUR business. Often, entrepreneurs assume that a business plan is to be written only when you seek venture capital or debt. However, a business plan is nothing but your plan for your business. Create a document that will help you think through the steps you need to take in your entrepreneurial journey. And that’s your business plan.

Do not bother about teamplates. A business plan is not about templates or formats. It is an articulation of your story about how you plan to go from point A to point B and then onward to points C and D in your journey. And as you think through various aspects, including costs and revenues, the plan will start getting more robust.

Don’t focus on the excel sheet. Focus on the business model. A 5-year excel sheet projection is just that – an excel sheet exercise. It is neither a reflection of the potential nor a reflection of your ability to meet that milestone. However, an excel sheet exercise provides you a reference point to consider different possibilities of scale and help you plan the intermediate steps in reaching those milestones. I.e. it is not important to detail the calculation for a Rs.98.74 cr revenue by 2012 as it is important to be able to state “We believe we can be around a Rs.75 cr to a Rs.100 cr. enterprise by the 3rd year of operation and here is how we plan to go towards those milestones”.

It is ideal to gain experience about building and managing businesses before you create your own enterprise. Most successful entrepreneurs have built businesses after gaining significant experience across functions in different organizations. Though often celebrated, entrepreneurial successes of people with no prior work experience are a rarity.

Think big if the opprtunity exists. Your ability to scale should be restricted only by your aspiration and not by capital. In today’s environment, it is far easier to raise early-stage capital than ever before. If your concept is right, if the market potential is large and if you have the capacity and capabilities to deliver on that potential, you will find the capital to fund your dream.

One of the most common observations of investors, both domestic and foreign, is that entrepreneurs (especially in India) are afraid of thinking big. Entrepreneurs tend to think that it is prudent to be very conservative in your projections, especially if you have no past record to prove your scaling-up capabilities. However, unless you are keen on creating a business that is small, it will be important to provide a view of the potential and your aspirations, especially if you are seeking venture capital. Of course, the aspiration to scale has to be based on a validated assessment of the potential and backed by a strong, sustainable plan to deliver on that potential.

Make your own decisions but listen to what more experienced voices have to say. If a number of investors reject your proposal, it should be a signal for you to consider what aspects of the model seem to worry investors – relevance of value proposition, market potential, business model or your ability to deliver on the potential. Once you have identified the issue or issues, you need to revisit that in your plan and see what changes you may want to make in order to address any flaws in your plan.

Just because you do not get funded does not mean it is a bad idea or your plan is wrong. Often, especially with new concept, it is difficult for investors to take a bold step. Often entreprenerus are able to create new markets based on their insights and conviction about the opportunity. Others may not be able to see the vision as the entrepreneur is imaging it. Hence, just because others reject your idea does not necessarily mean that this is not worth pursuing. But do also consider the points of skepticism as it will only help you iron out issues that you may not have thought about.

If you still do not get funded and do believe it is a concept worth fighting for, you need to find innovative ways of building a proof of concept.

Find mentors and investors with belief in your concept. It is also important for you to find investors who have a strong belief in the domain that you wish to be in and convince them about your ability to deliver on that potential.

Importantly, don’t be a lone ranger. Connect with other entrepreneurs. Seek guidance. Ask those ahead in the entrepreneurial journey to share their experiences. Network and seek mentoring from accomplished and successful entrepreneurs.

To end, I would like to clarify that entrepreneurship to my mind is not just about starting or owning an enterprise. It is about an entrepreneurial spirit that inspires individuals to take ownership of an assignment of area of responsibility. It does not matter whether it is in your own enterprise or whether in an organization where you work or whether the organization is a commercial enterprise or a not-for-profit entity. Do well in whatever you choose to do. Do it diligently, honestly, ethically and with enthusiasm and commitment.

And THINK BIG.

As the advertisement of a spirits brand said ‘Its your life, make it large’.

This article was originally published in Inc42. Read the article here.

Image Courtesy.

 

 

 

Life Is Short. Get Set. Startup.

I have often heard senior professionals tell entrepreneurs that they wish they had the guts to leave their jobs and startup on their own. But I have yet to hear an entrepreneur, irrespective of whether their venture is doing well or struggling, tell any professional,

I wish I had your job.

The reason is easy to understand. Entrepreneurs start ventures largely in their areas of interest or passion or competence. It’s always a great feeling when your work is also what you love to do. A job may or may not provide that option. Entrepreneurship does.

business man in start - racing position

But just doing what you are passionate about is not the only reason why entrepreneurs are generally more excited about their work. In some cases, rare though, you may get to do what you really are passionate about in a job too. The big difference however is that while in a job you are living either someone else’s dream or a company’s objectives, in your own startup, you are driving your own vision, goals, dreams and aspirations. Every small step in an entrepreneurial journey feels like an accomplishment and gives you the satisfaction of having reached a new milestone.

Continue reading “Life Is Short. Get Set. Startup.”

The Entrepreneur’s Guide To Estimating Market Size For It’s Startup

Note: Before I begin, I would like to clarify the difference between market potential and revenue estimate. I have often seen entrepreneurs use the two terms interchangeably.

pie-chart-icon

Market Potential

Market Potential is about estimating the size of the overall market opportunity. It is a sum total of the potential revenues of all players who are addressing that opportunity, if all the potential customers were to buy. I.e. If you were selling ‘affordable’ golf kits for first-time golfers, then you could estimate market potential as follows (all numbers are indicative for illustration and do not represent actual market) :

  • There are about 20 millon golfers across the top 10 golfing markets in the world. Additionally, about 100,000 new people take up golf every year across the top 10 golfing markets in the world.
  • About 25% of these find the cost of golf kits expensive. If you take this as the addressable market at USD 400 a kit for 5 million buyers, we are addressing a USD 2 bn market opportunity, even if you look at only those who find the price of current golf kits too high.
  • Additionally, the ‘high-quality at lower price’ value proposition is likely to attract regular and casual golfers too i.e. 20 million golfers. This opens up a USD 8 billion market among existing golfers. And that’s a market growing at 15% pa.
  • However, given that most people who want to play golf do not take it up because the current kits cost upwards of USD 1500, we believe that a USD 400 kit will explode the market and we would be able to encourage 10 times the number of people to start playing golf. I.e. by redefining the price-point, we can create an additional market potential worth over USD 500 mn.
  • i.e. with an ‘affordable and high-quality golf kit’, we will be playing into a market that’s roughly USD 8 – 10 billion in the top 10 golfing markets of the world.

Revenue Estimate

Continue reading “The Entrepreneur’s Guide To Estimating Market Size For It’s Startup”

Guest Post – I initiate… therefore I am !!

17th century philosopher Rene Descartes said – ‘I think therefore I am’. With all due respect to him, I am inclined to revise this for the 21st century as – ‘I initiate therefore I am’.

For me the world is truly binary, people who take initiatives and people who don’t and that pretty much decides who survives the marathon and who doesn’t. Don’t get me wrong here. I don’t want to discount the value of thought because the very act of doing has its roots in a thought. However, in the modern world, taking the initiative to execute matters much more than just penning a thought on – is what needs to be done.

wpid-picsart_1410795441553

Before we delve deeper, let’s be clear on the definition of initiative. If you look on the net, you will find many interpretations, but for this write-up, I define initiative as not accepting status-quo and exploring ways to make things better. People who take an initiative are always working for the betterment of their own self, their family, their organization and the society at large. People who don’t are on the receiving end and perpetually complaining about the state of affairs.

Continue reading “Guest Post – I initiate… therefore I am !!”

Guest Article – What can be your core competency in today’s world?

A lot has been written about core competency in innumerable management books. But what does it really mean? Its only when companies understand the real meaning of core competency in today’s context, can they truly work on building a ‘differentiator’ that gives them an edge over others in the market.

A dynamic concept

The notion of core competency has evolved with changing times and market dynamics will continue to do so. For instance, in the times of Sony Walkman, the term ‘core competency’ was associated with deep technical innovation, and at other times,with just the sheer size of assets and deep pockets of a company, since they were crucial in the formation of a large conglomerate.

611

So what can be the core competency of an organization in today’s digital economy, where it only takes a handful of smart guys with minimal funds to bring the next disruptive innovation and consumers adopt it in millions, thanks to the internet?

Can it be the capability of your R&D labs and patents you own? Yes, in some sectors like pharma, patents go a long way in demonstrating a company’s prowess, but not in the industry a general. They can be used to protect the product and manage market leadership only until the next innovation comes around. At the same time, it is not the patent that can be  your core competence, as customers buy products, NOT patents.

Continue reading “Guest Article – What can be your core competency in today’s world?”

Starting your entrepreneurial journey – some food for thought

In my view, easier availability of early-stage capital than ever before, public celebration & adulation of entrepreneurial heroes, a well-deserved respect for entrepreneurism and also society’s willingness to accept failures in entrepreneurial ventures make it easier for younger people to consider entrepreneurship as a career.

I share below some observations that will hopefully provide some food for thought before you embark on your entrepreneurial journey.

A great idea of concept is not the same thing as a great business. Once you identify a concept that has a meaningful value proposition to your potential customers, you have to think of how you can build a strong, sustainable business around that concept. Think hard about concepts like revenue streams, business model, go-to-market strategy, resource requirements, etc. Continue reading “Starting your entrepreneurial journey – some food for thought”

Why are business metrics important for startups?

In the context of startups, metrics are parameters used for quantitative assessment of performance and progress of a venture. If goals are about where to go and strategy is about how to go there, metrics are about tracking progress of your journey.

Startup phase is about discovering what works and what does not. Scale up phase is about replicating what worked. For companies, especially startups and early-stage companies, metrics help founders identify what is working and what is not.

600

Importance of metrics for startups

They are important because in your entrepreneurial journey, you don’t want to discover at a very late stage that you progressed well, but in a different direction; or were going in the right direction, but at a different pace than estimated.

The journey of a startup is about making certain assumptions about what will happen once you launch your product or service in the market, and doing several experiments to ascertain if those assumptions are valid, and what is working and what is not working around the assumptions.

For example, If you assume that 1.5 per cent of all registered customers will buy, you first need to track if that is indeed the case in the market. And whatever the outcome i.e. whether 0.5 per cent registered users buy or 3 per cent users buy, what you need to know are the reasons for the outcomes so that you can avoid what did not work and replicate what works.

Success of a startup is NOT in executing a plan well, but in adjusting plans efficiently, appropriately and effectively, in order to go in the direction the venture was intended to. Metrics provide early warning signs – whether good or bad. It helps you adjust your plans based on quantifiable data on what impacts the outcome. Metrics help you make better-informed decisions in making adjustments in your plan.

Some myths about metrics – It’s not always about improving your metrics

1) Performance does not improve with scale. For example:

Continue reading “Why are business metrics important for startups?”

Guest Article – Do good leaders make good managers?

A lot has been written in the industry about leadership traits and whether it maps to good management skills or not.

dreamstime_m_14281983-follow-the-leader

In my perspective, leadership and good management are two different skills and an organisation needs both of them. Also, it is very rare to find both the characteristics in the same person and it is imperative for CEO’s to realise this.

The quintessential trait of a leader is to ‘make sense of it all’ in this highly unstructured and dynamic world. Leaders get a good handle on what is happening, and how it will/may transition the industry (or society at large) in the next couple of years.

Leaders don’t believe in status quo and know that change is the only constant in life. What sets them apart is the courage and self-confidence with which they embrace change. While most of us prefer to sit on the fence and see changes happen and try our best to protect our turf from them, leaders actually make changes happen and drive them in the direction they believe is best for organisation (or mankind at large).

Driving Change

So what does it take to drive change or to shape the future of an industry? It starts from having a vision. A vision of where do you want to be in next few years, as an individual, organization, society or mankind itself. While each of us has plans for our future, our vision rarely goes beyond the immediate self and family. A leader’s vision typically starts from the other end, i.e. industry or society in general. A leader wants to see the desired change at a much larger level and his only goal is to make that change happen.

Continue reading “Guest Article – Do good leaders make good managers?”

We need to think of entrepreneurship beyond VC-fundable ventures

The startup ecosystem in India is progressing at a very stable pace. The percentage of young individuals as well as experienced professionals thinking of entrepreneurship as a career option is growing due to a number of reasons:

  • There is an enabling environment for entrepreneurs. Boot camps, accelerators, and incubators guide first-time entrepreneurs about converting concepts into ventures. The number of funding options is increasing, including venture debt.
  • The emergence of some media houses that cover the startup eco-system, as well as mainstream media that gives some space/time for startups is creating a better understanding of startups, and entrepreneurship as a career option.
  • The words startups and entrepreneurship have entered the vocabulary of the government and there is an expectation of policy and resources that will turbo-charge entrepreneurship.
  • Parents are now a lot more willing to let their children give up lucrative job offers and pursue an entrepreneurial dream thanks to what they have seen and heard in the media. There is now a critical mass for startups and entrepreneurs to not be considered an oddity, but one of the top career choices, at the beginning or in the middle of a professional journey.
  • Also, as a society, we have started becoming more accepting of failures, and have come to recognise that entrepreneurship is a set of experiments, some of which succeed and some fail. Till a few years ago, we used to say that in the Silicon Valley, failed entrepreneurs have a higher chance of getting funded because they have learned what does not work. Glad to notice that the same is happening in India too.

Overall, it is a great time to become an entrepreneur in India.

However, the entire entrepreneurial community, as we think of it today, is  minuscule in comparison to the much larger number of aspiring entrepreneurs in the country.

yourstory_Entrepreneurship

Continue reading “We need to think of entrepreneurship beyond VC-fundable ventures”

Changing dynamics in India’s startup eco-system

2014 was a defining year for the Indian startup ecosystem. Compared to the rest of the decade, a number of significant events and activities had changed the very nature of the startup world. Companies like Flipkart,Snapdeal, PayTm, Zomato, etc had redefined ‘scale’ and investors had started placing big bets on them. These companies darted ahead of the pack, to not just dominate their markets, but to grow it too. Of course, they were helped by a conducive environment – mobile phones, internet connectivity etc – but they also built infrastructure, people and processes that could handle a different order of scale than what they themselves could have imagined a few years ago. These startups demonstrated the potential and the competence to build world-scale companies and created new goalposts for entrepreneurs to aspire for.

Startups-India

As a result of e-commerce, a number of enabling technology and service companies started becoming more meaningful. Analytics, online engagement platforms, delivery companies etc found a much larger market to address their business case, and therefore their investment-worthiness became stronger. What remains to be seen is how effectively the e-commerce industry will retain customers once the discounting era is over and customers have to buy on the fundamental value proposition of e-commerce i.e. ease of access and choice. We may see some changed market dynamics at that stage, and the transition phase may throw up some new, unexpected leaders.

Continue reading “Changing dynamics in India’s startup eco-system”

India needs 10,000 more angel investors to build a thriving startup ecosystem

Only a very few aspiring entrepreneurs from among 1000s are able to convert their ideas into a business.  And one of the key reasons for this is the lack of access to capital that is required to start something new.

Out of 1000s of investment-worthy startups, less than 300 are able to get initial capital in India.

The present environment is very conducive for people to think of entrepreneurship as a career option. Entrepreneurship cells, incubation centres in colleges, boot-camps, hackathons, and other forums for entrepreneurship promotion, as well as a vibrant media for startups – all have inspired very few to become entrepreneurs.

Angel investor groups, accelerators, and incubators get over 5,000 applications every year. Nearly 10,000 startups send their profiles to media houses every year. While quite of few of these large numbers may not be serious contenders, there is a significant number of aspiring entrepreneurs with the competence, commitment and concepts that can become strong businesses. And quite a few of these can become profitable investments for angel investors.

Yet, only about 300 or so of these aspirants are able to get initial capital to get started. And mostly those, who require capital between Rs 2 to Rs 5 crore range. That’s the declared ‘sweet spot’ of most angel investor groups and VCs who participate in early-stage deals.

Why are there less than 300 early-stage investments in India?

VCs and Angel investor groups are unable to do smaller deals because their members do not want to write smaller cheques, and the efforts required to review, process and close a Rs 50 lakh deal is as much as it takes to close a Rs 5 crore deal. The largest angel investor network in the country does less than 20 transactions in a year.

The number of startups whose funding requirements are less Rs 50 lakh is significantly higher than the number of startups requiring Rs 2 to Rs 5 crore. In fact, many a businesses can get going with just Rs 25 lakh.

untitled-3

Significantly, If we don’t find a way of funding 1000s of deserving entrepreneurs, we would end up frustrating that segment.

Continue reading “India needs 10,000 more angel investors to build a thriving startup ecosystem”

Do 8 out of 10 start-ups really fail? And how do I know if I am failing too?

(My response below, to the above question on Quora)

Failure has many dimensions in the context of a startup and the founder of the startup.

For example: Failure could mean that you have not been able to achieve the numbers (revenues, or customers/users). However, it can still be a fairly profitable business at a lower scale than what you had estimated. If you have raised capital from investors, they may see a venture that does not scale as a failure. The founder may not.

Failed Stamp Showing Reject Or Failure

Likewise, failure could mean that while the concept was good, the team was not able to execute well, or they ran out of money because they were not able to raise capital. In this case, the startup SHOULD NOT have failed, but it did not work out because of inexperience or lack of execution capabilities.

So, when people generalise that 8 out of 10 startups fail, it generally means that 8 out of 10 startups are not able to go to the scale or in the direction they assumed it would. It MAY or MAY NOT be a failure for the founders.

Also, it is important to recognize that very few startups fail because their product was bad. They usually flounder because of issues on areas like execution, processes, capital, etc. I have seen many, many founders start off without even talking to potential customers. This is usually a recipe for a disaster as your own views may or may not hold good in the market.

My belief is that while the number of unsuccessful attempts are quite high from among the ones that started off, the percentage of failures comes down significantly among those who had put good thought into their concept and business around the concept BEFORE starting off.

If your question was out of fear of failure, I would urge you to think again. Plan your venture well, understand the market and then take the leap of faith. Check the LinkedIn status of failed entrepreneurs. They either get started again (and investors like to back them) or they get good jobs (corporates like failed entrepreneurs because of the enterprising spirit and the learnings they bring with them). So, while your venture may not succeed, you are unlikely to fail if you pursue the path of entrepreneurship.

Image Courtesy

What are the differences between angel funding, venture funding and crowd funding? In what scenarios can they be exploited for maximum benefits?

(My response below, to the above question on Quora)

Different investors participate in different stages of a venture. Angel investors invest at the very early stages – when the founders only have an idea or when the idea is being or has been developed into a prototype. They provide enough capital for the idea to be tested and proven in the market, so that another set of investors can bring in more capital after the model is proven and when the venture needs more money to take the proven model to a wider base.

Continue reading “What are the differences between angel funding, venture funding and crowd funding? In what scenarios can they be exploited for maximum benefits?”

Guest Post – Building a Consumer Product Brand with Virtual Infrastructure: Going the Xiaomi Way

Getting a consumer durable brand in the market meant significant investments in distribution, on-ground displays, marketing and everything else that was traditionally associated with the launch of a consumer durable brand.

I.e. creating a consumer product brand required large capital, and therefore was not something that new and emerging entrepreneurs without access to capital could aspire to do.

Xiaomi just debunked that theory with a model execution of a creative & unconventional strategy.

Without opening a single store, without keeping the products on shelves in physical stores, without spending on advertising, this China-headquartered company has already become the world’s 3rd largest handset manufacturer in just under 3 years time since launch.

Continue reading “Guest Post – Building a Consumer Product Brand with Virtual Infrastructure: Going the Xiaomi Way”

Guest Post – The era of truly click and brick: making the elephant dance

Brands will have to quickly and efficiently integrate virtual and physical infrastructure in consumer retail to remain relevant in the marketplace

Perhaps no other industry in history has seen such a radical transformation in such a short period of time as consumer retail has, and continues to, especially in India. Even the telecom transformation was spread over a decade or more to become transformational for the industry and the consumer.

Technology, e-commerce and multiple mediums of interaction and social-commerce etc. are drivers of change in consumer retail. The nature of the buying behaviour of the consumer has changed fundamentally in the past few years, and continues to evolve as multiple channels of interaction become part of the consumer’s product discovery, decision-making, purchase, post-sales support, and overall consumer experience.

SBSq

Now, also imagine the Tesco example above being integrated with NFC and analytics. E.g. given that it is a virtual wall, unlike the physical stores, the inventory displayed can be changed dynamically depending on who’s in front of the wall. Imagine a new parent getting packets of diapers in front of him, while the teenager behind her seeing acne cream displayed in front of her. The technologies for all these exist.

While the environment has changed, and e-commerce and m-commerce and offline and online marketplaces coexist, the industry continues to operate in silos – the e-commerce players and offline retailers operate as two different and philosophically competing worlds.

As a result, it is the consumer who is currently making the efforts to navigate the online and offline worlds, as neither traditional retailers, nor new offline retail format brands or e-commerce players have made any substantial effort to integrate the consumer experience across different touch points.

Continue reading “Guest Post – The era of truly click and brick: making the elephant dance”

Guest Post – Team, the most important ingredient in a startup

Ask any investor or successful entrepreneur, and they will reiterate that the most important factor in a start-up is the quality of its founding team. A team is more important than the idea or the size of the market or the technology or the business case, or indeed any other factor that investors will review to check the investment-worthiness of a venture.

VU-Picture

Even if  – the product is great; the technology is cutting-edge; the market is large and the company has a strong chance to be a dominant player in that large market – investors will hesitate to invest in the venture if they do not get the confidence that the founding team can deliver in the market.

What investors seek is a team that is passionate about the subject, is enthusiastic about the opportunity, has a good grasp on the dynamics of ‘business’ and not just the product/service, and who can demonstrate commitment to fight it out in the market.

While it is good to have experience in the domain, that is not a must, as that will exclude a number of bright people who either do not have work experience or are from a different domain than the concept they are pursuing. However, what is important is that even without experience in the sector, the team should have studied the sector enough to understand it very well. In fact, that is also why passion and interest in the sector is critical, because that makes it easier for a person to study the sector well.

Continue reading “Guest Post – Team, the most important ingredient in a startup”

My advice to students aspiring to be entrepreneurs

During my talks at engineering colleges and business schools I often come across students who are clear that they want to be entrepreneurs, but they cannot do so immediately because they have student loans or other financial commitments to take care of. And that is a perfectly understandable reason for deferring your entrepreneurial ambition.

My advice to such aspiring entrepreneurs is to keep their entrepreneurial ambition as the key focus on their lives. Sure, go ahead and take up a job because you need to. BUT NO MATTER HOW MUCH SALARY YOU GET, KEEP YOUR EXPENSES AND LIFESTYLE WITHIN RS.25000 – RS.30,000 (USD 500). Continue reading “My advice to students aspiring to be entrepreneurs”

Startup Next, the global and top pre-accelerator program comes to Delhi.

Startup Next, the global and top pre-accelerator program – backed by the likes of Techstars, Google for Entrepreneurs, Global Accelerator Network and Startup Weekend – is coming to New Delhi !

SNext

The Startup Next program is designed for startups who plan to apply to accelerators or are pitching to investors for funding.

Startup Next is an intense mentorship program consisting of weekly sessions (one session in a week lasting three hours) for five weeks. The program has a structured curriculum and in-depth engagement with one-on-one mentoring, designed to help startups build the foundation of scalable ventures.

Continue reading “Startup Next, the global and top pre-accelerator program comes to Delhi.”

The 4 P’s of Entrepreneurship – Patience, Persistence, Perseverance, and Passion

Entrepreneurship teaches you a number of things about life, in general. It is an immensely satisfying journey, even if you do not reach your intended destination. However, the journey is often very challenging and it takes a lot of patience, persistence and perseverance to succeed. And unless you have the passion for what you are doing, finding the other 3 Ps within you becomes challenging.

Patience1I advice aspiring entrepreneurs to not get taken up by stories of instant success. Those are rare. Instead look at the 1000s of others whose ventures did not succeed. Or did not succeed as aspired.

Even those who succeed, often a lot longer than they had planned for, and it is often tougher than they had imagined. What sets the successful apart from the ones that gave up are the 3 Ps that I outlined above.

Continue reading “The 4 P’s of Entrepreneurship – Patience, Persistence, Perseverance, and Passion”

Why Startups should assess opportunities in the renewables energy sector

Apart from the global macro factors and a drive towards renewables, the Indian government is making some solid statements that indicate their thrust and seriousness about the renewable energy space. In fact, the Renewable Energy Minister Piyush Goyal has declared in a statement in The Economic Times India’s intent to be a world leader in this space in 4 years. That’s huge.

Given these statements, it appears that the government will create policies that create a more conducive environment for entrepreneurs to create ventures in this sector.

Green nature landscape with planet Earth

While several opportunities exist, one has not seen too many entrepreneurs considering it. Especially at early-stage, there are very few entrepreneurs creating startups addressing this segment. Continue reading “Why Startups should assess opportunities in the renewables energy sector”

Learning Time Management is Critical for an Entrepreneur

The founders and teams of any startup are most likely to have more things to do than they can manage in a day. There is always likely to be more activity, primarily because in a startup, things are constantly evolving and changing, than there are people to execute those activities.

time_management

In such a scenario, time management becomes a critical skill that entrepreneurs have to learn and implement in their day-to-day life.

But fret not! All it needs is a little organising and prioritising and some serious time management. I came across this article written by to Alex Cavoulacos, “One founder’s best productivity trick: Save time and do less”.

I agree with Alex’s opinion. She hits the nail on the head when she says that – knowing what not to do, and what to stop doing, can make a huge difference in your happiness and productivity. Here’s what I would like to add… Continue reading “Learning Time Management is Critical for an Entrepreneur”

M&A: Why small exits matter? The big value of small exits (#iSPIRT-OEQ)

iSPIRT Open Ecosystem Questions(OEQ) Series. The conversation around this exciting session was lead by Sanat Rao (iSPIRT) and the speakers were Jay Pullur (Pramati Technologies), Sanjay Shah (Invensys Skelta), Pari Natarajan (Zinnov), Karthik Reddy (Blume Ventures) & Vijay Anand (The Startup Centre).

Sanat initiated the conversation with an observation that it was only the bigger exits that are picked up by the media. Smaller exits do not get any media attention at all. , We all hear about the big bang “home runs”: WhatsApp sold for 19 billion USD to Facebook, Google acquires Nest for 3.2 billion USD, etc. However, studies show that 65% of VC funded companies in the US return 0-1x to their investors. Even among the remaining 35%, the exit valuations are relatively small: since 2010, the average M&A deal size in the US/Israel is 100 million USD. Only a small 0.1% of VC-funded companies are home runs (50X returns). And not just in India. In Israel too, from 2010-14, out of the 88 exits, two deals on Viber and Waze accounted for a whopping 25% of the total M & A value.

M_Id_476035_PE_funds

Given these statistics, why do we promote the myth of a multi-billon $$ exit? Why don’t we recognize the value of these smaller exits? Should we not be promoting and helping product startups to find an exit at an earlier point in their lifecycle, rather than treating these exits as a worst case scenario? Continue reading “M&A: Why small exits matter? The big value of small exits (#iSPIRT-OEQ)”

All successful startups are great examples of learning from failures.

4761780118_26c7cf0d4c_z

Ask any investor who has engaged with 100s of companies, and they will tell you that the plans they begin with, are almost always never the exact plans that they eventually build their successful businesses on.

Failure is not a negative in the ‘Startup scenario.’ It merely means that some of the assumptions did not hold true in the marketplace, and hence we dumped it and we did something else. In that sense, the earlier conceived model failed, and we pivoted to a different concept;  product;  value proposition; customer segment; price-point; marketing plan;  business model; sales plan; team or whatever it is that failed.

I therefore advice entrepreneurs to not fall in love with ideas but to fall in love with a problem. When you look at ‘owning the problem’ to solve, you can think of many different ways of solving it and try what seems to be the most suitable way, given your circumstances and the market. Then it doesn’t matter if a few ideas don’t work and you eventually have to try a different approach to solve the problem. Since the goal was defined as ‘solving the problem’, it is still a victory even if a few initial ideas fail.

hbr-failure-cover-closeup

Converting an idea into a business

I often get asked this question: “I have an idea. But I just don’t know what to do next. How do I start implementing it?”

It is not unusual to get stuck with the idea without knowing how to take it forward. Often the fear of having to manage operations, finances and staff is what stops people from getting started on their idea.

Having an idea is a good starting point. The first thing to do is to let that idea rest for a few days. Think about it every day. But don’t act on it. Think through all the positives AND all the negatives. Think of how great it can be. And also think about what could go wrong and how worse can it get. You will start seeing different aspects about the idea. Not all will be good. And that’s OK.

Continue reading “Converting an idea into a business”

Communicating your story in a minute

At the pitch session for Microsoft Accelerator’s next batch, more than 35 startups presented at today’s event at 91Springboard in New Delhi ( May 30th 2014).

1240638_10152149543433947_6953138247054866171_n

I was really impressed to see that the number of high-potential startups – great teams driving meaningful concepts addressing large market opportunities – was much higher than the number of average or not-so-good startups. The startup eco-system in India is certainly moving in the right direction.

Continue reading “Communicating your story in a minute”

Is there merit in starting e-commerce ventures now?

That online commerce has a strong value proposition is proven. For urban consumers, the biggest value proposition is convenience followed by choice. For consumers in tier 3 cities and below, access to choice is the biggest value proposition.

Given the size and scale of the country, and given that internet penetration still has significant headroom for growth, that online commerce will only grow is a given.

Therefore, on the face of it, it appears that there is indeed merit in starting e-commerce ventures, especially in categories that have not been dominated by someone and where newer brands could have an opportunity to establish leadership positions.

ecom

However, e-commerce is not a game of just making products available on a nice looking website. The business case of e-commerce depends on being able to maximize the lifetime value of a customer. Let me explain further… Continue reading “Is there merit in starting e-commerce ventures now?”

What should an undergraduate aim to get out of a VC internship?

(This post was my answer to a question on Quora)

Think of a VC firm as an observatory. A role in a VC firm gives you a vantage position to observe what works and what does not, and what real-world dynamics impact success and failures of businesses. Interacting with successful as well as struggling entrepreneurs provides you an opportunity to learn from other people’s experiences. Of course, being in a VC firm gives you an opportunity to understand what kind of businesses investors invest in, and more importantly, why. 

9-13-12-crev-types-observation-research
All these opportunities give you a well-rounded view that is made up of different experiences and different perspectives.

Of course, one could argue that you could get this well-rounded view also by working in a consulting company. The difference however is that in a consulting company the discussions are largely about strategy and plans. In a VC firm, apart from strategy, it is also a lot about gut feel, individual insights & beliefs, AND MOST IMPORTANTLY, also about the most crucial factor for the success of a business – the on-ground implementation. 

Most businesses fail not because the idea was not good. They fail because the founders made incorrect assumptions and/or were not able implement well in the marketplace. 

Being at a VC firm can be a huge learning experience. 

I must however also add that i have seen very, very, very few young professionals working in VC firms make appropriate use of this awesome opportunity. Most often they do not recognize the power of learning from other people’s experiences and tend to be clinical in their approach to challenges and opportunities. In the real world, entrepreneurs tend to celebrate successes and introspect on failures. Unfortunately I have rarely seen employees at VC firms spend time to introspect on failures. They just move on. They tend to spend a lot of time on analyzing why a particular model/concept/team was successful… and that is useful too. But is is much more useful and helpful for the future to understand why something did not work.

The Importance of Market Research

“Research is formalized curiosity. It is poking and prying with a purpose. ”

Zora Neale Hurston, American author

marketreseachprajaktoct

Scene 1 : A couple of years ago

You or your visionary team have a great idea for a new product!! It ‘feels’ like the answer to everyone’s problems! It will definitely be a big hit! So you get your creative heads, product designers, technical staff and experts all into a tizzy! The product must be ready in next 6 months! After hours and hours of hard work, there it is – to take the consumers by storm. You launch it with big fanfare!!

Scene 2 : Cut to the present

The ‘great’ and promising product was ‘great’ only on the drawing board! Your negative inventory is piling up; there are just not enough takers!

What went wrong?

The consumers just didn’t connect with the product or the price point was wrong or the brand personality did not appeal or the communication was not clear or the distribution was poor or the value-proposition was not meaningful!! There are a number of things that can have a very different response in the market, than you had imagined it. Continue reading “The Importance of Market Research”

Find a Co-traveller – Find a Co-founder

In my view, it is extremely helpful if you find a co-founder when starting an entrepreneurial venture. Apart from sharing the work and responsibilities, a co-founder can be the motivating companion and the emotional support that you will need when your business is going through a tough phase. And all businesses do go through a tough phase.

Also, a business needs different types of skills and competencies. The ideal composition of a founding team is when the founders bring complementary skills to the venture. E.g. someone from the marketing/brand management category, the fashion industry and an operations management/procurement person – will make an ideal founding team for an e-commerce startup.

images

Ideally, apart from people with varied skills and competencies, it is also useful to have a founding team, with different personality types – someone who depends on gut feel for decision making will find it extremely beneficial to have a co-founder who takes measured, well-thought out decisions, and vice versa.

Who exactly is a co-founder?

Continue reading “Find a Co-traveller – Find a Co-founder”

My Notes from TC/1

I spent this weekend (15th and 16th of March 2014) at the first conference organized for creative entrepreneurs by The Coalition. Great initiative, awesome experience.  Check out www.thecoalition.in.

Screen Shot 2014-03-17 at 12.57.17 pm

Here’s a para from their website about what this initiative is about. The Coalition is a new platform to support creative entrepreneurs in India. Whether it’s music, film, design, fashion, arts, creative technology or something completely radical, The Coalition gets young creative thinkers together with the people, skills and money that can turn their passion into successful businesses – and connects them to the resources that can help their business grow.

Continue reading “My Notes from TC/1”

Summary of my workshop at TC/1

Screen Shot 2014-03-17 at 1.26.49 pm

This was a workshop at conducted for Startup Weekend at The Coalition on 15th March 2014. Here’s a summary of what we covered:

  1. Different stages of the venture are fundamentally different – the entrepreneur has to change roles from the DOER to a MANAGER to a LEADER
  2. A good product is not the same as a good business – you have to design a business around a good product or service
  3. Personal readiness and organizational readiness are important – Check the presentation for my 10×10 scorecard on personal and organizational readiness
  4. Delegation is difficult – but critical – If you do not delegate, you will become the bottleneck
  5. Hire Rockstars – An entrepreneur’s role is to attract and retain good people – Spend 30% of your time on HR – hire people smarter than yourself
  6. Have a business plan that outlines what you want to do and how you will do it
  7. Clearly identify and align with your motivations – ensure that all founders are aligned on the goals and vision and direction
  8. Redefining your business opens new possibilities – don’t describe your business by the product or service that you currently offer – define it as the problem you solve – check notes in my presentation 
  9. Visualize your goals, milestones and activities – first define them clearly
  10. Identify key stakeholders and have a plan to engage them

Leap of Faith

Many people have ideas for a business. Almost everyone thinks of some idea at some point in his or her lives. But only a few individuals actually take the first steps to convert those ideas into a business.

download

To be an entrepreneur, one has to have the conviction and belief in the idea that one is pursuing. Unless you have that conviction, you are unlikely to take the first step required to convert that idea from a ‘thought in your head’ to a ‘venture in the real world’.

Once you have a thought or an idea about something that can become a good business venture, you have to think hard about the potential of that concept, assess the merits and challenges, and once you feel convinced enough, you have to be able to take that leap of faith to go and implement that idea in the marketplace.

Many aspiring entrepreneurs tend to test and research, and retest and re-research their idea or concept and depend only on the research findings to pursue or drop that idea. Often, research cannot give you the answer to whether an idea will work or not. Sometimes, entrepreneurs have to take that leap of faith and that gut-feel to make a concept work. Entrepreneurs however, should NOT be blind risk takers. Successful entrepreneurs understand the risks and take necessary steps to overcome those risks and challenges. Planning well is what helps them deal with the risks and challenges better. Others who give up often do not think hard enough about addressing those challenges. They get scared of the challenges because they do not think of solutions.

Entrepreneurship requires entrepreneurs to pursue their vision often in the face skepticism and negative feedback on their ideas and plans from many individuals. Often these individuals who are skeptical of the plans are well meaning and may give an honest feedback based on their own assessment of the risk-reward dynamics of that idea. But mostly, entrepreneurs are able to spot opportunities where others see problems.

Entrepreneurs see opportunities before others see them. Entrepreneurs catch the wave on the up…. That’s why successful companies often have the ‘first-mover advantage’. Others, who follow or are me-too copycats to successful first-mover concepts, often have a much harder road to success, if they do succeed. Entrepreneurial thinking and aptitude is about seeing the ‘signals’ where others see ‘noise’.

The ability to take that leap of faith AFTER assessing the potential and understanding the risks allows entrepreneurs to be confident and optimistic about the opportunity and potential of an idea. Optimism and confidence create positivity and enthusiasm, which infects others around them. It helps entrepreneurs build teams, get early adopters, and often, helps them get investments from investors. (It is not without reason that entrepreneurs who are successful are good presenters and can tell their story with conviction and passion.)

Go ahead. Think hard about the opportunity around that idea and what you need to do to make it work. Seek mentoring. Get guidance from those who have more experience in operationalizing a business venture. Plan well. Execute efficiently. Be confident.

You will never fail. Either you will win or you will learn. And this learning will help you prepare even better for the next journey of your life. Go ahead. Take that leap of faith in your idea.

This article was first published in the SheroesCommunity on the 6th of March 2014.

How do you choose a name for your startup?

Decide on the name for your startup very, very thoughtfully. Give it as much importance as a parent would give to naming a child. YOU will have to live with that name for life… even if the startup fails and shuts down.

Ideally, a name should give your intended users/customers a clear idea of what you do. e.g. ‘Page on makemytrip.com‘. It should be easy to pronounce for all people across geographies and it should, as best as you can research, mean the right thing in all languages.
Naming-It
Ideally, it should be short, and should sound nice.
More importantly, the domain should be available. If not, trying to create a ‘compromise url’ (e.g. abc-info.co) is not very useful.
The sound should be relevant to your audience. E.g. if it is an enterprise solution, it should sound very professional and solid. If it is a fun thing for teenagers, it should sound fun.
Likewise, the logo design for that name should also reflect the personality that is relevant for the intended audience.

What’s the appropriate way to terminate an advisor relationship that isn’t adding value?

This was my response to a question on Quora.

The person had provided this additional information: We do 24 month vests and are about a year in with someone who just isn’t adding much value. We don’t want to burn the bridge but feel it necessary to unwind the relationship. Other than simply picking up the phone to let this person know, what other steps do we need to take to do this properly?

My response

Different people will have different styles, and different personality types will deal with these situations very differently.

My style is to have an honest conversation. State your expectations, highlight where the delivery has not been as expected, assess if the reasons were within the individual’s control, and provide an opportunity for the person to respond. And ask the person what you think is a fair way forward.

In most cases, if you present a fair assessment of how things are going, the person may himself/herself offer to step aside. Of course, if the person is not agreeable to stepping side, then you need to do what is in the best interest of the company.

Of course, it is also possible (and often that is also the case) that the company itself was not able to leverage the advise and inputs of the mentor/advisor. And that is also a reality that needs to be dealt with. If that situation is unlike to change, even then having an honest conversation and saying “I don’t think we are geared to make full use of all the good advise you give us. We are just too bogged down with other priorities, which I understand you may or may not agree with. But for now, we have decided to focus on those. How do you suggest we move forward. Can we disengage for a bit and see if there is merit in reengaging when we are in a better position to benefit from your wise advice?”.

(And of course, the shares vested till then should be given to the advisor).

Why Weak Decision-Making Is Dangerous For Business, But Is Difficult To Spot

Leadership is not the same as good management.

Corporate leadership is usually seen in the context of ‘managing’ the journey of a company in a defined direction.

l

Efficient management of people, resources and environment may help the company progress smoothly on course in an agreed direction. However, the success or failure of the company, or whether the company is able to fully leverage the market opportunity is often dependent on the leader’s ability to make tough decisions, sometimes involving making a choice between progressing in the agreed direction, or changing the direction.

Leadership is about leading i.e. setting the direction and ensuring that the troops are aligned to move in that direction, and encouraging them to move in that direction.

Use the analogy of an army in the past, marching on to conquer new geographies and it is easier to visualize what a leader’s role is. Leadership involves the ability to see far in the horizon; imagine what the land beyond the mountains looks like based on assessing the current environment; and then chart the most optimal route; stock up on the necessary supplies; communicate the plan to your troops; create smaller manageable groups and identify people among them to lead those contingents. Then before the onset of the journey, the leader’s role is to give a rousing speech to motivate the troops, and as you move along in the defined direction create the mechanism to review if the progress is happening at the right pace and in the right direction.

Sometimes, the journey may be more difficult than imagined and the leader may have to reassess the plan. Often, when you reach the top of the mountain you may realize, that the vision of what lay ahead was different than what it actually is.

It is during such times that good leaders make tough decisions, while weak leaders keep ambling along on the same plan hoping that somehow things will change for the better. This is the crucial difference between definite leadership and the mere ability to manage the march in the agreed direction. This is the difference between good managers and great leaders.

If managing change is tough, deciding to change is tougher

Changing direction is a tough call as it may require the company to realign its direction and resources. It requires conviction, confidence, the ability to convince others that the changed strategy or direction is a good decision and then the ability to reorganize the resources and people in the new direction. Of course, it calls for a vision that can assess what the outcome of a new direction could be. And it certainly calls for courage to give up what was debated and decided previously as a good direction, and embark on a new journey or a new direction. It also calls for emotional maturity, as suggesting a new direction may often mean debating against the very decisions/directions that you earlier fought your way for. Even if it is in the best interest of the organization, it is a difficult decision as it involves a whole lot more effort, not the least to convince the rest of the team to realign their views and plans.

To be able to pull off such a tough change in plan requires a leader with great competence and one who enjoys respect from the rest of the army.

The impact of indecisiveness or lack of foresight and vision is not measurable under normal measurement trackers, and hence managements need to debate at board meetings, on whether the direction needs adjustment.

When a leader guides the company and manages people & resources well in an agreed direction, it is visible as a ‘success’ because there were milestones identified and measurement criteria defined, and it is easy to ‘see’ that the company is progressing well. Or if the leader is not driving the progress well, that is easy to spot for the same reasons.

However, since the outcomes of an alternate direction are in the ‘unknown’ zone, absence of push in that direction is not visible.

Great leaders introspect. They assess the environment, and the factors that led them to take the original decision. They are not afraid of thinking of alternatives.

Apple may not have been relevant if Steve Jobs had not decided that Apple is NOT a computer manufacturer and bet on music players and mobile devices as the new direction. It took great leadership to change the Indian Tobacco Company into ITC, a multi-category brand, including hospitality – something that was not at all related to the business they were originally in. It took great leadership to reimagine Titan from a watch brand to a fashion accessory brand.

Great leaders take bold, difficult decisions. All decisions are not necessarily right. Because, a decision is nothing but choosing from amongst the various options available, all of which would have different outcomes in the future. All scenarios of possible outcomes are based on assumptions. And hence, it is dependent on the leader’s conviction on these assumptions and outcomes that will set the direction and pace for the company. And success will depend ultimately not on whether the decision was right, as any of these decisions could have been right, but on whether the leader was able to align the team, resources, products and processes to the decision.

This article was originally published in NextBigWhat on February 3, 2014 (Read here).

Entrepreneurship : the option of leading a life you love.

I have often heard senior professionals tell entrepreneurs, that they wish they had the guts to leave their jobs and start up on their own. But I have yet to hear an entrepreneur, irrespective of whether their venture is doing well or struggling, tell any professional “I wish I had your job”.

download

The reason is easy to understand. Entrepreneurs choose their ventures largely on the basis of their areas of interest or passion or competence. It’s always great when work is also what you love to do. A job may or may not provide that option.

But just doing what you are passionate about is not the only reason why entrepreneurs are generally more excited about their work. In some cases, rare though, you may get to do what you really are passionate about in a job too. The big difference however is that while in a job you are living either someone else’s dream or a company’s objectives, in your own startup, you are driving your own vision, goals, dreams and aspirations. Every small step in an entrepreneurial journey feels like an accomplishment and gives you the satisfaction of having reached a new milestone.

And while the entrepreneurial journey is not always smooth and often fraught with risks, challenges and failures, the entrepreneur’s passion for the concept and the domain provides the person the patience and courage and the will to push ahead and sometimes, even if the venture fails, gives the person a personal high of having tried something.

Most importantly, irrespective of what the outcome of an entrepreneur’s venture – whether it fails or succeeds – the entrepreneur always wins, because even the failures teach you so much about business and life. They prepare your foundation for another leap. Another shot at glory.

Most entrepreneurs continue on the entrepreneurship journey, if one venture fails, they try another. If the entrepreneurial experience had not been a satisfying one, they would have given up and taken up a job.

But passion about what you do is not just a nice by-product of entrepreneurship. It is a necessary ingredient. Because, without passion and commitment; you are unlikely to find the will to push through challenging times. And challenging times there will be at many different times of the venture’s life. That’s why I tell entrepreneurs, especially women entrepreneurs –don’t start a venture because it was the first opportunity that came across, or because you saw someone else do something well. Don’t just think of the obvious business ideas like baking, cooking, children related events, and other similar business that seem easy to do, manageable within flexible times etc.

My suggestion to aspiring entrepreneurs is to think hard about what you are personally interested in – what you are passionate about. Think hard about what would give you maximum pleasure. Then when you have a list of many, many options, narrow the list to a few that pass a certain set of filters that you may want to apply – e.g. time, capital, profitability, travel/non-travel etc.  Once you have a list of 2-3 venture ideas that you think you are keen on, start evaluating them deeply. Think about all the aspects about this venture – see whether this will give you the joy as well as the financial returns you seek, as well as some of the other aspects that may be important to you (e.g. the recognition and respect, intellectual stimulation, etc.). Once you have thought about all this, let these simmer in your mind. Let some time pass post your initial evaluation. Then revisit that evaluation and see if you still feel strongly about them. If not, go back to the drawing board, including adding some new ideas into the pool. If you have a couple of ideas that seem to be good contenders for the finals, run it past a few people, get their views and perspectives and then take your final decision based on your gut and instinct. The rest will be detailing that can be left for later when you start planning your entrepreneurial journey.

Go ahead. Give entrepreneurship a shot. You owe it to yourself. After all, it’s your life. As the ad of a popular whiskey brand says, ‘Make it large’.

This post was originally published in The Sheroes Newsletter on February 11th, 2014  ( Read here )

What does being an already successful one-time entrepreneur do to your chances of being successful again?

Any entrepreneurial journey, even the most successful one, is not a straight line up. There are always ups and downs in that journey.

success
The experience of having built a successful venture exposes you to many of the challenges that one can face in an entrepreneurial journey. It teaches you to keep your assumptions practical. It helps you understand what it takes to make a sale. It give you the wisdom to keep costs low. It teaches you that there will be ups and downs, and it teaches you to be resilient and teaches one that perseverance can pay.

Continue reading “What does being an already successful one-time entrepreneur do to your chances of being successful again?”

Why are most people scared of trying entrepreneurship as a career option?

I believe everyone can be an entrepreneur. Just that not everyone’s personal circumstance are conducive for them to take entrepreneurship as a career option at all times. Sometimes, personal situations, including financial, physical, emotional, may need the person to be in a job. And that’s perfectly OK too.

Often career professionals switch to become entrepreneurs. And that’s OK too.

My view is that ANYONE can be an entrepreneur at anytime they feel they are ready. That desire to be an entrepreneur is heightened when they stare at an opportunity in an area they are passionate about. Most people however give up that opportunity… and do not take the plunge into entrepreneurship even if the opportunity is staring at them. And often that’s because they are not sure if they are ready for entrepreneurship. The fear is about failure. But the cause of that fear is often that they are not certain that they understand enough about different aspects of business to be successful. (Professionals usually have more of this fear than say student entrepreneurs. Perhaps because professionals may have experienced the complexities of business, which students may not have had an opportunity to.).

My advice therefore is that it is good to educate yourself about and experience different aspects of business. It is good to ‘prepare’ yourself for running a business if such an opportunity presents itself. Even if you do not want to start something of your own, an entrepreneurial mindset and orientation and understanding of business as a whole will be a great asset even in your job. Whatever that job may be.

An entrepreneurial journey will have failures on its way. And that’s OK. If you do not fail in the beginning of the journey, you will face challenges at some other stage of the entrepreneurial journey. There is no reason to fear failure or challenges. You just have to be well-prepared to estimate the challenges and to deal with them as and when they happen.

Will crowd-funding evolve as a popular funding option for startups?

In my view, crowd funding will continue to evolve. And perhaps someday become a significant asset class for people with a little bit of cash, which they are willing to play around with in a high-risk – high-return investment.

For crowd-funding to mature and become a popular investment option, there will have to a greater awareness of entrepreneurship and that the only way the game can be played is to invest in many, of which only a few would survive and may be one or two would give you disproportionate returns that justify the investment.

As investors start getting more aware and accepting of the failure rates, crowd-funding will start getting wider acceptance.

I do not agree with some comments that a few early successes will drive the growth of crowd-funding. At least I hope that a few early-successes are not the reason for many people jumping in to fund through crowd-funding platforms. Because there will be more failures than successes in startups. Investing in startups because you missed a few success stories is almost always the wrong reason to invest in startups.

Innovation in the context of a startup

Often entrepreneurs confuse innovation with differentiation. We often get plans where the entrepreneurs think of their innovation as ‘something more or different’ that they are doing which others are not. That to my mind is not innovation.

INNOVATION

In my view, innovation is when you either create something new (a product or service) or do something that  that makes an existing product, service or process faster and/or better and/or cheaper.

Also, innovation is understood or at least widely perceived to be only about a product or service. But, innovation can be in any aspect of the business. It could be innovation in pricing, packaging, business model, marketing, positioning, resource utilization, etc.

Some examples to illustrate the point

  • EMI or Equated Monthly Installments is a pricing innovation that made high-ticket items accessible to many who could not afford to pay the price upfront.
  • Outsourcing non-core processes to locations where it could be done cheaper was a business model innovation – BPO
  • Software companies like TCS offering enterprise class software to small & medium enterprises wherein they pay a small fee every month instead of a one-time payment for the software  – a business model innovation.
  • The packaging that Paper Boat uses in India for their non-alcoholic beverages is a packaging innovation… it stands out in the category.
  • An online platform for art, provides art and art prints on a subscription model… which allows people to have many different art pieces at their homes without owning any… that is a business model innovation.
  • Shampoo in sachets – single use packs – is a packaging innovation
  • A startup offering free auto-rickshaw rides outside their biggest competitor’s annual event  – a marketing innovation
  • At one of the largest smart card and chip makers in India, they use a quick manual intervention to put a colour tag as per groups over 100,000+ hand-filled forms that they get everyday from their telecom customers for whom they manufacture SIM cards. Their competitors use sophisticated and expensive software which slows the process and is practically useless for dealing with the scale and speed in which they have to operate. This is a process innovation.

Innovation is not a one-time activity… it is not a quest for that ONE thing. It is a process, a way of approaching things that should be a part of the DNA of a company.

While most organization can be good at process or business model innovation, it is much harder to create or invent something new. And that’s why we need to encourage and reinforce a mindset of innovation with a clean slate as a starting point, rather than looking at how you can make improvements over something that is already existing.

How then, does one create an atmosphere of innovation in the organization?

  • Well, to begin with, you have to declare, announce and reinforce, to the entire team, that innovation IS the culture in the organization
  • You have to celebrate innovation AND experiments – with awards, rewards and ceremonies…. This is important, as it not only incentivizes teams and individuals to innovate, but it also reinforces the innovation culture
  • Create matrices to measure innovation
  • Allow people to experiment and allow them to fail… do not applaud them only when they succeed, but applaud every well-planned experiment they undertake and every well-thought idea they put on the table
  • Once you have figured out an innovative concept/product etc, implement it… demonstrate that you are serious about and committed to the concept.


New Picture (8)

Why is innovation important for startups?

Innovation is especially important for startups. New concepts – products and services – help establish a unique value proposition. It creates intrigue and induces trials.

Also, innovation almost always makes it possible to make your products and services accessible to a larger audience. Innovation increases access. (Process and scale innovation allows telecom companies to offer one of the lowest cost telecom services in the world. Healthcare companies like Aravind Eye Hospital and Narayana Hridalays conduct surgeries at a fraction of the cost of other hospitals because of their process innovation.)

Innovation often reduces the cost of delivering the product or service that it gives the company a pricing advantage, which allows it to target bigger markets, which in turn allow it to get more investor interest and sometimes better valuation. Good, well-thought through innovation almost always makes it easier for the company to get funded… because it increases the chances of success of the product or service.

A culture of innovation also helps startups attract quality talent. Because people love places where they have the freedom to experiment.

And lastly, innovating is fun. It gets energy into the team. And often the process of ideating throws up new interesting possibilities.

%d bloggers like this: