If ever there was a time to be an entrepreneur, the time is now. The climate today is a lot more conducive than it was even 10 years back. However, statistics say that only 20% of start-ups survive beyond the first two years. So what should entrepreneurs do to make it work and for those who are contemplating taking the plunge into entrepreneurship, and what does it take to make it a success?

Excerpts of the Panel Discussion organized by Businessgyan in association with TASMAC.

The distinguished panel members:

Prof. Kumar K is an entrepreneur, manager, consultant and academic. He is currently driving the research program on entrepreneurship at NSRCEL in IIMB.

Bala Girisaballa has worked as Director of product management at Oracle, and managed over US$120 million product line portfolios of Sales Force Automation applications. He is currently the co- founder of Nine Motion.com.

Parag Dhol was with ICICI Ventures and is today a VC at Intel Capital.

Suresh Narasimha is founder and CEO of TELiBrahma, a company that delivers context oriented communication and transaction on mobile.

 
Prof. Kumar K: Getting into entrepreneurship is possibly the best way to chanelise one's energies and capabilities to create value. This can be done at a subsistence level or at an extraordinarily high scale. Coming to the difference between being in a regular job as against being an entrepreneur; it can be compared to an arranged marriage as against a love marriage.

You can't decide to be an entrepreneur unless you have a good idea; just as you can't fall in love without a girl/boy. Whereas in a job your profile matters, as also in the arranged marriage. Getting into a job is a very predictable process where the outcomes are also predictable, unlike being an entrepreneur where anything can happen.

There are 3 key elements to being an entrepreneur:-

1) Personal motivations of the entrepreneur- What do I expect out of it? The answer to this question often makes the difference between success and failure.

2) The idea is so important that an entrepreneurship venture not triggered by a good idea is not entrepreneurship at all.

3) Methods and strategies that you adopt to implement the idea.

Now all these things must exist in a certain kind of balance to achieve a state of stability for the entrepreneur.

Parag Dhol:  My view of entrepreneurship has always been from the other side of the table - given this I feel that entrepreneurship is your ability to articulate your value proposition very concisely to a VC or to a customer. As they say if you can't explain you haven't understood. The team is of course important and also focus on your cash flows.

There are a number of things to be considered when undertaking such a giant leap. There's family to be thought of, the right amount of funds, lifestyle and social support for the kind of product or company that is to be launched. Entrepreneurship especially the initial years is all about hard work, sweat and toil.

Entrepreneurship has to be a balance between ‘God is in the details' and ‘Do not lose the woods for the trees'. These two apparently contradictory statements bring out the essence of what the entrepreneur has to do to succeed.

So what should one be prepared for? As someone put it beautifully even if you have a business plan at the start of a venture then you need three times the capital, three times the effort and thrice the amount of time, for one fourth the results. That is what you should be prepared for! So that you are prepared for the worst but hope for the best. 

Suresh Narasimha: I will try to elaborate on my experiences and learnings as an entrepreneur with respect to four aspects:

1.  Structuring

2.  Operating perspectives 

3.  Sales and marketing and

4.  Strategies

Structuring: It is very important that you should be able to explain why you are structuring your company in a specific way. Have a reasonably higher equity base at the beginning itself as it will help in future structuring of your company. Always be prepared with the exit clauses and keep it well documented. This will give you the flexibility of restructuring the organization at some point of time.

Every entrepreneur must realize that management and control are two separate entities. He must be able to cope and manage with all the people and situations he is faced with, and at the same time he should not exercise too much control with his employees.

Operating perspective: You need to have your technology team or idea team ready from day one. Make sure you have good content writers. One must also have a quality team and don't become an entrepreneur if you are not exited about selling what you build. You have to be the "sales guy." So if you are two guys one has to be a sales guy and the other a technology guy, you cannot do without either.

Other than this you need a reputed auditor, who is well known in the industry and well connected with VCs. Knowledgeable lawyer who has time for you. Patents and PR agencies that will be able to create recognition of the company in the market.

In terms of employee relationship - there should exist, an open communication between employee and employer. One important aspect of entrepreneurship is your willingness to share things like profits, equity, or anything for that matter. Make employees responsible for spending and it should be Return On Investment (ROI) based. The highest pay should be less than 4% of the total available of funds.

Try to experiment a lot, hire lots of freshers, mentor them and groom them; these are the guys who will be most valuable when you start growing. Start delegating from day one, so that your next level of management is a lot stronger than what you are at the beginning.

Marketing and Sales: Marketing and sales is where creation of need and a basic amount of desire for the product is generated. Try to find alternative methods for sales. Sales can be generated by tapping the right clients and maintaining a strong relationship with them so as to have long lasting sales.

Strategies: Start scaling up much before you want to. Most of us are extremely conservative and we won't spend, but it is important to spend right and scale up at the right time. Try to have a definite goal, though you can't plan that your company will be sold for a billion dollars after two years, you should be able to differentiate yourself and raise good money as soon as you can because money is always helpful especially in this environment.

Bala Girisaballa:  Why did I become an entrepreneur? I once saw the picture of a beautiful yatch called the Rising Sun. The reason I'm in love with this yatch is because it belongs to Larry Ellison the CEO of Oracle, my ex boss. I realized that all the time that I was working for him I was contributing to his yatch. Then it struck me that what the yatch symbolized was freedom, he is free to do what he wants. It symbolized courage and I too took the plunge. But then just like the Buddha's experience, I will suggest 3 things before you embark on this journey, that is to meet 1 failed entrepreneur, 1 struggling entrepreneur and  1 successful entrepreneur.

The next important thing is to learn to be ‘naked' that is with entrepreneurship you will not have a title behind which to hide. No big offices where you can sit and think I'm important. You are your own boss and you've got to bare your soul and be able face the music. Be prepared to stand up for what you feel and be able to confess to yourself. Every time you confess it makes you stronger and bolder. You also get some feedback which makes you better. The advantages of confessing is greater than the advantages of concealing.

Find your ‘yang', the other half. If there is a ‘yin' there is definitely a ‘yang' out there. Because without your ‘yang'; you are not complete. Once you confess to yourself, then others will be able to help you. In my view entrepreneurship is not risk taking but risk mitigation. And you can mitigate your risk by finding your yang.

The next thing is to know that you are not the idea. Lot of people get it mixed up. That is if anybody criticizes the idea they take it personally.

Finally I have realized that it is time today. Because all you need today is a laptop a cell phone and a camera. That is how low the entry barrier has become. It is scary and exciting all at once.

What is the key difference between leadership and entrepreneurship?

Kumar: One of the ways to look at it is the way in which people execute their responsibilities. The entrepreneur typically is focused on the opportunity while the leader usually behaves like a trustee to take care of the interests of all the elements in the vicinity of an organization. The focus of the leader is on how he can conserve and manage the available resources well to be able to give a fair return to all stake holders. Whereas, an entrepreneur is in pursuit of an opportunity or something new with very limited resources.

Parag: Leadership is also a part of entrepreneurship in my view because an entrepreneur in his organisation is the last shoulder to cry on for any employee. So finally an entrepreneur also needs to be a leader. So they have to be able to put up a brave face in spite of knowing the actual problems they are facing. They have to be able to tackle these problems honestly and tactfully.

Bala: Whenever we refer to leadership it need not be in context to a big company. A leader is one who carries out his vision. The soul of entrepreneurship is when one creates something out of nothing, on a daily basis.  There is also intrapreneurship where you are on your own in a large organization Here there is no financial risk but lot of political risk that is if you fail, your career as you know it is doomed. It is like the soul of an entrepreneur living a leader's role there. 

Compiled by Arathi P. Balaji 

Issue BG71 Feb07

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