Most of these lifestyle entrepreneurs are keen to stay clear of extra stress, even if it translates into more money. 

Gone are the days when choosing a career meant juggling between being a lawyer, or doctor or perhaps a chartered accountant. Nowadays, everyone wants to be an entrepreneur, and kick-start the next multimillion dollar business! In fact, to gain maximum mileage, entrepreneurship itself is being steered forward on a new highway - the Internet.

"Virtual Entrepreneurs" are people who launch virtual businesses that function via the Internet. These may sell a product or service, much the same as regular offline businesses, and thus require a host of back-end staff and support systems. The key differentiator, however, is that every transaction takes place on the Internet.

Want to setup a virtual business?

Hyderabad based chartered accountant Bhaskar believes that thanks to technologies like broadband Internet, VOIP [Voice over Internet Protocol], cheaper computers, and remote access software, outsourcing businesses lend themselves well to virtual entrepreneurships. Having coined the phrase Virtual Public Accountant to describe the services that an accountant - chartered accountant (CA) in India and certified public accountant (CPA) in USA - may render over the Internet, he shares his opinion of the kind of outsourcing businesses that work well over the Internet.

"Outsourcing of bookkeeping or any kind of data entry is the easiest form of virtual business, since the inputs that are just data, may be easily transmitted over the Internet. Knowledge Process Outsourcing (KPO) is another business that is well-suited to virtual entrepreneurships as again, its input / output is easily transmitted from / to remote locations. KPOs exist in various fields - accounting, law, engineering design, etc. Specific activities could include - audit, drafting of agreements, patent searches, patent application drafting, computer aided design (CAD), etc. A virtual business that involves physical delivery of goods is also possible - such as online ordering of books, CDs, flowers, gifts, tickets, etc. This is referred to as the ‘Click and Brick' model that links a physical warehouse with an online Web presence," says Bhaskar.

Catering to a global marketplace

Ram Sridhar, CEO of VirtuIndia, a Chennai-based virtual office service, lists consultancies, coaching, small or home-based

setups, franchisees, any business that requires an international presence, any Internet-based business like travel portals, HR firms, and real estate as businesses that are easy to establish and run virtually.

Besides the technologies listed by Bhaskar, Sridhar also cites the convenience of using a host of social / business networking sites like www.ryze.com or www.xing.com to develop virtual entrepreneurships. He opines, "These sites have an international presence as their members are drawn from many countries across the world. For example, I received a query mail from a person in Estonia, a country which I never heard of! This is immensely useful to a virtual entrepreneur targeting the global marketplace, not merely the guy on the next block, or in the neighboring state. In this digital age, potential clients are just as likely to buy from an e-Bayer in Istanbul or in Karachi."

Bearing in mind that it relies on the Web, CEO of OSMOS Multimedia Pvt Ltd Sanjeev Sarma points out that online entrepreneurship has boomed alongside the increasing scope of the services and products that the Web offers. Some of the key businesses that he believes are associated with a virtual entrepreneur are Web design and hosting, including design, programming, content, etcetera (his very own osmosweb.com), search engine marketing, domain Name trading (check out sedo.com), portal offerings (his own portal indianshutter.com), ad publishing leading to views / sales (check out adbrite.com), and blogging.

What's new in the world of outsourcing?

Extending the concept of virtual entrepreneurship a tad, nay a mile further, futurist and CEO of the DaVinci Institute Thomas Frey proposed the "Empire of One," a virtual business run singly by a virtual entrepreneur. This business empire, mind, is starkly different from professionals offering their services via a solo practice. This new breed of virtual entrepreneurs leverages the power of the Internet to create and control a vast business empire from wherever they happen to be.

You may well wonder - how would transactions take place, with only one person in the driving seat? Who would man production lines if the business is a manufacturing concern? Who would distribute the goods, and market the product or service?

The answer is simple - every function is outsourced, from production, to distribution, to marketing, to accounting, to legal consultations. The Empire of One thus takes outsourcing to a brand new level. We've all heard of the West's infamous outsourcing of business and knowledge processes to the East, but this concept takes outsourcing much beyond the East-West divide.

Do you have what it takes to be such an Emperor?

This mass outsourcing, as it were, could result in a business that virtually (and I mean this!) crisscrosses the globe, with the inputs of each provider being managed by the Emperor! Evidently, s/he would require sound managerial skills. In fact, Frey has opined that "the Empire of One business model is one with great appeal to former corporate executives with global contacts and good ability to manage things remotely."

Frey also cites Boomers searching for meaning and significance in their lives, as the kind of people who are more likely to turn into virtual entrepreneurs. Interestingly, he also calls those founding new startups as lifestyle entrepreneurs - people who've gone into business to take more control over their lives and to build a lifestyle that suits them. "Health and happiness," he continues, "are bigger priorities [to them] than wealth." Most of these lifestyle entrepreneurs are keen to stay clear of extra stress, even if it translates into more money.

Business architects not managers

The octopus-like functional entrepreneur is envisaged to need ‘intelligent skills' as opposed to the more conventionally spoken about ‘brute force skills.' Besides, s/he should be a self-starter, competitive, strategic risk-taker, and a person who doesn't view mistakes as failures.

It is also said that an "Empire" business person needs to be more of a business architect than a manager. What exactly does this mean? Ajay Patel is a power seller on eBay selling lifestyle products like USB drives, TV tuners and other useful items. In order to maximize the chance of a virtual sale, he is constantly on the lookout for new products to list on his store. He doesn't even have some of these in stock but knows that they are available locally or at short notice - enough to ensure the product ships to his customer within 24 hours. Patel's task is to constantly develop his online product line so that he boasts of a maximum range of competitively-priced latest technology products for clients sitting in far, isolated places where a physical store may not exist.

In Sridhar's case, he has designed the very concept of his business - offering virtual offices - keeping in sync with today's ever-changing business culture that sees speed, flexibility and economy as essential to succeed. He believes these very reasons have led even Fortune 500 companies to appoint virtual offices throughout the world, instead of opening branches.

Rise to face new challenges

Sridhar believes any virtual entrepreneur just needs a bit of an edge...the Virtual Entrepreneur's Edge, as he puts it, which he describes as "nothing but how deftly a virtual entrepreneur uses the technologies facilitating his business to his advantage, how he maintains relationship with his clients and how fast he responds to their needs." At VirtuIndia, confidence-building exercises among clients play a paramount role. This is quite natural, as one of the key challenges of a virtual business is trust - after all, how do you trust someone you've never seen?

Not surprisingly, these entrepreneurs manage to find a way forward. For instance, Patel lists a whole range of advantages of shopping on his eBay store (www.stores.ebay.in\epresent), from saving time and petrol to avoiding parking hassles and availing of door delivery. But would a client who doesn't know him buy this argument? Probably yes, as Patel's power seller status indicates that he has received positive feedback from more than 99.00% of his customers. This client feedback is made available online so that prospective buyers can form an opinion of Patel's ability to fulfill the sale on time, and his reputation for offering a quality product that matches its description.

The rules are changing

The main challenges Patel faces are a lack of awareness and the possibility for a genuine sale taking place. In recent years, online collaboration and commerce has gained much ground on an international plane. Indians, too, are slowly waking up to the immense possibilities online. For instance, a collaborative effort like Wiki indicates the power of masses of people pooling their knowledge and effort to create an online encyclopedia. Flickr and YouTube are also examples of thriving online communities pioneering a new form of collaborative production, where customers are not merely end consumers of a product but have evolved to the status of "prosumers," or co-creators of goods and services.  

In fact, Don Tapscott's book Wikinomics exemplifies how the Web has facilitated many to participate in the economy to creating online content, design software, research cures for disease, and so on.

In the business sphere, this change is being viewed skeptically by some, favourably by others. But every business leader needs to realize that as hierarchies are changing, lines of authority may never be as well-defined as before. The in-charge at the top may no longer be the controller, but simply the coordinator of a collaborative process who infuses a sense of direction into the joint effort.

Smart companies will lead the way

Wikinomics suggests that this trend towards global action mustn't be feared for its potential to eat into a company's profits. Quite the contrary, it harnesses collective capability and genius to spur innovation as never before. Apparently, quoting from Wikinomics, companies such as Boeing, BMW, and Procter & Gamble are applying collaboration and self organization as powerful new levers to cut costs, innovate faster, co-create with customers and partners, and generally do whatever it takes to usher their organizations into the twenty-first century business environment.

The Larvol Group (TLG) is a San Francisco-based pharmaceutical market research company that exemplifies the spirit of "virtual businesses." Founded by Bruno Larvol, who is also its president, TLG has successfully leveraged a virtual resource - its people. Its well-compensated geographically dispersed accomplished practitioners have the freedom to deliver without the usual constraints of location, hours, organizational structure. Inevitably, this entails facing the challenges of different work cultures, time zones and personalities. As Larvol points out "communication is key to our business model and though it is a challenge in a virtual office, we have overcome it through various tools and practices. One example is instant messenger to stay in touch while we work, so that people can ping each other whenever they need to without having to worry about disturbing colleagues or their family at odd hours - if they reply they are available. We also have teams interact socially in a virtual environment with our ‘happy hour' calls each month. These calls enable teams to know each other better, to discuss issues, challenges they face, generate ideas for better communication, etc. These practices also help teams build trust and good working relationships. Another challenge we face is working across different time zones. Instant messenger, email and pre-arranged interactive calls have enabled us to overcome this to a large extent. Common technology usage has to be ensured across the teams and finally training, performance monitoring, rewarding and mentoring are issues that need constant attention."

Another challenge that TLG has successfully bridged is security - as the team handles confidential data and relies significantly on IP for the constant exchange of files and data. Larvol explains this challenge is overcome by applying tools such as antivirus protection, exchange of data only via the company email accounts, password protection of data and so on.

At the end of the day, as Sarma says, "Although virtual entrepreneurship is probably the easiest thing to get into, it is also probably the most demanding, with every byte and pixel being fought for by people. It calls for staying ahead technically and also in terms of innovation. Technologies and concepts change or crash overnight and online disruption is very high." Easy yet difficult - either way, virtual entrepreneurship is here to stay!

Charu Bahri is a freelance writer and author of two books. She also writes funding grants and software for a charity working in the health sector. 

Issue BG79 Oct07

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