The journey involve many ups and downs. Prabhakar speaks of  the 5 Traps to be avoided.............

Prabhakar Valivati  is the Managing Director of Mentor Partners. He has 20years of business management experience spanning areas of Business Planning, Finance strategies and Inter-national Business management. Has also worked in key roles at TVS Suzuki and Wipro prior to co-founding RelQ Software. He currently serves on the Board of RelQ Software. 

Excerpts from Mr. Prabhakar's Talk...

I've been an Entrepr-eneur for about 18 years formally, I started my entrepreneurial venture when I was 13-14 years old, there used to be a company in Baroda called Centron, who used to make blades called Centron blades. They had released an adver-tisement, which said that if you cut out the coupon and send it along with 20 rupees, we would send you a box of blades, which you can sell for 25 Rupees, and that is how I started with my first venture. Subsequently we found a person who sold the same for Rs. 18/- in Chickpet, so we sourced it from him.

Formal Entrepreneurship started in 1989-1990. I've gone through plenty of hardships and it is due to the traps which I'm presenting here. There was a time in 1997, when I was 39 years of age; I was down to my last 10 or 15 thousand rupees. I did not know how to meet the next month's expenses, when I actually started my biggest venture, RelQ Software. 

The various ventures I founded and operated in the last 18 years are varied; I've done about 18 different things. I've done market research, management consultant; I've sourced products From 8 countries and sold them in about 7 countries, without visiting any of these places. I've sourced Fertiliser from Hong Kong and sold in some other country. I've attempted Ship breaking, may be that is why I went down to my last 10,000 Rupees, trying all kinds of things.

These are not the only traps, these are the traps that we fell into. Some of these will help you negotiate better terms with fate as you go along; hope they will help you build bankable ventures. I've listed the 5 traps that we have gone down.

I Trap:  Overestimating need... Is there a reason you are in business? Is it because you want to be or is it because you have nothing else to do. Is there a need for the products/ services being offered?

If all aspects of the business are being met, serviced to the satisfaction of all customers, at all price points, and then it is very difficult to make an entry into that field. But even in a complete business, you can find black holes, if there is no black hole yesterday it doesn't mean it can't be there tomorrow.

Do sufficient research in the field you intend getting into. There may be a latent need, but you may not have a capability to bridge that Gap. If there is a business that you want to get into, please identify the big black hole that is there, what is it that sets you apart form the mass. In other words, are you different from all other incumbents in that business? If there is no supply - demand gap in the segment that you are bridging, you are exactly like the other incumbents, then how on earth will you succeed in that business. The black hole can be that the current service provider's rates are very high.

Not investing enough in understanding the market is probably the biggest trap. You will always overestimate the need and underestimate the inertia.

2nd Trap: Underinvesting in the differentiator... What are the things that set you apart? Having identified the differentiator, adequately invest in it. If you under invest in that differentiator, then you are lowering your barrier, and other competitors will get in. Just because there was a big demand in a country for fertiliser, without understanding the industry we got into the business  and lost huge sums of money.

3rd Trap: Focus .... This is the trap of not being focusses. Trying to generate multiple sources of revenue. Not focusing on the one thing that you are in business for is a sure way to kill it.

4th Trap: Team ... If your team does not have multi faceted skills, then you are in a trap. Because it is hard for a single person to understand all aspects of the business. You don't need to have everybody who helps as co - founders, but bring them in as advisors, or on a part time basis. (Then it is another big Trap.)

5th trap: Undercapitalising... This is one of the surest way to kill a business. Not investing enough capital, if a venture needs X amount of money and if you invest X - 5, you are not taking the business anywhere.  Also do you have the luxury of time or is speed of the essence? An undercapitalised business is almost always an undertalentised business.

In my two new ventures I may not fall into these 5 traps, I might fall into some other traps..........

He was speaking at a Panel Discussion organized by Businessgyan and TASMAC on the topic ‘What makes Entrepreneurs Tick?'. 

Compiled by Ms. Mangal D Karnad for Businessgyan

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