American Economy slowing down, Rupee Appreciating, Stock-markets in a yo-yo, high interest rates, declining export numbers, all this is slowly and steadily having an impact on business. Assumptions on which certain businesses were built are being questioned, business models are breaking apart how does one plan for uncertain times and not only that but grow? How does one deal with a demoralized team? Businessgyan and TASMAC put together a panel of Experts to share their experiences and interact with the Audience to generate ideas on how to deal with this aspect of business.

The Panel Members were :

Prashanth Prakash, Partner - Erasmic  Venture Fund

K Vaitheeswaran, Chief Operating Officer - Indiaplaza.in
(formerly Fabmall.com)

Prof. Rishikesha T Krishnan - IIM - Bangalore

Excerpts from the Q and A session:

Q: Has it been worthwhile being an Entrepreneur?

Vaitheeswaran: No question, it is not possible to replace this with a job anytime.

Q: Are the times as bad as the media make it out to be?

Prashanth: I really like the CNBC interviews, where 2 people who have the exact opposite opinions, one who says things are really bad and it's worse than the 1920s recession and the other who says you've got it all wrong, the whole world is growing. However I don't think we're in doldrums, but the growth sectors of last few years will change, due to what's happening in the US, but India is at a stage where new sectors will replace the sectors that are going out. 

Prof. Krishnan: India's exports is about 20% of our GDP, China is at 27 to 28%, if export market is to grow slowly or if it was to decline, yes, there will be some impact, it will effect 20% of our GDP, 80% of our economic activity is India focused, so it will not dry up if basics are in place like Monsoon will affect the local demand and I will not worry too much, 6% or 5% growth can be looked at, Indian economy is robust. There is quite a bit of flab, our software industry is used to operating with really big margins, so there will be some cutting down and it will have a ripple effect.

Vaitheeswaran: I really don't think so, I think it's a good time.

Q: Why is the  growth phase and maturity of Indian companies slow, Why is it that a Google or a Yahoo has not happened in India?

Prof. Krishnan: Many India companies tend to be under capitalised in the early stages to really build the size and scale which is required. Many Indian Entrepreneurs are averse to giving up control so they don't take external money, and they don't have enough money to grow the business. If you look at US companies which are successful, it is because, they take many rounds of investment in a quick succession. Infrastructural bottle necks are another of the reasons for the slow growth pace.

Vaitheeswaran: First generation Indian Entrepreneurs find it difficult to vision the scale of their business, to think Huge. If you are not from a business family, it is difficult to visualise your start up growing to a 1000 crores company in 5 years time. If you visualise it at the beginning, you will acquire talent and you will capitalise frequently. If you move at one step at a time, you are impacting the velocity of growth.

Q: What should be the Exit strategy?

Vaitheeswaran: IPO as a exit route is questionable, it requires a lot of Due diligence. IPO is not the right kind of exit strategy for a company below 500 - 1000 crores.

Prashanth: For a company like Google to happen in India, there are 2-3 way. A Naukari kind of IPO in the US scenario would have sucked in 3-4 other smaller companies. Consolidation can happen in different ways; you can have 5 similar start ups with complimentary capabilities come together, form alliances that are more meaningful. Even 500-1000 crore companies can aspire to go the IPO way.

Q: What are the practical difficulties that start ups face in terms of obtaining licences etc.?

Vaitheeswaran: It is sector dependent, so it is difficult to give a standard answer, getting the necessary government approvals is not very difficult anymore. Perhaps if you need manufacturing licenses it could be little cumbersome.

Prof. Krishnan: It may be lot easier to start than to close a company, we stopped operations in a company in 2001, and I'm still not able to close it.

Balaji: Lot of the licensing issues can be outsourced today.

Q: Software companies with dollar-rupee arbitrage kind of business, has been impacted today due to the Dollar depreciation is there anything you can suggest how they can manage their business?

Prashanth: There is a risk if it is a ‘Me Too' kind of business, and it is a pure arbitrage game, there are other countries in various stages of growth, which can probably be more competitive. If companies focus more on intellectual arbitrage the danger is lesser, you have to align yourselves to the customers need in the US. Making yourself a lot more indispensable and there by leverage your value.

They were speaking at a Panel Discussion organized by Businessgyan and TASMAC on the topic ‘How to grow in turbulent times?'.  Balaji Pasumarthy Chief Catalyst of Businessgyan was the panel Moderator.

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