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Tag: Entrepreneur

8 Secrets of Success

As the father of two teens, there are many moments when my children ask, even implore, me to “Just tell me what to do!

As a parent, it’s hard not to TELL your kids what to do. Of course there are far more times when they don’t want to hear the things I’d like to share with them. Mentoring entrepreneurs in many ways not that different from raising teens – you’ve gotta resist the urge to tell them “the answer” even when they ask for it and you’d better get used to your advice not being adhered to or at times even heard.

That of course never stopped me as an entrepreneur, mentor or parent from sharing, lessons and insights that I never cease to learn. Even while urging kids or entrepreneurs to focus on impact and the journey, rather than “success” – the question of how does one get to be successful comes up all the time. Luckily better men than me have grappled with this issue and here’s a short (3.5 minute) video that answers this very question. For those that prefer to read over watching a video, however short, I have provided a short summary at the end.

The eight secrets are

  • Passion – be passionate about what you do (& the money will follow as Marsha Sinetar put it)
  • Work – work hard but have fun. As Richard St. John puts it, be a workafrolic and not a workaholic!
  • Focus – focus – on one thing is critical to being successful
  • Persist – persistence is an attribute that comes up consistently
  • Ideas – be creative and constantly come up with new ways to think & do
  • Good – practice, practice, practice – so that you get good at what you do
  • Push – you have to push yourself, past doubts & doubters, obstacles to be successful
  • Serve – be of service, whether with your business or product or in life

10 Non-business Books Every Entrepreneur Should Read

Given how popular 10 Books Every Entrepreneur Should Read has been, I reckoned it would be good to share 10 non-business books that every entrepreneur will do well to read. So here it is.

 

So what would be your favorite non-business book? Join in with your thoughts.

5 Simple Tips for Successful Negotiations

Negotiation Cartoons: Positions Vs. InterestsAs an entrepreneur, you’ll find yourself having to negotiate almost as much as you have to sell. From landlords, to suppliers, prospective employees, partners and of course customers – you’ll negotiate often without even recognizing that’s what you are doing. While there are entire books written on the subject of negotiation, a few simple rules have served me well over the years.

Be clear about what you want Simple as it sounds, often we get carried away or worse yet upset and take a position or ask for something, which is really not what we want. Sometimes it’s as simple as that we were not clear going into a negotiation as to what it is we want. So when we actually get what we demanded and find that we are not happy, it’s not a good place to be – especially if you’ve burned bridges or needlessly cheesed off folks you’d have to work with. So don’t go into any negotiations without clarity on what you want – be it bringing on board a new employee, signing a new customer, re-working the terms of a loan or selling your company.

Know you walk-away price Be clear when you would not do a deal – this has to be black and white to yourself and can’t have any ifs or buts. And this need not be just about money, could easily be about the other terms. For instance, if you are selling your company and the buyer is not prepared to give the terms that you want for your team (for instance, employment guarantees or restricted stock) — a situation I’ve faced —you need to know are you prepared to walk away. Being clear about this makes the entire negotiation far less stressful.

Never negotiate against yourself This is by far the most common error all of us commit. We’ve all experienced it. Like when you see a jacket you like at a store – you ask for the price and find it too high. So you walk away – the shopkeeper calls after you – saying he’ll knock of 20% – he’s just negotiated against himself (of course he may have marked it up 40% 🙂 Particularly when negotiating a contract with a prospective customer, the temptation is great to lower our price or improve our terms when the customer feels we are not offering a good deal. Instead, it’s always best to ask the customer to counter your offer – let them quote a price that’s agreeable to them or terms that are more palatable. Now you have something to negotiate about – maybe you get nearer their price, but take something off the table (support, warranty, options) or you can counter with a different price for better payment terms. The important thing is that there’s got to be give and take and until the party puts a stake in the ground, don’t move yours.

Bring something to the table that you can concede All of us like a good deal – especially one that is done in a spirit of give and take. Just as we expect the other guy or gal to make concessions be prepared to make some of your own. This requires you not only to know what you want and what your walk away is, but what is NOT important to you. For instance, if you’re trying to close a large deal and having money up front is not critical for you, be prepared to give that up – the important thing is to ask for a thing or two, that you know you are prepared to concede and be clear which those are and which ones are non-negotiable. If everything is non-negotiable you are not going to get too far. And it makes the whole negotiation less than pleasant.

Save your best for the last Despite much advice against it, some folks and entire cultures conduct negotiations on a piecemeal basis – that is one item at a time. You discuss one point, make concessions and then they make their next demand. Refuse to do this politely. And the best way I’ve found to do this is what I term, saving your best for the last. In essence, establish what’s the critical care about for the other party (and yourself). Ask them, if we close on this item (whichever one it is) is there anything else that’s holding the deal back. If the answer is no, close on the other times. If they answer is yes, get down to negotiating to a close. If they pop something else up after this they are not dealing in good faith. Be prepared to walk.

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Are We Celebrating India’s 10,000 Entrepreneurs

“What does Anand Mahindra winning the entrepreneur of the year award mean?”

I hadn’t realized the same question had also been lurking in my mind until my friend raised it. Before I could really wrap my arms around the issue, he continued.

“Does it make sense, that in a nation of a billion folks, and likely a million plus businesses, that the leader – even one as successful as Anand Mahindra – of a 65-year-old company wins the entrepreneur-of-the-year award?” he asked. “You would think they would be able to find a smaller, up and coming company.”

And this came from an ardent admirer of Anand Mahindra. It set me thinking – never a good thing on a Monday morning.

Mr. Mahindra has many firsts and successes to his credit, be it his magna cum laude from Harvard, his growing the family business into a global powerhouse in tractors or his leadership of corporate India whether at Davos or on twitter (@anandmahindra).

A little further digging into (yep, I Googled) the entrepreneur of the year award revealed that previous winners included Kumar Mangalam Birla and Ratan Tata, both leaders of multi-billion dollar businesses founded by their grandfathers.

To be fair, the judging criteria of this particular award included global impact and leadership in addition to the standard business metrics. Past winners also included first-generation entrepreneurs N.R. Narayana Murthy of Infosys and Sunil Bharti Mittal of Bharti Airtel. Yet some others stuck in my craw.

It was around this time, that I got a call inviting me to speak at an entrepreneurial event called “Unpluggd” (no, it did not involve any acoustic guitars). Unpluggd was billed as a different event, namely one featuring only practicing entrepreneurs sharing their experience with an audience of entrepreneurs.

I am glad that I let myself be persuaded to speak at the event. I learned more from the other speakers and the more than 200 attendees – most of whom were practicing entrepreneurs – than they likely got from anything I said.

The first and foremost takeaway for me was that entrepreneurship, not merely of the tech variety but of every kind imaginable, is thriving in India. And entrepreneurs are getting started at ever-younger ages. A majority of the attendees were under 30 (Yes, I asked).

It was the audience that made this event electric for me. A fair number of the attendees came from engineering backgrounds, though some graphic designers and finance folks were also present. Most were already running a business full time with a couple having even scaled to more than $1 million in revenues. If there was an area that could have been improved, it was that less than 15% of the attendees were women. Then again that’s probably higher than the percentage of women CXOs in the BSE 500.

The speakers included folks running businesses ranging from corporate hospitals, online bookstores, mobile phone apps, bus-line ticketing and even a restaurateur. All of them were first-time entrepreneurs that spanned the funding spectrum – from completely bootstrapped, through angel-funded all the way to venture capital-funded. Most of the other speakers were yet to hit forty (I was a notable exception) or even thirty-five. The stories – and dare I say wisdom – that some of these folks shared with total candor and very little jargon was refreshing. And this was just one Saturday in Bangalore.

With Open Coffee Clubs, Saturday Startups and The Indus Entrepreneurs (TiE) events, there are signs of an entrepreneurial revolution brewing in India. And these are just the visible urban, mostly technical or professional group of startups. At the National Entrepreneurship Network (NEN), we’re helping thousands of students start businesses each year (full disclosure: I work at NEN), many of them in India’s Tier 2 and Tier 3 cities.

Meanwhile in Ajmer, Rajasthan, in Panruti, Tamil Nadu, in Shillong, Meghalaya, in Wardha, Maharashtra and many such places, young people are pursuing their entrepreneurial dreams. The story of these yet-to-become Karsanbhai Patels and Sunil Bharti Mittals, their experiences and journeys need to be heard, shared and re-told.

The mainstream media is far too busy celebrating the already arrived, regardless of how late they got there. As a mentor remarked, we should quit looking into the entrepreneurial rear-view mirror and look forward to the road ahead.

All too often we hear that only Bollywood and cricket sells in India.  But there are other sports and stars – be it our chess champions, our women boxers, snooker kings or trap shooters, not to mention our hockey and football teams. It’s also important to recognize that there are a million entrepreneurs struggling and thriving, not only the billion-dollar barons who seem to hog the printing ink.

Nasscom’s product conclave and several other nascent entrepreneur forums are a small step in the right direction. India needs its own version of the Inc. 1000 to recognize, encourage and celebrate its toiling entrepreneurial masses. We could call it the “India 10,000.*”

I am sure Mr. Mahindra would agree with me.

A shorter version of this article first appeared in Wall Street Journal in May 2010.

postscript
Two years on, after I first wrote this article, NASSCOM launched their 10,000 startups program in March, 2013. NextBigWhat, organizers of Unpluggd have themselves partnered with NASSCOM.

Dedicated startup sites, including YourStory.com, NextBigWhat and startup-focused weekly coverage have arrived at all major business papers, including, Economic Times, Hindu Businessline, and Mint.

Decision making for Entrepreneurs

Life has a nasty way of springing surprises on you. The only certainty, it would appear, is that you will encounter a lot of uncertainty. Being an entrepreneur is no different. If you are like me, you might have thought you made your hardest decision when you chose to become an entrepreneur. Wrong! Before you know it, the business, customers, employees and the world at large are bringing problems that require you to make decisions. There also seem to be few easy decisions. Why didn’t anyone tell you about this? Well, you heard it here first — much of your productive time as an entrepreneur will go to making, hopefully, good decisions.

“Effective executives do not make a great many decisions. They concentrate on the important ones,” says Peter Drucker in his book The Effective Executive. Simple as Drucker’s assertion sounds, it is hard in the fog of entrepreneurial battle to focus on the important few. So how do you identify the important from the merely urgent or routine problems? Having identified these, how can you make good or effective decisions?

Is this your decision?
The best way to make good decisions is to first determine if it is even your decision to make. Entrepreneurs — and here I speak with some experience — love to be in the thick of things. “The equipment is stuck in Customs. We won’t be able to ship our product on time. What do we do?” “He won’t accept our offer without a joining bonus. Should we offer him one?” “The customer will not issue a purchase order without a penalty clause. Do we agree to one?”

Issues like these will keep popping up all the time. While you may love playing Captain Crunch, the one everyone goes to for decisions, you would be mistaken to offer one for every question posed. If you want your business to grow and, importantly, if you want to have a personal life, it is critical that most decisions be made by other people. That is the first decision you have to make every time, answering the question: Is this a decision someone else should be making?

So how do you determine which decisions are yours to make? I’d recommend that you use the following simple guideline — if a year from now it would still matter what decision you make now, then it is probably something you want to be involved in. For instance, agreeing to a penalty clause in a multi-year contract with the Government will matter. Similarly, anything that involves the culture of your organisation or shareholding or capitalisation would make the cut. Most other decisions can probably be made by someone else. Which of course brings up the question: How do you ensure that the decisions others make do not drown your business?

Decision mechanics
Having a well thought out and tested process for decision making will not only help you but your entire team make the right decisions. Here again, I refer to the work of Peter Drucker who spells out a five-step decision-making process. They are:

  • Comprehending the nature of the problem or decision — is it generic or an exception?
  • Understanding the boundary conditions of the problem.
  • Figuring out the right solution without considering real world compromises that might be needed.
  • The action required to execute the decision.
  • Validating the appropriateness of the decision once taken.

At first glance, it may seem tough to figure out what to do if your product won’t ship on time. Most operational issues do not require executive decision making. As in the example of agreeing to a penalty clause in your Government order or deciding to do business with the Government or setting up an overseas distributor — issues that will have a long-term impact on your business — a well thought out process helps. Further, it allows your senior staff or other partners to use the same methods and yardsticks to make their decisions. This way your direct presence or involvement is not needed in each time.

Drucker makes the point that one rarely encounters truly exceptional cases. Most situations you encounter, even if new to your business, are generic and would require a rule to be fashioned. “We don’t sign penalty clauses in our contracts or any penalty or liability clause cannot exceed the value of the contract itself,” is a rule you can formulate. “We may offer discounts or walk away but no penalty clauses,” is another. It is critical to define the problem before you attempt to make a decision. This requires the first three steps to be followed rigorously. Subsequently, dealing in the real world rather than in some ideal scenario, it is important to ensure that the solution is effective. And this should not merely be faith-based but data-driven; such validation after a decision is made will ensure you continue to make good decisions or learn from bad ones.

The five steps could take a few minutes in some instances and a few weeks in others. Either way, it will help you make measured decisions. Needless to say no process is infallible and good leaders trust their instincts. Of course, great leaders know when not to rely on their instincts but to get the data first.

Not making a decision is a decision
The former Indian Prime Minister P. V. Narasimha Rao epitomised the art of non-decision making or so it seemed. Legend has it that he’d avoid making difficult decisions and in time, the problem would disappear or resolve itself. As an entrepreneur you will rarely have the luxury of ignoring decision making. That is not to say you will not do it. I have avoided the hard decision to let go of some difficult employees, as my staff keep reminding me frequently. Such avoidance of decision making is the classical ostrich-sticking-its-head-in-the-sand syndrome.

It is critical to recognise that it is a legitimate decision when you decide to not make a decision. It’s worth reading the previous sentence more than once — it is not intended as a play on words. Choosing to not make a decision is completely different from avoiding a decision. The difference is that you have made an explicit choice, one with consequences that you understand and are prepared to live with. Such a choice is particularly appropriate when it is evident that the situation will take care of itself. More importantly, it is of little importance, even if annoying, and is unlikely to have any material impact. In such circumstances, it is worth keeping in mind the Roman edict, “De minimis non curat praetor”or “the magistrate does not consider trifles!”

This article first appeared in print in the Hindu BusinessLine in Nov 2008.

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