Over the last two months, I participated in a number of meetings with founders of startups – as an adviser, reviewer or investor. Interestingly in nearly every one of these meetings the same questions kept coming up.
In particular four different companies – two nascent startups and a couple in their early tweens – were facing eerily similar issues. Despite the startups being in very different spaces, the varying ages of their endeavors and having smart and motivated founders – they were all trying to come to grips with the lack of market traction. This despite a great deal of time spent talking to prospective customers, partners, building and launching working prototypes.
I must admit after the first couple of meetings it appeared they were having different problems. In one, a marketplace that was not getting suppliers nor buyers off the starting block, in another focusing on the technology to the exclusion of all else, and yet another having a solution looking for a problem. However, by the time the fourth meeting rolled around it was plenty clear, that all of them required a sharp focus on answering the question
“Who is your target customer?”
and more importantly,
“What pain are you trying to solve for them?”
Two years into our own start-up, we find ourselves returning to this question with reasonable – some would say troubling – frequency. When we got started on dog-earz, the newsletter tool for the rest of us, we defined our target customers as “marketing & sales folks in SMBs” and the pain we were trying to solve for them was How to keep in meaningful touch with everyone in your Rolodex, even if there wasn’t a deal on the horizon.
Of course, it helps, if your target customers actually exist (ours did) and are accessible (a little more difficult) and truly felt this as a problem (not clear). Our solution seemed more a nice-to-have vitamin rather than make-my-pain-go-away Aspirin. We hung in there, as we felt we were target users ourselves. With time it was clear that we’d better solve their pain rather than imagine that they will behave the way we’d. Seems obvious in hindsight, doesn’t it?
Things are not always as evident as we’d like them. I once had an opportunity to talk to Phanindra Sama, founder of redBus.in about his understanding of what pain they are solving for their customers. Phanindra shared his view that the pain his customers felt was not in purchasing bus tickets – as I’d have thought. In fact it might still be more convenient for a traveler to call someone to hold a ticket and pay for it at time of boarding – only one phone call needed, but it is the absence of reliable information – as in how many buses, when and at what price or location will leave from Bangalore to Chennai (or better yet from Jalandhar to New Delhi?) that was the customers’ pain point.
Ask yourself these two questions, repeatedly and validate them by getting out of the office and asking your target customers about their pain points. Once you nail this down it makes, at the very least, decision-making a whole lot easier. Knowing this is of course only a good start, but not knowing can kill your business.
“Son, businesses can succeed or fail. Because your business fails doesn’t mean you have failed!”
My father said this to me, one evening as the two of us sat down to discuss how the startup I headed was doing.
For a little over four years I had been running my startup. Months after we got started, the dot-com bubble peaked and burst. We had also chosen a technology, that everyone felt would not take off despite the initial hype. Our two nearest competitors where both American companies – one, also a startup, that had raised about 100 times more money than we had and the other a listed company with well over a 1000 customers. We’d over committed to the first three customers we’d acquired – miraculously in three different continents – and ultimately failed to deliver outright or were so late as to be not useful for the customers.
We had borrowed money from the bank (another of my father’s favorite piece of advice – debt is a good thing) and from family including my father. Just the previous year, we had to cut back on a rather ambitious – and poorly thought out – plan to design chips and keep our focus on software. We also had to let go nearly fifteen people, whom we’d hired in a burst, without much attention to culture fit, while persuading the people who remained to take 10-20% pay cuts with no commitments on when these cuts would be reversed.
This was also a time when I was commuting – spending two weeks every other six weeks in Bangalore, whilst my family lived in California. So between hotel rooms and my sister’s house, I spent many a night tossing and turning, worrying how we were going to make payroll that month and not sure if we’d ever turn the corner.
To add to the pressure, the senior staff, who’d been putting in 10-12 hours a day were buying first cars or homes incurring debt, getting married and now had spouses who now wondered what they really did. Once when we had to send a key engineer to a customer site overseas, we packed his new bride with him – so that they are not separated within weeks of their wedding! We’d had actually celebrated with a cake, when the company made its first million in revenue but ten minutes later had to dash off to dampen new fires.
This story did have a good ending. Despite ourselves we turned a small profit in year five and a real one in year six. We sharpened our business focus and were gaining traction. Newer challenges emerged as pricing pressures drove deal sizes down, competitors were gobbled up by customers in some instances and the market adoption was slower than we anticipated, and the payroll bill continued to grow each year. Whilst my partners and our immensely committed employees along with some luck, brought us to a successful and profitable M&A conclusion, it was my father’s words that kept me going.
“Son, the failure of your company doesn’t mean you have failed.”
What should all of us who care about entrepreneurship and helping it thrive in the Indian milieu do? There are three simple steps I believe we can take.
Story telling Collect and disseminate stories of entrepreneurial success at every forum and opportunity. Blog about it, write it up in a newspaper, share it at meetings. Just as the story of Dhirubhai or Karsenbhai inspires, stories such as Girish’s or Balan’s can ignite others to follow them. We need more stories of success, small and big, to make entrepreneurial success a realizable dream for more Indians. Every time we read a story of someone who’s made it big, we better find and tell stories of five others who have made it small. Demand that our newspapers and magazines celebrate the little guy as much as they do the big guy.
Encourage During and just after the Kargil war, there was a spurt of public appreciation for soldiers and the men (and women) in uniform. Even today when I travel in the USA, I see strangers walk up to soldiers in uniform, in airports or shopping malls, and thank them for doing their job. When was the last time we did that with any entrepreneur or business owner? The gentleman who runs the tyre shop with its six employees may well be tomorrow’s Kishore Biyani with the right breaks. Ask how their business is doing, listen to their story and appreciate them openly and explicitly.
Educate Each of us has skills that if we share with entrepreneurs will help them get ahead. It could be teaching them how to raise capital, hire senior staff, make better presentations, manage their cash flow or land major accounts. This education is best accomplished bydoing. “Show – not tell!” as good writing coaches say. We can do this even by creating forums for bringing entrepreneurs together. Just by sharing each others experiences they can learn from one another and most importantly gain the insight that they are not alone.
Now as three of us embark on our latest entrepreneurial journey at Zebu, we are once again those little guys starting out (though not in a garage but in a small house). I know we could certainly use all the encouragement, education and story telling to stay the course.
“We’d like you to come on board as a founder.” After the first few seconds of excitement and dare I say, exhilaration, reality sets in. “Can you explain to me what being a founder means?” Does being a founder mean, like a parent, being present when conceived? And will it seem much like a parent, largely thankless, picking up things behind your offspring and acting as a source of funding for them? Sure you feel good about that first finger-painting up on the refrigerator, or the #1 Dad doodad on your office wall. But when you are up mopping their vomit or worse and staying up all night hoping the fever will subside is it worth the trouble?
My answer is a resounding yes!
And its always better to found a company with others than by yourself. With that said, it’s worth keeping in mind, your co-founders are likely where you will get grief when you least expect it. In almost every startup I have been part of, founders falling by the wayside has been a feature. Before you conclude the problem was me, I am in good company. When Paul Graham spoke at the recent Startup School 09 – he pointed that all the entrepreneurs he spoke to felt picking the right (or rather not picking the wrong) co-founder was the most important lesson they learned.
The toughest lessons I learnt about co-founders, was there can be so many unstated expectations, particularly when it comes to issues around your own evolving roles. Founder, partner, core team member, executive management – words that initially are used interchangeably and seem just so many words. Yet they have so many different meanings and nuances, as I learnt the hard way. Having been a part of five start ups, two as founder and three as early-to-late senior staff or management member, I have been at all ends of this expectation spectrum.
I’ve loved being a founder and will share the ways I have found to deal with the finding, keeping and savouring co-founders in my upcoming post. Share with me your experience with being a founder, what it meant to you and why you would or wouldn’t do it again!
Last week one of the first tweets I came across, as I started my day, was a re-tweet by @CharlieCurve — a poetical summary of Gary Vaynerchuk (@garyvee) earlier tweet.
“Stop worrying about who’s President, what the market did and FOCUS on your business & brand.”
Yep, focus – say it again – FOCUS is the one thing you need to succeed as an entrepreneur. If you thought you needed it before, the recession has made it a burning need as the economy totters, markets tumble and Cassandras abound. You’d think it would be easy to keep this one word in mind and hence stay focused.
It’s easy to understand why we lose focus, particularly in entrepreneurial setups. The passion and dynamism of being entrepreneurial is the first cause for the loss of focus. There’s always some new problems to be solved, a new customer to be served or more cash to be brought in. This makes it hard to say NO to a lot of things. So one YES at at a time, you get another ball in the air, and soon there’s no time to do things as well as they need to be done. Worse yet, you keep falling behind and losing ground.
Staying focused requires us to master just one word and that is “No” Doesn’t have to be NO, screamed at the top of your voice, or even a “Hell no!” hissed out the corner of your mouth. Just a plain and polite no would suffice. Everything else that lead you to be an entrepreneur in the first place will kick in, once you focus. So take Gary’s advice and quit worrying about anything other than staying focused on your business goals!
For the two of you who may have not heard of Gary Vaynerchuk – here’s a quick blurb. Gary, who by age 30 had grown his family’s small wine business into a $50M dollar business, knows a thing or two about building successful businesses. And that was before before he started “Wine Library TV” that has nearly 100,000 daily viewers. Gary has become a much sought after speaker on the matter of personal branding — patience and passion, he exhorts are critical elements to building your brand and business. But that’s matter for a whole another post.
If I had a dollar for every prospective employee who said he loves what he’s seen and heard at our company but his father/spouse/friends feel more comfortable if he joins ‘Giant Co Ltd’ next door, I’d be a rich man. And every one of those prospects was honest enough to admit that their father/spouse/friends felt far more comfortable with the safety, reputation and BRAND of ‘Giant Co Ltd’.
Brand, the very word seems to connote a variety of images. Advertisements, billboards and neon signs, models and Bollywood stars are what many people associate with the word. If you probe further, you may hear AirTel, Britannia, Disney, Coca-Cola and Pepsi or Sony and Samsung as companies that people think of as brands.
People in the trade, be it marketers or financiers, talk of brand equity, brand loyalty, and brand names. When you talk to entrepreneurs about brands and what it means to them, they, particularly those in the early stages of their business, admit that brand is important and something that they aspire to build one of these days. However, right now they have to run and take care of this cash flow matter or woo that key hire, so they will get back to it when they have more time and when it’s more appropriate!
So what is a brand and how much should entrepreneurs care about it? And when should they care about it? Doesn’t it cost a lot of money to build a brand? Is it a luxury for a struggling start-up? These are a few questions worth considering and answering even as you embark on your business.
Brands, simply put, are what people think they are. In other words, when people associate Amul with butter, Kissan with jam, Disney with TV (if you are an Indian child) or with Mickey (if you are a 40-year-old American) that is what those brands are. Beyond word association, they often denote something specific — what marketers such as Al Ries, co-author of Positioning: The Battle for Your Mind call the brand promise. For instance, among cars BMW promises performance, Mercedes luxury, Toyota reliability, and Volvo safety.
The key point that Al Ries has been making for the better part of three decades is that a brand’s positioning or promise is determined by how it is perceived by the consumer and not what you as the product or service’s maker believe or state it to be. In the simplest sense, as a start-up or an entrepreneur, if you comprehend and internalise this, you are already on the road to building a differentiated brand.
Know yourself
You have already persuaded some friends and a few former colleagues to join your start-up and are now trying to hire a few more key people. “I am quite happy where I am right now. I am not really looking for a change,” is what you’d usually hear from really good people, the kind you’d want to hire for your start-up. One of the key factors in their decision-making will be your brand and what it’s perceived as. At this stage, when you have just started or have not even become operational, it may seem counter-intuitive to talk about your ‘brand’ — don’t be fooled, the day you began dealing with people other than the founders, you began building your brand.
The reality is that your candidate is thinking about the pros and cons of staying at his present job and the alternative opportunities he may have elsewhere . In other words, he is positioning this opportunity against others and the moment he does that, he is associating a brand such as ‘risky’ or ‘unique opportunity’ or ‘great technology’ with your company. If you want to participate in this mental conversation and persuade him to indeed make the leap to your organisation, having clarity about your brand and what it connotes is critical.
The best way to build your brand is to have clarity — namely knowing yourself — as in what does your business stand for, what do you promise your employees, your customers, and other stakeholders. Once you have the clarity, state it and act on it each day. The day you open shop, your brand matters, and if you don’t state it and shape it yourself, the other guys will be they competitors or prospective employees and, most importantly, the spouses of your current employees.
Be yourself
As Anthony J. D’Angelo, creator of The Inspiration Book Series put it: “If you talk the talk, you damn well better walk the walk.” If you thought knowing yourself and stating it succinctly for others was hard, being yourself consistently is harder still. At this point, particularly in the context of start-ups and entrepreneurs, it’s worth pointing out that ‘brand’ is not something people associate with your product alone, but with your company and many times with your employees and you.
Southwest Airlines is one of the best examples of such brand value and perception permeating not merely the flights and on-board service, but also the founder and first CEO Herb Kelleher and all employees of Southwest from gate agents to in-flight staff be they pilots or cabin crew. So if your image is one of love and fun (as it is with Southwest), you had better exhibit it every day and everywhere.
Nearer home, the Tata brand as personified most recently in the Nano announcement or how Ratan Tata himself is perceived or how an entire earlier generation views the Tata Administrative Service, speaks of knowing and being oneself.
Just as it is a good idea to get a friend signed up when you embark on any new and often difficult activity (running three miles a day or yoga), walking your talk as an entrepreneur is easier if you get your team signed up. They are with you every day and will be (much like your spouse) the first to point out when you stray from the path of walking your talk. So if you make that guy who has come to interview with you wait interminably while you finish something, you are not walking your talk of “individuals matter” (if that is your position). Similarly, if you say “Ship it so that we can make the billing and we can fix it afterwards,” you are not walking the talk of “quality at affordable prices”. As any married person will vouch, telling the truth is always the less expensive option (regardless of near-term consequences). Similarly, being true to who you say you are as a business is the best way to building a brand. Who said it would be easy?
Sell yourself
Jack Stack, founder and CEO of Springfield ReManufacturing Corp (SRC) in his book A Stake in the Outcome states: “The company is the product.” For an entrepreneur and a start-up, there is no truer statement of their raison d’etre. It is easy to ascribe a brand or positioning to your products or services, but much harder to both conceive of and work on your company itself as the product. Great entrepreneurs, be it Dhirubhai Ambani or Richard Branson, have known this intuitively and Reliance and Virgin are a direct result of this ‘company is the product’ philosophy.
From day one, it is this vision of what your company is (or will be) that you need to sell, starting with your team all the way to your customers and their customers (the reason Intel advertises its products to consumers, who are its customers’ customers). Some of you may feel uncomfortable with the idea of ‘selling’, be it your products, your company or yourself. The lesson you need to draw from good sales people is that selling is less about talking and all about listening!
So listen to what the world is telling you and be consistent and true to yourself, and the brand will take care of itself.
This article was first published in the Business Line print edition dated September 8, 2008
“Maybe you can tell your team about your desire to partner with us.”
As soon as these words left my mouth, I realised that I had made a major faux pas. The words were addressed to the visiting CEO of one of our major prospects; one we had been trying to get interested in our products and services for nearly a year.
I was young and probably viewed myself as the hotshot marketing guy and the words had rushed out due to my frustration at dealing with the lack of coherence within their company.
Our chairman, who had put his personal credibility on the line to bring this gentleman in, was still reeling from the shock and the look on the face of our CEO made his desire to eviscerate me amply clear. In this instance, except for some ruffled egos, no permanent damage resulted from my inopportune directness. It could have been a lot worse.
It is through such avoidable mistakes that many of us learn the nuances and subtleties of doing business. In this particular instance, our chairman — luckily — did not confine himself to dressing me down (in private), but counselled me on what I had done wrong and how it could have been handled better, even while getting my message across.
I wish I could say such specific feedback and mentoring happens all the time in companies, let alone start-ups, but this seems to be the exception rather than the rule.
A common excuse in most start-ups is that “We are running at a hundred miles an hour, you just have to dive in and swim.”
So training, if at all, is mostly confined to a quick orientation session: “This is where the bathrooms are, here is where the hardware team sits and finance is over in that corner and oh, here’s your team and your desk. Good luck!” But it is in start-ups that we need to pay attention to mentoring.
The very word with its connotations of ongoing and consistent, if not continuous, investment of an already overworked person’s time seems such a luxury — which explains why most of us fail to give mentoring its due. Big mistake! Particularly since start-ups, with a small group of people, try to hire the best, and that Linux guru or penny pinching accountant we hired are often worth their weight in gold for their technical skills, but are often just not fit for normal human company.
When you have taken the trouble to hire the best, you often find they have come with as large a set of challenges to overcome as they have key skills.
And if they happen to be fresh graduates, then you have your work cut out!
Who mentors whom? You have resolved that mentoring is the way to go to take your company to the next level. Now all you have to figure out is who needs to be mentored. This may not always be an easy thing to figure out. A simple rule of thumb I’d suggest is that anyone who has moved into a new role, particularly if he or she is being promoted, needs to be mentored. While this is true even for lateral moves such as the engineer who moves into marketing or the finance guy who wants to move into sales, all individuals you hope to grow into a leadership role have to be mentored. Lest you groan loudly or at the very least roll your eyes at the thought of all that overhead, mentoring, while very important, if done right need not be a major time drain.
Who should do the mentoring? Conventional wisdom (or if we are to believe Hollywood) paints a mentor as middle-aged guy, greying if not balding, teaching the young buck a thing or two. Experience matters, not just to be knowledgeable, but for credibility as well. Such experience could reside in a young but proven manufacturing supervisor who has managed a unionised workforce, just as easily it could in a white collar vice-president of engineering. So knowledge that stems from direct experience, a willingness to share and patience are key attributes that a mentor should possess for the whole mentoring programme to work. It certainly helps if the mentor is well thought of in the organisation and experienced in multiple domains if not in multiple departments. Many a time, a mentor may come from outside the organisation — for instance, an up and coming woman manager may only find a mentor who has both the experience and empathy outside her company. An executive staff member may look to a member of the board for guidance and mentoring. The key to successfully mentoring your future stars is for such mentoring to be sought by the employee rather than it being prescribed like medicine! Of course, your actions and culture will have a good deal to do with whether people seek such mentoring.
How do you mentor? In one word, gingerly. Mentoring has far too much in common with parenting, most of all in that there are many ways to mess it up, calling for therapy for all concerned! As this has not stopped us from having children, clearly it is not sufficient cause to avoid mentoring.
Albert J. Bernstein and Sydney Craft Rozen in their book Dinosaur Brains – Dealing with All Those Impossible People at Work talk about the rules of a mentoring relationship. They advise prospective mentors to think in terms of a contract and ask “What would you like me to do,” so that a mentoring relationship doesn’t fall into a parent-child role or a courtship role in the case of people of opposite genders. As a mentor, they warn, if you don’t consciously think and state your expectations, you may end up with vague emotional ties that result in anger or guilt from unmet expectations.
Once all the parties have stated their expectations, mentoring can be a very enlightening, fulfilling and rewarding experience. For practical reasons, it is important to have some regularity (monthly, quarterly) to your interactions and sustain these meetings, whether in person or on the phone, even when there seems to be “nothing” to discuss. Being available in times of crises certainly helps, but there is a fine line between being helpful and becoming a crutch, that you should not cross and must monitor to keep both of you honest. Asking questions, open-ended ones at that, is a sure fire way to do this, rather than providing the solutions that you know will work.
Mentoring Successfully If mentoring at times seems like crossing a minefield, you need only to talk to parents of adolescents to know you have the easier job. With all the energy and emotions that need to be expended, mentoring, when done well, pays off in spades. Otherwise, every one of your promising employees is learning all the lessons the hard way. Mentoring with its real life coaching, the occasional nudge and shove will make it a lot less painful and a lot more productive. The hard part of mentoring is resisting the urge to act yourself when decisive action is called for; for the person being mentored, these are the best opportunities to learn, so allow them to do so by cajoling, pleading or where required threatening if plain old reasoning doesn’t work. The harder part is knowing when the bird is ready to leave the nest and providing the autonomy and respect for them to do just that. Mentors who can do that are the ones who are truly successful.
Most people seem to have a reasonable idea of what engineering (design and build stuff), finance (manage the money) or sales (make money by selling stuff) do in a business. Marketing is another story altogether, being confused with sales in the best case or perceived as a money-sucking black hole in the worst. It is likely the most misunderstood part of doing business.
Marketers, in turn, are often perceived by other employees as spending the company’s money on flashy ads or on exhibitions and junkets that involve travel to resorts and fancy meals. The words ‘entertainment expenses’ seem to dance before their eyes when they think of marketing. While some or all of this may be part of marketing, they don’t make us a marketer any more than reading the business pages of a newspaper makes any of us a stockbroker.
So what is marketing and what are marketers supposed to do? And why should you care? Theodore Levitt, the American economist, in his seminal book The Marketing Imagination asserts that “marketing … view(s) the entire business process as consisting of a tightly integrated effort to discover, create, arouse and satisfy customer needs.”
He also makes the distinction: “Selling concerns itself with the tricks and techniques of getting people to exchange their cash for your product. It is not concerned with the values that the exchange is about.”
Even if entrepreneurs agree that marketing is important, they sabotage themselves in a number of ways stemming from not comprehending how best to go about it. The real or often perceived expense of marketing is the most common concern that cash-strapped start-ups have.
When company founders are technologists, there is a belief that superior technology or product performance sells itself. Marketing, I argue, is a critical function for entrepreneurial ventures. It is every employee’s job, starting with the CEO, and is too important to be left to the marketing department alone.
Discovering needs The dictionary definition of the word discover is to “determine the existence, presence or fact of.” Discovering customer needs is rarely as simple as asking them — though that is always a good place to start. And it helps if you begin this even before you start building your product or service.
Once customers state a need or requirement, repeatedly asking the question ‘Why’ helps. When a mother states “I wish I had more time to exercise” or “I wish I could feed my children healthier food,” she may be talking about the lack of household help or her commute time or how much organic food costs. So understanding the core problem to be solved is important, and many a time the customers themselves may be unaware of it till they go through this multiple ‘Why’ questioning. Even when the desired outcome is clearly stated, such as “Increase the gross margins for our digital cameras” or “Shrink our order fulfilment time by 50 per cent and reduce mistakes to one part per million,” asking ‘Why’ ensures you are working on the right problem.
The first job of marketing is to discover the pain points for the target customers and define them as requirements. Once we have a well-defined set of questions (what and why), we can look for the answers (how).
The challenge for entrepreneurs or start-ups is that they usually get started due to a perceived gap in the marketplace such as “Buying tickets for inter-city bus travel should be easier than it is.” Being men (and women) of action, they immediately set out to solve this problem. Of course, once you have a part of or the whole solution and then get it out there in front of people, you find that your product or service is not exactly setting the world on fire. This is why discovery prior to product development is an important piece of your marketing success. In real life, you don’t do discovery only at the beginning, but iteratively at each stage of your product or service’s lifecycle.
Creating and arousing demand The most mystifying aspect of entrepreneurship is that once you have built that better mousetrap, not only is the world not beating its way to your doorstep, it’s not even returning your calls when you try to tell them about your solution. As a good marketer you did your homework and discovered that people found buying inter-city bus tickets painful. So you developed your easy-to-use, Internet-based online bus ticket booking system and yet it’s greeted with a great yawn. Creating and arousing demand, what technically the marketers call demand creation, is a critical marketing step. In a previous article, I noted “Build and they will come” only works in films. It is for marketing to get customers to move from “I have a problem” to “This is a good solution to my problem,” where ideally “this” is your product or service.
Creating and arousing demand will require re-acquainting the customer with the learnings of the discovery phase. Tell your customers, “Adding GPS to your digital camera is a good way to differentiate yourself from the competition and it will allow you to hold your price and hence stop the decline in your gross margins.” This way you state the key problem they have, your solution for the same and how the solution works.
Satisfying the demand The most dangerous stage (and cause of much teeth gnashing for marketers) is the transition from demand creation to fulfilment or satisfying the customer need. Having comprehended the customer’s needs in the discovery phase and evangelised your solution in the demand creation phase, if you don’t execute well in this last phase, your competition is likely to satisfy the customer and enjoy the fruits of your labour.
So having a clear plan to fulfil the demand you’ve created and executing it is key in this last stage of marketing.
Satisfying the demand created rarely ends with product delivery as this only highlights other unmet needs or even the gap between the expectations raised and the reality of your solution. Ensuring customer satisfaction through sustained support and a new iteration of discovery, creation and satisfying is needed. So don’t begrudge your poor marketing guy’s dinner expense — he’s on a tread mill, get on it and support him and sign that darn expense report!
Yesterday I read an interview with Kiran Nadkarni, former VC and presently founder/CEO of Kaati Zone on CitizenMatters.in. Kiran was one of the first VCs that I met when I came to India in 1995/6. At that time he had just begun working with Bill Draper’s organization after having run ICICI Ventures and was before he got involved with JumpStartUp, I believe. It was refreshing to hear his thoughts from the entrepreneur’s side of the table, particularly with reference to early stage funding, which as so many entrepreneurs and bloggers have noted is practically absent in India. Read the interview and check out CitizenMatters as well.
Talking of early stage funding I finally managed to get off my duff and to the NSRCEL (NS Raghavan Center for Entrepreneurial Learning) at the Indian Institute of Management in Bangalore. My erstwhile partners in entrepreneurship, Baskar, KAS and Vidhya had just moved their new startup Amagi Technologies into the incubator at NSRCEL. Never one to pass up on a free meal, I dropped in on them during lunch time to catch up on what’s happening with their startup and their recent whirlwind tour of all the major VCs in India. I hope to have Baskar on here as a guest soon and will let him share his insights and learnings in his own voice.
The realization that dawned on me in the meeting with him, was the sheer number of bootstrapped startups that our friends and acquaintances have launched. These include:
Amagi Technologies – local ad syndication for digital TV; Baskar, KAS, Vidhya; bootstrapped – looking to raise a round
HealthcareMagic – consumer medical portal bringing doctors & consumers together Kunal Shah; bootstrapped looking to raise a round
loconomy – finding, using & rating of local (neighborhood) services Sanjay, Gaurav, Pallavi; bootstrapped
RightFields – business automation & ERP solutions around Microsoft AX Raghu; bootstrapped, has revenue and looking to raise capital
Most of these are first time entrepreneurs and a couple including Amagi and HealthcareMagic are going around the entrepreneurial whirl for the second time – all of them have been India based, as elsewhere people wondered if it is foreign returned Indians who are doing a whole lot of bootstrapped startups. Only diMobili is still in stealth mode, with others having at least a website if not actually operational or a couple actually making revenue. I hope to get the founders of these startups visit us in this blog, sharing their thoughts and journey in the near future.
Should I start my own business?” If you have ever found yourself asking this question, you are not alone. And rarely does this question arise by itself — on its heels, many more rush in. “How do I know it’s the right thing? What’s the first thing I should do?” A simple search on Amazon or Google with the words “Starting your own business” provides 738 books and over a million hits respectively — in a sense, this choice of plenty only seems to add more questions beginning with, ‘Where do I start?’ The best answer to this question is the simple one — start with yourself!
Before you try to figure out, “How do I raise money, or should I get a patent first or do I need partners?” the first step to answer the question should you even start your own business, is to better understand yourself. While some reflection is needed, this is not so much a philosophical or metaphysical exercise as much as answering three simple questions about yourself. You may have never taken the time to think about it and even if you have asked yourself one or more of these questions, never had the opportunity to step back and answer them. Certainly, once you start your own business, you will not have the luxury of time to answer these in any detail.
N.S. Raghavan, former joint managing director and one of the founders of Infosys, narrates a story about a young man who approached him seeking advice. “I have a job offer from Infosys and an option to start my own business — what do you think I should do?” When Raghavan responded, “Take the job with Infosys,” the youngster was taken aback. In Raghavan’s words, “If you are an entrepreneur, starting a business is not an option that you consider alongside taking a job — you’d just do it!” To dive in, or to ‘Just do it!’, as the ad exhorts us, is easy — staying the course, not drowning and not ruing it along the way — is the hard part. Let’s ask ourselves those three simple questions.
Passion Ask yourself, “Do I feel passionate about this? Will I feel as passionate about this a week from now? A year or five years from now?” If the answer is anything other than yes, you might want to keep that resume polished. When you ask yourself, “Do I feel passionate about this?” — ‘this’ could be a product — a low maintenance, low-cost, yet effective water purifier that four-fifths of the world needs; it could be a service — ball room dancing instruction for high-schoolers; it could be a concept — helping farmers in your hometown reach customers worldwide directly — or nearly evangelical — fresh water to every village in your state/country — it could be anything, as long as the fire of passion within you burns undiminished for long periods with little or no kindling. This is a good question to ask first and have answered in the affirmative before starting your own business. Do not confuse passion with being right or knowing something — passion is primarily believing and wanting. Once you start your business, you will learn more ways of being wrong than you’d thought possible.
Risk-taking Being an entrepreneur, which is what you’d be if you start a business, is a risky proposition — probably not as risky as skydiving or crossing a busy road in Bangalore during the evening commute. Most businesses last longer than a skydive and are fraught with challenges. So the next question to ask yourself is how risk averse you are.
Risk means many things to many people. Most people think primarily of financial risk — this, while certainly measurable, may be the least important. Often there will be others to bear the financial risk with you.
However, the time you personally invest, the emotional energy that would be required of you individually and most importantly, your self-worth, will be the bigger risks you will be taking.
These will be largely immeasurable but have far greater import on the rest of your life. So if you have never taken off for the weekend on a whim, usually get to the airport three hours ahead of schedule and have never run a yellow light, it is worth figuring out what your risk appetite is.
Perseverance Call it whatever you want — doggedness, perseverance or relentlessness — to be an entrepreneur means continuing in the face of constant discouragement by the world around you.
Often it would seem as though everyone but you feels it makes no sense to continue and yet you persist. Investment bankers who have yet to begin shaving will offer you advice. Your spouse, your engineering manager (and her spouse), that cheeky long-haired fellow in customer support not to mention your suppliers and even customers will question, critique and challenge you.
So if you haven’t been called pig-headed more than once in your life or find you cannot last through one session of working through the “simple” income-tax form or are discouraged by having to make the same presentation for the 17th time, some work may be needed in this area.
If you answered in the affirmative to the passion and perseverance questions, you are ready to start a business.
Should you actually start one, your chances of being successful at it or even enjoying the journey, will be determined by your answer to the risk-taking question. Luckily, for us, unlike the Prince of Denmark, it’s a little easier to answer the question, “To begin or not to begin?”
This article first appeared in the Hindu Business Line dated December 17, 2007
Over the last several years, I have written about startups, entrepreneurship and business in general in the Hindu BizLine and Wall St. Journal. I have compiled these for easy access in the column below.
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