Vijay Anand | The Startup Guy.

Posts Tagged ‘entrepreneur

I remember listening to a very wise man once utter the words that … “Every Civilization that ever survived and flourished, all had a culture of Right to Passages”. I am not sure if I heard much of what was said after that. My mind had already raced to a truth that I’d known innately. We must earn our right to passage, if we are to get anymore as a nation, civilization and as a species.

There is a troubling trend though. There is much talk about Entrepreneurship becoming a lifestyle – I still disagree with the notion (You are either built and wired to think like an entrepreneur or not). But there something very slithery scammy about entire groups of people and organizations working to make life for an entrepreneur “easier”. Support is another thing all together.

There was an incident at the Delhi Edition of Proto.in, where Sanjay Anandaram raised the simple question to the audience as to what all they expect from an Investor – and what should be the right metrics. The answers went all the way from “Should help hiring potential partners” to the obvious funding, to getting clients, to providing strategic direction. I must get a clip of that conversation, but when I did jot them all down, they were just about every element of a startup mapped. Nothing left. Sanjay did take the shot and ask the question “So what the hell does the entrepreneur do?” And he was bang on.

In my definition, entrepreneurs are risk-takers. They create wealth faster than anyone else because they are legitimate con-artists who’ve figured out a flaw in the system and they know that they can make money off of it – or by fixing it. They are also people with this innate capability to look at everything they got and can make a rocket out of it and be there before NASA can even fathom a trip. They are the junkyard Gurus, and they are great in survival tactics. They just need to fix things, and without that they’d ruin the world – so its better that they have something to fix. That’s my entrepreneur. And in order to make such elite ones – and rightly so – stand out, we need to go through our rights of passages. Without it, we are just recruiting lazy bums to the army and giving our entire freedom in the hands of those who wouldn’t know what to do with it.

And handing out entrepreneurship in a spoon, ah, such a thing doesn’t exist. Entrepreneurship will never be a lifestyle. It’s who you are.

What do Startups Need is the Question asked these days.

"What do Startups need" is the Question asked these days.

Seems like that’s the kind of question a lot of companies which are looking to support, nurture and grow alongside Startups are asking themselves these days.

I’m invited to be part of a fairly small panel that is to discuss on this very topic tomorrow in Bangalore in a short meetup that Sun Microsystems is putting together.

The more I think about it, I think the sheer number of pages where business opportunities, support systems, efficiencies can be made all seem to just go on and on and on.

I think the key element that it comes down to is not “selling”, but “enabling”. Really, if you think about it and put all the power law distribution to  a graph of economy (financial status and revenues) versus size of the company, it’d be quite easy to see the bigger corporates easily contributing to 80% of the economic wealth that is being garnered. That’s almost a no brainer.

I think the insight is this: An average startup entrepreneur is young, imaginative and full of ambitions and dreams. The key is to enable them. Not sell to them, but help them achieve their dreams. Its going to be pretty much the same way that you would want to support artists to come out with more creativity.

Someone wise once said that the role of a supporting organization to a startup should help startups make truck loads of money and make a small slice out of it. We need to tie in our success with that of the startup. Everyone wins in the end.

So now, most organizations are not gonna want this headache. Go after all the small companies, give them that additional support and handholding, just for 20% of the revenue. But isnt 20% quite a lot? I dont think it would ever make sense for a company to focus on just this 20%, but if they were already saturated with the market share in the corporate world, a 20% extra market share will give these companies a lot of footing, wouldnt it?

Now obviously, the number of companies very much increases. The queue of companies to support would almost be as long as the infinitely long tail itself. Thats when shared resources make a lot of sense. Technology helps to scale. Thats what it does beautifully. And if a technology company says that it cannot cater to this group,.. they woe.. something is truly terribly wrong.

Related Posts from Before:

Selling to the Unaffordable – Part I

Selling to the Unaffordable – Part II

Startup Entrepreneurs are oodles of Fun to work with. Perhaps its that drive within them to change things, and the paranoia of taking on a bigger industry which adds to all that. As hectic as it could be, its nothing short of exhilarating – I seem to be gasping for breathe during the slow times for sure.

So the point is speed. Its a crucial element. I think its the first criteria anyone looks at to evaluate and measure the strength of an entrepreneur. “Fire in the belly” “passion”, are all just variables of the same thing being described, I’d say.

I think the second most crucial aspect when it comes to that is the accuracy – The quality of implementation so to speak.

I wanted to briefly write about this, for a couple of reasons. There are quite a bit of early stage ventures out there – almost 2000 of them at any given point in time, and the truth of the matter is that less than 10% of them survive the first two years. That’s a lot of enterprises dying out. And if you really look at it, what stands as foremost in the list of reasons is the lack of guidance in terms of implementation and execution that counts towards it.

There are this couple of folks who are in the back of my mind (Who are part of the incubator) while I am writing this, and I am wondering if they would survive out there in the world, if not for day to day guidance. Probably not is what i’d say.

In a recent discussion with some investors, the enlightening moment was when someone made the statement that ‘investment is pretty much rocket fuel. It’ll help you go faster, dont know where though”. And I think there is more than an ounce of truth in that matter. Investments, especially money will accelerate the direction that you are aiming for – and God help you if you are aimed at the wrong direction looking at the wall, because the thud will just be that much louder. And as much as everyone claims that they will provide support, guidance and all that, ping me whenever that really does happen.

The truth of the matter is that early stage ventures require almost a weekly review meet. That’s essentially the time period when the company is accelerating and the strategy starts to fall in place. In three months (between board meetings), the company would have gone so off the tracks that it would take years before you can bring it back on track – and dont complain if that window of opportunity you were chasing, isnt there.

So if you are an early stage venture and someone promises you guidance, demand that the minimum guidance you require is one where he/she is available to you any time of the day, and will meet with you for atleast an hour once in a week or fortnight. Its crucial to be accurate when you are racing like a cheetah to take down the elephants.

If you are an advisor, I would suggest sitting with the team in the beginning and doing a brainstorm of all the possibilities in terms of directions, products, market trends and potential exits (its good to think of that distant tunnels). If a company has no scope of going IPO on its own, but will just create a whirlwind of an opportunity and spin to be part of another company, I dont think there is anything wrong with that – and having that clarity will make a lot of difference, because you start focusing on strategic partnerships much more intently.

So coming back to the advisor. Do one elaborate meeting – which you can continue to hold during every three months, and in the meantime meet every two weeks or so and talk about everything that goes towards that. Revenues, Morale, productivity, Team, partners – everything. Jot down all the questions, and start working out possible solutions. The percentage of solution creation is what should shift slowly – starting off with the mentor contributing the most, to a half and half to a point where the mentor just listens and corrects if something goes terribly wrong, and letting the entrepreneur take the helm. You gotta teach them to fish at somepoint Mister!

So Run, as fast as you could. Also make sure you are running in the right direction and doubly make sure that there is infact a door on that wall, and its open.

Question: I am interested in starting my own venture and have been doing the groundwork for it. I currently work for a company, but would like to do the pilot run while still holding my day job and as the venture stabilizes, take the plunge fulltime. What would you suggest?

Dear X,

There are a couple of ways to do this and a few things to keep in mind.

1. Usually all job offers have this clause that you have to solely focused on the job you are hired for at your primary workplace. Hence usually taking up another offer or even a consultancy (even if the employer may never find out) is done by getting a letter of permission allowing the employee to be involved with other things.

a) Though this is not required, it gets you a lot of brownie points with your employer, just for the sheer honesty. As much as Proto.in does not interfere with any of the activities of what I do here in the incubation centre – but only enhances it – I still wrote a mail asking for permission and to let folks know that i am involved in something. They go easy on me whenever proto.in is around the corner.

The point: Keep everyone informed so that they can give their support in whatever manner that they could.

2. If you are going to do this as a proprietary thing, then even step 1 wont help, cause its assumed that you are fulltime with the venture – when you are the 100% shareholder and the guy running operations. So what some folks do is register the company in the name of the spouse – if she is not employed, or if her employment contract is not so stringent.

3. One thing to keep in mind is something called the corporate veil. When a company becomes a ‘corporation’ it becomes an entity by itself, that even the founder is nothing more than an employee in it. Because of that structure, if the company goes down under, it still doesnt take the founders along with it – nor their assets, since they were just employees. But there are cases when they consider the corporate veil to be broken, which would be when the personal assets of the founder are mixed up with the assets of the company and in such cases, the founder can be sued – if in the future the venture gets funded and things go awry.

I don’t mean to scare you, but just giving you a heads up on all the things involved.

I would suggest:

1. Go ahead and register the company – if you are sure you want to do this venture.
2. This would be the time to bring onboard some advisors and get them involved in the venture – since there has to be a minimum of two directors to incorporate the firm
3. Get the permission from your current job to be involved.
4. Keep going with that setup, till you are comfortable making the flip – hopefully which wont be too far away.
5. During the process of step 4, at some point your venture will possibly take enough time out of you as your day job. Do talk to the management to perhaps transition into a part-time role if possible. Its good to stay clear with your conscience.

I hope that helps.

Vijay

That was the title of a talk that happened at the Fastrack Sessions of Proto.in January Edition. Since we are sitting on three editions of fabulous talks, I thought I’d take the pains to transcribe them one at a time whenever i find the time so that the larger audience – some who didnt and couldn’t make it – could benefit from it.

Imagine a situation where a technologist is trying to showcase the iPhone. He goes through every step of the features of the phone, the gestures, the various user interface nuances of the device and the audience barely reacts. A little frustrated, the technologist tilts the phone to the side, and the picture aligns itself sideways, and the audience goes wild – almost giving him a standing ovation. We’ve seen this demo before, and we know what all an iPhone can do.

Case in point: Technology alone doesn’t fascinate. How it is packaged, and how it resonates with the audience and customer means a lot more. India lacks in that space, most times.

Read the Entire Transcript at the Proto.in Blog here.

The truth of the situation is that there is way too much capital chasing too few good deals. So, If there was ever a time when you could be picky and be specific about wanting the best director and investor onboard, this would be it.

In an attempt to ensure that you dont come off as arrogant beyond reason, but as one who is sane and more logical, here are a set of questions to ask an investor to ensure that he is a right fit for your board.

1. How long have you been with this current firm that you are working with?

2. Hmm. What was your previous engagement? Have you always been an investment banker or have you had the pleasure of bootstrapping an enterprise yourself?

3. If You dont mind me asking, how many other company boards do you sit on?

4. So what is your first impression about what we do, and the market that we are aiming for?

5. How long have you been here in India? Do you have a lot of network and contacts here?

6. I’ve been through your portfolio companies (and you better have), and there are some interesting companies there. Do you envisage any direct synergies with any of them?

7. (If Yes to the above) Do you think you could put us both in touch so that we could probably do some preliminary discussions to see how far we could work together?

8. Lets theoretically say for a moment that you were in my shoes, and that your firm was investing in this company. What would you say would it take to take this company to a successful exit?

9. Are you in town quite often? We should certainly catch up again.

There are a couple of underlying reasons why you might want to phrase a set of questions this way.

Questions 1 and 2 help figure out if the investor has been with the firm for long, and if you are dealing with an entrepreneur or an overbloated MBA. If its the case of the latter, pick up the tab, pay for both of you and make a run for the door 🙂

Question 3 about how many boards he sits on will give you an idea of what you could possibly expect out of him, and possibly could also use as a means to get some references out of those companies about what he and his firm bring to the table.

Question 4: This is a nice way to see how far he can stretch his analytics skills and give you a different outlook from his perspective. This is an area that most venture capitalists will ace in. This is also the part where you want to shut up, make as less noise as possible and listen.

Question 5: How many people does he know? How much time will it take before he picks up his phone and will make that call for you. All that matters.

Question 6: This will pretty much tell you whether they are serious and have done their homework or are just messing with you.

Question 7: If they were seriously looking at you, he’d leap at joy at you proactively asking for a meeting and opportunity to evaluate yourself. Oozes of self-confidence, and the ability to network and market yourself. You’ll get oodles of brownie points for this.

Question 8: This will give you a picture of how big they are thinking. Just like question 4, pay close attention.

Question 9: Make friends with such folks, if you’ve been able to bear with him for so long. They are worth keeping around. its not everyday you meet guys who understand what you do, what your market is, and also can think of an exit. You need to be in touch, and even become drinking buddies if possible 🙂

Recommended Must Read: Befriend an Investor

ABCD – American Born Confused Desi. That’s what they’d call an individual whose parents are originally from India, but probably gave birth to, and raised a son or daughter in the American Soil. The kid probably grew up with nothing more than strong dose of american culture, idealism and the values which grow with interaction of the location population, but the skin color just gives it away. No matter how american you are on the inside, you always end up having to live up to the expectations that rise because of what is visible from the outside.

I remember some of my friends growing up in other countries, that whenever they met people who had lived their entire lives in India, they’d ask them something about the hometown of their parents and some remote village, or some news which was a headlines for a while, and they’d draw a blank. I knew that they always whispered under their breathe that this kid was pretentious, when he or she really wasnt.

That’s not where the issue ended. The issue really began there. The issue really got worse when it came to social engagements. Now Whom would an ABCD marry? An indian girl – in which case the girl would beat him with a worn out pair of slippers cause he’d be clueless about any of the local customs, or a foreigner of the land who’d possibly adjust well with him, but his parents and family would have a hard time reconciling?
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