The Startup Guy

So it all seems to be coming together. Entrepreneurship is not such an alien concept anymore, there are more and more universities imparting entrepreneurship as a logical career choice, there is enough knowledge base, and support organizations that are there to help entrepreneurs, the media seems receptive to the notion of new enterprises, the economy and policies are gearing towards spurring its growth, and the investment community realizes that India is a big enough market that they are open to tweaking the funding models that they are used to. Change is not an easy thing, and thats happening.

Is Entrepreneurship mainstream in India yet? No. When will it? Well, when you see these two things change.

1. Stop Expecting Free Handouts.
Listen, I do contribute a lot to the startup community and I can say so. I have hours to show forth and I am proud to be part of it. But You might not want to expect that as a norm. Everyone has reasons why they do the things they do. Mine – eventually I do want to get into investing, advising and turning around companies as a career, and it helps to be part of building the foundation of the ecosystem.

All that said, time is limited. And anything that is limited is expensive. So if you are going to ask someone to spend time with you on a periodic basis, and also put the mental energy, pull connections etc, then you are going to have to compensate them – doesnt have to be in cash, can also be in equity, but beer simply isnt going to cut it (I’ve gotten plenty of beer offers, and so do plenty of folks i’ve talked to)

Think about it: You are going to build an enterprise that makes you your own boss (atleast for a while), lets you pursue your passion, and if all goes well will make you filthy rich. Tell me again why you are asking for my time in free? Karma doesnt cut it. There are plenty of NGOs that could return better Karma points.

There is also a more solid financial reasoning behind it. Every enterprise has to be calculated on the basis of inputs vs outputs and the value creation is the difference between the two. Economical break-even point is just one metric out of this calculation. What is also important to measure is every bit of input that goes into creating this value – otherwise you are going to end up with a skewed equation which can misrepresent the actual value that you are creating – what is not accounted for and leads to positive returns is no different than a subsidized model. So if you really want to measure the effectiveness of your venture and have a standing chance for when the market really shows its teeth at you, build it right, and measure everything possible right from the beginning. Account for it, and ensure that the model still holds.

So when will Entrepreneurship become mainstream? When there evolves a model to fairly compensate the support structures that are required to support entrepreneurs – that goes not only for Mentors and Advisors, but also for lawyers, Accountants etc.

2. Get out of Weekend Entrepreneurship Mode.
Have you noticed how everything related to entrepreneurship happens during the weekends in India? Why is that? Are we trying to accomodate students and people who are in day jobs to be part of it? If so, that answers your question as to whats the state of entrepreneurship in India – it means most folks are part-time, and so is the landscape as a whole.

I hate quoting silicon valley examples, but I was curious to notice how many events across the globe – (flipping through the Calendar of Somewhat Frank) that most startup events in Mature ecosystems happen during the weekday. Infact when I was in the valley, I was surprised to note that most of the startup events DIDNT happen during the weekend – except for ones where you build products over a weekend.

If startups are mainstream, and if entrepreneurship is an actual way of life, then it has to function as any other profession, right? Makes perfect sense to me.

In my mind, till these two are in place, starting up isnt mainstream Yet.

Its strange, but its true. The Indian Institute of Technology is just next door to the phenomenal growth that is being witnessed in the IT industry in Chennai. While entire stretches of roads are seeing the boom of buildings that house thousands of engineers and designers who are developing the next generation of technological advancements, IIT has had its own share of exploits in the same. But it might be dawning that the two will start to meet and greet each other in the hallway now.

An evening stroll from the newly constructed IIT Research Park, leads you right into Rajiv Gandhi Road which houses some of the well known landmarks of the IT Sector in Chennai. The walk while euphoric in ways – carrying the charm of greenery which is a signature of the IIT element, is also in a way baffling; because as soon as you reach the main roads, you realize that you are greeted by the hoards of professionals from the IT industry. Its probably the most simplest of realities, but it hits hard. Why? Because for the past four years, I’ve passed by these IT landmarks, seen these professionals on the road, and have carried myself with a certain bit of pride of not being part of the rat race. We have been rather proud to be house, protected and in a way isolated within the greeneries of the 600 acre land that is IIT Madras. Our visions have been different, our ideas, development, and the sheer philosophy has been different, and we have thrived in it. Suddenly it feels like we would have to explain the outside world what we have been upto. And might even have to include them, and learn a thing or two from them as well.

Buildings are powerful. Because they are symbols. The parliaments, the house of commons, and every building of authority carries with it the commitment that as long as the building stands, the goal for which it was initiated and established for, will continue forth. And thats the reason why the building of the Research Park is a phenomenal step forward in the history of the IITs. Have the IITs been too much drowned in their own “brand”? probably so. Some rightfully, some just gloat. But a symbol like this will push things in the right direction and elevate everything that has been good and give enormous propulsion to the various serious efforts that have been birthed out of these walls.

Buildings are a statement. And this is a statement being made as the walls are calling out for collaborate, to be invited to the dinner table, converse, and to create a new future together. And it gives me a kick to know that for once – and within our lifetime, we see the visions of our great leaders being crossed. While Nehru and the visions laid out for the formation of the IITs were foretold and defined decades ago, this is a new evolution, a new start and one whose future and destiny we will control, and grow for the better.

I am both saddened and happy by this new move. Slightly sad because our elitism has been ripped away now. While a few craved to be back on the corporate workfloor, and we got it, there are some of us who got our fix of ideologies by the lush green campus, and the life that thrives around it. But I am happy, cause this means inclusion, and a brand new future to look forward to – most of all, this means we are moving forward.

Thinking of Starting up? 10 Tips to starting up right.

1. Know your strength. There will always be a difference between those who inherit a strength vs someone who is intuitively good at it. Know what your forte is.

2. Learn to Tell a story. Boy meets girl, they fall in love and eventually end up together. This has been the story of the bollywood for atleast a decade, yet the style changes in every movie. learn to talk about your product, company and yourself as a story. It matters.

3. Take your time. Haste makes waste, and that relates to entrepreneurship quite well. Thinking of starting up? Meet and Interact with people, read enough, establish relationships, create dialogues, and be sure of what you are doing before you start.

4. Lead from the beginning. Entrepreneurship is not an alternative to having a job. Infact its all about being effective and having an insight that no one else seems to have. There will be plenty of time when you’ll have a curve ball thrown at you and you’d have to catch up, but dont start at that.

5. Predict the learning curve. At some point your learning curve will not keep up with the needs of the company and its complexity – which is when teams expand. When starting out, you should know when itd be time to step down and let someone else lead.

6. Measure everything. Passion is one bit of entrepreneurship, the rest is about making a miracle happen with the least amount of resources possible. Obcessively measure everything – not just the bottomline – and compete, strive harder. Apart from measuring your own growth, also take numbers from your competitors, place them at your stage and compete against their numbers (compete with the Industry, not just yourself – You can quite easily cheat yourself if you do)

7. Learn to manage Cash. A major portion of running a business is all about managing cash and cash-flows. It is imperative for the founder to plan and execute “on time and on budget”

8. Structure it right. Form leads to function, and the structure of the company in most cases, leads to its stability. Whether it be a Partnership firm, or LLP or Pvt Ltd, define roles, boards, advisory teams, etc with vivid clarity.

9. Pick your co-founder well. You do not know a person till you have started a company with them, and emotions run high in a startup-environment. If you do not want to lose a close friend, it helps making that choice wisely.

10. Nurture relationships. And do it as a habit, rather than by need. Your advisors, potential bankers, investors, partners, team mates, employees – spend time with them and keep their interests in mind as well. You never know where and when they might be able to help you out.

Its been a while since I’ve written here. I am not going to apologize for it. The reason being simple. I once by accident went back a year and on what I “was” thinking, and i realized how fast the space of startups, innovation and clarity was emerging. I am not even seeing the evolution of concepts, ideas, and reality happening. In some cases, it feels like the sky is falling, and out of nowhere things are happening. And thats scary. Its been sometime to pull out of the race, and to look at things to gain perspective. And I only think I understand things a wee bit better. I am sure I’d have to go back to that space once again, and repeatedly from time to time to keep this perspective afresh. Its important.

I once used to have the question in my head as to why cant we create a product and brand like the Mercedez in India. And then we got the Nano. Not at all the same thing, is it?

I cant stop by sit back and think what would be the scenario if we had indeed launched a car that ranks shoulder to shoulder, or even beats the quality of a Mercedez. Why Benz, lets make it beat a Bugatti Veyron, if our fancies need to fly a little. I am not so sure we would have succeeded. Am sure the first question and comparison that would come out, is the price. And India has been so successfully been marketed as a low-cost Utopia that even if we make a Mercedez, we would have to make it cheaper than the Benz.

Now is that technically feasible? Yes it is. And that is our End game in a lot of ways. But where do we start? We start at low-cost.

A lot of people get very upset and turned-off at the notion that we were, and in a lot of ways still the low-cost destination. And so should I – if that is the end game. But it isnt. Let me give you examples.

HCL once used to be nothing more than a pure outsourcing arm for Cisco in the telecom division. Today they have moved up the value chain to establish a joint-venture with Cisco (Setting up HCL-Cisco) that they co-own, and in some cases license patents and IP to Cisco. And trust me, that doesnt happen overnight or by chance. It takes leadership, strategy and direction to make that happen. Which is why I am hoping that entrepreneurs, especially startup entrepreneurs will get to hear this, cause you have to start thinking that way to get there.

So look at the Nano. Tata owns Jaguar, and Tata owns the Nano. Amazing, I must say, and it all makes sense. In order to make the Mercedez, you first have to make the Nano.

Why? Because building a brand takes time, and enroute to that, you have a brand to break – the brand that India is low-cost. And how do you do that? Thats what “Disruptive” technology stands for – by definition. Anything that can Disrupt people’s normal, everyday thoughts in terms of a breakthrough in technology, thats capable of breaking business models as well – thats also more or less the reason why technology entrepreneurship is so glamorous. Because it can bring down prices, do sexy things, grab attention and make people take notice.

So seriously, whats the link from a Nano to a Benz? The Nano is important, because its a crucial step to get to the Benz, and the crucial step and mindset breaks when you get people to say the first Wow. And the Tata Motors Company, has successfully managed to do that. Get the world to say a Wow. And that is the first leap for any of our companies, be it whatever domain to do. The wow could be quality measures, cost, design, Interaction mechanism, or the simple science behind it. But it has to begin with the Wow. Get that in, into your product somehow.

The second bit is the value engineering. How do you mass manufacture something, and still manage price points and quality. If you think this is a mechanical engineer’s curse, think again. Most web companies will bleed and die because of their “cloud” bills. That silly recursive function that takes that extra compute cycle, will come to bite you in the wrong place, if you dont fix it. This is where specialists kick in. This is where experience comes in, and this is where price point remains still. This is definitely India’s second move. And I’m already starting to see plenty of companies do this.

The Third move will be in Feature Engineering. Whatever you did in the first bit, you want to do the reverse of that, with the supervision of the second phase engineers. You want to put stuff in, but not the old stuff, make a leap and bring in the next generation of things that make it easier on the user, the manufacturer and everyone who comes near a ten foot radius of it. And this is where the next generation of Benz, Jaguar, and Bugatti’s are born.

The interesting point will be that, without step one, we would never have step three, because the evolution of talent, processes, and engineering will simply not be there. And If we try to jump directly to step three, what we will end up will be a fake imitation of a luxury product, twice priced, and having to fight the mindset of it being in the wrong place (it should be low-cost instead).

I remember standing on the stage at Proto.in in 2007 asking where are our companies that can make a Merc and Ipods. The Answer – They are coming, and the first generations of them are just born. To be in India, to be in the products space, and to thrive in it, it helps to keep this in mind. It took me a while to get this, but thats also cause I see this trend happening around me – Playing out in real life.

I can imagine the look that you have on your faces reading this. Where is our market then? Isnt the US the most wealthiest market to go tap into? Am sure you have that look on your face, judging me for that. You might want to sit down for this. I think there is a strong misconception. While the western “developed” markets might be the richest, the emerging markets are the biggest – they make for 5/6th the world, and make up in large numbers. It’s almost the long-tail in the truest sense of the word and according to the definition of Pareto distribution (Economic divide on the 20-80 rule). And listen, if it works in India, it will work in most of the emerging markets. And fortunately for us, the high cost of innovation, the inability to grasp emerging markets and the masses, all play against the research labs of the far west.

If anyone can make it happen, and playing with the advantages that we have in terms of the ability to communicate better with the rest of the world, the collaborations we have with abroad, the support that we can garner from the govt (alright alright, we can improve on this bit) and most importantly, our inherent need to innovate, we are probably the best suited for it. And if we are bold enough to take that first step, our journey has finally begun – well hurry up, cause there are already folks getting a headstart on that – Mark my words, the Nano will lead the way to the next generation of Jaguars!

More and more I see this happening. I am logged onto most of the IM networks, from Office, Mobile, Home, and several devices. Whatever status you wish to show – busy, online, available, paranoid don’t really matter no more. Some folks are just permanently affixiated with certain statuses and close friends would know. Others dont. And when the rules are not clear, chaos reigns high.

There is also an assumption that if someone is online also means they are available. Lets not talk about all those embarassing moments, when we forgot to go “offline” on chat, and had some very personal messages displayed on the projector in the middle of a meeting. Oh, am I the only person to whom this happened? Oh boy!

But coming back to the topic, the point is that even though Instant Messaging is supposed to be “always on”, it still might be common courtesy to follow some rules, especially in this day and age where everything and anything seems to be demanding attention, and the option to avoid will go a long way to ensure that your relationship doesnt snap.

This is a simple rule that I follow, and those around me by now have come to know. Whenever I do see someone online and do want to talk to them, I send them a simple “?”. If they are in the middle of something, they either say so, or just ignore, and I assume that they are unavailable. If they respond back, then we chat. If they arent there, they always get back when they see the ominous question mark waiting for them.

Simple, but you have no idea how easy it makes life sometimes. The option to opt-out and not have to pay attention in real-time, is a luxury and anyone you can give this option to, will eventually thank you for it.

A lot of folks seem to be very curious as to what I am working on, since my stepping back from Proto.in. Well, quite a bit actually and on some rather serious stuff. Serious as cash, infact. One of the major concerns that has been on my mind is the scarcity of capital in this market.

I am absolutely with the camp that believes that if there are quality companies, then capital will find its way. But we also know as part of most of our risk mitigation strategies, making a leap into a market with no safety net or partners makes it a really serious gamble – even for some of the most well-versed entrepreneur to tread in. I strongly believe that unless we enable some capital to flow, we are not going to see much of a difference in the number of quality startups that spring up, and inevitably the number of startups that get funded/get recognized, and the number that make an exit. This cycle, as you know is recursive.

So What have I been obcessing about? I’m focusing on three aspects and I think all three aspects are crucial.

1. The mechanisms for loans from banks to become accessible for startups/SMEs
2. An effort to bring together the Angel Investment Community, educate them and help them engage in an effective manner
3. An effort to fix the “broken VC Model”

The First and Second are fairly straightforward and I promise to come back to you with some better news soon. But this is primarily about the third one.

I think the third one warrants a closer look for a simple reason. People have been claiming as long as for the better part of the decade that the VC model is broken and there seems to be no heed to that warning. Whats worse is that given that India couldnt be farther away from whats happening in the Silicon Valley in terms of similarities, the model is a force-fit one (There are some better models in Israel, Singapore etc). If you’d understand how a VC firm works, its primarily a specialized bank which runs on a management fee and bonus paid with the return on the investment. The overheads of running such a team is so high, that the only viable way for most firms to operate is to increase the fund size, which sets the ball rolling on them getting into a soup not able to invest in early stage no more, and the next thing you know they are either full-fledged in growth stage, or are in growth stage and are disillusioned about being an early stage investment firm. Suddenly working for a VC firm or being one doesnt seem so glamorous, does it?

What we need in India is essentially a firm which is capable of dispensing funds as low as 50 Lakhs to a crore (I am consciously keeping figures in INR to make it a point that we arent in dollar land and the rules and requirements are different here) – which can operate at lower costs, and can also manage a sizeable portfolio.

• Problem #1: Cost of Manpower.

Manpower seems to be the highest cost in a VC firm. if you want to make your investment sizes smaller and invest in a reasonable size of companies, the issue usually is the fact that you are put in a loop of having to hire more resources, which pushes the envelope further to want to raise a bigger round to cover the increase in operational cost.

Solution: The right leads to manage the firm, the right risk management frameworks and rating mechanisms, and with a process management team, will make this work. More on this later on.

• Problem #2: Monitoring.

Every investment is usually tied with a board member, mostly to ensure that the investment is safe. A fund investing in 100 companies, becomes a nightmare for most of the partners to manage the number of boards they are in, and even the number of companies that they can constructively help build.

Solution: If this space has to become active, those who have had experience building a company or two cannot afford to stay in the sidelines. There is a need to build a portal which will enlist potential Advisors who can be engaged on a token fee +minority equity model should solve this problem.

• Problem #3: Investment cycles:

Most companies in India simply take longer time to mature. 5 year cycles are bit of pressure on the firm and the companies to perform. You are lucky if you get the fund raised towards the earlier part of the cycle. The latter, the worse it gets.

Solution: Becomes easier if the funds are raised within India.

• Problem #4: Vishal Gondal’s ABCDs

Building Indian companies needs the experience of Indian entrepreneurs who have built companies here in India to take calls. Fortunately there are a handful of such VCs in India and they clearly stand out.

Solution: Get hands on with a company or two. The rest will work itself out.

• Problem #5: Hand in the Cookie Jar.

The VC industry isnt spared by the issue that most of the banks in the US are being accused of – the management teams making payments before the returns come home. Most of the compensations are primarily out of the management fee, in addition to the career interest generated from the returns on investment.

Solution: If the overheads have to go down, obviously the baseline salaries have to go down and the pendulum has to shift towards creating value and taking a pie out of that.

Is Micro-Finance Leading the way?

As I am understanding these issues better, there is a starking constrast to the operations of banks that becomes more vivid. Banks traditionally have the same problem. They cant issue small ticket loans because monitoring and recovery becomes an issue and logistics of the loan management are a night mare. Hence the the reason banks lend to Microfinance companies to handle this arduous task. Now most microfinance agencies have insights into the “individual equity” of a loaner to know the risk involved with lending with that individual and mitigate risks accordingly. We need a similar system like that.

Microfunds might very well be the trend to come. Why? There are 32 million SMEs in the country and the traditional way of investing is not going to work. They do not require huge quantities of money, and most of all there is a requirement for capital for expansion.

So How does this process scale? I came across a risk profiling tool built by an insurance company a few weeks ago, that allows field agents in rural areas to calculate the risk factors of an individual and household based on various parameters that they can understand from the individual. The tool is well built to the point that it can be used by an agent who doesnt have to qualified more than a 10th pass, and even better they are rolling out their next set of tools to enable these 10th pass graduates to manage the wealth of people in rural India.

Same criteria, same issues, but they’ve found a solution to it and are making money. That’s possibly a step that the funding models in India will have to take a look at and learn from. Its taken for granted that everything in India is grand – from railway stations to public toilets we have an issue of models having to scale up and dying by the lack of it. Funds are not going to be an exception to that rule. The right processes, definitely will play a crucial factor.

Ofcourse this is my understanding. Am counting on the wisdom of the audience here to continue this discussion – Whatever it takes to improve on things that already exist, but dont quite satisfy.

Malcolm Gladwell in his book “Outliers” talks about a rather interesting theory to becoming an expert. 10,000 hours. The theory is that if you spend 10,000 hours in developing a skill, by the end of it, you’d be an expert in it.

There is common perception that startups are entities who are low on resources, are always constrained by talent and time, and have none of the perks that bigger companies enjoy. That statement couldn’t be more wrong. Startups are infact by definition, entities that are extremely good at what they do, can deliver the next generation of quality and experience at half the cost. If your startup doesnt live up to that promise, its a sure sign that something is seriously wrong.

Lets think about the Logic of this whole matter for a minute. There are bigger companies with loads of cash and resources, and the network to go after the same market that you are aiming for. The only standing chance that a startup has is if you are amazingly good at what you do.

Thats exactly where Malcolm’s theory comes in. Every business has certain crucial aspects. If its a technology company, you are going to need someone who has great R&D background, one who has solid understanding of business and the markets and someone who can manage finances and play complementary roles. You Have to be the absolute best in what you are. When starting up, its worth asking yourself that question, as the destiny of the company you start very much depends on it. If you dont have a skill, its time to sharpen it. 10,000 hours to go!

Over the past three years, it has been quite a journey interacting with startups, some of the key stakeholders and in a lot of ways understanding some of the constraints that we are facing in building up this landscape. There is undoubtedly a lot of enthusiasm, an unparalleled momentum within the community and daring spirits aspiring to build world-class companies. No doubt about it.

But we are not nearly where we’d like to be.

Lets also have a bit of background here. We must humbly acknowledge that certain things existed even before we all arrived at the scene. There is nothing new under the sun says Solomon who was apparently one of the wisest man to roam the earth and he possibly could have been true. A report by the committee on National Enterprises clocks the number of Small and Medium enterprises in India at 32 Million. Yep, you read that right, its 32 million! 40% of the gross manufacturing GDP is a contribution of this sector of the industry. One of every ten Indian is employed by an SME. If you thought startups became fashionable in the past three years, we would be very misguided. That said, there is a sudden trend and confidence emerging that India too can build world-class companies. That sentiment is a recent one.

Though it was the camp at Proto.in, that initiated some of the key initiatives to drive this change, its no doubt that today there are several entities – all very key elements who have started to play a role in shaping this landscape. The purpose of this series is hopefully to point out some of the obvious things that we are going to have to work towards – so that we dont contend ourselves thinking that we’ve arrived.

I’ve thought about it, mulled it, discussed, debated and fought over it, but simplistically it comes down to this. Startups need two very crucial elements that we need to build in order to nurture them.

a) Media Focus
b) Capital

I’d also add a third component of Mentorship/Networks, but I am going to presume for a second that that onus can be laid upon the entrepreneur as there are several means and ways to compensate for that (linkedin, included) for now.

Media Focus:
Let me be very very honest here. There are several attempts by everyone involved in this space trying to get some coverage in the media, but there is a serious issue with the focus here. ET’s Ideas competition included, the focus somehow seems very much on the initiative than on the entrepreneurs. This goes for the Proto.in camp as well – while sometimes its nice to rest on our laurels, we have to constantly remind ourselves that we are just a mere platform and our success is when the companies we help succeed. We have got to do better in this. I know we can.

There are shows on television which as of now seem to be doing a better job at this than what most of the “showcase” events have managed to do, and its quite sad that thats the level of comparison we are at. Rest assured that there are also going to be equally enough efforts from the media to want to sensationalize it, and even make an emotional outcry out of entrepreneurs, dreams, hopes and dreams smashed, and its sooner or later meant to happen, but one of the things seriously lacking is the media network and lack of focus for startups.

Things we ought to do in this space:

a) There is a serious need for a authoritative blog that covers startups, and the emerging verticals.

b) There is also a need for a firm to start analysing the emerging market, as the value chains shift, and to help companies position themselves based on that. Such a company could almost become “the” means to start categorizing and analysing, comparing startups systematically.

c) We need more journalists who could write about entrepreneurship and startups with a solid understanding. There are very few right now (like Snigdha Sengupta) who can do such analysis as of now.

d) Everyone has this question. Every platform, Bplan Competition, Entrepreneurship summit seems to showcase 10-15 companies. What really happens to these companies after that? Do they get funded, attract clients, sign on anyone significant, strike any key alliances? There is space for a “Startup Tracker” to be in place. This will be crucial for the Media to start reporting indepth stories, and also for raising funds in the future (More on that in the upcoming series)

e) Events such as TiECon, Proto.in, Headstart have to put their heads together and figure out how to a) Get the startups coverage on national media b) Get coverage on overseas media – For Example. When PlasticLogic launched at DEMO, The Hindu Chennai edition had a coverage of what they presented the next day. Needless to say that company received enough backorders for their product, including bagging the order from Amazon and Sony within the next three months. If these native platforms are not able to offer that level of coverage, make no mistake, DEMO/TC50 will make its way to India to deliver that value.

There are projected plans to bring the employment rate in India to below 2%. In a global economy where countries are struggling to stabilize their unemployment rates, we are actually talking about almost making it disappear. SMEs will piay a significant part in it, and since Employment is a key value proposition of any government and referring to my previous article on who really owns a company, You can rest assured that the government will get involved and play its part to help. But the initial organizing of this sector has to be driven by all those who are claiming credits already. And clearly there is lots of work to do. Its time to get to work – and not stop at empty promises.

I am an entrepreneur. And the first thing you develop as part of being an entrepreneur is to start picking up patterns of directions people are moving in, and either do a mental math or just walk on the opposite direction of the flow and see whats it that people are totally missing. Usually there are interesting business propositions at the end of that rainbow.

There are two things that trouble me lately, and it connects to the subject of this post. Size.

We are in a rat race, and unfortunately so are most entrepreneurs. Working with entrepreneurs, the common chorus sung these days is to build a company, get it funded, scale, scale globally, make tons of money, go IPO or get acquired, and settle down. And this usually a 15-20 year plan (Anyone who does it in time less than that is either a genius or in sheer luck). The problem with this picture is that everyone thinks this is the de-facto route to go. But not everyone seems to be built for that.

Instead of getting into all the gory details, here’s the question: What’s really wrong about running a Sole Proprietorship firm, making perhaps about 3-5 crores in revenues, and being stable at that?

I met an audience of around 300 such entrepreneurs a month back, and the pace they live their lives by, not hazzled by competition, globalization, board pressure, missing out on family time etc seems almost non-existent – One even mentioned that its a better tax plan as well.

The reason I write this to this audience is cause, one of the biggest things that we worry about, especially with rural enterprises is scale. And at times you notice, sometimes with RTBI, and often outside that not every entrepreneur and entity is built for this. Small can be beautiful, if you know thats what your capability is, and can with content deliver on that consistently.

The second aspect of whats bothering me is something directly related to the first.

I am possibly fairly young, but even I miss the days when you call a company for customer service and you got someone that you spoke to the last time – makes for such a pleasant experience. I have an issue with my Airtel connection and I have called them 17 times so far over the past 18 months trying to get it fixed – so far no solution yet and I have given up on their system and started hoping for Number Portability to arrive.

One of the other side effects that I am lately noticing is the sheer amount of bills and receipts that I am hogging. You make a broadband payment, settle something here, there and you want to keep a copy of it all, because you really dont know when one of these companies will send you a note saying you owe them something and you have to make a case for yourself – and there is no one in the entity who can show you a friendly face.

Its almost unfortunate that with scale, customer experience has gone out of the window. Its said that when we were still bound by the day and age when we werent globally connected, most local businesses and entrepreneurs eventually “ran out” of a market to target, and their way of keeping themselves busy was to constantly improve upon what they offered to keep their customers engaged, happy, and conversing with them. Those days are really gone, arent they?

I think small is, was, and will always be beautiful. The sphere of success and what we really want – whether it be the size of the enterprise we are building, the mode of operation, or the values we want to be known for (even if its darn good customer support) are decisions we make. If anyone can make a decision agains the tide, its entrepreneurs. And with this day and age when trust is nowhere to be seen, and transaction costs inevitably will rise, small can be really beautiful – with a pleasant experience and happy customer.

It is an unfortunate reality that any member of the creative class, be it an entrepreneur, an artist, or a creative director has to deal with. You almost have to continously reinvent yourself, and prove yourself over and over again, if you want to remembered. The world has a nasty way of having a short term memory and there are many great achievers who have fallen down the wayside in the trench of being forgotten, and was never again recalled, till they passed away.

Thats the nightmare of everyone in the creative class.

So the bottomline is that we have to strive to be better than the best, and in most times, we are our own enemies – as we try to overdo what we have accomplished in the past. The bigger nightmare is to build one great success followed up with a disaster and have people talking about the second one, more than the first.

With this as a background, one of the biggest dilemmas that entrepreneurs have to deal with, over and over again, is as to how to deal with people. Every one of us, if we have a tint of visionary streak in what we are trying to do, will come across a point when some of those who work alongside with us, dont see us eye-to-eye on what we are trying to accomplish. When that point in time arrives, is it going to be the people, or the cause that you are going to align yourself with? Thats the question.

I have wrecked my head over this dilemma. Most achievements are a matter of the team coming together right? In which case, shouldnt the vision be easy to compromise to accomodate those who have stood by us? Yet, it is also deceiving that if the vision can accomodate the team, then there also is scope for loads of mediocrity to creep in – and thats not one that a visionary can afford to have.

One could argue both ways on this, but I’ve come to the conclusion as such: For most of us, its not the glory in the act, nor the money, but the satisfaction of getting something done that was once deemed impossible – atleast for me it is. So the question to ask, when you are placed in the bridge of having to make a choice between taking that investment money or going bootstrap mode, or letting go of the partner or team lead, or even having to ask a close friend to step down are all a factor of what you really want to accomplish and where your passion lies. If your passion is in making a difference, then dont settle for us – whatever the cost. Because without it, and the vision that is birthed by it, we are just ghosts with no life nor grip on existence.