5 Things Every Entrepreneur Must Know
India has had a long economic history. We have transformed and grown over the years – from the license raj era socialism of the 50s, to the Manmohan Singh globalisation era of the 90s. But our true reckoning has come in the last few years – when our daily newspapers sing stories about professionals turning entrepreneurs, entrepreneurial societies spring up across our college campuses and our traditional middle classes values expanding to see entrepreneur as a career path beyond doctor, engineer and CA. Over the last few years, I have watched with fascination as the hustlers and ‘jugaads’ within us Indians has woken up – to shake up industries altogether, and add value to a life plagued by inefficient infrastructure and little structural support – from services to allow online booking of bus tickets to themed party planning.
Over the years, I (still at a very young age) have had the fortune of working with and for entrepreneurs – discussing and debating their ideas, policies and dreams with the objective heart of a finance grad. I have seen entrepreneurs in all forms – from the elites who’ve graduated from the likes of Harvard Business School to those who haven’t gotten a decent degree because their hearts lay somewhere else. Based on my few experiences, I lay down the little wisdom that I have:
- Have an Awesome Idea: A business is the tree born out of the seed of a great idea. It’s not the greatest idea if you are doing something similar to what a lot of other people are already doing. Be a game-changer. Invent and disrupt an entire industry. Look for areas where people are under-serviced, and provide a value-adding service there. Amazon.com came in with one simple concept- to sell stuff to people when the Internet was just coming of age. Today, portals like coursera.com are levelling the playing field for those who didn’t go to an Ivy League school while others like thefancy.com are changing the way we shop online. If your business offers something that most people want (‘value’) but aren’t getting now (‘innovation’), then you have a great chance of success. This does not in any way mean you have to invent the next iPhone. Innovation can be simple – from a ‘Cash on Delivery’ service by Flipkart to something really complex – $100 Masters degree planned by Udacity – but it is valuable as long as it serves an unmet need of a reasonable number of people that form your market . Get the ‘value innovation’ (‘The Blue Ocean Strategy’ by W. Chee Lan Kim, HBS) right, and macro-economic forces will be the wind as your business sails.
- Watch the Cash: A business is about profits, but it is more so about the cash. So long as you have cash, you are in business. Illiquidity can kill a business as much as a stupid idea. So, watch the cash register. Don’t over-expand or over-spend: Subhiksha and Kingfisher expanded themselves too quickly – only to find themselves hemorrhaging cash by the truckload each day. Keep a cushion for safety. Watch your outflows like a hawk. Constantly look for ways to reduce your spend. Just because a VC has just written you a fat check, don’t think up on ways to spend it all. Evaluate every idea on a ‘cash flow’ basis. Don’t undercut your cash flows expecting to make up for it later – later probably never comes.
- Get an All-Star Team: Several people who join into a start-up are accomplished professionals – and for most of them, it’s not about the salary or the stock options. They are here; to make a difference for something they feel passionate about. Cater to this ‘self-actualisation’ need, involve your people in policy and strategy decisions, and you will be surprised at the perspectives they offer. Give freedom to your team to make their choices, offer flexibility that is lacking in large organisations. Start measuring people solely on their outputs, not on their inputs. People will rise up to the trust you show, and can surprise you with their capabilities once they are rightly motivated to give their 100%
- Go All In: It’s not enough to just have a good idea and do some decent execution. You have to go all out to promote and expand your business. Speak and pursue your network and your contacts for feedback and connections relevant to your business. Attend entrepreneurship and VC events to get other people’s perspectives and run your ideas by them. Show initiative and be willing to take up partnerships and affiliations. Go out and do stuff one wouldn’t expect from the CEO : call up a customer randomly and ask for a 5 minute conversation to talk about his experience doing business with you, present your business as a study in a local business school et al. You will be surprised at the amount of perspective you can get from these few things.
- Focus on the Important Things: Once your business has achieved a decent size and you have a few employees, ensure you start delegating day-to-day operations to your people. Focus on business development, strategy and growth. A lot many CEOs get bogged down by minute details of day-to-day workings, but that may not be the best use of their time and minds. Leave the details to your people, let them figure out the ropes – one learns best by doing. Get mentors and advisors – not the VCs who sit on your Board but an actual third party who will genuinely not think twice about dishing it out to you when you’re wrong. Spend your time talking to a bunch of interesting people – and listen carefully, sometimes we don’t see something that’s right in front of us.
For more things entrepreneurship, do visit http://thincquisitive.com/category/entrepreneurship/ We will be coming up with our tips and advise based on our experience and education as well as interview some interesting entrepreneurs, so keep watching this space for more.
(Do feel free to reach out to me at firstname.lastname@example.org or via twitter at @aniket_nikumb for feedback, ideas, a conversation or my 10%)