Middle class upbringing doesn’t change middle class values

I was reading on write ups on successful entrepreneurs. I found that 95% of them  are born in a middle class family. It is true that middle class upbringing(read save every penny, buy whatever is necessary, early to bed early to rise...) doesn’t change middle class values( no exorbitant salaries for employees, no fancy decors at office...). These values help entrepreneurs deliver when the chips are down. Recession no recession they survive with elan. The rich kids are not in tune with the ideals entrepreneurship stands for. They are not able to empathize with the people. They want to create a hollow image and live in that bubble. I know of a person who started an start up venture in the field of event journalism. Half the time he was partying, going on holidays. I have no idea how his start up is surviving.
On the other hand, I was reading about CEO of aspire systems who started in a modest fashion. Even-though he clocked his first million in the first year, till date he travels in his company bus everyday to office, all his employees take comfortable salaries. His company was able to withstand recession and grow robustly.
His mantra was: live a modest life and always plough back profits into the company.
Merry Christmas  to all the readers of the blog . May god bless all of us.

What ails startups in India

Startup companies find it difficult to raise funds in their early stages.

I remember, the day I started my company. I approached many banks for loans. All of them offered personal loans( 18%-20% interest- to high to repay). None of them offered any other loan cos I was dealing with a service and there was no physical stock to show(it didn’t matter that I had IP). I did’nt get any loan and I had to beg and borrow money from friends and family to get started.

My angst was echoed at the TIE conference held here. They discussed that the seed funding structure was like an inverted pyramid. There is a shortage of funds at the startup level and there is a lot of interest in later stages of funding. This spells badly for many start ups, as primarly cash is important for startups in the beginning.

(For those newbies who don’t know about funding,  let me elaborate on the funding nature.There are primarly 3 sources of funds for startups. They are-

• Friends and family funding-When the other two stages don’t work
• Angel funding- Happens when the company is 1-3 years old. Source of funding-Angels fund managers
• Venture capitalist funding- Happens when the company is 3-5 years old. Source of funding – Private equity firms.)

On the contrary, in western economies good funding exists at every stage of the development of the company. Probable reasons why there  is less money in India for startups is that there are higher  executional challenges for newer companies in India than in the west and there is a dearth of quality mentors who can guide start ups in the early stages. Fund managers  prefer to leave a company to its fate for the first few years, check if it survives and take a call in the 3rd or the 4th year of operations to start or not. That is indeed a sorry state of affairs.

Maybe the HNI(high net investors) in India should invest more in startups than in real estate and gold. The overall startup ecosystem has to improve for all of us tomorrow.

Want to learn how to market

Read Seth Godin blog

He talks about idea generation, marketing insights. Do read his blog.
http://sethgodin.typepad.com/

great posts from harvard professor

Pofessor Tom Eisenmann - Professor at Harvard (technology and entrepreneurship) has compiled a series of articles worth reading at.
Go ahead.

There are lots of it. Most of them are tech related. Try converting them into your stream of business...

http://platformsandnetworks.blogspot.com/2009/11/compilation-of-webs-best-advice-for.html

Enjoy!

Surviving during uncertain times

To survive during uncertain times, you and your company must be able to survive the downturn. You and your company must build competencies which will hold their ground when competition strikes or when the market changes. I was thinking about building competences when I read this article in Economic times. I found it relevant.
“ The world would truly have been a better place if Steve Jobs had thought a bit like his archival Bill Gates”- Michael Cusumano,Professor of management @ MIT Sloan.
As per Michael,  there are 6 enduring principles which any company should  be following to stay in the race . They are
1. Build Platforms not products .
The reason why far superior Macintosh Computer didn’t have a greater market share than clumsy Windows PC is because Microsoft went in for a ‘platform strategy’.
What is platform strategy?
A company should own a platform and license its code to other developers to innovate. In this way other developers would modify the code and make their own applications. Hence the platform gets used exponentially. This leads to greater market share. Be a platform leader.
Apple held onto the Macintosh operating system. If it had licensed the operating system it would have become 100 times more popular than windows.
Take I-phone. I-phone too began as product which runs only Apple applications. But soon Apple learnt from their past mistakes and modified I-phone to run other applications. Hence I-phone has a market share of 60%+ in the smart phone segment. 
2. Build Services not just platforms and products.
Business is dealing with people. If you have a service and if it is in tune with the needs of the people then your business will survive. I’m sure major banks in the world make more selling insurance, home loans then standard banking operations(fixed deposits, Chq issuing…)
3. Build capabilities(how to do things) than strategies(what to do).
If you want to endure during uncertain times its better to develop systems to empower your employees to do things correctly, but to develop these process you must have a through understanding of the business you are in.

4. Focus on scope ,not just scale.
Focus on using a common base of technology to solve multiple problems of customers, hence multiple products. This is similar to a factory which has a fixed set of components but the factory can produce different types of products.

5. While marketing- Pull not push.
Attract people to your product, they will spread the word. This requires interacting with customers and  creating products in lieu with customers expectations, dynamically.

6. Seek flexibility not efficiency.You need people who are flexible( people who can perform a variety of functions) than people who can do only activity.  This means more work will be completed but they may not be 100% efficient. If they are 80% efficient, that’s ok.
-Staying power: Six enduring principles for managing strategy and innovation in an uncertain world – Michael Cusmano.

What does it take to be an entrepreneur?

Most of the entrepreneurs when they are start are foolish people. :-)
They have grandiose ideas which they believe will truly change the world. They will break even within 1 year. Earn their first million within 2 years. Sell their companies within 5 years. Earn a billion dollars in the process. They are mostly wrong. Very few people can become like Mark Zuckerberg (Mr Facebook) i.e. become a billionaire by 30.

On closer observation of an entrepreneur, it is not his idea that attracts people, its his pure optimism, unrestrained confidence and his ability to rise from his numerous failures. He will learn from his mistakes and delusion, correct his path and go on and on and on….

A good entrepreneur is 

• Open to new ideas 
• Good at goal setting-(setting clear goals and jotting down an action to achieve the goal)
• Able to schedule time in such a way that they have the least amount of time unscheduled in a day.
• Able to reward himself/herself for goals achieved.
• A good time manager
• Shrewd when it comes to handling business (Delay payment as much as possible. Get payments as soon as possible)
• Builds relationships like crazy(the number of facebook friends, twitter followers and linkedin contact is a strong indication)
• Able to command loyalty from his/her customers. During the initial phase of the company it is better to follow this mantra – ‘promise to serve and serve what you promise.’
• a systematic planner.

Most of us are not born entrepreneurs. For some of us it comes naturally, for others the calling comes as a quest to do things differently.
Entrepreneurship is not just one skill set. It is a total sum of skill sets(risk taking abilities, perseverance,  ability to network effortlessly, ability to survive, knowledge, reading skills, extrovert character, sales skills……)which defines entrepreneurship.
So go ahead take the plunge, be neck deep in it, then navigate your course, …….feel the experience of a life time……
It’s the journey which is entrepreneurship not the end result.

Entrepreneurs as change agents –Power of Ideas- List 1

I’m presenting below entrepreneurs who IIM A,CIE, ET have shortlisted as “change agents who will rock India”.

A brief analysis (list 1 analyzed, List 2 will be uploaded soon),
Sector-wise analysis :
Media -2, Mobile -1 IT/Web -3, Education -2, Logistics -1, Retail -2, Cleantech/energy -3, health care -3
 
Products/services:
New Products- 5        New service -12
Majority of the ideas where service based, new products might require lots of research.
Majority of the ideas where based on improving a social cause i.e. helping poor artisans, helping school children in labs or thinking skills development, dealing with renewable energy resources, traffic monitoring.

They received a cash grant of Rs.5 Lakhs to start.(The capital required to start is less than Rs.5,00,000)
Majority of the products are intended for mass consumption i.e the number of people who consume the product or use the service is huge. Except one( high end lingerie shop ).
Here is a list of entrepreneurs who have got selected for the economic times power of ideas 2010. Also I have listed what sectors they are working on.

Sector: Mobile/Telecom
1. Aaditeshwar Seth
Idea: Information services to rural India using mass media
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Sector: IT/Web
1. Amit Jain
Idea: Web based application providing asset tracking solutions for all movable assets to prevent transit theft.
2. Ankit Sabharwal
Idea: Offline/online application enabling online exploration of locations replacing photo and video galleries.
3.Briraj Vaghani
Idea: Traffic monitoring system to aggregate data from vehicle tracking systems disseminating via web interface to commuters, police and transportation services
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Sector: Media/Entertainment
1. Anirudha Gupta
Idea: Technology based service using unbreakable copyright protection and flexibile payment systems, making content distribution easier
2. Harjaap Mann
Product enabling better outdoor ad campaign planning for corporate clients with data from various cities across India
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Sector: Logistics/Transportation
1. Ankur Tripathi
Idea: Electronic road transportation exchange, reducing lead time of transportation requirements and improving reach and efficiency
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Sector: Retail
1. Annu Grover
Idea: Retail chain outlet selling green gifts and lifestyle to those who seek to flaunt the same, giving employment to artisans
2.Arpita Ganesh
Idea: High end lingerie boutique offering women a variety of exclusive brands and products, as well as consultation to choose the most suitable innerwear
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Sector: Cleantech/Energy
1. Ashok Jagatia
Idea:Energy efficient hardware and software for outdoor and indoor lighting reducing carbon footprint.
2. Brijesh Rawat
Densification of fuel from loose biomass and development of gasification technology
3. Hemanshu Bhatt
Idea: Integration of PV cells with arraying and controls, power electronics and digital logic, to enable highest performance at lowest cost reducing energy cost by 40%
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Sector: Health care/Life sciences
1.Ashok Mital
All encompassing dental health services to serve patients better,
2. Ashwini Nangia
Pharmaceuticals co-crystals that will help discover new and improved medicines
3. Gaurav Porwal
Idea: A chain of dialysis centers
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Sector: Education
1. Ashutosh Khurana
Curriculum on thinking development to develop cognitive, social  and emotional thinking skills.
2. Hitesh Mehta
Idea: Worlds most extensive fibre optic table top lab equipment which helps expose students to the real life situation encountered in labs.
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Role model for the week – Sapolai Yao

Sapolai Yao is a Papua New Guinea athlete. He participated in the recently conducted common wealth games held in Delhi. He participated in the men’s steeple chase tournament. He came last in the finals.
Why have I chosen him as this weeks role model?
During the finals, he was pitted against the strong Kenyans. He was from the “smaller nations”,  small built, the climate was too hot for him. He ran the entire race at a steady pace and didn’t falter despite being many places behind the top 5. As the distance between him and the others grew steadily, never once did he allow the pressure get onto him. He still maintained the pace. There came a point when his opponents over took him i.e. he was a lap behind them. Everyone expected him to stop the race, but he plodded on. Finally the race finished.  He still had one lap to go. He ran the last lap with the entire stadium watching him run. All the other athletes had completed the race and were getting ready for the prize distribution ceremony, our man was still running.

He carried on at the same pace. When he finished the race finally, he got a standing ovation from the entire crowd. Some people clapped in mockery, but other people applauded his spirit.
What would you have done?Would you have given up the race knowing very well that the competition has beaten you hollow or would you have carried on at the same pace and come last.
Lessons learnt
Keep your fighting spirit, till the end. You never know what destiny has in store for you. The trick is to be focused on what you are doing and not let anything disturb your equilibrium. You might win the race or come last, but at the end of the day you are a winner in your own way. Yao came last in the race. Yet his fighting spirit inspired people at the stadium and inspired me to write about him.
Go ahead fight till the end, irrespective of what happens at the end.

Luis Urzua, the LAST Miner Rescued from the Chilean Mine - MIRACLE!!!

Your role model for the week- Luiz Urzua

He was the shift commander  of the Chilean miners who were pinned nearly half mile underground by 7,00,000 tone of rock.

He used all his wit and his leadership skills to help his men stay calm and in control for 17 days till the rescuers found them and then over two months while the rescue process was on. He stretched the emergency food supply meant to last just for 48 hours to over two weeks.
He made risky but calculated decisions to use a bull dozer to carve into a water deposit. A minor error could lead to a cave-in or the cave filling with water.
He is the man who kept his people’s spirit high by using prayer,morale boosting stories and at times force. He is the man who the world salutes.

Luiz Urzua – our role model for the week.

Our lesson: 
Entrepreneurship is a lonely road. In philosophy, the bleakness of the human condition is a recurring theme. Place people in a situation where they are reduced to the most basic instincts of survival and their darker selves will take over. Entrepreneurs should have a strong will to survive. What ever happens there is no looking back. Whatever be the challenges ,you should guide yourself and your team members to shore. No problem is unsolvable, it can be solved by looking at it in another perspective.

Inbound marketing vs outbound marketing.

Inbound marketing
making people come to a neutral point and then making them come to you.
If you have a website and if you want to promote it. Start a blog, make the blog popular (post reviews,answer comments in social forums). Link the blog to your website, thereby increasing footfalls to your website.
Pros
•    It doesn’t take money to market, other than maybe internet charges.
•    Its increases your reputation and fame
•    It makes you popular among your peers and friends; Your peers see you all over facebook,orkut… You
      become a star….
•    You can do it alone, You need not have a marketing team
•    Future clients see you as a person and are able to relate to you more.
Cons
•    It take a lot of time to get a steady flow of visitors your site. (for me it took a year to make steady visitors
      of minimum 1000 a week)
•    If your site doesn’t have great content or if doesn’t have a repeated value (read fresh content every
      week), then your visitors will not come back to your site, further they might spread the word that it’s a
      horrible site to visit. Then you are out of business.
•    You need to be innovative and attract visitors with new events and lots of freebies.

Outbound marketing-
Placing an advt in the newspaper, popular website and hoping that people will see the advertisement and come.
If you have a website and if you want to promote it. Put an advertisement in MSN or Yahoo home page. Don’t worry about the cost, it will cost around $2000 or Rs.1,00,000 per day. I guess it will make a big hole in your purse.
If you are running a retail chain with atleast two outlets in different parts of the city and if you have deep pockets,   Then out bound marketing is your best bet.
Pros
•    It gives your brand good visibility
•    It gives your brand a size( this is necessary for B2C market)
•    It gives you brand a high recall value
•    You get a good social standing from future investors, clients…
Cons
•    It is very costly
•    It has to be sustained over a long period of time
•    You need lots of people to coordinate with you so that all the promotional activities happen at the same
       time.
Overall if you are a just starting a company; go for inbound marketing. If you want to scale up fast go for outbound marketing+ inbound marketing.

Remember there is not right or wrong channel(web,newspaper,posters…) of communication. Don’t forget to simultaneously display the product or the brand through all the channels. Don’t do it one at a time.

Small towners, think big.

Recently I read articles about some small town entrepreneurs who have come up in life. I noticed few common features

1. People from small towns are more determined to achieve their goal and put their maximum efforts to achieve them
2. They are very stubborn. Come what may they are fixed onto their ideas.
3. They have no support system. When they move from small city to a big one, they are usually alone and have to build a team from scratch.
4. They are used to hardship and are able to face the hardships head on
5. They have rock solid family relationships. When they make sacrifices and when they take risks, they get family support.

So if your are from a small towner and if you have entrepreneurial dreams, go ahead start a company.

Knowledge is power.

Indian info line message- very apt
“Rockets didn’t put man on the moon
Nothing adds up to anything without knowledge
Stocks multiply money only when you pick the right ones. In fact its our research that brought us a million investors. And convinced juries to to vote us India’s best broking house*. After all, finance is more than numbers.”
True if you want to start anything study the market, study the product, study the competition, study the pricing strategy, study the city, study the location, study the weather, study the purchasing power of the customer, study the business model, study the communication channels, study, study,study,study,study,study,study,study,study,study,study…………..