What is risk in Entrepreneurship?

Dear Friends

Recently I came across the following mail forwarded by my friend. It just changed my mindset regarding Entrepreneurship. Hope you will feel the same after reading it.

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Update on 18th May 2010. I have been long wondering who has written this inspiring post. Finally, I found him. His name is Sameer Guglani. People may refer to his linkedin profile at http://in.linkedin.com/in/sameerguglani

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Recently I met with parents of the founder of one of our portfolio companies. They asked me about their son’s venture , how do I think its doing and what will be the outcome etc. Here was my answer to them:Your son worked for 1 year as a SW engineer with a big company before starting his ventureNow the venture is 4 months old and is already seeing some good tractionLets say he works on this venture for 2-3 years, at the end of it one of the two outcomes will be seen Good case outcome: He continues with the venture. It has become successful – not necessarily an IPO but at the minimum its growing steadily and makes enough money to sustain itself and pay him a salaryWorst case outcome: The venture shuts downWhen your son started this venture he auto promoted himself from SW engineer to the CEO / CXO A level he may have never achieved or achieved after a very long time period in a regular career with big SW companiesSince he is CEO / CXO – he would need to work & network with CEOs / Founders / Owners / Senior management folks of other companies As a matter of fact this person I am talking about has already met CEOs / owners of more than 10 established / funded companies which are from the similar domain as his own companyIn case of shutdown of his venture it is certain that with the right efforts your son will: Find a senior management position – VP / AVP / Director / Head of department with a company in the same domainGet very good salary to go with these positionsAnd he would have switched from writing code to a domain of his choiceAnd if he has another venture in him, he can save enough to start itThis will happen because 2-3 years as an entrepreneur will give the two things needed to get a senior position: Network of decision makers at good companies who have seen him run his own company3 years of intense learning you get as as a start up founder, is worth more than 10 – 12 years in regular jobThese days people in the industry are very happy to hire X-entrepreneurs, since they know these guys can get work doneNot all companies would be open to hiring him. But there are lot of funded, growing, young, dynamic companies who would be happy to consider him seriouslyYour son will be way ahead, both in salary and position, as compared to most of his classmates / colleagues who will never go out of the SW industry and become Senior SW engineer or at best a team lead in these 2-3 years. Some of these guys may have gone to top B-Schools to do MBAs and after 2 years will be doing entry level jobs in companiesSo if in the worst case spending two years passionately working on your startup can him chance to switch his job profile and domain, a very good jump in both and salary, and in good case he may be running a successful venture – doing a start up is a great investment in career, and not at all a riskThey understood my point since it was quite logical, but still did not seem fully convinced . I don’t blame them. They are from a different generationI also shared with them my personal example:In August 2004, when I left my job to start madhouse, I was Principal SW engineer in a telecom startup in California, two levels below a managerI started madhouse and promoted myself to be the CEODuring my three years with madhouse I worked and networked with lot of other CEOs / VPs / Owners / Partners of other companiesAfter three years madhouse was acquired by Seventymm and I joined as Vice President – Corporate StrategySo in three years I went from being two level below manager to the topmost layer of a well known company and with quite a good salary packageNow while I was at Seventymm I had access to senior management jobs across domains like retail, consumer products, media. I had an offer to join as president of strategy at one of the leading public entertainment companies in India and the annual package was more than 50LBut I turned that offer down and decided to start the next stint of entrepreneurship – MVPOther two founders of madhouse (Ankur and Nandini) saw a similar result as well. Nandini became AVP @ Seventymm and Ankur joined as VP @ TravelguruI am aware of many more similar casesBusiness Ideas may fail, but Entrepreneurship is risk freeNo opportunity comes with surety. Even an MBA from a top B-School might not get the best returns. There are lots of bright ideas which never reap fruits. What is important is that you should be able to separate failure of your idea from your personal failure. Its very clear, if you choose to become an entrepreneur for the right reasons, have the right approach and are determined to give it your best shot for 2-3 years and create value in your venture, chances of failure are near zero. You will learn so much and get to know so many people that even in case of the worst outcome, you will come out way ahead and will be a much wanted resource.hThe journey of entrepreneurship is the real value add for the entrepreneur. The result is a by product.So where is the risk in entrepreneurship?

Sanjeev Bikchandani-Naukri.com

Sanjeev Bikchandani

With a bachelors in Economics from St Stephen's, Delhi and a diploma in management from IIM-A and a stint with advertising and GlaxoSmithkline (then HMM), Sanjeev Bikhchandani, co-founder and CEO, InfoEdge (India), better known by its Web site naukri.com, is today sitting over a business worth Rs 45 crore (Rs 450 million) with 600 employees and 35 offices all over the country.

The GlaxoSmithkline days

It was during his stint with Glaxosmithkline (then HMM) that Sanjeev realised that employees love talking about jobs and career movement. He realised jobs are an extremely high interest information category for almost all people and headhunting had tremendous potential.

First taste of entrepreneurship

Sanjeev started out as a partnership firm in 1989, where he was a sleeping partner. By 1990 he had concluded that there was probably a large, highly fragmented database of jobs out there with HR managers and headhunters which, if someone were to aggregate and keep current, would be a very valuable resource. He set up office in the servant's quarter above the garage in his father's house, paying his father a rent of Rs 800. For the first few years his company did salary surveys and built and marketed a database of pharmaceutical trademarks.

Though the company was kept afloat, he was unable to draw a salary and Sanjeev ran the house on his wife's salary. To meet his personal expenses, he would teach at business schools as visiting faculty on weekends. It was in response to a Department of Telecom's (DoT) advertisement to launch a videotex service in Delhi that he prepared a database of jobs. It was a pay-to-view model, where initially the employer would be allowed to host his job free and they would earn from the revenue share the DoT would give us. But the project never took off.

Turning point

It was on his visit to IT Asia in 1996 that Sanjeev came to know of the World Wide Web. To register his website and get a domain name, he had to take help from his brother, who lived in the US and has a stake in the company. The naukri.com site was set up in March 1997 as a division of InfoEdge.

What was interesting was that Sanjeev could not get any domain name he wanted (all such names which had the word job were already registered) and had to settle down with the Hindi term "naukri", which actually makes it different from other jobsites today. At this point he was joined by Anil Lall, the chief technical officer and V N Saroja, chief operating officer.

Dual responsibility

With the recession, Sanjeev had to take up a part-time job, but in the same domain area. Between 1996 and 2000, he also worked at The Pioneer. Initially, the consulting editor of Avenues -- the careers supplement of The Pioneer -- he was instrumental in working out an investment package with a consortium of four financial institutions -- ICICI, IDBI, IFCI and UTI. In the morning, he used to work for naukri.com, go to The Pioneer during the day and then get back to naukri.com in the evening.

Reaping fruits of success

Naukri.com became profitable from the second year. Today, it has a profit after tax of Rs 8.5 crore (Rs 85 million). It was now time for expansion. InfoEdge aquired Jeevansathi in September 2004. Besides, it has an offline recruitment business through its venture Quadrangle.

The site had a revenue of just over Rs 200,000 in the first year of operations. In the second year, however, revenue quickly climbed to Rs 1.2 million. Sanjeev made do with his own finances till 2000, when he got funding from ICICI Venture Capital. So far, InfoEdge has taken only one round of venture capital of Rs 7.3 crore (Rs 73 million).

Today, naukri.com gets over 100 million page views a month and has over 3.5 million registered users. It is estimated that over 700,000 people have found jobs through naukri.com. Over 15,000 organisations have used the site for recruitment. It has also launched a real estate portal in 2005.

Dame Anita Roddick - Proving Entrepreneurs Can Do Well by Doing Good

Entrepreneurs need role models. They help us to believe that our dreams are possible. They demonstrate a path to success. They inspire us to set bigger and better goals than we ever would have otherwise.

Anita Roddick was such a role model for any aspiring entrepreneur. In 1976 she started her own beauty products business in a small building wedged between two funeral parlors in Brighton, England. She took out a mortgage for $6500 and got an investment of $8000 from a neighborhood garage owner. A little more than 30 years later, she sold her business, The Body Shop, which had grown to 2000 stores in 50 countries, for $1.14 billion.

But Anita Roddick achieved much more in her life than financial wealth. She pioneered the way that businesses interact with the world. She saw herself first and foremost as an activist – actively engaged in making the world a better place; her business was just one of her many means of doing so.

Anita never saw herself as a small player, even when she was first starting out. She never doubted that one woman, with determination, could make a difference. The slogan on her U.K. delivery trucks read, “If you think you're too small to have an impact, try going to bed with a mosquito.”

Anita worked in the beauty business, but she was never part of the beauty business. The Body Shop only sold cruelty-free products which did no testing on animals. She believed in doing well by doing good – working to help the environment, and promote animal rights and human rights while helping the company’s bottom line.

Anita, whose personal net worth was over $100 million, donated millions to charitable causes. She was personally involved with Greenpeace and with organizations to help the homeless in the United Kingdom. She founded Children on the Edge, which helps disadvantaged children in Eastern Europe and Asia. In 2003, Queen Elizabeth II appointed her Dame Commander of the Order of the British Empire.

Anita Roddick passed away this week, at the age of 64, due to a sudden brain hemorrhage. But she leaves a legacy of inspiration behind. Aspiring entrepreneurs sell themselves short when they assume they need to make a choice between improving their company’s bottom-line and improving the environment. Anita Roddick proved that by employing the single-minded determination of a mosquito, both are possible.

For more inspiration and information on entrepreneurship, visit my blog, More Than We Know.

Michael Dell-Founder of Dell Inc.

Michael Dell - Founder of Dell Inc.
Michael Dell is the founder of the computer company Dell, Inc. He created one of the most profitable computer companies in the world with annual sales of up to $50 billion American dollars. Dell has also become one of the wealthiest people in the world with a 4th place listing on the Forbes rich Americans list in 2005 with an estimated worth of $18 billion.Michael Saul Dell was born on the 23rd of February, 1965 in Houston to an orthodontist father and a mother that worked as a money manager. Dell was interested in computers from a very young age and was already pulling them apart at the age of 15. He attended the University of Texas with hopes of becoming a doctor. Much to the dismay of his father, he abandoned studies to start his own business at just 19 years of age. The idea struck him when he saw people interested in buying much more advance configurations than were available in the market.
With just one thousand dollars in his pocket Dell started "PC's Limited" in 1984. From his university dorm room Dell started building and selling personal computers from stock computer parts. The idea that set the young entrepreneur apart from others was to sell directly to the customer, rather than going through a third party to sell his products. He is an entrepreneur not just of an organization but also a concept that has changed the way people do hardware business.
Dell pioneered the concept of selling computers directly to consumers, built to their specifications and without the added costs of retail distributors. The idea has proven to be quite profitable, and has been belatedly adopted by other computer makers who are struggling to keep up with Dell Computer Corporation's phenomenal success. By targeting educated consumers (i.e., corporations and government agencies), Dell is able to avoid the expense of heavy investments in building and maintaining retail channel sales and the after-sale burden of supporting unsophisticated users, though the company has a well-deserved reputation for its technical support services. He wisely passes this savings on to consumers, who have returned the favor by becoming repeat customers.
PC's Limited allowed the customer to customize their computer before it was custom built to their specifications. The prices could also be kept much lower than PC's Limited's competition as they had no stores to maintain or middlemen to pay commissions to. All computers were sold direct to the customer with the use of order forms, phone orders, and now Internet orders.

In 1988 PC's Limited had a name change to "Dell Computer Corporation" and had an initial public offering (IPO) that valued the company at roughly $80 million. By 1992 Dell Computer Corporation was listed on the Fortune 500 list of the five hundred largest companies in the world, making Michael Dell the youngest ever CEO to head a Fortune 500 company.
The company continued to grow and expand dramatically year after year, eventually selling more computers in the United States of America than any other PC company (including Compaq). The growth came with its own set of problems. Dell was growing at a frantic pace and it became hard to manage it. Moreover, Dell introduced some advance configurations that were not well taken by the consumers. He then set things right and eventually took his company out of trouble.
"Dell Computer Corporation" became "Dell Inc." as they moved into other areas of business. Dell Inc. now has an expanding product range that includes home entertainment systems and personal devices.
Michael has published his partly autobiographical book "Direct From Dell: Strategies That Revolutionized an Industry". The book is written in an entertaining, fast paced style that explains how Dell turned his $1000 company into a mega-corporation worth more than $100 billion.
Dell stepped down from his role as CEO at Dell Inc. in 2004 but remains the Chairman of the Board.
Michael Dell uses some of his great wealth for philanthropic activities and has started the "Michael and Susan Dell Foundation" with his wife Susan. The organization is committed to improving the lives of children in the United States of America and internationally.

Entrepreneur Profle-R Sriram,Former CEO of Crossword Bookstores Ltd.

R. Sriram, Former CEO of Crossword Bookstores Ltd.

Sriram is a pioneer in the retail industry in India and has helped start and grow two bookstores: Walden in Hyderabad and Crossword in Mumbai.
It was about 20 years ago that Landmark, a well-known bookstore chain based in Chennai unleashed what has become a fairly lucrative market in India: bookstores. Sriram started his career at Landmark quite by accident and learnt the ropes of the trade of book retailing in his first job. After a few years along with two of his colleagues (one of them was Anita, who is now his wife) moved to Hyderabad to start Walden Bookstore.
In 1992 Sriram and Anita relocated to Mumbai to start the Crossword chain of bookstores. The couple along with a dedicated staff spent over a decade in creating and expanding the Crossword chain of bookstores. The couple helped create a unique chain of bookstores, where the comfort of the readers was their primary focus. The wanted to encourage readers to drop by, browse, and buy books.
Sriram was also responsible for setting up the Crossword Book Award, which is modeled after the famous Booker Prize. The Crossword Book Award is the first of its kind introduced in India.
Sriram is passionate about his books and it shows both at his home and the stores, where he has a special section called "Sriram Recommends." He is a voracious reader, and still finds time to read books.

Sriram lives with his wife Anita, and their new daughter Kavya in Mumbai.

Sriram believes that few pleasures in life equal that of a few quiet hours with a good book. He derives great pleasure in infecting other readers with his enthusiam for the books that he has enjoyed.
ABOUT CROSSWORD

Crossword was founded in 1992 by Mr R. Sriram and Ms K. Anita along with a young team from India Book House Limited and the first Crossword store opened on 15th October 1992 at Mahalaxmi, Mumbai. Currently, Crossword Bookstores Ltd. is a wholly owned subsidiary Company of Shopper’s Stop Ltd – India’s leading department store chain. The Holding Company inter-alia also acts as a Master Franchisee of the Company.Their first franchisees, Mr. Gaurav Shah and Mrs. Supriya Shah, were appointed in 1995 and the first franchise store opened on 7th October 1995 in Ahmedabad spread over an area of 4500 sq. ft. With their passion and commitment it has grown over the years and is currently spread over 15,000 sq. ft. in the same location. Gaurav and Supriya have also opened three Crossword Corners in Ahmedabad and operate a total of four stores currently.Crossword has grown to 37 stores today over 10 cities, with a mix of company owned and franchised stores.R Sriram Quits Crossword, to start Consultancy
Now he is starting a consulting practice in the retailing, publishing and consumer space .But, he will continue to be a consultant to Crossword.

Philip Rosedale, Founder of Linden Labs and Second Life

I saw Prabal’s Article on secondlife.com so I thought why not know about the person behind Second Life.

Philip Rosedale built his first computer in 4th grade, and started his first computer software company while still in high school. In '95 he developed FreeVue, a low-bitrate video conferencing system for Internet-connected PC's, which was eventually acquired by RealNetworks. He worked at RealNetworks for three years and eventually became the CTO. He decided to leave in 1999 and joined Accel Partners as an Entrepreneur-in-Residence. There he founded Linden Labs, a company which had the audacious goal to build an immersive 3-D virtual world for people to live and play in. That world became Second Life.

Second Life is a place where anyone can have just that. It is a richly detailed virtual world where anything a computer programmer can imagine can exist: There are minutely detailed replicas of Rockefeller Center and human-size raccoons; sex and sadism and spiritual retreats; conference calls and a currency exchange. Almost all of it is created by the people who pay to dwell in it. Linden Lab, the San Francisco company that created and owns Second Life, acts as a sort of laissez-faire government. It makes money primarily by selling property, of which it can conjure an infinite amount.

Second Life’s economy has a real currency that you can exchange U.S. dollars to get a currency, and that if you make money in Second Life by building things, selling things, providing a service, doing whatever, you can actually take those Linden dollars that you earned, and you can go to this currency exchange, and turn them back into US dollars and pay your rep in the real world.

What is Entrepreneurship???

What is the Entrepreneurship???

That is the question that has been pounced on me many times. Most of times by professors. But more than the times it was pounced, I got the variety of definitions from them. Some of them are :

• Its about risk taking capacity


• Its about vision


• Its about craving to do something different in life


• It’s a lust to earn money


• It’s a need to be your own boss


• Its all about luck


• Its …………………………
  …………………………….
  ……………………………

But, according to me
“It’s a mental disease, which masses are suffering from. The only unlucky ones are the few on whom the antibiotics doesn’t work.”

Yes, that is what I have realized till now. It’s a pure mental disease.
From the very start of the life, we are taught to be disciplined, to be good worker, to be good employee, to earn enough in the life.
But, this very teachings are the antibiotics I am talking about.

Our environment, forces us to be what we are not supposed to be. We go to schools. But question is why??? Is it education.

The answer is big NO

The reason behind putting up the schools, originated in Industrial Revolution times. The very reason behind setting up schools was not to educate, but to tame the free man we were. Yes, the industrialists wanted the tamed human slaves for their boring, repetitive and fruitless jobs. But lemme clarify one thing here, Job Means Security. But, so it means chains.

Yes, that is the pretty notion of mass slavery via schools till date. One can get better insight into it by the classic work of Alvin Toffler ‘The Third Wave’.

But, then again what are the ingredients of Entrepreneurship:

• Courage


• Courage


• And only Courage

Here I will like to quote one line “ Your Heart is born free!!! Have the courage to follow it” by William Wallace
I think that is entrepreneurship all about.

I have seen all the entrepreneurs start with one cynic Junoon i.e. to follow their heart. They are called Psychos, Crazies, Unfit for society, and sometimes even evil. But, that’s just the start. The moment they become successful, the very terms used by the people for them just transforms in the meaning. They say yes one needs to have Junoon to be entrepreneur.

So, if one digs deep into the lives of the great Entrepreneurs like Dirubhai Ambani, Bill Gates, Akio Morita, L N Mittal, one will find the common element they were having. It was the mental disease, nothing less nothing more.

And then the fancy names like Intrepreneurship, Social Entrepreneurship, Technopreneurship comes into picture. But again, if we get into lives of Intrepreneurs like Jack Welch, we will find the same element of mental disease there.

Now the question is, whether this disease is good or bad. I will say here, its fatal. And only the people with the more fatal craving then the disease can bear it. So, think ten times before even thinking of going for it.

At last I will say, Entrepreneuship can’t be taught, it can only be experienced.

Have a disturbing Diseased Sleep
Prabal