The Entrepreneur

History shows that right from the invention of the wheel to the present-age of transport system, the progress of human civilization bears close relationship with transportation. Transportation has played an important role in improving quality of our lives. Railways, shipping, roads and air transport have effected industrialization, diversified international trade and globalization, and allowed free movement of people and goods.

There is a close link between efficient transport system and economic prosperity. For example, a 2% reduction in time for all business travels can save crores of rupees. Goods roads will ensure low maintenance cost, lesser fuel consumption and safer means of traveling.

As individuals, we must have experienced that delays and unreliability of road network can cost people and businesses dearly and affect productivity and innovation. Roads cannot create wealth by itself; they are just means to improve productivity provided other conditions are right.

Transports are the arteries of domestic and international trade. They boost competitiveness in imports and exports. Road networks support productivity and success of the urban world. They get people to work, support labor markets and allow the business within the area to reap the benefits. They equally contribute to the development of rural economy by creating and new markets and proving the existing ones faster access to sell agricultural produces.

Government and individuals alike, should take the responsibility for superior quality construction, better connectivity and maintenance of roads. If that happens, the road  ahead would be a rather comfortable one.

“Every idea is good, the most important thing is the commitment towards your idea,” this is what Rashmi Bansal advised to the budding entrepreneurs of IIT Kharagpur in a jam-packed auditorium in the evening of 29^th August 2009. Entrepreneurship Cell organized a guest lecture by the author of the bestseller “Stay Hungry Stay Foolish” as part of its leadership lecture series. Rashmi Bansal is a writer, an entrepreneur and a youth expert. She is an IIM A graduate.  In a country where selling 10,000 copies is considered a ‘bestseller’, 100,000 copies of the book have been sold in just 9 months of its release. The book contains the inspiring stories of 25 IIM A graduates who chose to tread a path of their own making, the rough road of entrepreneurship. This book seeks to inspire young graduates to look beyond placements and salaries and believe in their dreams.

She disapproved the myth of having an MBA degree for becoming an entrepreneur-“What we learn in MBA is all common-sense and any graduate from a reputed college/university really doesn’t need to spend two more years with formal college system. As a matter of fact, most of the successful entrepreneurs don’t have MBA-degree rather many of them are college-dropouts.”

One must be clear in one’s goal. To elucidate this point she cited the example of Sanjeev Bhikchandani, founder and CEO of Naukri.com, who decided to go to St Stephens and not an IIT for graduation, only because in IITs courses were of 5 years and in Stephens it was of only 3 years duration. Bikhchandani’s idea saw the daylight when once he visited an exhibition and it immediately stroke him that the “Internet” can be used to commercially exploit the “job-seeker market”. However, this idea didn’t materialize in just few days or months. It took him 3-4 years to get funding; he had this idea of a “Job-advertisement business model” from the days he used to discuss the various openings of “Business India’s Job Ads” with his colleagues.

The “Stay Hungry, Stay Foolish” author also discussed about an innovative IIT-Guwahati guy, who convinced private car owners to carry advertisements on their cars for a token amount. He used a web community for his initial research while he was studying at IIT. This example suggests that online presence though necessary should be used primarily for advertisement, marketing and market research rather than just creating a web-portal.

“Innovation is not about doing something new but doing the same thing in a new and efficient manner.”She echoed this thought when explaining about the story of Narendra Murkumbi, founder of Shree Renuka Sugars. He has become a billionaire by setting up sugar plants, an industry we associate more with politicians rather than a businessman and that too an IIM graduate. His long term perspective is that one day petroleum products blended with ethanol will be sold and then he will have a much larger market.

She suggested the entrepreneurs to fall in love with one’s idea, “for you your idea is the best.” Also one must develop decision making ability, at many points of time there may be two roads and you may have to choose one. She cautioned the entrepreneurs about the biggest reason of failures, which is interpersonal problems among the partners. We must make sure that there is clarity among the partners about the shares in the venture. So we must choose partners in such a way that they complement each other and drive the venture forward. In this respect Ashank,Ketan and Sundar from Mastek, an IT company are perfect role models, they have stayed together even 25 years after the company was found.

Regarding her own journey to success, she quoted the famous line which Steve Jobs, founder of Apple, is reputed to have asked John Sculley, then CEO of Pepsi, before hiring him as the CEO of Apple in 1983-“Do you want to spend the rest of your life selling sugared water or do you want a chance to change the world?” This particular line always inspired her to do something different. She completed her graduation in economics from Sophia College, Mumbai and further studied at IIM- Ahmedabad. She had the hobby of writing from the very beginning and so she felt disinterested in the subjects taught at IIM A, to the extent that she got 3D’s, one less than that for repeating a year.

After graduating out from IIM A, she worked for two years in Times of India for pursuing her hobby. Thereafter she took the plunge in the rough road of entrepreneurship, she started JAM(Just Another Magazine) as she felt disinterested in her job. JAM was started with an initial investment of Rs 50,000 which she had saved from her job. She started in the small servant room in her parents’ home by purchasing a computer. She showed the magazine to different companies for advertisement space. She had to undergo all sort of experiences in selling the magazine, which usually an entrepreneur has to experience for his success. Her experience puts the fact that “one should not have venture capital from day one, but the constraints of resources takes out the best from you.”

After the success of her book “Stay Hungry Stay Foolish, “and the accolades that she received for this, she realizes that her purpose in life was writing this book. This book not only talks about the rosy pictures but also the challenges the entrepreneurs face. She says,” so Stay Hungry has sold 100,000th copies but it’s the impact on individuals that makes me really happy, if people say after reading the book- i can do it then this is my success.”

In the gracious presence of Rashmi Bansal, the session witnessed the launch of all E-Cell’s competitions and Entrepreneurship Awareness Drive to be conducted in 10 cities in a time span of 10 days traversing the length and breadth of the country which will take entrepreneurship in India to greater heights. She bid adieu by asking the students to do some crazy things and “Stay Hungry, Stay Foolish.”

By Mr. R. Ravimohan, MD and Region Head of Standard & Poor’s South and South East Asia division, and also the appointed Chairman of the CRISIL Board of Directors.

The recent episode of fraud by he Chairman of Satyam and all the several other frauds perpetrated by other entrepreneurs around the world is a shame on the name of entrepreneurship. These isolated episodes have a tendency to make other entrepreneur’s life tougher. They bring a bad name to the ilk. They are usually followed by tougher regulations, which have a tendency to restrict freedom of business choices for entrepreneurs. They make conduct of business more expensive. Financiers too increase the risk premium and generally make entrepreneurs grovel more to get at their money. All because, someone got greedy and unscrupulous. The price that genuine entrepreneurs pay for the fault of these scamsters is so huge that it is worthy of a self disciplined vigil within the community itself. There is a case for them to
become active policemen of themselves and blow the whistle when they see one of their cohorts behaving funny.
In my long experience funding, raising funds and rating the entrepreneurs over the past thirty years, I have seen two stages when the bug of cheating
bites the entrepreneurs hardest for different reasons - at the initial phase and once success is established. When the project is in the initial phase there is a focused pursuit of a limited objective – may be a small project- driven by a passion to succeed and gambling everything to increase the prospects of success. There is not much care given to forms, rules and norms, perhaps not affordable as well, as typically entrepreneurs start poor, are up against established players who are much more powerful. Some entrepreneurs mistakenly believe that their only way to succeed is to pursue some short cuts, which seem to work for sometime. Unfortunately the road that greets entrepreneurs in India is often littered with obstacles and tempting chances for wrongdoing and many fall prey to those temptations and compulsions. This it seems has become the norm rather than the exception. It is unfortunate because, those entrepreneurs of lesser competitiveness and objectivity do fall prey to this and compromise so
much of their business future. They never learn the right way of doing
business. They do not understand competition and believe corruption to
be a legitimate part of business. They do not develop strong work culture
and leadership within their organization, filling them instead with
incompetent staff that will learn to manipulate rather than work smart
to ensure business success. Most harmful of all they will earn for
themselves an ill reputation, which may be tolerated, but never
respected and hence will not ever be the choice partners for financiers
and businessmen.
The second stage when entrepreneurs go off track is when the flush of
success many times powers them with a sense of invincibility. There is
either a cooling off or a phase of complacency that sets in or a
megalomania that prods them to play ‘god’. In either case, focus shifts
away from managing the business with the edge that ensured its initial
success, and business falters. Instead of correcting that in the right
manner, entrepreneurs resort to short cuts that their newly acquired
‘power status’ offer them and set down the path of wrongdoings which
often brings them to a collapse. Some of the well known global
philanthropists, such as Rockafellers went through this process of
metamorphosis, reportedly starting of as bootleggers, but who them
redeemed themselves before it was too late and earned a respectful
place in society and history by becoming philanthropists!
The initial period of struggle sets the tone for the character and behavior
of entrepreneurs through the lifecycle of their ventures. Azim Premji in
the early 80s, is reputed to have declined to ‘take care’ of some corrupt
officials in his hydrogenated oil plant in Karnataka in the early stages of
his entrepreneurial life. As a result, the officials closed the plant on false
charges of flouting of excise rules. Azim Premji did not buckle down; let
the plant remain shut, while fighting the case legally. It took reportedly 3
years for him to come out victorious, thanks also to the support of the
employees of the plant who were also suffering, and reopen the plant.
While it was painful, the episode surely sent a clear message to all that
Azim Premji is not to be messed around and I seriously doubt if he has
ever been harassed on that front ever after. More importantly, it is still
remembered and recounted as a legend in principle based entrepreneurial behavior. The way I look at it, Mr Premji invested the suffering caused by that incident, including massive financial losses in creating a credibility capital, from which he is still reaping benefits. This early strength in his resume ensured businessmen and financiers around the world respect Mr Premji as a trusted business partner, aiding him considerably in his ventures to date.
While there are connotations of ethics and morality associated with the notion of integrity, I am focusing on the competitive advantages of integrity
as a corner stone of entrepreneurial behavior. Once an entrepreneur earns the credibility as a person of integrity, doing business becomes that much
easier. Partners will seek to do business with such an entrepreneur who they can trust, and might be even willing to pay a premium for that feeling of comfort. Financiers will vie with each other to provide funds, as they know their money is relatively safe with such an entrepreneur. Once the entrepreneur sets the limits on acceptable behavior based on principles of integrity, he and his team in the organization know that they can not resort to short cuts and need to be genuinely competitive to succeed in business. This makes them seek real competitive advantages and conduct business to succeed against not only other routine businesses, but also some that may ‘enjoy’ advantages due to practicing business without integrity. This is not easy and I am not asking the entrepreneur to be a monk.
Let us take a live example from the field of road contract business. Let us
assume there is one contractor (called Mr I) who behaves with completely integrity and there are others whose integrity quotient lets say varies from awful to ‘godawful’. The challenge that Mr I faces when he bids for a contract are that he needs to take into account the possibility that the bidding process is perverted to favor the others because they may ply bribes, or for someone in the bidding organization to let these corrupting bidders know the lowest bid amount, so they can quote a marginally lower prices and win the contract, etc. Can Mr I can overcome this challenge while maintaining integrity? Yes. There are many things he can do, including, finding technological solutions to render road building less expensive and hence can quote so low that others without that technology may find it unattractive to bid at those prices. He could resort to the new provisions of Right To Information (RTI) to shed the required extent of transparency in the bidding process. He could build high quality roads on a pro-bono basis to demonstrate the longevity and riding comfort, and hence win the support of the users, who could be used to campaign for him. Incidentally these are
ideas I picked up from several good contractors’ real life experiences.
Let us not kid ourselves. It is tough to be straight. But who said being an
entrepreneur is a cake walk? But setting your behavior right from the beginning, though might make it tougher, straightens a lot of stuff for
the lifetime of clean, successful business. Giving into pressures or temptations to cut corners usually sets entrepreneurs on a slippery slide that look so inviting and harmless at the beginning and then keeps getting harmful over time to what Ramalinga Raju calls the ‘riding the tiger, without knowing how to get out without being eaten’ phenomena.