“Chaos and uncertainty – two things you must learn to live with if you want to be an entrepreneur” – started Surya, our presenter for the expert talk this Startup Saturday (Bangalore, November). One of the most awaited sessions, November’s Startup Saturday saw the highest number of participants in the history of SS Bangalore. Over 170 people assembled at the IIMB auditorium on this brisk Saturday morning eagerly waiting for some insights on entrepreneurship. While the event started with a series of the regular lightning pitches (find the companies that presented this month here), the audience waited eagerly for the key attraction of the day, the expert talk and discussion on “To be or not to be an Entrepreneur.”
“You have an idea or a maybe even a lot of them. But you don’t know where to start. You are confused.” continued Surya, adding “Then you can assume you are in the right place… you are fit to be an entrepreneur.” A huge collective sigh of relief spread through the audience. You could almost hear them thinking “thank god, am not alone.”
The next hour and half went by quickly, packed with questions, discussions, and some more questions. Surya answered all of them patiently with a wisdom that can only be gained through experience. Surya, short for Suryanarayanan A, a three time entrepreneur, is the Chief Operating Officer at the NSRCEL, a world-class Centre of Excellence for seeding, nurturing and promoting entrepreneurship in Bangalore. Surya is also an active supporter and mentor for many in the Bangalore startup ecosystem. So it is only expected that the audience could not wait until the end of his presentation to ask their questions. What was planned as an expert talk almost became a streaming Q & A with Surya. With diverse questions ranging from seeking mentors to venture funding, some were even unreserved in voicing out their personal dilemmas of starting up!
Some of the planned key topics that were covered though include:
- What makes an entrepreneur entrepreneurial? The difference between the managerial mindset and the entrepreneurial one
- Nature of opportunities – creating them versus discovering them
- Crossing the entrepreneur chasm – Steps/aids to cross the chasm
- The four important factors you cannot ignore while starting up – People, Operations, Finance and Dealing with Competition
Let me try to outline each of the above as discussed at the session briefly here.
What makes entrepreneurs entrepreneurial?
Most entrepreneurs start off knowing only one thing for sure and that is “they want to do something on their own.” Though they may have an idea for a product or service, they aren’t really sure what their end objective is. Their passion is more inclined towards pursuing an idea than a clearly set target or goal. They frequently encounter roadblocks, either of their own making or from the ecosystem, that make them change their mind, change their product or service, or even change their very basic idea. But they go on with their pursuit. This exactly, this state of chaos and uncertainty, is what sets an entrepreneur apart from others, from other ‘though-successful-but-not-on-their-own’ people, more widely called “managers”. The art of dealing with uncertainty is then what makes or breaks an entrepreneur. While a manager performs his best amidst rules, targets, and easily available resources, an entrepreneur flourishes in the very antithesis of these.
So if you have been wanting to start out on your own or have recently ventured into it but increasingly find yourself confused and frequently changing your stance, don’t be perturbed. This is the right way to start.
Nature of opportunities – creating them versus discovering them
You can either discover an opportunity that already exists (but has not been explored before) or create an opportunity. As an entrepreneur, your idea could fall into either of these two categories. The success of your startup and idea will depend entirely on how you execute your idea and not really on what type of opportunity it is. But understanding what type your idea falls into will definitely aid you in the way you execute it.
A discovered idea is independent of an entrepreneur. It is widely available in the market for anyone to pick up and execute. It is quickly, very quickly, imitable by the others in the marketplace. So if your idea falls into the ‘discovered’ category, you would need to really ensure that you are quick to market and have the right and deep skill sets and resources you need to gain a first entrant/leader position. Speed is the essence with such ideas.
A created idea is indigenous to the entrepreneur. He/she dreams up the idea and its execution will totally depend on how he/she develops it. These ideas are not easily imitable and they frequently change form and factor during their execution. The motivation level and the entrepreneur involvement is what will make these ideas successful or otherwise.
Crossing the entrepreneur chasm
So you have an idea. You even have access to some funds to see you through the uncertain times ahead. But how exactly do you go from idea to startup?
Most people who dream of becoming entrepreneurs encounter their first difficulty when they transition from ‘being just an idea’ to ‘starting up’. The difficult period in between these two stages is what is called the entrepreneur chasm. Most people either give up in this stage or fail to make it across to the other side. They have great ideas, funds, resources, etc – but their venture fails miserably as they don’t pay enough attention to the factors that make the initial startup succeed. The four important factors that can help you manage this transition successfully can be defined clearly – People, Operations, Finance and Dealing with Competition. The way you handle these four factors will determine whether you end up as an entrepreneur or just remain a manager.
Steps to cross the chasm
1. Access and make use of the basic resources available to you (Net/Networks)
a. Do sufficient research. There is no excuse for a poorly researched idea.
b. Don’t spend money. Spend your time.
c. Network with experts and the support ecosystem if available. Talk to experts, sound out mentors.
2. Access funds (Affordable Loss)
a. Understand the concept of affordable loss. How much or how far can you go, sustaining yourself and your dependents, without going broke/bust.
b. Set a limit on how much you are willing/afford to spend and loose. Write away this money – do not expect a return. This will be your affordable loss.
c. Never cross your affordable loss. The moment your startup demands more than your affordable loss, it will be time to look at alternatives – quit, move on or bring others who can provide the required resources.
d. Always remember that you will never get money (angel investors, venture funding, etc.) when you need it most crucially. Plan for contingencies.
e. Never assume that you will get funds and then startup. You must have funds while starting up – either saved from your previous employment or occupation or loaned by well-wishers.
f. You need to become ‘money ready’ before you seek venture funding.
3. Access the right people
a. Being an entrepreneur is less about you and more about others in the ecosystem.
b. Do not be possessive with your idea – you can never own it completely or 100%. You would need to let it go so that others (employees, investors) can grow it too. Your idea and the well-being of your startup come before your own personal desires and ego if you are an entrepreneur.
c. Always remember that you cannot demand loyalty from your employees. Loyalty will come only by creating opportunities for other people.
d. You would need to sell your idea to your employees too. Your ability to share rewards, ideas and value with your employees will decide how long they stay by you.
e. You must find out and learn what your stakeholders want and need- whether they are employees, investors, mentors or other market factors.
f. You will need multiple mentors at different stages of your idea/startup. It does not pay to cling to a single mentor who may not be able to advice you once your startup moves beyond the initial stage.
g. If you form an advisory board, do it purely based on the need of your startup (ex, domain experts)
h. The most common reason for investors not funding your venture could be this: they think you are not amenable to advice. So in your presentation to investors, be firm and passionate about your idea, not inflexible and rigid. Be open to change parts of your idea/execution plans upon advice.
4. Dealing with competition
a. An effective way to deal with competition during the startup stage is by forming strategic alliances
b. Identify other vendors or service providers in the market who have complimenting products and services. Tie up with them. Form joint go to market strategies.
This is but a sketch of the rich essence that was the session on “To be or not to be an entrepreneur”. As mentioned earlier, the varied questions from the audience provided a whole new dimension to the topic and helped us cover a wider spectrum of knowledge and wisdom on being an entrepreneur not outlined in the above brief.
The session concluded with Surya’s last slide which resonated with all of us long after the Saturday. It simply stated thus:
“Don’t be disappointed if the world refuses to help you out. Remember what Einstein said -I am thankful to all those that said No. It’s because of them that I did it myself.”