How's my Luck now?

Reflections, views and descriptions during my stay at IIM Lucknow from July 2004 to March 2006

Name:
Location: India

Sunday, August 15, 2004

'Nirvaan'

That is the name of the programme organized on Sunday by 'Abhiyan' - the entrepreneurship cell here.
It started off with a talk by Mr. Akash Sethia, IIML alumnus of '96 or '97, who runs a software firm from Indore, specializing in geographical information systems. His talk was rooted in the ground realities of issues in entrepreneurship - the cost of failure, when to start, how to start, spreading of risk, the struggles involved, basics of preparing business plans, etc. It was a simple and straightforward talk.

The next talk was delivered on a similar subject of entrepreneurship by Mr. Mahesh Murthy, who runs a company called Passionfund from Mumbai, and 'advises, guides and occasionally invests in businesses'. He has a background in advertising where he has worked as a creative director. He is familiar to us through his column in Businessworld. He was typically blunt in his talk and busted some popular myths/perceptions. The audience was very much involved in asking questions, arguing the points etc. But he turned every argument of the students on its head, drawing from his wide experience. He gave a lot of examples which kept the talk very interesting.
Here are some of the points he talked about:
  • As a would-be entrepreneur, if you see a 'trend story' in a newspaper or magazine about some sector or industry, which also profiles the top 3 or 5 companies operating in the sector, that sector is as good as dead for you. (Sumantra Ghoshal's Rule of Threes was cited.)
  • Ideas, by themselves, mean nothing. It is the ability to execute on ideas that is most important. Ideas are a-dime-a-dozen. 'I don't invest in ideas, I invest in businesses.'
  • An entrepreneur is one who refuses to fit into any mould.
  • If you have a product or service that is sufficiently different or provides even slightly more value than the existing ones, go to market with it as soon as possible. Never wait to perfect the product or service, as that will take unbounded time. First deliver to the market what you have, promising that the best is yet to come.
  • Enter a market when the demand is down or the general condition is bad, not when the market is riding high. If you do the latter, when the cyclical forces push the market down, you will find yourself inequipped to deal with the situation.
  • Don't rely on venture capital to start your business. If you can manage the necessary resources by yourself, or with help from relatives/friends, etc., do so. As an entrepreneur, you must take maximum risk on your business plan yourself. Don't expect others to take funding or other risks for you, if you show yourself to be unwilling to take such risks.
  • The maximum returns or margins lie at the end of the value chain delivering directly to the end-customer.
  • You can very well enter a market at this end of the value chain, rather than climbing your way up from the bottom.
  • Pricing is a big weapon in building a brand. Starting out with little cash resources, you should keep your pricing structure high, not low in order to build your brand. Sustaining a low-cost product or service in a competitive market requires deep pockets, which you most probably will not have. Price undercutting is a weapon for the big companies, not small fry.
  • The companies with the biggest ad-spends are actually the worst marketers. (Examples of Coke and Pepsi given).
  • Your product or service should show enough differentiation and should be able to create enough value for the customer so that word-of-mouth publicity becomes your biggest marketing tool. 'If people come to me with a business plan with a large marketing budget, I tell them to go back and rework the plan.'
  • 'The biggest mistake you can make at IIMs is to believe that your education is going to be of any value to you.' The basic point was about people 'disrespecting' their education. A Computer Science engineer from IIT-Kanpur takes up marketing at IIM-Ahmedabad and because investment banks pay the most, takes up a banking job.
  • 'Placements are a very lazy way of getting jobs. It is like saying to companies, "main yahan aa gaya hoon, ab mujhe yahan se le jaao." Go out there and get a job for yourself.'
  • Placements are also for lazy HR people who don't want to find out the best available talent for themselves. They just assume they will get it at some of these institutions.

There might be some more major points I am missing but this gives an idea of how things went. Finally he said, 'There is no pot of gold at the end of the rainbow of life. The gold is all to be found on the rainbow itself, provided you are looking for it. And I believe entrepreneurs just have a more colourful rainbow.'


7 Comments:

Blogger ASHOK VAISHNAV said...

There is an intermediate- and as powerful and neccessary- stage between pur "professional" manager - who optimises output within given constraints - and an entrepreneur - who takes on constraints by taking calculated risk(s)-, which is termed as INTRAPRENEUR.
INTRAPRENEUR is a professional manager, who is creative, proactive and dynamic enough to rewrite the rules of the game such that the limits of constraints are always stretched within the bound of calculated risk domain.
The golden rule of the rewards - or profit- is that it is directly proportional to the risk of success - or failure.
As one rises higher in the organizational ladder, these qualities - of dynamic proactiveness, ability to take risk and lead the team thru' the process of proactive change - differntiate the "highly" successful from the "also-ran"s

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Blogger Tadatmya Vaishnav said...

Thank you for introducing me to this term - 'intrapreneur'. It is certainly true that even professional managers face opportunities/threats/risk-reward scenarios where they have to 'think on their feet' and use an 'entrepreneurial mindset'.

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