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TECH TALK: Entrepreneur’s Enigmas (Part 2)

January 14th, 2003 · No Comments

This is a dilemma the entrepreneur faces often. When an entrepreneur is worried about meeting payroll at the month-end or going through periods where it is difficult to generate revenues, it is all too easy to make decisions which can result in generating revenue in the immediate future but takes the enterprise away from the future he wants to create. If the entrepreneur considers only the near-term, he may fail to build out a sustainable, rapidly growing business, which is the ultimate objective and what is really driving the entrepreneurial venture. What makes it even difficult is that without survival in the near-term, the long-term does not even arise!

The challenge for entrepreneurs is, therefore, to create a two-fold strategy: one, build a business which may not be directly in line with the final goal but can help generate revenues in the near-term, and two, build out the new and exciting growth business, but whose gestation time can be unpredictable.

Building out a business which focuses on revenue generation in the short-term also helps keep the entrepreneur in touch with the market and the constantly changing competitive scenario. This also ensures that what the entrepreneur does for the long-term is grounded in reality, and not a static view of the marketplace.

Let me give a personal example. In IndiaWorld, our ultimate objective was to use the Internet to build out an electronic bridge and marketplace for Indians worldwide. But having gone through a couple of failed ventures, I realised that unless there is a bread-and-butter revenue stream, we will not live long enough to make that vision a reality. So, we took to creating websites for corporates. It may not have been the most exciting of businesses, but it helped us create positive cashflow, and thus gave us the money to invest into our portals business. We waited (waded!) through the initial years until the advertising business took off to give us the high growth that we wanted. Had we only focused only on the long-term, we would not have survived through the initial years. Had we focused only on the short-term, we would have been running just another commoditised business as other players got into the website design business.

I face a similar challenge now: we have an existing Linux messaging business that has been the breadwinner for the past few years but is now an undifferentiated business (too many competitors, falling revenues). Even as seek to build out a computing platform for the next 500 million users in Emergic, we need to ensure that we can build the messaging business into one which can generate a steadily increasing revenue stream.

My plan is to build out a Linux software solutions for enterprises which emphasizes customization to fight commoditisation and aggregates components from open-source and developed internally. This will keep the revenues coming in and keep us in touch with the enterprise market. In parallel, we will work on targeting new markets with the affordable computing solutions. This will take time to build out but has very a large upside if we can pull it off.

So, this enigma is not about either the near-term or the short-term. An entrepreneur needs to balance both to have a chance of succeeding.

Tomorrow: Entrepreneur’s Enigmas (continued)


Tech Talk Entrepreneur’s Enigmas+T

Tags: Tech Talk

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