There are three requirements for Indian entrepreneurship to flourish: People with Passion, Constructive Capital, and Big, Bold Ideas.
We need people who are willing to leave aside the comforts of the 9-5, Monday-to-Friday job and switch to a 24×7 mode of working and thinking as an entrepreneur. This is not an easy decision family and financial considerations are paramount. After all, given the way salaries in India are going up, why bother with taking any unnecessary risk? That is why entrepreneurship needs that little extra something that inner desire to do something different, to make a difference, to change the way things work. During tough times, it is this passion which will make the difference making one wake up and be ready to battle a new day of challenges. So, people (founders and the initial management team) need to be ready to work without roadmaps charting out a course that is their very own.
The second need is for start-up capital. While India has plenty of capital available for growth, there is little available for early-stage ventures. Even the existing venture capitalists would much rather fund late-stage venture than take risks with the early-stage ventures. Start-ups require what I call constructive capital capital which comes with the promise of mentoring and the belief that the entrepreneur has a right to own a significant portion of the venture that is being created. The way I look at it is that in start-ups, one is betting on the entrepreneurial team if they fail, the initial valuation discussions are irrelevant, and if they succeed, everyone comes out ahead. The goal should be that the entrepreneurs succeed and there be enough incentive for them to stay the course in building out the venture.
One conclusion I have reached is that even for ventures targeted at India, entrepreneurs should not consider raising less than a million dollars (about Rs 4-5 crore). By doing so, they can focus on building the company without having to worry about raising capital again in a few months. They will make mistakes that is par for the course. Theey need to have enough capital available to allow them to take risks even if they make a few mistakes, they should be quick to learn and course-correct. Without the latitude for error and limited capital, a start-up will turn to services to supplement the initial capital and there goes another product dream.
The third pre-requisite is the Vision big, hairy, audacious ideas. Since the entrepreneurs are going to spend at least the next few years of their life working on this, why look at incremental change? Transforming the world, unleashing the next big revolution that should be the goal, nothing less. This is one area where we in India are not ambitious enough. Vision of course needs to be matched with Execution but while we are envisioning the future, we must aim to dream big.
This quote (via Atanu) by Daniel Burnham, Chicago architect, is worth keeping in mind. Make no little plans. They have no magic to stir men’s blood and probably themselves will not be realized. Make big plans; aim high in hope and work, remembering that a noble, logical diagram once recorded will never die, but long after we are gone will be a living thing, asserting itself with ever-growing insistency. Remember that our sons and grandsons are going to do things that would stagger us. Let your watchword be order and your beacon beauty. Think big.”
Tomorrow: A Personal View