1. Importance of Vision: Dream the future
Envisioning how tomorrow can be different is the starting point of the dream. For this, one should not just look at the immediate area of interest, but also consider other related areas which can impact it. For example, today, the world of computers, communications and software are inextricably tied together. Similarly, even in biotechnology, computers and software are playing an increasing role in the emerging areas of genomics and proteomics. Considering developments as an aggregate is important in building the vision of tomorrow. What the vision does is brings clarity: it helps in making many decisions which otherwise may be hard because one is not sure.
2. Think 2-5 years hence; near-term opportunities are gone
As one thinks about the future, it is necessary to look beyond the near-term. A new business must not be pressured by time at the start. If one is looking to capitalize on something in the next few months, it is already too late – many of the companies targeting these opportunities would have been formed a few years ago and thus are better placed to do so. It takes many months to build the foundation for a good business. Hence, the time-frame for targeting opportunities must be in the 2-5 year horizon. This is not easy because while we can say with some certainty what is likely to happen in the next few months, it becomes harder to look further ahead. But then that is the challenge: this ability to build a framework — a mental map – of the landscape in the future is what can help create the right foundation for the business.
3. Best way to raise capital is by being profitable
While the natural instinct on starting up may be to go and raise capital so one can build a business top down (with money and a strong management team), I believe that the best way to build a lasting business is by being profitable as quickly as possible. This is not to say that one should not raise capital or build a strong management team – both are very important. However, the objective inherent in the business should be to be cash-flow positive as soon as possible. For this, it is important to build a “bread-and-butter” business, which ensures that money keeps coming in and pays the salaries every month. Nothing is as habit-forming as making profits (or for that matter, losses). Keep in mind the long-term vision, but also work on generating cash in the near-term. Profits are the best motivator, and also a strong reinforcement that one is headed in the right direction.