The Startup Journey

At an event last week, I learnt that Nokia produces about 25million cell phones in its factory in Sriperumbadur. This by itself was not amazing but the fact that Nokia went from receiving barren land to setting up a factory to creating a supporting network of suppliers and vendors to rolling out its first phones in 23 weeks i.e. in less than 6 months. Contrast this with the situation in many public projects where large sums of money are spent with nothing to show even after 23 years, let alone 23 weeks! For example, the Bangalore International Airport was first conceived in 1991, the MOU was signed in 1999, the construction work commenced in 2005 and the first phase is expected to be thrown open to the public (fingers crossed!) in April 2008, a good 17 years after project conception! Naturally, costs of constructing not just the airport but also related infrastructure like approach roads have escalated, technology has changed dramatically, and estimates of passenger traffic have had ...

VentureBeat has an invited article by Charles Moldow of Foundation Capital on why entrepreneurs should not be seeking VC financing unless they clearly want - and their product idea is big enough in scope - to aim for the "home run". HotFeature.com has 10 employees and the founders each own 35% of the company. They pitch me on the idea and I agree with their assessment that consumers want and need HotFeature.com. They have raised $1.5M in angel money to date and have given up 20% of the company to investors. They require another $10M to grow their audience and build brand. Here’s where things get interesting. I point out to the founders that they could probably sell the company today for $20-$30 million and that they would each make $7-10M which is not bad for a few years of work. If they take $10M from VCs at a $15M pre-money valuation and create an option pool for the next 30 employees (assume 15%), they each now own less than 20%. To make the same $10M, the co...

Bob Pritchett has a post that helps distinguish managers and entrepreneurs based on an experience of a business owner who deciced to sleep overnite at the office floor instead of paying a premium to get a locksmith repair the lock at a late hour. (Please note the entrepreneur was also resourceful enough to have his wife drop off a bed roll!) As you grow a business you learn to delegate. You give other people some of the chores you used to do yourself. You become a manager. But in times of crisis you can distinguish managers and entrepreneurs. Entrepreneurs will sleep on the floor. Arun Natarajan is the Founder of Venture Intelligence India, which tracks venture capital activity in India and Indian-founded companies worldwide. View sample issues of Venture Intelligence India newsletters and reports.

That cricket is a religion in India is a cliché. That cricket exists as an “international” sport largely because of India is a fact. More people, perhaps, play cricket in Mumbai’s Shivaji Park than there are first class cricketers in Australia. Yet how is it that the country where its been played in for over 100 years, that has tens of millions playing cricket, many more fanatical millions following it, that generates billions of dollars, who’s media gets on hyper-drive when India plays, that provides relevance to sundry has-beens and wanna-bee experts, that has one of the world’s richest sports bodies “controlling” the sport, does not have a world dominating team like the Australian team? Especially when there are only 8 countries in the world really playing the sport! How is it that not one noteworthy innovation in cricket has emerged from India – be it in technology (e.g. stump-cams, hawk-eye, snickometers), team selections (e.g. separate teams for one-dayers and test matches), scor...

Knowledge@Wharton has an interview with Richard Fuld, CEO of Lehman Bros on how he transformed a sagging firm. First, leaders must understand their business. "Know how the pieces fit," he said. "Read. Network. Connect the dots. Anticipate. Try to limit the surprises; surprises kill you." Leaders who have done their homework make it safe for others to follow, he added. "Leaders earn the right to lead." ...Fuld noted he has been with many of the same top managers for 22 years and expects them to push back when they disagree with him. When he has to make a tough call he asks them: "Does anyone feel this decision would be disastrous to the firm?" Unlike Bobbie Lehman, Fuld never lets managers who disagree square off directly. The most dissension he will tolerate is an agreement to disagree. "What I need is peace in the family," he said. Finally, he noted, it is important to lead by example and to know when to give managers lower down in th...

“How many national scale, socially relevant, market oriented, impact making businesses can you name in India?” is a question that I asked at a recent gathering of friends. This is partly due to the fact that the only answer that springs to my mind is “Amul”, partly out of a certain confidence that the other person too cannot name any other business and partly out of a genuine desire to know. This question has intrigued me for some time now. Why haven’t there been many more Amuls in our country? God knows there are enough and more social problems to be solved! Amul was created by government initiative and by the passion of people like Dr Kurien. It wanted to bring out change in the way milk was produced and distributed on a massive scale. The vision was big, there was passion, there was capital (direct and indirect), there was terrific leadership, sustained and involved engagement with the grass-roots, and the formation of partnerships to create the impact via the business. If we are t...