April 27, 2009

Entrepreneur pitching to VC: Reality TV-style

CNBC-TV18's Enterprise Inc. show has an interesting Reality TV-type video of an first-time entrepreneur pitching to an angel investor.

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the Private Equity and Venture Capital ecosystem in India. Click here to learn about Venture Intelligence's products and services for entrepreneurs.

Nominate Indian Startups for The World Economic Forum's Tech Pioneers Program

Startup Journey is happy to invite you to nominate companies you are associated with in India to The World Economic Forum's 'Technology Pioneers' Program 2010. The Program, started in 2000, with the goal of identifying new technologies that will have a dramatic and sustainable impact on business and society, has achieved the distinction of being the most prestigious recognition in the world of technology.

Last year, Bangalore-based mobile payments company JiGrahak Mobility Solutions was selected as one of the 34 "Technology Pioneers" for 2009. Another tech firm that does a lot of its development out of India - Nivio - was also named.

To be selected as a Technology Pioneer, a company must be involved in the development of "life-changing technology". In addition, it must demonstrate visionary leadership, show signs of being a long-standing market leader and its technology must be proven. WEF solicits nominations for the Technology Pioneers program from Technology Pioneer alumni, WEF members, partners, entrepreneurs, innovators and other technology experts.

To nominate a candidate please fill out the form available at
http://www.weforum.org/en/Communities/Technology%20Pioneers/Nominations/index.htm


Please note that once a nomination is accepted, a detailed application form will be sent to the contact person in the company.

Successful candidates will be notified in October 2009 and the class of Technology Pioneers 2010 will be officially announced to the public via a press release on 3 December 2009.

Links to more information on the Process & Criteria:

http://www.weforum.org/en/Communities/Technology%20Pioneers/Nominations/AbouttheProcess/index.htm

http://www.weforum.org/en/Communities/Technology%20Pioneers/SelectedTechPioneers/index.htm

http://www.weforum.org/pdf/techpioneers/TechnologyPioneers2009.pdf

Work-Life Balance. What's That?

Jason Nazar, founder CEO of DocStoc.com, has a great post on the "The Unintended Consequences of Startups" that a lot of entrepreneurs can definitely empathize with (and hopefully learn from). Hat tip: StartupDunia

It took me a while to admit that I was stressed out, and even longer to realize I would turn to food to compensate for that stress. Over the past year, I’ve become a more solitary person with my thoughts and emotions than I’ve ever been, while increasingly becoming a public figure who’s known as an outgoing social networker and showman. It’s a strange dichotomy.

My family has been both incredibly supportive but also upset that I’ve seemingly disappeared. I have three (quite) older siblings, and we’re undeniably close. But while they’re all proud of me, they disapprove of my unbalanced lifestyle. My brother and I share opposing sides of duplex, he’s literally a wall away from me. But I can often go 2 weeks without seeing or talking to him. My sisters are busy raising their kids, so they can relate a bit more. But like so many others, our conversation often come back to them asking me “why don’t you ever want to talk about what’s going on in your life”.

...I think I’ve reached my breaking point, at least for now, and mostly in regards to my health. Somehow I know my relationships will work out, but I often find myself feeling like I’m working at 40% of my capacity and energy, and I think its due in large part to poor physical habits.


Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the Private Equity and Venture Capital ecosystem in India. Click here to learn about Venture Intelligence's products and services for entrepreneurs.

April 21, 2009

"Wanted: Entrepreneur Politicians" - by Sanjay Anandaram

As the cliché goes, the world’s largest exercise in democracy kicks off yet again this week in our country. Hope, hopelessness and cynicism are the constant emotions accompanying this exercise. The political class appears determined to demonstrate new lows in venality, criminalization, corruption and crassness. Competitive one-upmanship in making empty, patronizing, platitudinous, parochial, narrow and sanctimonious statements of intent is the order of the day. Civil society is battling away slowly and doggedly. But change is very frustratingly slow to come by thanks to the twin deadweights of our fossilized justice (viz. police, courts, laws and legal procedures) and administrative (eg. defence procurements to social project implementations to securing a driving license) systems.

Social and political change has always been brought about by visionary and charismatic leaders (Gandhi, for example) who could articulate that vision such that it mobilized vast numbers of people towards achieving seemingly impossible goals. Less daunting but nevertheless very impactful changes have been brought about by public minded and powerful people – think Jamshedji Tata (eg. IISc in Bangalore, the counry’s first labour association at Tata Steel in 1920 with collective bargaining, creation of the city of Jamshedpur). While it appears impossible that a Gandhi will emerge again anytime soon, it is possible that many first generation entrepreneurs like Jamshedji Tatas will emerge in the near future given the changing circumstances of India and the world around it.

First generation entrepreneurs are not businessmen in the traditional sense. As entrepreneurs, they’re driven by the desire to change a status quo, to upset the applecart as it were. The financial rewards are a derivative of the successful conversion of that desire into action. Businessmen are less concerned about changing the status quo (in many cases, preferring a status quo and the cosy crony capitalism that comes with it) than with making money. First generation entrepreneurs are not constrained by lack of resources but creatively leverage resources through their imagination, will power and obsessive passion to succeed. Subsequent generations do not have to grapple with this mismatch between aspirations and resources and then tend to focus more on managing the bottom lines than in participating in “risky” endeavours like engaging with the political class to effect social change.

If one looks at the political landscape today, one sees film-stars, criminals (both convicted and yet to be convicted), businessmen, people with sectarian, religious and regional interests, and some with genuine public minded agenda for change. There are no entrepreneurs yet in our system unlike in the US, the most powerful democracy. The reason for this is that there aren’t quite as many successful first generation entrepreneurs yet in our country and the few that fit the label have been wary of engaging with the system given their initial experience. India however has many political entrepreneurs but not enough entrepreneurs in politics!

The attributes one would look for in the political leadership today would encompass the following:
- an agenda for the country that will help it achieve its “tryst with destiny”
- an articulated time-bound set of actions towards fulfilling that agenda
- a qualified, passionate, hard-working, honest and experienced team
- confident yet humble
- decision making in the larger interests of the country, not hostage to narrow cynical agendas
- willing to engage with the world around them to actively promote the agenda
- develop partnerships and alliances in furtherance of this agenda
- a belief in meritocracy while providing opportunities for all
- fighting injustice through the creation of effective and efficient systems
- being transparent in all dealings
- in touch with ground realities and with the citizens

In short, an entrepreneurial mindset is required where personal ambition is subservient to the larger goal of building a successful company. Where competence is valued more than loyalty. This is an important point to keep in mind because “I want to be the Prime Minister” is like saying “I want to be the CEO” but both are rather different from saying “I want to be part of building a great country or company”.

What do you think?

Sanjay Anandaram is a passionate advocate of entrepreneurship in India; He brings two decades of experience as an entrepreneur, corporate executive, venture investor, faculty member, advisor and mentor. He’s involved with Nasscom, TiE, IIM-Bangalore, and INSEAD business school in driving entrepreneurship. He can be reached at sanjay@jumpstartup.net. The views expressed here are his own.

April 14, 2009

Private Equity appetite for slowdown-resilient Education Cos. soars

Press Release

Over 80% of Private Equity and Venture Capital investors surveyed by Venture Intelligence in its newly released “Private Equity Pulse – Education” report, plan to make an investment in Education companies during the next 6-8 months. With an estimated $40 billion market for private institutions and a CAGR of 8.6%, it is no surprise that PE & VC investors are looking to ramp up the 30 investments (worth over $300 million) they have already made in Education-related companies, the Venture Intelligence report indicates.

“In the current uncertain economic environment, the attractive and predictable rates of return of the Education industry, is serving as a magnet for PE investors,” points out Arun Natarajan, CEO of Venture Intelligence. “In fact, in another poll which we had done in end 2008 among PE investors, Education had received thrice as many votes as the next favorite sector in terms of attractiveness for investments in 2009,” Mr. Natarajan added.

Despite the overall optimism, investors have their own set of concerns, the topmost being the regulatory uncertainty surrounding “for profit” ventures in the K-12 and higher education segments and the lack of scalability of ventures in “non formal” segments. Over half the fund managers surveyed by Venture Intelligence felt that regulatory hurdles are a significant deterrent to the free flow of investments into the Education industry. The lack of quality teachers and political interference also figure in the list of concerns.

Entrepreneurs, by their very nature, are optimistic and resourceful. And those interviewed in the PE Pulse report seem confident that the constraints facing their industry can be overcome. For instance, Vinay Pasricha of Wigan & Leigh College (India), a vocational education firm that has raised Private Equity funding, feels there is enough scope to create scale in the unregulated segments of the industry – both within and outside India. "Tell me a sector where you do not face regulatory uncertainty," he asks adding that "Education, apart from healthcare, is the only mass growth opportunity that will continue to flourish during any economic downturn”.

Incisive Articles
The report features an article by a team from The Parthenon Group highlighting how investment opportunities in India’s education industry can generate high returns even in an unfavorable economy. Leading Private Equity firms like India Value Fund and Sequoia Capital India weigh in with their thoughts on the Higher Education and the Tutoring segments respectively. Dushyant Singh, Director (Strategic and Commercial Intelligence) of KPMG's Transaction Services practice, elaborates on one of the most exciting segments: the Kindergarten-to-Class 12 segment (K-12).

Will the boom in for-profit education ventures benefit only the economically better off sections? In her article, Reema Shetty of Kaizen Education Fund, assures us that there is no conflict between delivering high quality inclusive education and providing high returns to investors. Vignettes from PE-backed education ventures in other countries, highlighted in another article, also support this.

Given the significant regulatory challenges facing the industry, this report also features the expert views of top corporate law firms - ARA Law and Dhir & Dhir Associates.

For the convenience of entrepreneurs, the report provides a listing of Private Equity and Venture Capital funds keen to invest in this industry. A directory of investment advisory firms, who provide value-added intermediation services with a special focus on Education, has also been included.

The Private Equity Pulse on Education can be downloaded from the Venture Intelligence web site on http://ventureintelligence.in/pepulse_edu.htm

April 04, 2009

"Entrepreneurial MBA - An Oxymoron?" - By Sanjay Anandaram

An increasing number of universities and colleges are offering courses in “Entrepreneurship” as part of their business education. Around the world, business plan competitions are held by academic institutions at regular intervals. The wide publicity given to “entrepreneurship” in recent times has resulted in entrepreneurs gaining respect and being acknowledged as critical participants in a country’s economy, wealth and job creation.

But does taking a course or two in entrepreneurship while pursuing a business degree make one a better entrepreneur? My own view conditioned by many years of experience is that a business degree, with or without courses in entrepreneurship, is not material at all. Then are all these courses useless? Well, no they’re not! They’re useful for learning and understanding multiple aspects of entrepreneurs and entrepreneurship but don’t, in any way, make one a better and successful entrepreneur. A small percentage of any population become entrepreneurs while the vast majority become employees. There’s nothing good or bad or right or wrong about this – it is just the way it is and indeed should be as both entrepreneurs and managers-employees perform complementary activities in the growth of an economy.

It is said that entrepreneurship cannot be taught but it can be learned. And what better learning environment than the real world, through interacting with other more or differently experienced entrepreneurs, customers, investors, partners and suppliers?

Entrepreneurship is not a traditional discipline with theoretical constructs unlike say, engineering where one needs to spend many years in a classroom learning the sciences and mathematics. Entrepreneurship is more an art therefore than a science. The study of entrepreneurship offers opportunities for researchers and academics though! One doesn’t, for example, learn swimming from reading books in a classroom but by being in a swimming pool with the help of a coach. But even the best coach in the world will not and indeed cannot prevent the novice swimmer from unintentional and painful swallowing of water the first few times! Without that experience of “drowning”, learning from others and then through rigorous practice, it is impossible to be a quality swimmer.

In countries like India, most students doing their MBA have no or little work experience. Their ability therefore to spot opportunities, appreciate scenarios, develop and leverage relationships is limited compared to those with experience. It also doesn’t help that academic institutions in India are insulated from industry, entrepreneurs and the entrepreneur eco-system.

Yet, why are investors almost always are biased in favour of entrepreneurs with degrees from well known business schools? The reason is that, all other things being equal, the degree is a filter – demonstrates that the holder has passed other stringent selection criteria. It is obviously not perfect. On the other hand, many professional investors and many senior executives in the corporate sector are usually business school alumni so having a degree leads to membership into alumni networks that can be leveraged by the entrepreneur. Business schools teach students to analyse situations and excessive analysis leads to paralysis. Business schools teach students to manage risks. Business schools, however, don’t teach students to take risks while solving problems and addressing opportunities because risk-taking cannot be taught. In real life, decisions are taken with incomplete information with imperfect people being involved. Decisions are taken on a “leap of faith” basis and persevering when all analysis suggests otherwise requires self-belief and conviction. These cannot be taught in a class-room situation. They can only be learnt through experience, introspection and with the help of a mentor.

Now here’s an exercise worth doing. Business school education in the US is about 100 years old and about 45 years old in India. During this time, how many “successful” companies, across all sectors of the economy, were founded by MBA entrepreneurs in either country? “Successful” meaning wealth creators and not lifestyle income-substitution businesses like consultancies. I believe that this number would be a very small fraction.

Keep in mind therefore that while there are many attributes of a successful entrepreneur, having a MBA isn’t one! What do you think?

Sanjay Anandaram is a passionate advocate of entrepreneurship in India; He brings two decades of experience as an entrepreneur, corporate executive, venture investor, faculty member, advisor and mentor. He’s involved with Nasscom, TiE, IIM-Bangalore, and INSEAD business school in driving entrepreneurship. He can be reached at sanjay@jumpstartup.net. The views expressed here are his own.