December 29, 2009

"To Indipreneurship" - Article by Sanjay Anandaram

1991 was when India achieved its second independence – that of economic liberalization. But, in retrospect, one has to say that it has been far more than just economic liberalization. It also liberated the mind of the baggage of self-doubt, low confidence and ignorance. It has therefore been my belief that those born around or after 1991 would be the change agents of India. Entrepreneurship and entrepreneurial thinking would be the vehicles of change.

In the first column of Indipreneur published August 25th, 2006, I wrote: “For the first time, an entire generation of young people cutting across class lines is acutely aware of the opportunity ahead of them. They also recognize the inscription on the other side of the coin: RISK. And it’s not a four letter word anymore. While earlier generations were defensive and inward looking, this generation is aggressive, outward looking and not given to the self-doubts of the past. This is the “why not?” generation. This generation has the potential to lead India to heights that are greater than anything we have achieved till date.”

Here’s an example. I met an impressive young woman Jayashree Hegde, an engineering graduate of 2008, yesterday. Energetic, vivacious, quietly aggressive, understands the value of relationships and networking, entrepreneurial. Being interested in marketing, she interned with well-known advertising agency McCann-Erickson in Mumbai for 2 months after her engineering from Bangalore. In these 2 months, she also attended a week long programme on marketing in Malaysia during this period. Returning to Bangalore, she joined redBus a startup to help with on-line marketing while volunteering with a theatre company and learning French. After about a year at redBus, she recently quit to start her own company. She toyed with the idea of doing a MBA but rejected it in favour of becoming an entrepreneur. To raise money for her venture, she brokered some high value real-estate deals, sold art-works of some friends online (selling 35 pieces in 1 month!), co-founded an events management company focused on arts and cultural events, secured sponsorships and helped conduct various events in India and abroad. Jayashree’s dealt with bureaucracy and the political administration and has emerged unscathed! Today, her company provides online and digital marketing services to 5 clients and she employs 15 people. She is currently developing an innovative digital marketing programme for educational institutions that is set to launch in January. Her first year revenues will cross Rs 1 crore. According to her, “I have nothing to lose. If I don’t take risks now, when will I? If I fail, I can pick myself up and move on. At least I will have failed doing what I wanted to do”.

As the end of the first decade of the 21st century dawns, it is important for all to understand how far we’ve come in just 19 years. The decision this year to stop production of the Bajaj scooter is symbolic of the shedding of the pre-1991 past; The globally watched and celebrated arrival of the Nano was a metaphor for the possibilities of 21st century India. There are huge problems still to be solved, enormous inequities to be addressed and immense entrenched regressive mindsets to be battled. Entrepreneurial thinking (across society) will be required if these are to be dealt with.

As we contemplate India in 2010 and beyond, it is worth reiterating that we must first learn to celebrate entrepreneurship and entrepreneurs. Role models and successes need to be highlighted. But, while doing this, we must also learn to celebrate failures. Setbacks are inevitable in the course of creating successful enterprises and navigating these successfully is the hall mark of great entrepreneurs. Creating such a celebratory mindset and a culture is imperative to fostering entrepreneurship.

This column has been devoted to entrepreneurs, entrepreneurship, and in general to an entrepreneurial approach to problem solving for over 3 years now. It now re-dedicates itself in 2010 to the Indian entrepreneur – The Indipreneur.

What do you think?

Sanjay Anandaram is a passionate advocate of entrepreneurship in India; He brings close to 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.

December 22, 2009

"Self Awareness" - Article by Sanjay Anandaram

A CEO’s job, like any leader’s, is a lonely one. The CEO of a startup is especially lonely. He’s expected to manage finances and investors, the board, motivate employees while dealing with recalcitrant ones, engage with, influence and grow relationships with key customers, partners, suppliers and industry players. The CEO needs to be emotionally strong to deal with all the pulls and pushes. And has to always present a sunny disposition even when times are difficult.

It is a job that requires enormous confidence and humility. Confidence to keep executing towards the goals of the company and humility to keep learning and unlearning. Not surprisingly, these are uncommon traits that only the more successful CEOs have. Rarer too is the desire to know one’s weaknesses and the willingness to work on improving oneself.

I was therefore delighted when I recently received an email from a CEO saying he wanted an honest appraisal from me of his leadership. He had commissioned a 360degree appraisal of himself to understand his limitations and how his leadership style is perceived by others around him. He had set ambitious (audacious?) goals for his company and believed that the market presented the opportunity to realise those goals. He was also humble and more importantly, displayed amazing self-awareness, in realizing that he did not possess the capabilities and qualities necessary to lead the company towards those goals. And he wanted to understand what those limitations were. How many of us do or would do the same? Our egos would come in the way, our insecurities and fears would prevent us from an honest self-assessment. CEOs who aren’t self aware tend to be insecure and in extreme cases become delusional surrounding themselves with sycophants and yes-men. Constructive feedback on capabilities, need for improvement and development of inter-personal skills especially in groups need maturity and self-awareness to appreciate and internalize

Obviously, there are different types of leaders. Some self-aware and others not quite. To become an objective evaluator of oneself including one’s behaviour and values is not a trivial task. It requires one to be conscious, serious and committed to transformation. One has to first manage oneself effectively before one can manage others and/or a business, let alone transform them. Self-awareness, self-esteem and confidence are required to do this; they’re connected and entrepreneurs tend to implicitly know and react to these concepts in practice. It leads to people being honest with one another, acknowledging that they don’t have all the answers and that they’re keen to learn from outside. It is OK for the CEO to say, “I don’t know” but it is not OK to be defensive or otherwise to be a “know it all”. This results in the CEO’s credibility getting enhanced and his points being respected. Such credible honest behaviour also creates an organization with low levels of politicking. It ensures that one doesn’t become judgemental about events, situations and others. Learning to listen and marshalling the facts and data before arriving at a decision therefore become far easier to achieve.

The first step in problem solving is to recognize there’s a problem and then to identify the source(s) of the problem. Only then can any problem be resolved.
Daniel Goleman, whose studies and practice of meditation in India decades ago played a crucial role in his developing the celebrated theory of Emotional Intelligence, describes self-awareness as a critical competency of high achievers. Being self-aware, they realise their strengths and weakness and are comfortable with the realization. They surround themselves with the appropriate talented and competent people who then fill in the gaps, so to speak.

The result? A well-rounded, competent, complementary team consisting of team members who’re comfortable with each other and with the company’s goals. There’s no dissonance with regard to values, objectives and action.

As the saying goes, all bottlenecks are at the top of the bottle! And self-awareness has to start from the top of the organization.

What do you think?

Sanjay Anandaram is a passionate advocate of entrepreneurship in India; He brings close to 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.

December 13, 2009

The Entrepreneur who brought McDonalds to India

Forbes India has an interesting profile of Vikram Bakshi, the JV partner of McDonald’s in India.

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.

December 07, 2009

Sources of Govt Funding

DARE magazine has an article on the various government-related agencies that provide funding for technology start-ups.

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.

"Is "Business Ethics" Old Fashioned?" - By Sanjay Anandaram

The TV channel had headlined the story “Education or Business?” The story was about how students had been taken for a ride by the administrators of a couple of educational institutes that had taken large sums of money as fees and then not provided admission to the students. The police, the students’ families and even the local MLA were all interviewed. The administrators of the institute were not available for comment. The headline “Education or Business?” was troubling. Was it implying that education and business were mutually exclusive? Or, was it, even more so, implying that cheating students with false promises was unacceptable behaviour in education but, and here’s the rub, understandable and even acceptable if it were yet another business?

Is business assumed to be corrupt and unethical? And therefore is it perfectly legitimate to indulge in practices that might not be considered ethical as long as it benefits the company? What then does it mean for entrepreneurs starting out to create something of value?

The CEO of a venture funded startup told me he wanted to create a company that was admired by all. The attributes he used to describe “admired” were illuminating: well-known brand, financially successful, large number of well-known customers, a thought leader, attracted top class talent. I asked him about the kind of culture he wanted to create. He responded by saying “open and professional”. And what about integrity and ethics? He looked at me and said that one needed to be practical and “real” in business in India!

Really?

Over 20 years ago, as a fresh sales person at a then young and small computer company I was asked to sell computers in a state where my company did not have any real presence. The state was perceived to be among the more backward and corrupt states in India. There was hardly any private sector worth mentioning and almost all the purchases were made by various department of the state government. Upon returning from my first visit, I told my boss that it would be impossible to sell without financially taking care of various people typically involved in government purchases. My company was and is known for a zero-tolerance policy on issues of integrity. The integrity at all costs mantra had been drummed into all of us right from the Chairman downwards and we all swore by the mantra. We were proud of that mantra. No one was penalized for losing business because of unethical practices indulged in by competition and customers. All very well but how on earth was I expected to sell in this state where apparently everything had a price? I was told unequivocally: “We’re aware of the situation. We also don’t believe that there’s 100% corruption there. Get us business from the 10% who’re not corrupt!” I returned and over the course of the next 12 months managed to bring in business from one of the more corrupt departments (the Public Works Department!) without diluting my company’s mantra or impacting my conscience. We lost a lot of business to competition in the course of these 12 months. But we had a small installed base of customers. The reason I was able to do it was because I had the full backing of my company, right from the very top, and was challenged to prove my worth vis-à-vis the company’s mantra.

It is true that we don’t have enough role models in business as far as integrity and ethical practices are concerned. It is true that more businesses choose the easy way out and succumb than those that don’t. Whether it is paying taxes or indulging in questionable business practices, what is the acid test? If there’s a doubt in our minds about a practice, what’s the company mantra? To err on the side of what we know is right or push the envelope, or even tear it perhaps? Should we do something as long as it is “not illegal” or should we refrain from grey areas and choose just the white?

How then does one answer the CEO who felt that one had to be practical and “real” to do business in India? Should one just say, as I was told over 20 years ago, to go and get business from the 10% that are straight?

Yet for all of us involved in today’s India, involved in building a new set of entrepreneurial companies and involved in creating jobs and wealth, the challenge remains. And one that we must all rise up to.

What do you think?

Sanjay Anandaram is a passionate advocate of entrepreneurship in India; He brings close to 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.

"Look Outwards" - By Sanjay Anandaram

It was the first presentation the CEO was making to the recently constituted board of directors on the company’s performance till date and the business outlook for the next 12 months. It was well laid out with a series of numbers detailing revenues, margins, headcount, growth rates and so on. The CEO was well acquainted with the numbers and was aware of the operational details. But there was one troubling issue.

There was no data on customers, competition and market dynamics. None of the analysis focused on the revenues, margins and opportunities in different market segments or with different customers. Information was lacking on how the headcount of the company was distributed across customers and geographies. Were customers satisfied or not? Which customers were showing the most promise from a growth standpoint, which ones were giving the company higher margins and which ones were a drag on the company? How many new customers were being added every month and how many customers were not renewing their contracts? What were the reasons for not renewing their contracts? Was the business going to competition? Was there the possibility of new players entering the market with a different business model and a different range of products and services? What if any were the threats and opportunities to the company – regulatory, financial, competitive, supply side etc?

Were customers demanding newer services and products that could not be serviced? If so, what were the trends in customer requirements of product features and services? Was the business heavily dependent on a few large customers and therefore risky or was the business spread out over a large base of customers? Were existing customers being mined for more business from different departments or was just one customer department giving business? How was the company perceived by customers – commodity player, high quality vendor or a partner? Was the company being beaten down on prices or were customers comfortable with the prices? How was the company placed vis-à-vis competition in terms of pricing, range of services, perception by customer? How often did the CEO meet top customers? How many customer outreach programmes did the company run? What was the nature of the relationship enjoyed by the sales team with customers? Just order takers or partners with whom the customer shared their medium and long term plans and requirements? Given changing market and customer requirements, what are the implications for the company in terms of its people and business model?

All too often, companies spend their time not just looking inside themselves but in a manner of speaking, actually living inside themselves as hermits. They don’t engage with the market and customers. They are unaware of the goings-on in the world around them – new technology, new competitors, changing customer needs. Focused maniacally on operations and delivery, these companies lose out on the opportunities and the threats from outside the company. They become reactive, focused on servicing only the stated needs from a manager or two at the customer end. The company grows by riding an existing wave of industry demand along with everyone else. It drives margins by being operationally efficient. However, there’s little or no strategic value the customer sees in working with the company. No name recognition, no top management visibility and no long term business. The customer too then views these companies as commodity providers of little or now value and develops a purely transactional relationship with them. In the event of a slowdown, the first to lose business is the “commodity value, transactional relationship” company. This kind of a company is also the first to be hit by changing customer situations, new technology, new regulation, new competition, new business models.

Meet customers, competitors, industry experts, advisors regularly to learn about and understand what’s happening in the industry. Read about the industry and learn what others around the world in similar businesses are doing from the standpoint of people, business models, technology, pricing, suppliers. Build relationships based on long term value and value-systems, not on short term transactions. There are a vast many examples of companies from every business segment that made the mistake of not looking outside themselves often enough and deeply enough. Most of those companies don’t exist today.

What do you think?

Sanjay Anandaram is a passionate advocate of entrepreneurship in India; He brings close to 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.