The Startup Journey

Extracts from the brilliant article by Dr. Ajay Shah : Let us start with short-sightedness. The best firms in India are able to borrow five--year money at around 13%. At 13%, a rupee five years from now is worth 54 paisa today. A rupee ten years out is worth 29 paisa today, and a rupee twenty years out is worth 9 paisa today. In contrast, a rupee next year is worth 88 paisa today. With this kind of discounting, it is not surprising that projects that yield returns next year (i.e. 88 paisa today for each rupee of profit) are very attractive when compared with projects that yield returns 10 years from now (i.e. 29 paisa today for each rupee of profit). This difference -- between 88 and 29 paisa -- is striking. In a world with high interest rates, being short-sighted is rational. ...What about risk, and the willingness to undertake risky projects? Modern finance teaches us that when firms are able to issue equity into liquid and efficient capital markets, the risk premium that they ...

Smart CEO has an article by Adam Leipzig where he describes how Disney and Dreamworks executive Jeffrey Katzenberg handles his team's successes and failures. The Monday after the big box office opening of the movie "Honey, I Shrunk the Kids": We were all full of laughter, high-fiving each other and passing around compliments when Jeffrey strode in. He took his customary seat at the head of the long table and looked around the room. “Congratulations,” he said, simply. Then, with barely a pause he said, “Next.”Next? That wasn’t what we wanted to hear. We wanted to hear praise for the next hour! But no, it was back to business. I thought I understood the meaning of “Next” that morning: we shouldn’t focus on our success or we’ll become complacent and self-congratulatory. But there was a deeper meaning, and I didn’t learn it until months later. We assembled for another Monday morning meeting, this time after we had opened a movie called An Innocent Man....But the movie d...

Manish Sabharwal of Teamlease provides this great contrast in an article for Economic Times. We are frugal with capital because we know that entrepreneurship is the art of staying alive long enough to get lucky. But we also understand that entrepreneurship is a leap into the unknown so if you are going to jump from the 10th floor you might as well jump from the 50th floor! What is happening in India today is not once in a decade or once in a millennium but once in the lifetime of a country. This offers unique entrepreneurial opportunities. Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of data and analysis on private equity, venture capital and M&A deals in India. Click Here to learn about Venture Intelligence products that help entrepreneurs reach out effectively to the investing community.

Extracts from a Mint interview with Stuart Read, professor of entrepreneurship at Switzerland's International Institute for Management and Development, and author of Effectual Entrepreneurship: The first thing they do differently is they start with the stuff they have available. This is called starting with the means rather than the goal. An entrepreneur will, for example, set out saying he knows software and partner with someone who knows graphic design and get into making graphic skins for the iPad. But in talking to the customers, he may discover that a security service is what people really want and he will end up making this. ...The other thing they do differently is how they approach competition. In management, we teach how to look at competition using Porter’s five forces. Do you think the Freitag brothers bothered about competition? They cared more about working with partners, their bicycle messengers who would help them create a market. Looking at partnerships in the earl...