Friday, June 27, 2008

Answer Lies in the Questions.

Answer Lies in the Questions

After getting a Masters degree from abroad in computer science and business administration, I was working in a technical role with a large financial company in the United States. But two years ago, I came back to India with the intention of starting my own business in the information technology/business process outsourcing sector. My initial efforts were not successful and now, after a hiatus, I am making another attempt, this time to start an online marketing company. I need advice on how to go about it.

When I came back to the country and emailed US companies to explore outsourcing opportunities, the responses were not encouraging. Sometimes, there was no response at all. I realised that nobody would outsource to me unless I have some reputation, solid experience, infrastructure and backing to carry out the work.

Soon, I got absorbed in my family business and the idea of an outsourcing startup took a back seat.Over time, however, I developed a keen interest in and some knowledge about online marketing. Now,I am in the process of setting up my own business. By this time,I know that building a customer base is going to be a challenge,especially given that I have to compete with much bigger and stronger rivals.

I want to know the correct strategy I must adopt to build an online marketing firm from scratch. Do I need to change my approach or attitude in order to be successful in this business? Or, are my concerns just the fears that any entrepreneur might have? I would appreciate your guidance.
Dear Mentee,

I hope you allow me to refer to you as such. First, let me congratulate you on contemplating going down the “entrepreneurial” path not once but twice while you are still young (my assumption). After that, in the absence of more detailed information on exactly what you did on your first attempt and have done on your second, I must tell you that you are asking me to do all the heavy lifting. Some of my colleagues in Silicon Valley, faced with such a general and broad question, would have terminated the mentoring session . While normally a little more forgiving, I too believe that a mentor’s role is to provide feedback on the DEEP RESEARCH and VALIDATION the mentee himself/herself has conducted and to provide at most a single spark which ignites all that passion and hard work. Here, I feel I am being asked to do it all. If I am wrong and you do in fact have done a lot of homework, my apologies.

So, I am going to ask you a series of questions (which are not exhaustive) and invite you to consider them and what your responses to them would be. I will even offer through the editors of this column to personally meet with you after you have these responses. In framing these questions, I hope also to give you some pointers on strategy, attitude, approach and customer acquisition all issues you have raised in your general enquiry. So here goes.
  • What were your learnings from your first attempt in being an entrepreneur? Why did the US companies not respond to you? You have already indicated that you lacked solid experience, reputation, infrastructure and backing (financial or otherwise) at that time. Are all of those not present now? What have you done to cover your bases on these?
  • What value proposition are you going to bring to potential customers which is different from others, many you suggest being large and strong players. Are you going to be faster, better, cheaper? Online marketing is a huge space. Have you identified the sweet spots for you — vertical or solution or service? How and why? Have you actually talked to potential customers to establish their needs?
  • You say you have developed a keen interest in and “some” knowledge of online marketing. Normally that is not enough. The usual words one looks for are “passion” and “deep” knowledge in you and the people you have got on board as part of your founding team, advisers etc. Have you identified such a team who will present a credible alternative to a potential customer? If so, how are you going to incentivise them to stay with you and build the organisation? Does your philosophy of entrepreneurship include the sharing of the wealth which is created if you are successful?
  • How do you intend going to market? Normally building a solution or service is the easy part. Selling it is tough. How do you intend to reach your potential customers? Have you identified partners, channels who already are serving your potential customers? What do you bring to the table for such partners/channels?

There are many other questions which I could ask or give feedback on if I had more information on the work you have already done. So my response may be slightly shorter but my offer to meet with you when you have the responses remains open.

So I finish as I started. You seem to have the entrepreneurial bug. That’s great. But there is a lot of hard work ahead. How much you have already done will not reduce the amount yet to do. Figure that out. Best of luck.

SRIDAR IYENGAR Partner, Bessemer Venture Partners

This article appeared in the Economic Times in one of their successful columns called "Starship Enterprise" dated Sept 7th 2007.

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