Thursday, August 7, 2008

The Giant Leap

It’s just the age for first love, first vote and first drive in father’s car. But it can also be the age for your first company.

NOT YET out of teens and already dreaming of being an entrepreneur? You have an idea to fix a problem and believe you can make money from it? It might have been unthinkable in the golden age of lathe machines and steam engines, but in the featherlight economy of internet and mobile phones, it is not just real, but an inviting precollege career option. Imagine Google being founded by a 60-year-old business patriarch! Both Larry Page and Sergei Brin were 25 when they started what would become synonymous with web searching, but the age of entry for startup businesses is coming down. More and more workable business ideas are coming out of campuses, often from abroad but occasionally from India too. Fearlessness, exploratory mindset and self-confidence — all ingredients of youth — are becoming business assets. Teenage startups offer a unique proposition; if you succeed, you make it big. If you fail, you are wiser by the experience that college education couldn’t have given. Never was time so ripe for the country to warm up to this interplay of youth and entrepreneurship.

But then, success stories are often hyped up and failures, larger in number, ignored. The road to entrepreneurial success is hard and unpredictable even for veterans, and can be quite daunting for a teenager. There are so many things that one must get right from the start, if the venture has to take a professional step forward. Here are a few tips that can show the light, but the journey is all yours.

Studies Or Business?

So, your parents have told you to finish college and do whatever you want only later. The good news is that internet has eased so many of the business functions that go into firing up a startup, that you can run the business in your spare time. When the Aggarwal brothers, Raghav and Abhinav, started, one was in college and the other in school. Peak season visits on their web site have touched 10,000 a month, but the business hasn’t affected their education. They plan to continue their study and qualify themselves better for business, but they also have plans for expanding the site and offer new services. With a bit of time management, it is possible to ride both the horses.

That said, big education is not essential for successful entrepreneurship. An MBA, for instance, is fancied by kids looking for a career in business, but business experts say you don‘t pick up the art of entrepreneurship from the degree itself. “MBA, by itself, imparts very few skills that are really valuable in a startup situation,” says Alok Mittal, a venture capitalist with Canaan Partners. “The uncertainty and non-linearity of startup businesses is something that most MBA courses shy away from. What it does provide is an allround theoretical view of how businesses function, but it’s not very difficult to pick that up in any case.” Want to hear what an IIM entrepreneurship professor has to say when asked if it is better to get an MBA before trying out a new business? “Certainly not. MBA makes students more risk averse,” observes Anil K Gupta of Indian Institute of Management, Ahmedabad.

Everyone Says It Won’t Work

The single biggest hurdle that young entrepreneurs report is that elders do not take them seriously, at least initially. Let us hope the grown-ups will grow out of this attitude as news spreads about more successes, but till then you have to learn to live with dismissive comments. Even friends can be sceptical. “People tend to have this natural tendency to want to put down an idea however good it is. We saw some of this from our peers and sometimes, they even throw you off track,” says 17-year-old Abhinav. But then, “If you are convinced, then that’s all that matters.”

Canaan’s Mittal likens entrepreneurship to new world exploration. “I would take an analogy of an explorer who has a vision which is seldom shared by others.” The traveller must have the courage to face unexpected obstacles and find his way around in an unknown land.

A deep knowledge of what you do, a professional attitude and focus on solving your customer’s problems will gain you recognition in due course.

Do I Need Prior Work Experience?

There are those who think it would be useful to have some work experience and others who feel such experience can actually make people timid. But hardly any expert suggests work as an essential qualification for entrepreneurship. “It is a myth that experience is a must for entrepreneurial success,” says R Satyanarayan, founder of Career Launcher, which is training 55,000 business school aspirants this year.

TechEnclave, an online discussion forum for computer hardware issues, enjoys the patronage of 20,000 users today. Its founders, Ajay Datta and Sumit Chaudhary, were teenagers going to engineering college and picked up some experience working informally for their friends’ web sites. “Work experience is not needed. If you just have a good idea, that’s it,” Mr Datta says. It is important to know the importance of business operations, finance, marketing and negotiation and these skills can be picked up while working for somebody else. It is a matter of personal choice whether one must work before starting up a business or just take the plunge. “If one has an entrepreneurial spirit, he/she will do it either ways,” says Manish Vij, co-founder of Quasa Media.

Do I Need A Partner Or A Mentor?

A partner who brings complementary skills, experience or money can be valuable, but of utmost importance is “alignment of objectives and high degree of trust in each other,” says Mr Mittal. A single leader startup might have its own value though. It would be easier to impart focus to the business and maintain the vision. But if you must get a partner, choose someone you know and respect, says Abhijeet Virmani, founder of Positron Advisory Services. The same thing goes for a mentor. Young people benefit immensely from mentors, who can shorten the learning curve and help in making decisions at crucial turning points. However, having a mentor is no alternative to the hard work required to make a business successful. “A mentor is not needed to solve a business problem as much as to solve a dilemma in the head,” says Mr Satyanarayan. The guide can help you decide if and when you need to raise money, hire people or form collaborations. You should not turn to the mentor for day-to-day problems.

If Something Goes Wrong?

Two hours of sleep should improve your head, says Mr Satyanarayan. All businesses, big and small, hit low points. The ability to remain calm and make logical decisions during such a phase is critical. “I remind myself that this is a hole that I need to climb out of and I sleep it off. Never make a decision at the top most or bottom most of your game.” Early troubles can actually teach an entrepreneur valuable lessons in business. Exampapersonline, run by Aggarwal brothers, saw a slump in student visits to their site immediately after the annual examinations. They say this forced them to think of ways to spread out the traffic to the whole of the year. They have come up with new ideas to keep the site relevant for periods far from exams. They are now planning to launch internship listings, campus reporting and project work forums.

My Idea Needs A Lot Of Money

An expensive idea can still be a great one to pursue if it can provide commensurate returns, says Mr Mittal. “As a first-time entrepreneur, understanding how to phase the capital raising process is a key. Progressively, as you establish the opportunity better and address the risks in the business, you can raise more capital and fund expansion.” Services based businesses that leverage the power of technology and Internet can be started at a fraction of the cost of manufacturing businesses. Mr Satyanarayan says, “True entrepreneurship is about making sure that a business model is mortally dependent on capital.” So, here goes. Entrepreneurship is like a game of chess. The starting move defines your position, the middle game shows your grit and staying power and the end game determines your fate. It takes both a bit of daring and bit of careful approach to make the winning move.

Article Resource:
Author: Jacob Cherian is the Chief Editor in the The Economic Times, Mumbai and the article appeared in one of their successful columns on Entrepreneurship/Start-ups called "Starship Enterprise".

1 comment:

Lytton said...

I remember my own experience as a college student. I made money as a tutor, hence it never affected my studies, it even helped it. I now plan to make tutoring a business.

This might interest you Join Louis Lautman in his journey to become a successful entrepreneur.