Category Archives: Entrepreneurship

10 books every entrepreneur should read

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A question “What books should Indian entrepreneurs read” on Quora set me thinking. The good news is that Indian entrepreneurs should read, for most part books that entrepreneurs anywhere would do well to read. The trick is picking the 10 or fewer, that would make reading (or starting) seem not so daunting and that you’d have a snowball’s chance of completing. My own recommendations (& favorites) include the following. Much like a travel guide that tells you what to see if you have only one day in Paris, a week, a month or more, I have attempted to bin them in an attempt to bring coherence and priority.

Plan to ready only ONE book

The Effective Executive by Peter F. Drucker: Forty years after its first publication, this book, like good wine, has aged well. If you are going to read only one book, this should be it. Even if you are only contemplating to be an entrepreneur, you should read this. You’ll do better in any role with this one.

If you can squeeze in two more
Particularly for tech founders and any first time entrepreneurs, knowing about sales and design, particularly as it related to customers, these two books work.

Selling the Wheel by Jeff Cox and Howard Stevens: Most entrepreneurs are surprised when they build something and the world does not beat a path to their door on its own. This novel is the gentlest way to get acquainted with selling.
Design of Everyday Things by Donald Norman: How many times have you had to re-print your document to get the two-sided printing working? Or needed to paste instructions on your copier or building door. Before we build it – anything – it would be nice to understand what folks are trying to get done.

Now you are on a roll, here are three more
Now its time to hear others’ stories and to see what part of it is relevant to you.

Growing a Business by Paul Hawken: The first person conversational tone of the book speaks from the heart and is as applicable today as when it was written more than a decade ago.

Founders at Work: Stories of Startups’ Early Days by Jessica Livingston: this is probably the newest book in this list – and one that I am still working my way through. The breadth of entrepreneurs covered alone would make it worthwhile.
Made in Japan – Sony’s story by Akio Morita, Edwin M. Reingold and Mitsuko Shimomura is a timeless story of innovation, perseverance – that’s particularly relevant from Indian entrepreneurs trying to enter global markets

If you are still with the program, these can help you round it off

What the CEO Wants You to Know by Ram Charan: The author’s Indian origins and his experiences with the family shoe store make this book easy to relate to and important for business acumen
Marketing Myopia by Theodore Levitt – if you were going to read only one book about marketing this should be it. Insights that seem self evident in hindsight will bite all of us in the rear. This tells you how to avoid some of it.
Eat That Frog!: 21 Great Ways to Stop Procrastinating and Get More Done in Less Time by Brian Tracy – being an entrepreneur is all about getting things done – and nothing stops you as procrastination can. A simple, yet hard hitting book on getting things done.

Bonus number ten
If you got this far, you need to read a darn good yarn of how a set of engineers got a new machine built.

Soul of a New Machine by Tracy Kidder – this book helped the author land a Pulitzer prize – a non-technical journalist covering the story of how Data General went about trying to beat Digital at the microcomputer game. Human drama and much that goes on in the name of startup success.

It is hard to pick a finite list and any such list if likely to be highly subjective. You will notice I have not picked any Indian entrepreneurial stories – its just that they don’t figure in the top 10 – in which itself only one book younger than 5 year old figures. This is in a sense a foundational reading course rather than here’s how some specific company has done it, in India or overseas. It is important in the first instance to read – which I am still surprised how many tech folks in India don’t seem to read and freely admit to not doing so .

Happy reading!

11 Recommendations for the Entrepreneur’s Bookshelf (mashable.com)
What books should young entrepreneurs read? (compassioninpolitics.wordpress.com)

Who’s pain are you trying to address?

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In the last two months of 2010, I participated in a number of meetings with founders of startups – as an adviser, reviewer or investor. Interestingly in nearly every one of these meetings the same questions kept coming up.

In particular four different companies - two nascent startups and a couple in their early tweens – were facing eerily similar issues. Despite the startups being in very different spaces, the varying ages of their endeavors and having smart and motivated founders – they were all trying to come to grips with the lack of market traction. This despite a great deal of time spent talking to prospective customers, partners, building and launching working prototypes.

I must admit after the first couple of meetings it appeared they were having different problems. In one, a marketplace that was not getting suppliers nor buyers off the starting block, in another focusing on the technology to the exclusion of all else, and yet another having a solution looking for a problem. However by the time the fourth meeting rolled around it was plenty clear, that all of them required a sharp focus on answering the question

“Who is your target customer?”

and more importantly,

“What pain are you trying to solve for them?”

Two years into our own start up, we find ourselves returning to this question with reasonable – some would say troubling – frequency. When we got started on dog-earz, the newsletter tool for the rest of us, we defined our target customers as “marketing & sales folks in SMBs” and the pain we were trying to solve for them was How to keep in meaningful touch with everyone in your Rolodex, even if there wasn’t a deal on the horizon.

Of course it helps, if your target customers actually exist (ours did) and are accessible (a little more difficult) and truly felt this as a problem (not clear). Our solution seemed more a nice-to-have vitamin rather than make-my-pain-go-away Aspirin. We hung in there, as we felt we were target users ourselves. With time it was clear that we’d better solve their pain rather than imagine that they will behave the way we’d. Seems obvious in hindsight, doesn’t it?

Things are not always as evident as we’d like them. I once had an opportunity to talk to Phanindra Sama, founder of redBus.in about his understanding of what pain they are solving for their customers. Phanindra shared his view that the pain his customers felt was not in purchasing bus tickets – as I’d have thought. In fact it might still be more convenient for a traveler to call someone to hold a ticket and pay for it at time of boarding – only one phone call needed, but it is the absence of reliable information – as in how many buses, when and at what price or location will leave from Bangalore to Chennai (or better yet from Jalandhar to New Delhi?) that was the customers’ pain point.

Ask yourself these two questions, repeatedly and validate them by getting out of the office and asking your target customers about their pain points. Once you nail this down it makes, at the very least, decision making a whole lot easier. Knowing this is of course only a good start, but not knowing can kill your business.

Who else is inside your entrepreneurial head?

Can startups afford work-life balance?

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Is work-life balance an oxymoron for startups?

Many people would suggest – Jack Welch comes to mind – that you are either successful or have work-life balance – and he wasn’t even talking about a startup!. So does this mean as a cash-strapped, competitor-chasing, crew-challenged startup you have no option but to give up your life till you reach some major milestone? To make matters worse, said milestone may each quarter either appear to change or move further away.

Yet others – such as the crew at 37signals and FogCreek software – strongly advocate fewer working hours and working smart. For many of us struggling in the trenches this may sound like Warren Buffett telling us “Money doesn’t buy you happiness.” Yeah right! We’ll believe it once we’ve have made some money!

An equally important question to ask is can you afford to not have work-life balance?

So can startups and entrepreneurs achieve work-life balance? And if so how do they do it?

My own experience is that it depends. It depends on what we mean by work-life balance and the choices we make. The extremes are easy to identify and agree upon.

You haven’t let your office for four nights, can’t remember when you last had a non-pizza meal and can’t recall the name of your first born, or if single, when you last called your girlfriend | mom ][pick your loved one]. And this is when there isn’t a crisis at work. You probably have only work (and likely no girlfriend).
If you clock in by 10AM (you have “flex” hours) – are out each evening by 455PM, take your lunch diligently between 12PM-1PM, and turn off your phones on Friday at 6PM, you are in the wrong place, working in a startup or even in a job!

But reality each day rarely appears in one of these two extremes, but in a whole slew of gray areas.

In a startup context, to me, work-life balance can be achieved by moving the goal posts to a realistic settings with two simple steps. I can hear some of you saying that’s cheating, but aren’t all successful startups about changing rules and sometimes definitions themselves?

15-day to 30-day cycles Measuring and working towards a semblance of balance over a longer period such as a month or week (depends on whether you have kids, girlfriends or other commitments). Simply put, be they chores such as doing your laundry or paying your bills, even filing your expense reports (all stuff I continue to have problems with) or having a life such as calling Mom or going on a date (one that’s prepared to be flexible) set a frequency – I will do this once a month or twice a month. So rather than beat yourself up, that you haven’t called your mom (which you can never do enough of, according to her) or paid your bills, because you are so busy you know that at any time you are unlikely to be more than a month/week/fortnight behind.

Emergencies - make the right call in emergencies – that means family/friend/life comes first in an emergency. As a startup you intuitively rush to a client, when they have a line down (or these days cloud down) situation, spend the four days/nights to get the application/system/production line back up or ship two guys to a small village in Japan. Similarly when the “done” deal seems to be slipping away at the last minute you spare no effort to get it back – regardless of the debasement required. Use the same judgement or gut call, when your spouse calls to say the kids running 102, or your best friend’s in a bad car accident or your dad’s having chest pains. Don’t Blackberry, multitask or manage – drop the other stuff and get over there. Your startup will manage, your employees/partners would better appreciate you and your actions will speak louder than any number of TXT messages or emails to your family/friend/life!

Now quit reading this blog and get back to busting your rear – you are in a startup Joe!

Are you a failure if your startup fails?

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: Image by F33 via Flickr

“Son, businesses can succeed or fail. Because your business fails doesn’t mean you have failed!”

My father said this to me, one evening as the two of us sat down to discuss how the startup I headed was doing.

For a little over four years I had been running my startup. Months after we got started, the dot-com bubble peaked and burst. We had also chosen a technology, that everyone felt would not take off despite the initial hype. Our two nearest competitors where both American companies – one, also a startup, that had raised about 100 times more money than we had and the other a listed company with well over a 1000 customers. We’d over committed to the first three customers we’d acquired – miraculously in three different continents – and ultimately failed to deliver outright or were so late as to be not useful for the customers.

We had borrowed money from the bank (another of my father’s favorite piece of advice – debt is a good thing) and from family including my father. Just the previous year, we had to cut back on a rather ambitious – and poorly thought out – plan to design chips and keep our focus on software. We also had to let go nearly fifteen people, whom we’d hired in a burst, without much attention to culture fit, while persuading the people who remained to take 10-20% pay cuts with no commitments on when these cuts would be reversed.

This was also a time when I was commuting – spending two weeks every other six weeks in Bangalore, whilst my family lived in California. So between hotel rooms and my sister’s house, I spent many a night tossing and turning, worrying how we were going to make payroll that month and not sure if we’d ever turn the corner.

To add to the pressure, the senior staff, who’d been putting in 10-12 hours a day were buying first cars or homes incurring debt, getting married and now had spouses who now wondered what they really did. Once when we had to send a key engineer to a customer site overseas, we packed his new bride with him – so that they are not separated within weeks of their wedding! We’d had actually celebrated with a cake, when the company made its first million in revenue but ten minutes later had to dash off to dampen new fires.

This story did have a good ending. Despite ourselves we turned a small profit in year five and a real one in year six. We sharpened our business focus and were gaining traction. Newer challenges emerged as pricing pressures drove deal sizes down, competitors were gobbled up by customers in some instances and the market adoption was slower than we anticipated, and the payroll bill continued to grow each year. Whilst my partners and our immensely committed employees along with some luck, brought us to a successful and profitable M&A conclusion, it was my father’s words that kept me going.

“Son, the failure of your company doesn’t mean you have failed.”

Entrepreneurship in India – Rules for Spectators – Part 5

Entrepreneurship in India – Rules for Spectators – Part 4

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LOS ANGELES, CA - JULY 24: A 'Drive Thru, Ope...

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Rubber meets the road

In early 2004, in its fifth year, our first startup broke even. I recall us making plans to finally buy decent ergonomic chairs for our committed and long-suffering employees. The demands of growth and the challenges of cash flow made sure we never got those new chairs. Yet with more clients, more visitors and greater travel by our staff, we ended up hiring a car and driver on a monthly basis. The same people who’d send us a cab for the airport trips now sent a car and driver who’d be at our disposal all the time, for a flat monthly fee.

Balan^* was the driver and in my first trip to the airport I learnt that he owned the car we were in, and he was a sub-contractor to our regular rental car supplier. Over the next two car rides, I picked up his story – high school drop out, set out driving an auto (that he’d rent on a daily basis), then worked as a driver in a company, before saving enough money to buy his first Indica. Now he owned two cars, drove one himself and had another driver on his payroll. He sub-contracted for a number of folks who had small fleets and one day hoped to build up his own fleet.

Last week I got a call from Balan. He was calling to introduce his nephew, who’d just graduated from college. Balan’s fleet has grown from the two Indicas to two eight cars now. Despite the recession his business had thrived and he’s effusive in expressing his gratitude for us giving him a leg up with our steady business. At a time when even basic services such as barber shops and restaurants were seeing customers cut back on their spending, that fact his business had grown is testament to his drive and what Ram Charan terms “business acumen.”

The town and the gown

Once we sold our first startup in early 2006, I have had the time and opportunity to consult for friends and several clients to help with their businesses. These have all been college-educated, entrepreneurs – ranging from manufacturing (electrical gear), distribution (music to mobile phones in Class B towns), software products to training services. In many instances, Prasad the barber, Girish the restaurateur and Balan the fleet owner, have a far clearer sense of where their businesses stood, who their clients were and where they made their margins. And these were the folks without the college (or even high school) degrees. Yet both groups of entrepreneurs are successful and struggling with common questions – from the strategic, “How do I grow my business?” “Should I grow my business?” “How do I raise capital?” “Should I take on debt or do I dilute equity?” – to the tactical decision making on hiring, pricing, marketing and promotion.

Academicians who study entrepreneurship make the distinction between voluntary (those who make a choice) entrepreneurs and those that fall into entrepreneurship, without a choice. Most entrepreneurs that get formal funding or the media mostly talks about belong to the former voluntary group while folks who go into their family businesses or traders and micro-entrepreneurs fall into the latter, involuntary group.

Yet both these groups have far more in common, particularly when it comes to problems they face and mistakes they make. Much like parenting, most entrepreneurship involves learning on the job. While reading up about parenting (particularly in my case about adolescent behavior) will help, it only takes us so far. Grand-parents (for people) and consultants (for businesses) help speed up the learning and avoid the most egregious mistakes, but nothing can replace the learning that experience brings. Yet the journey to achieve such experience need not be as stressful and lonely as it sometimes seems.

Entrepreneurship in India – Rules for Spectators – Part 3*

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This is actually Tom's Restaurant, NYC. Famous...

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Watching the numbers, one dish at a time

Ramani, my neighbor is himself a first generation entrepreneur. Though formally trained as a chemical engineer he has built a successful electrical business, initially in trading and subsequently in panel manufacturing. An active member of the morning walking group at the local park, he has roped me in as well to bundle up even on cold Bangalore mornings to put in our six or so rounds. The talk inevitably turns to our businesses and the challenges we face and many a days we lose count of both the rounds we’ve made and time that hurries by. I met Girish^{(name changed)}at one of these morning walks.

A diminutive man, who’s rapid walking pace merely hints at the energy packed in him, Girish came to Bangalore less than 20 years ago. Hoping to be the first person to make it to college in his family, he started on his pre-university course. His father and numerous younger brothers meanwhile were attempting to make a go of the family farm in their village. However, the family soon faced mounting debts and struggled to make ends meet. Girish abandoned his college dreams and returned to take care of the family farm. After several years of being a farmer, Girish found himself running very hard to stay in the same place. The little money they managed to eke out of farming went wholly to service the interest costs of the family’s debt. The principal they owed was untouched. Girish made the bold decision to head back to the city, and figure a way to make his fortune there.

Through a family friend, he got his first job, in a darshini – a fast-food restaurant. Paying a princely sum of Rs. 700 a month, the job required him to stand by the kitchen door, and note down every menu item that left the kitchen through out the day. At the close of business, his numbers had to be reconciled with the receipts at the cash counter. The very first month, the (absentee) owners of the restaurant saw so much savings, that they gave Girish a more than 25% raise to Rs. 900. Within six months Girish became the manager of the darshini, with yet another pay raise. The bulk of Girish’s monthly income was sent home to retire the family’s debt. Through family friends, a marriage proposal came and Girish soon was a married man.

A couple of years of running a restaurant 7 days a week, awakened him to the potential of the business. He approached the owners, who’d pretty much ceded the day-to-day operations of the business to him, with a proposal to expand their single outlet to a chain of fast-food restaurants and a small equity stake for himself. The owners were conservative and a little aghast that this 20-something wanted equity in the business and turned him down. Whilst disappointed, Girish did not give up on his dream and decided to strike out on his own. His father-in-law was prepared to provide him some seed money to get started. So Girish, in his own words, “I sought the permission and blessing of my employers” to set up his own restaurant and never looked back.

When I met Girish on that morning walk, he was handing out laddoos from Tirupathi. His son had just been admitted to engineering school and he wanted to share the good news with his walking friends. His first food outlet had grown into a chain of five restaurants. Starting with his second restaurant, he had taken a (different) partner for each new restaurant – these partners being nephews and other young relatives of his father-in-law who were getting started with their lives. Making them his partners, Girish had groomed a whole new set of entrepreneurs. This was his way to repay his father-in-law’s initial support and faith bestowed in him. He had not only paid off the family debt, but personally paid for the restoration of the village’s dilapidated temple – the prasad from which he was sharing with the Tirupathi laddoos.

Ramani, my friend, piped in as Girish completed his story, “Sri’s a food aficionado. He’s been talking about maybe starting a restaurant.” “You’ve got to watch the numbers, at two places – when you procure your supplies and at the billing counter. That’s all there’s to running a successful restaurant. Happy to talk to you anytime,” was Girish’s immediate response.

Girish’s entrepreneurial story, if seen in a movie or a TV show would seem too good to be true. It might even be dismissed as typical Bollywood fare (without the gyrating damsels, alas). Yet it is, I suspect, representative of a large number of unheralded Indian entrepreneurs.

Entrepreneurship in India – Rules for Spectators – Part 2*

Entrepreneurship in India – Rules for Spectators – Part 1*

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“If a tree falls in a forest and no one is around to hear it, does it make a sound?" is a riddle philosophers have posed to question reality and its relationship to observation. Much of the entrepreneurship in India is like trees falling (or growing) silently in an unobserved forest. The media rarely notices it and the public is hardly aware that its happening. Does this mean it is not happening?

The casual reader of the business pages could be forgiven if they reckoned that entrepreneurship in India happened only with technology or more recently Internet startups, often venture funded. Coverage outside the technology domain focuses on the hyper-successful and all to often on personalities. The stories of Dhirubhai Ambani, and his humble start in Aden, Karsenbhai Patel’s Nirma taking on the entrenched multinationals and more recently Kishore Biyani and his Future Group’s rise in retail have captivated the media and readers’ imaginations.

In many ways, the recent appointment of Infosys founder, Nandan Nilekani, as the Chairman of the Unique Identification Authority of India (UIDAI) marked a milestone in Indian entrepreneurship. In his own words [Infosys] “… was not a family-owned company. It was not a multinational. It was not a state-owned company. …It’s become a metaphor. If they can come from nowhere and create a world-class organization, then anyone can do it.” The grant of a Cabinet level post to someone who has cut his teeth as an entrepreneur and a professional manager is the most visible sign of mainstream acceptance of entrepreneurs.

Entrepreneurship in new light

However as we have learnt, having a woman prime minister or now a woman president, symbolic as it is, does not automatically solve all the issues plaguing Indian women. So too this recent interest and boosterism for all things entrepreneurial, while welcome, is merely a start. Even today, traders who likely constitute the lion’s share of Indian entrepreneurs are referred to in pejorative terms. Unlike the titans of technology or rajahs of retail, whom we read about on page 3, all of us encounter traders on a daily basis, but rarely recognize them as entrepreneurs. So there is much each of us as individuals, organizations and as a nation can do to encourage, nourish and grow the flame of entrepreneurship. This article is a small step in that direction.

Ram Charan, author and renowned management consultant, frequently points to his family’s shoe shop and to street vendors in India and elsewhere, and the lessons businesses can draw from them. Without romanticizing either the giant multi-billion dollar corporations he consults for, or the fruit seller on the street, he is able to highlight the commonalities that underpin businesses. It is such a balanced view of entrepreneurship – whether small or large, tech or non-tech, urban or rural – that we all need to develop to build an ever stronger ecosystem that will foster Indian entrepreneurship and innovation. The two books, “Stay Hungry, Stay Foolish,” published by the IIM Ahmedabad and “Inspiring Women to Start Innovative Enterprises” by the NSRCEL at IIM Bangalore, are a great start. Whilst still about college-educated entrepreneurs, both books highlight a wide variety of entrepreneurs across various stages of the business cycle. Without focusing solely on the large or “successful” but by including several still-at-an-early-stage businesses, they are a step in the right direction.

In this article I will share a few common but untold stories of entrepreneurial journey, along with my own experience as a first generation entrepreneur. Drawing on these and others’ experiences, I will stake a position on how we can influence the perception, coverage and the course of entrepreneurship in our own communities.

*The fine folks at Indira Institute of Management approached me to write an article for their quarterly magazine Tapasya. This article first appeared in the Summer 2009 issue of Tapasya.

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