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Posts Tagged ‘Entrepreneurship’

“Yeh Housla Kaise Jhuke, Yeh Aarzoo Kaise Ruke”

This has been one song which has always inspired me and helped me find motivation to fight against all odds. Song plays in a different setting in the movie ‘Dor’, and am too far away from anything like that in my life. But for someone who has jumped in uncertain waters of entrepreneurship and now learning to swim the hard way, this is certainly a song that would keep pumping oxygen in his lungs.

Determination, dedication and belief; without being arrogant or stubborn or foolhardy; and also being modest about it – is what would hand you swimmer that oyster of pearl! I especially love these lines from the song:

होगी हमें जो रहमत अदा, धूप कटेगी साये तले…

अपनी खुदा से है यह दुआ, मंजिल लगा ले हमको गले…

जुर्रत सौ बार रहे, ऊँचा इकरार रहे, जिंदा हर प्यार रहे…

यह हौसला कैसे झूके!!! यह आरजू कैसे रुके!!!

Hats off to singer Shafaqat Ali Khan and music composers Salim-Sulaiman. You guys are blessed, really! I am still searching who has written these meaningful lines. Any hints?

Enjoy the song:

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There is a thought among entrepreneurs from internet world that one needs to first focus on building a sizable user-base for their service/product; and think of its monetization later. Entrepreneur often end up making a very innovative service/product, but miss out on devising a sustainable revenue model. Later on as he tries to force-fit revenue model, he risks impacting the very core of the service/product, and might even prove fatal for the startup.

Selling the user-base to the marketers:

In today’s internet world, there is an increasing trend of letting the end-customer use the service/product free-of-cost; and instead charge institutions (read marketers) who are interested in reaching out to these end-customers through this medium. This activity of marketers advertising to end-customers need to be so well blended with the key proposition of the business, that the end-user does not mind it; else this can result into dilution of the very proposition on which the business has built the traffic and audience.

Let me explain this with an example. Twitter is today one of the hottest internet startups and has an exponentially growing user-base using the service for free. Also several social-media marketers have started using this channel to promote their stuff to this audience. Now tomorrow if Twitter starts charging these marketers hefty fees for using their channel, these marketers will also have to become aggressive in their promotions and advertisement in order to get a decent return for their investment. This might end up in making Twitter a commercial place with more spam content than actual micro-blogging generated content. Twitter will have to ensure a balance between this commercial content and the actual core offering of communicating “what are you doing”.

Of course this will be an extreme case, but the point is that if Twitter tries to generate revenue through this mechanism, it always risks spamming itself. Take example of Search business. We have one Google which owing to its almost monopolistic market share can afford to limit the number of ads to be shown on its search result page, allow only relevant ads and push up the price (revenue per search) through an auction-based model. The lesser successful search engines have to resort to showing as many as 4 or 5 ads above actual search results, and may also have to take all advertisements that they can get and compromise on relevancy of ads – resulitng in spamming their own service – to sustain their business. And still their price (revenue per search) lags Google. Startups should try to innovate around revenue model for search, instead of force-fitting one (by copying one which has been successful for Google and end up playing a catch-up game).

Making the service/product paid:

In a bid to force-fit a revenue model, one may stop offering the service/product for free, and ask the end-customer to pay a nominal fee to use it. The end-customer will pay the fee if the value he derives is more than the fees charged. However again, there is a chance that this may dilute the very proposition itself.

For example, say tomorrow Facebook becomes a paid service (at a very nominal cost like say Rs. 10/- per month), there would surely be a drop in the registered users. Even if I am ready to pay the fee, if my current network on Facebook shrinks, it reduces the benefit I am getting from the service. Then there are problems of collecting such nominal amounts through e-payment methods and so on. Something like LinkedIn – which offers basic service for free, and advanced features (which are an integral part of the core offering) for a charge – might work, but then this needs to be thought about at the beginning itself. What Facebook or Twitter service would you as a normal user would like to pay for?

Acquisition and Other Methods:

Entrepreneur by definition is an optimistic person, and acquisition will always remain a very attractive exit option. While every entrepreneur always starts with a confidence of building the Google-killer and hopes of getting acquired, having a sound revenue model is of utmost important to make that happen. An acquisition for the audience/traffic built will be possible only if the startup is among the top players in the segment. For others, having an operationally profitable revenue model becomes absolutely necessary.

There might be several other ways of monetizing the generated traffic and audience (like CPM based online advertising, database marketing, etc.) but one need to be ensure that the payoffs from these are enough to sustain the business on a daily basis.

Extending innovation to revenue model:

Entrepreneurship (even social entrepreneurship) is not philanthropy; instead it should be financially fulfilling for the entrepreneur, only then he will be able to continue. And for that to happen, devising a viable and sustainable (and also flexible) revenue model at the outset should be integral to the idea of entrepreneurship. This model might undergo changes as the business evolves, but it should always be of prime consideration for the entrepreneur. Postponing revenue-model for a later stage and then trying to force-fit one can be a very dangerous choice to make. Entrepreneur should not limit his innovation to the service/product alone, but should extend it to revenue model also, and have a rewarding entrepreneurial experience.

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I had put a post about difference between entrepreneurs and businessmen sometime back. Some appreciated it, but many drew a flak. I was amazed at that, but may be I am the weird one. Days have past, and the difference is getting clearer in my mind now. And I am happy about it.

An entrepreneur will stay by his idea. He may later realize that idea was a crap one and made no sense at all, or is not a viable business, but he would wait till he himself gets convinced about it. And once he is, I would want that entrepreneur to be practical and move on to the next thing. A businessman may be will be quicker in realizing this misjudgment, as he is not blinded by the irrational passion that entrepreneur has, but instead of moving on, he will try to make most of it. All that theory of sunk cost and investment will be thrown and moving into related business, which may or may not be as enticing but will surely be rewarding, will be tried out. Businessman will make success out of it, but I wonder if entrepreneur will be happy with it.

One important call that any wannabe entrepreneur or businessman should be taking is that whether he considers his venture and his CV as one and the same. The moment you start looking at it as two different entities, you are calling for trouble. I guess an entrepreneur while passionate about the idea, as he more and more gets convinced of the inviability of the business concept, is more likely to be selfish and think of his CV before the venture. He is characterized by the obsession for doing what he enjoys, what he really wants to; he does not think too much into future and though would have a plan, it will always be restricted to the idea. A businessman will be more willing to put his venture ahead of every damn thing, be more flexible and will make sure it becomes success. He will do all that it takes to make profit in the business. I am still not sure what this means, and whether it makes sense, but I am more and more getting convinced that this is something which clearly differentiates an entrepreneur from businessman.

On the last post, many said its a wasteful exercise to do this hair-splitting between entrepreneurship and business, am sure more will say so again, but I am enjoying it. Its fun trying to make sense (or to lose it) over things completely weird. 🙂

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Mr. Narayan Murthy has written a book titled “A better India: A better world”. It is a collection of his speeches where he talks about values that shaped his life, his thinking. I had read the pre-commencement speech by Mr. Murthy at NYU Stern School of Business which also talked about events which shaped the journey of Infosys, and Mr. Murthy as we see today. He mentions about an incident where he had to spend 3 days in jail and starve for 4 and half days in strange country of Bulgaria; all this for allegedly sounding communist while he was having a casual chat with his fellow passenger – a small girl. This event totally changed his view from being a confused Leftist into a determined, compassionate capitalist as we see him today.

A year back when I was pumping myself with inspiration from all possible sources for the entrepreneurial journey, I had read several more of such stories, from well known college dropout heroes of Bill Gates and Steve Jobs, or lesser known guys like my colleague at an IT firm who is successfully chasing his dream of running a small company making dairy products in his hometown. I also spoke with many fellow, all-charged up entrepreneurs; some surviving, some rolling, and many more in anticipation of getting deserving payouts for their efforts. These guys have been a continuous source of inspiration for me, as much as those biggies mentioned earlier. Also, I have seen/heard about guys who gave their best shot but circumstances or destiny or whatever didn’t work in their favour, and they had to go back to more civilian life of being employed with someone else’s entrepreneurial venture.

With all of above, I see a common thread – everyone was possessed with some passion, some ambition in their lives which made them take the big leap of jumping in entrepreneurial fire and kept them guiding throughout the journey. Also there have been many such incidents like the Bulgarian adventure of N. Murthy which had impact on not only their professional venture and business acumen, but also shaped the personality that they are beyond their business life. They all had these years of wilderness which took them through a roller-coaster ride with intense emotions spanning unbelievable range and gamut. Whether they succeeded in their business or not was outcome of many other factors external to their control, but all of them must surely have had come out as a better person with certainly more interesting lives.

I am sure – these are my years of wilderness!

And I am already witnessing with awe and gratitude things life has been throwing at me and making me give it back. Over last 3-4 months there have been so many emotions I have been through, all to extremes. From hopelessness, defeat, loss of direction to being so intensely driven that I myself have been the biggest source of inspiration for me. Of course watching ‘Guru‘ and ‘Lakshya‘ multiple times also deserve their reasonable share of credit, besides speaking to numerous unknown entrepreneurs and listening to their stories. There have been bouts of gloom, despair which resulted in many sleepless nights and sad mornings; but those long walks alone in anonymity of concrete jungle helped me regroup my thoughts and have pushed me back in the fighting ring. Quotes like “the lure of quitting will be greatest when you are a corner away from succeeding” do have impact on a mind and heart grappling in dark seas of uncertainty and on verge of giving up. Personal life also hasn’t failed me in this roller-coaster ride.  It kept me entertained with flares of hopes of cozy comfortable happy future, reminiscent of past times – both good and bad, heartfelt carvings for certain friends who got too busy and lost in the chores of routine life and also fighting hard to cajole self out of the immense sense of loss of certain intangible called luck.

I am sure these are my years of wilderness. These are jungles which many have crossed, but thankfully did not bother to leave landmarks and signboards, making this journey of mine and the curious lessons learnt worth the every next moment of uncertainty.

At this moment I am remembered of lines from prelude of one of my favourite songs ‘Bahon Ke Darmiyan’ from Khamoshi –  “Magar woh jindagi hi kya, jisme koi namumkin sapna na ho!

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Entrepreneurship is doing funny things to me. Its more than a year that I have actually jumped into the mysterious waters of entrepreneurship, and the way things have gone and are going, I am faced with a question of “Is there any difference between Entrepreneur and Businessman?” What sets these two apart from each other?

Instead of simply searching for an answer on internet, today I had kept this question as my GTalk nick and got some really interesting replies. Basic premise for almost all the replies was that “Innovation sets entrepreneurship apart from business”.  Entrepreneurs are driven by passion for their concept whereas profit motives drive a businessman. Businessman works under the liability of making profits so that s/he can sustain the business; whereas entrepreneur might simply be chasing his/her dream. Businessman will always ensure that all his/her investment will fetch the suitable returns and hence will always try to play as safe as s/he can; whereas entrepreneur by nature will be a risk-taking gambler.

Here are a few interesting comments I received over the day –

“Entrepreneur has usually fallen in love with the project/business …same may not be case with the Businessman”

“Entrepreneur loves what he is doing… he seek a purpose in doing what he is doing… businessman may be just in it because that’s the way he knows to work”

“Act of creation separates entrepreneurs from businessman”

“Entrepreneur is a businessman under a capitalistic framework and a people’s leader under socialistic framework”

Taking a clue from the last comment, I feel while a businessman is more of an opportunistic in capitalist structure, entrepreneur goes a step ahead and becomes the value-adding element of socialist structure. A businessman finds his/her place in the value-chain of the industry, and keeps running after the margins; whereas an entrepreneur will add a new value to the chain, or simply disrupt it altogether by his/her innovation and create a new business, a new value-chain out of it. While entrepreneur will expect monetary gains out of the venture, that need not be his/her sole aim.

I will sum it up with this Apple advertisement of “think different” which though not particularly made for entrepreneurs, speaks a lot about it. Entrepreneur is the guy who has no respect for the status-quo. They are the crazy guys who believe they can change the world!

What is your take?

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Entrepreneurship is really fun.

For last 2 months or so, I have been breaking my bald head on devising the right pitch to get an Angle investor interested in my entrepreneurial venture. (An Angel investor is a guy who funds a business in its early stage, when the business is more of an idea, a value proposition that any value actually being delivered.)

Records say that the much-sought after angels are actually like real angels, very rare to find. Even if you get hold of one, its more difficult to convince them.

Every entrepreneur feels he is smarter than Sergey Bin/Larry Page and his company is the Google-killer everybody is so dearly waiting for. I also fall in this category. But point to note that 1 out of 10 such believers actually manages to see the belief through to the end and strike gold.

With this in mind for last 2-3 months, today when I was just surfing a blog on Salma Hayek’s movies, I came across her movie titled “Fools Rush In”, which is based on the popular phrase “Where Angels fear to tread, Fools rush in“. Next moment I was ROTFL. 🙂

I better find an Angel for my business soon!

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