Tuesday, November 26, 2013

The talk I gave as part of Global Entrepreneurship Week (at IIIT-Hyderabad)

Was tasked with speaking about "the things a start-up founder should do" and to speak a bit about mentors and incubation.

Thought I would transcribe and post the hand-written notes of my "speaking points".


a) Given that for reasons of brevity (this is going to be a long post anyway) I am not explaining or using the examples I used while speaking, there may be some loss in translation.
b) To set the stage, a significant part was in the form of questions, with prizes for correct answers being the sweets that I love and that I pick up at the Abbey in Piona, Italy.
c) The speaker before me, a board member of TiE Hyderabad, and a much-accomplished man had argued that Entrepreneurship was an art and a science. When I started I used that to make the point that I was going to disagree, that disagreeing had nothing to do with disrespect, and that the point to underline for entrepreneurs was that they had to get used to hearing different views and deciding for themselves.
d) Most of what I spoke about was based on my experience. The only thing that was not, was the part on Incubation.

Ok so lets get to the speaking points.

1) Will ask questions. Sweets for what I think is the right answer.

2) Will speak about universal skills - those that can be applied in any situation.

3) Why is it that a person who does not know theoretical physics cannot talk on theoretical physics to theoretical physicists but a non-entrepreneur can talk about entrepreneurship to entrepreneurs?
Answer: Its an art, not a science.
While I am not an entrepreneur it is true that I have been mentoring them for about a year and have done a fair bit of research on the subject so in a way I was not being entirely honest.
Also make point that entrepreneur (E) needs to be a bag of contradictions. Example have a massive ego while also not having one. Think big and think small.
(As an aside, the earlier speaker had said an E should not have an ego, but I stated that to execute on something that others do not believe can be done, or believe you cannot do, you do need a healthy ego.)

4) 3 statements. Question is who said them? Hint - if you have been watching TV in India you will recognise theme.
a) "Chase your dreams, but make sure you do not take short cuts."
b) "Path may be difficult but don't give up."
c) "Be a nice human being."
Sachin Tendulkar, a much-loved and accomplished Indian cricketer had stated the above in his farewell speech at the Wankhede stadium and had said that this was the advice his father had given him. I thought it particularly appropriate for entrepreneurs.

5) Which one of the 3 quotes is not necessarily good advice?
Answer: the second one. Speak about knowing when to quit and move on.

6) What do most E's need? Money
What do most mentors not have? Time
Time is money. As an E whether selling your product, pitching to investors etc. the Q you have to ask yourself and solve is: "How do I get the money out of that pocket into mine?"
Same approach for mentors. "How do I get them to give me their time?"

7) Situation = you are unfamiliar and scared of dogs (we have many of them "on the loose" in India). Who should adapt, you or the dog?Who should change their behaviour to suit the situation?
If you are clever you will realise that humans, yes it is true (!), are smarter than dogs. Yet we just stay scared and do not try to study dogs and understand what to do. We expect the dogs to change. Not us.
Kind of similar when dealing with investors and mentors. Not to compare them to dogs, the dog example is incidental. Point is it is incumbent on us to state our case so the investors and mentors understand it. The burden is not on them. It is on us.
Real case in point. A friend had (has) a product and lamented the fact that the investors just did not "get it" i.e. they could not see the uses (and resulting value) he could see. My point to him was to break it down into parts they could understand and call the rest as "future development" and introduce it and depending on their reaction, stop there. I told him that in my opinion most of us are driven by egos and have a hard time saying "I do not get it, please explain" and that an investor would more likely than not have the same frailty. Rather than try to understand they are likely to react by finding a reason why the idea will not succeed.  We therefore have to talk in their language. We adapt.

8) Be selective in choosing a mentor and even more selective in choosing an investor.

9) Do not accept mediocrity and more importantly do not accept that "it is the Indian way".
Question: Is your competition in the next 10kms, 100kms or 1000kms?
Answer: it is global. If you do not believe me, the next time you are stationary in traffic observe that an out-of-state economic migrant is selling you goods made in China. Some 20 years ago there were some 600 products on the so-called Reserve list. Today there are about 25. So your competition is global and you cannot compete globally by accepting mediocrity.

10) Social Capital (saw the below on the internet but did not note down source - apologies).
Question. Is a small business nothing but a small version of a big business?
Answer. No. A big business like Dow or J.P. Morgan is not a person. A small business is you. Your value systems and your biases.

11) Question. Which would you rate higher: Jugaad (Indian word that translates into improvisation) or Innovation?
Answer. Innovation. Jugaad is improvisation and has its place but is a band-aid (give example). Innovation is more long-lasting and better-value (give example).

12) Circle of Opportunity. Check out Gary Sinek's TED talk. Why, What, How. Always in that sequence whether you are building or selling your product/service.

13) Question. "I must know how to create an excellent business plan to be a successful entrepreneur." True or False?
False. while a tool that has its uses its link to performance is tenuous at best and to me unproven.
As an aside, it is a good means of evaluating the person who is presenting it. Have wild assumptions in there and you lose credibility instantly.

14) How do you get your first client(s) (in general, approach is product/service, market, and customer type dependent). As an aside, believe I got the first and sixth from some scholarly article, but do not remember which. Apologies to the author!
i) Be credible: before starting your firm (you are likely to sell to folks in your circle); during; and after (i.e. after-sales).
ii) know your offering well
iii) Solve a problem
iv) demonstrate value
v) Social capital - i.e. network, go to where your customers are either online or off.
vi) Find 'leverage customers" the type that will lead you to or influence more customers
vii) Give it for free - careful though .... only if it makes sense

(Source for this section: “On the structure and internal mechanisms of business incubator: A comparative case study” Ali Ahmad. Note: I did a decent amount of research on the subject and found this paper to be particularly good.)

Incubation is primarily relational in nature.
3 key relationships Incubation Manager (IM), Client (C) and Third Party.
Quality of incubation is dependent on "incubation clicks".

Positive incubation clicks
- shared awareness of gaps in knowledge, competencies and resources
- mutual willingness to engage in incubation activities
- recognise that IM can fill gap
- capacity of IM to commit sufficient time to implementing a breadth of activities and achieve the level of intensity needed for impact

Negative incubation clicks
- client's (over) confidence in personal activities
- view that IM is incompetent
- uncertainty as to type of business problems to bring to IM's attention

Ground rules help
- subscribe to community spirit
- adhere to standards of housekeeping
- adhere to standards for conducting business affairs
- consider the incubation centre a true stakeholder (not just a shareholder agreement).

Thank you.

Stay well. Stay true.