Beginning a Successful Entrepreneurial Journey
Date: Wednesday , August 01, 2012
Happiest Minds was launched in August, 2011 by Ashok Soota and a team of industry experts, with the mission to create Happiest People and Happiest Customers. Happiest Minds is a next gen IT solutions & services company, enabling organizations to capture the business benefits of emerging technologies of cloud computing, social media, mobility solutions, business intelligence, analytics and unified communications. Happiest Minds secured a $45 million Series A funding led by Canaan Partners, Intel Capital, Ashok Soota and supported by its founders.
How to begin a successful entrepreneurial journey? How to transform an idea into a successful enterprise? Most businesses are founded on the basis of an idea. The idea could be a new product, a new service, a new business model, or capitalizing on new technologies. As in case of Happiest Minds the technology we focus on is cloud, mobility, social media and analytics. There has to be something new in the sense that it triggers an opportunity.
David Thomson in his book "Blueprint to a Billion" says that probability of an idea being converted into a business which reaches $1 billion is one in 20,000 for global companies. Even if we were to define success much more moderately, for example- the ability to do a successful public listing, the probability would still be less than one in 1000. So you can see there are challenges which have to be overcome as you start.
There are five important factors for success, a few things to avoid and things to focus on.
Factors for Success:
Soundness of the entry strategy: It includes the ability to avoid head-on clash with larger incumbents or, while you're doing so to exploit their weaknesses, you have to be clear that even the largest players have their own weaknesses. There is a need to create an ecosystem/partners to multiply your strength even as you compete with larger entities in the market.
Organization building: This is the most fundamental thing but still would come after strategy. It includes building your team, sharing wealth, creating an organization bound by a shared 'Vision & Values' and an organization which is run with the highest standards of corporate governance. In our case we have gone beyond that and said "We have to focus on the happiness of the team". We believe, to quote Aristotle "the purpose of our existence is really happiness." And therefore we are working towards creating the happiest organization.
Third important thing is to focus on cash flows rather than profits. In a start up this becomes even more important. In fact I would like to define the terminology. The concept of "Time to next round". How long your money is going to last? When will you do your next round? And if you look at all your decisions in that context you will realize how important it is to stretch your money because if you can defer your next round and get a higher valuation you will restrict your equity dilution.
Identify your weakest links: One of the challenges in running a business is we get so focused in our strengths, which we should be, but at the same time any one area which is not functioning well comes in the way to your path to success. It is good to do some introspection in the areas where we need help. It is important to build on your core competencies but also to know you are as strong as your weakest link.
Timing is key: A CEO has to be the conductor of a symphony. Timing may seem like luck, but you can also play a huge part in making your luck. For example, you have to ask yourself why so many companies collapsed during the dotcom bust. Timing-wise they thought the boom would last forever, which is why starting during a slowdown in an uncertain economy like the global economy, is a good thing because you don't get caught up with irrational enthusiasm and do your investments more cautiously.
3 things to avoid: Business is about risks. In the process don't bet the company. It is very easy to do that in a start up and very easy to do that even in a larger entity. So take your risks, realize that everything will not succeed but don't bet the company.
Don't ever use inappropriate means to get ahead. This is very fundamental. There has to be a philosophy in life – "If you achieve success through inappropriate means, it is not worthwhile and you can't even call it success."
Thirdly, in an entrepreneurial setup avoid 'getting carried away with early successes or disappointment with early failures.' You have to realize that neither good nor bad times last forever.
Things to focus on: You must learn from your success more than your failure. This is again about how you deal with failure. You don't want to repeat your mistakes. Focus on your success, celebrate your success, as it increases passion, increases energy, commitment and will, to succeed. A research study done at Wisconsin University shows that when you focus on what you do well, it leads to better results rather than always looking at what went wrong. I would have made at least six mistakes costing 500 thousand to $ 2million! I treated these as the cost of building two successful IT companies of about $ 400 mn each which generated enormous shareholder value.
As you select your team, take time to get the right person. In the beginning you may not have everybody you need. Multiplex if required, but don't hire persons you are doubtful about. Opportunity cost of 'wrong people' decisions is much higher than just their cost and it can set you back by months. In Wipro and MindTree, we got the wrong UK head the first time. It took us a few million dollars and two years to recover! But this time I am confident to have it right first time around. It is important to get the selection of key people right.
Thirdly, convert every problem into an opportunity. Some problems may come through external shocks which are unavoidable due to the volatility in the world. Positive mindset is important. What may seem as a problem in the first instance, when tackled in the right way, can become an opportunity.
Lastly, 'doing more with less.' In an entrepreneurial mode, you have limited resources and you have to learn to do more with less and use your limited resources efficiently.
(Based on the Keynote delivered at SiliconIndia Startup City on June 2, 2012 in Bangalore.)