Ready, Set, Startup!
Date: Monday , November 01, 1999
For the past two years in a row, the per capita income of Indians in the US is the highest it has ever been. Our entrepreneurs are showing up in the Top 40 under 40 and the wealthiest 400 in the US lists. This is thanks to the efforts and dedication of people like Naveen Jain, CEO of Infospace.com; Sabeer Bhatia, founder of Hotmail; Vinod Khosla, partner with Kleiner Perkins Caufield & Byers; Vinita Gupta; Sanju Bansal; Kanwal Rekhi and others.
This Is the Time
The Web is expected to grow from 800 million pages to 2 billion by 2001; in no other generations are there likely to be so many opportunities for success in technology enterprises. This year the Internet has hosted an estimated 130 million users, a number expected to grow to 500 million by 2001. Seventeen million households are shopping online today, a tremendous amount expected to grow to 49 million by 2004. Whichever way you look at it, the numbers are staggering. Imagine the need for the people, software and infrastructure, in areas ranging from security to e-commerce to intranet publishing that all of this growth will create! And, who better than us Indians to leverage this opportunity? We are the people with (supposedly) the best combination of analytical/technical skills and business savvy.
VCs have told me that anyone with a halfway decent Internet idea and strong perseverance can do it. But, why remain “good” employees by helping other entrepreneurs make millions, staying content with above average raises and maybe some stock options? If we are truly the “best,” why aren’t we ruling the technology world yet? Is our weakness a lack of entrepreneurial spirit or marketing skills or, is it simply, a lack of guts?
How many of you know “Our Guy”? The prototypical Indian professional — full of ideas, dreaming about a high-tech startup. He is a well-respected employee in a technology company. He loves to watch high tech stocks and talks about them at every Indian gathering (dinner, cards and Antakshari). He makes predictions on exactly who is going to win and who won’t. He knows precisely why Yahoo wants to buy Excite and how it would impact AOL.
Our Guy stands on the platform watching all the trains of high-tech ideas go by and doesn’t have the guts to jump on board. This is frustrating for him, trapped in a vicious cycle. Ctrl-C, Ctrl-C, Ctrl-C. While there is no secret formula for success, here is some advice to help “Our Guy,” derived from personal experience, that may help break this vicious loop. These are hard lessons learned from mistakes, summarized as seven tips, which can push the Indian professional through the finish line.
1. Take a Little Risk. It is all about having a vision, the ability to see controlled dreams with open eyes and an awake mind. Once you know who you are and what you want in the short and long term, select an idea and go! We take pride in and sometimes overly enjoy the analysis process. The most dangerous thing to do in “Internet time” is to get paralysis by analysis. Don’t wait for the “perfect plan”; there is no such thing. The only way to find out if something really works is to try it. Remember, “An imperfect plan executed is significantly much better than a perfect plan executed poorly.” Being averse to risk will never make you a big-time, successful entrepreneur.
2. Think Big. Do the Right Thing. If you want to be successful, you must have guts and passion. Plan to take a significant share of the market and convey this plan to others succinctly and confidently. Focus on the reasons your plan will work, not why it may not.
Do not create a penny-pinching “Desi” company reputation. There is nothing wrong with creating a frugal culture that gets the value for money, but always be prepared to spend for the right reason. Focus on getting it done in a very short time. Tell your investor, “dollars are cheaper than Internet time.”
3. Keep it Simple. Your investors, employees, partners and customers must be able to understand and appreciate your idea. Most decision-makers are probably less technical than you and if your idea isn’t simple and concise, you will lose them. Your business idea must be presentable in a sentence or two.
4. Get the Funding. …And get it from the right people. While it may be difficult to give away part of your company, it is better to have a small part of a successful company then a large part of an unsuccessful company, especially if this is your first venture.
Having qualified investors forces you to think clear, stay focused and brings tremendous discipline to the company. Despite the “Vulture Capitalist” reputation, in my experience, most VCs respect, support and help competent CEOs. VCs are looking for a winning attitude with fearlessness. You have the same goal as them: increasing shareholder value.
Before you approach your investors, you should already have the beginning of a strong team. In my experience, the majority of funding decisions are based on the quality of the management in your company. If you are technical, find high quality business development and marketing people and vice versa.
Most VCs read your detailed business plan only to validate their decision. They are looking for strong leaders, an unfair advantage and a growth market. They want a simple articulation of your “value add” and confidence that you can build a solid organization and distribution channels.
Do not be defensive when you present to an investor. Most Indian entrepreneurs work very hard to make sure that their projections are credible; instead, focus on why these numbers are possible and how you plan to achieve them quickly.
5. Technology is less than 30 percent of any success. Focus and invest in selling the products and building the brand. Focus on the channels of distribution and partnerships; they will always pay off. Develop a plan to acquire a user base to generate sustainable and recurring revenue. Get on target when thinking about your audience, focus on what they need from you.
Do not wait to release the perfect product; instead, make sure the timing of the product release is perfect. It is okay to “ship and burn, launch and learn.” While in the long term a good technology will create a higher barrier to entry, it still remains less than 30 percent of the reasons why a “high tech” company is successful (look at one well-known Redmond giant).
6. Get the Right People. Technology and market trends will come and go, but a strong team with a winning attitude will sustain your business regardless of changing times. Invest in people whom you respect, who can be told where they need to go but not how to get there. Let business people lead versus “techies.” Get people from some of the top consulting firms and top business schools who are polished in presenting a concept. Do not tolerate mediocrity in your team. Start with a few good people, get funding and even more good people will want to join.
7. Have Fun. Nothing is more satisfying than a positive, energetic, ethical work environment. Build a culture that is energetic and motivated from day one. A fun work environment will be a stress reliever to the demanding nature of intense high-tech operations. Create a “non-Desi,” fun and open environment to avoid isolating your key contributors. If you treat all employees equally you will earn their respect for your leadership, focus, dedication and fairness (not just your IQ and “speed”).
Certainly, it takes a lot more than these seven suggestions to build a successful business. But, it’s all about starting with the right attitude, mindset and work style. You must have tenacity, passion and a sense of urgency. And above all, it is all about doing something, taking a risk.
The difference between “Our Guy” and Pierre Omidyar (eBay’s founder) is that while Our Guy knew that an Internet auction was a great idea before Pierre did, Pierre executed it! The result: Pierre owns eBay and “Our Guy” is still spending hours looking for the cheapest printer on eBay.
Imagine the best-case scenario of a successful IPO, and the worst case of looking for a job…again. Ask yourself, is it that bad? “Awake! Arise! Stop not until the goal is reached!” – Swami Vivekananda