Thursday, November 19, 2009
just the way it is important for every entrepreneur to be unreasonably optimisitc about his biz, it is equally important to understand that sometimes even with the best of resources and efforts, the whole biz may fall by the wayside. to me, bankruptcy is as much written in blood as an entrepreneur's passion is. when you do the biz plan, the sub-text here is that if any of the assumptions go wrong, the tasks delineated may not lead to the milestones, and if milestones are not met, there will be a resource crunch, and if there is a resource crunch, the biz may come a cropper.
i do think it is the job of the incubator to keep the entrepreneur constantly grounded to this unassailable fact. not so it spooks the entrepreneur but impresses upon him time and again that he has to demonstrate as much passion for implementing the plan as he did for ideating it.
Thursday, November 12, 2009
once you have successfully built the biz, it may sound romantic to say that you could do a lot of things because you didn't have money, but the truth is having money, if not all of it, atleast some of it, particularly in the early stages, either during product development stage or going-to-get-your-first-customer stage, ensures two things, one that you don't abandon the thought of becoming an entrepreneur and two that you do direct constructive energy on task at hand.
a good incubator should provide pre-seed/seed capital. unfortunately no incubator does this and even in international conferences, i have heard engineering professors from ivy league schools lament that they are not able to encourage entrepreneurship because the institution does not have funding. what use is an incubator without seed funding ?
in the incubators that i have set up at PES School of Engineering and New Horizon College of Engineering, the respective managements have committed a fund ear-marked for this purpose. This is a good way to start. going forward, the fund can be made into a sizeable one by leveraging alumni networks, international agencies that are interested in a foot print in india for encouraging entrepreneurship, international agencies specifically interested in the clean-tech space, funds that are set up only to encourage enterprises which have high and deep impact across the fabric of indian society, government grants, etc.
Monday, November 9, 2009
it is in the incubator that the entrepreneur learns how to see the bigger picture. it is here that he learns that there are other stories too, besides his own. and it becomes the responsibilty of the mentor to make him acquire this sense of perspective.
entrepreneurs are notoriously here-and-the-now people. rarely do they ponder over future ramifications. if a solution can mitigate a particular problem today, go for it, tomorrow will take care of itself!! this is the most common mind-set.
time and again i come across entrepreneurs who are in a hurry to distribute equity to employees because the way they see it, there is no imminent cash flow by way of payroll!! i'm always appalled by this short-sighted approach and shudder every time an entrepreneur comes to me with this proposal.
like i said a mentor is not just must have but can't not have.
unfortunately the association of entrepreneurs with heroism has become banal in the minds of non-entrepreneurs, sometimes even in the minds of entrepreneurs. i think it is very important for entrepreneurs to believe that they are the magical thinkers, the heroes, like prometheus who stole fire from the gods.
caught in the rigours of building the biz, many entrepreneurs give up on their madness and begin to live phantom lives and i believe it is the job of the incubator to make sure that this does not happen. only if the entrepreneur believes in himself can he make the world believe in him. however banal it sounds, he has to internalise that he is the hero in his script.
Saturday, November 7, 2009
an incubator is one which hand-holds the entrepreneur to get his ideas off the drawing board into the market place. which means pretty much every single step, all the way.
a lawyer for incorporating the company, filing for patent, and drawing up the necessary contracts for biz partners, customers and investors;
a chartered accountant for managing the books of accounts;
partners who may be necessary for developing the product ;
an HR company for providing the right team ;
biz partners for sourcing the components ;
market specialists for reaching the product to the market place ;
communication experts for articulating the message to the market ;
investors for funding it all ;
and most important of all, mentors who not only make the above connections possible but also make sure that entrepreneurs show the same passion for execution as they did for ideation.
I then showed this slide and asked people what it represented. it was pretty much as i expected. no one knew. i would have been really surprised if someone had said i was talking about an incubator. and with that i rest my case.
no more validation is necessary that incubators in india suck.to me the three most important components of an incubator are mentorship, seed/pre seed capital and real estate. and necessarily in that order.many educational institutions comply on the real estate bit. they give work stations, computers with internet and telephone. many of them charge a rental for it.
no one provides capital. many entrepreneurs need some money even at the product development stage. not everyone is able to bootstrap. a good incubator should provide this. In Bangalore, we have set up incubators at PES School of Engineering and New Horizon College of Engineering and the respective managements have committed funds for this purpose.
many of them provide some form of mentorship but it's way below what's actually required. mentorship is about bridging the experience gap. today more and more youngsters are becoming entrepreneurs right out of engineering and management schools. they have no exposure to how organizations function, so obviously they have no clue how to build organizations that function effectively. this is where mentorship plays a crucial role.
mentorship is also about networking. as a young entrepreneur, the only thing he has going for him is the twinkle in his eye, the passion in his heart and the song on his lips. he needs someone who can open doors for him. he needs someone to play interference that he needs to be taken seriously.
mentorship is about knowledge. ask any entrepreneur whether he knows how to build the biz around his idea. and the answer will be no. right from writing the biz plan, incorporating the company, filing for patent, hiring the right team, going to the market, fully armed - doing all the right things at the right time,- mentors are a must have. not just good to have.
Friday, November 6, 2009
as always, loads and loads of exciting things both on the teaching front as well as on the mentoring front.
like i said in my last blog, i was mentoring Solkar Solar, Chennai, as part of the New Ventures India initiative. it's an interesting concept , they shortlist several companies after a rigorous process of due diligence, assign a mentor from the industry, who will hand-hold the company for the next eight weeks and come up with a robust biz plan which will be pitched to the investor comunity at the end of the eight week period.
solkar was assigned to me for mentorship.
ragunathan who's a first generation entrepreneur started solkar 25 years ago as a project for his Master's at IIT-Madras, way before solar was even thought of as a viable industry. up until two years ago he had a good run because there were government subsidies and government aid and he built an amazing bouquet of products and services and an incredible name for himself.
in the last two years, subsidies and aid have become moribund and he has had to reinvent himself to compete in the open market.
ragu is your quintessential inventor-entrepreneur. even to this day, he designs all his products.
for me this whole experience was exhilarating as managing ragu was a bigger challenge than managing his and his company's re-invention.
ragu has practically been the prime mover in the industry and as such has written the script pretty much at both State and Centre in renewable and non-conventional energy. he has tremendous brand equity and every cell in his six foot plus frame reverberates with energy (pun intended).
in his head ragu and solkar are the same. like all entrepreneurs, even after 25 years, he refuses to let go of solkar to breathe independently. he sees it as an extension of his persona. which is all very well except that at some point you need to be able to say that what i can give it is not enough.
my challenge was how do i manage ragu's passion for the benefit of solkar? because believe you me, he has no life beyond solkar and i wanted to harness that passion and energy positively for the growth of the company. when you have an entrepreneur who is egoistic, possessive and passionate, how do you mentor him? how do you tell him where he has gone wrong?
and this was my biggest learning. that you dont tell him where he has gone wrong. because if you do you incur his wrath!!! and that becomes a show-stopper. actually you dont need to tell him.
so what do you do? you do the trapeze act :) what i learnt to do was get ragu to focus only on the future. we rarely spoke of the past. the good, the bad, the ugly and the indifferent. we almost managed to treat solkar as a new start-up without legacy costs. result, ragu put together a very vibrant biz plan, we have very fruitful final stage discussion with VC's currently, and we have ragu in a completely transformed mode : from a i-me-myself entrepreneur to a builder of professional, catalytic, energising management team.
and my take-away from this whole experience were some very interesting insights into the do's and dont's of a mentor :
- identify with the mentee and his company. you have to impress upon the mentee that both of you are on the same side. so i learnt to say, our company. i never said your company.
- dont do post-mortem. no finger-pointing saying you did wrong up until now, because the sub-text then is up until now you were an idiot, now that you have me i will wave my magic wand and all problems will disappear :) NO NO NO!!!
- entrepreneur is already likely to be very opinonated, you dont add to the mess by being opinionated. your personal opinions and thoughts have no place in the mentorship equation. your advice has to be purely situational, contextual, not the baggage that you have come with. because if you do that, the poor entrepreneur will have to battle your baggage in addition to his own !!
- mentors cant have fragile egos. mentors cant say if you dont do what i ask you to do, i will stop mentoring you. i had a mentee who would patiently listen to me, would never argue when i gave him my reasons, and would go and do exactly the opposite. and the results would be at variance with his expecation and then he'd come back to me saying, sorry nandini, i didn't listen to you and now i have messed up, help me sort it out please. with him i learnt to be forgiving and never to tell him i told you so!!!because for god's sake every entrepreneur has the right to make his mistakes and learn from them.
- it follows from here that mentors dont know everything. neither they should think they do nor should their mentees think they do. both mentor and mentee are work in progress. it should be a journey of like-minded pilgrims, not Buddha and his disciples!!
- it is very important to assure the entrepreneur that you have no personal agenda. neither monetary nor psychological. it is this that inspires trust, funnily enough.
even as i write this, it occurs to me that mentoring is a lot like parenting. it's built on trust, and by trust i dont simply mean dependency but also honesty.
you should know what line neither of you can cross.
you should learn to balance your opinion and mentee's opinion with the demands of the situation.
you should learn to step back, watch him make mistakes and remain nonchalant even as he gets ready to dust and pick himself up and continue onward.
you should be prepared to learn alongside him, there may be times when there is a role-reversal.
and most important, both of you should know all the time that his well-being is sacrosanct to you.
i've learnt one thing : parenting and mentoring have made me a better person.