Why starting up is not everyone's cup of tea, and points to ponder for wannabe entrepreneurs
Sun Jul 03, 2016
So, you want to be an entrepreneur? Great. So did Paritosh Sharma. In fact, he believed he was cut out for it. After completing a bachelor's of computer application (BCA) from Jagannath International Management School in New Delhi in 2006, Sharma joined Mindtree in Bengaluru as a test engineer. He quit after 11 months. Reason: he was inspired by a book written by Mindtree cofounder Subroto Bagchi — The High-Performance Entrepreneur: Golden Rules for Success in Today's World — to start his own venture. One of Bagchi's golden rules was to listen to one's heart.
Cut to 2016. Now 32, a much-chastened Sharma has made the shift from entrepreneurship to employment. He reckons that inspiration alone is not enough to survive the bloody terrains of the startup universe. Even perspiration is not enough, says the man who these days gets an adrenaline rush when he executes an idea to perfection for his employers. He still dreams, but his dreams are of a different kind: how to make it big in his job.
"I am an execution man, I can't run a company," confesses Sharma, who has had two failures as an entrepreneur. In 2011, he exited his maiden venture following irreconcilable differences with board members who owned a majority of the company. The second setback came in 2014 when Sharma had to down the shutters on HashTaag, a startup that crowdsourced opinions for big ideas, due to paucity of funds.
"Everybody can't become an entrepreneur," he shrugs, adding that one needs to be brutally honest in assessing oneself. Sharma joined Hero Mindmine as head of digital business earlier this month. The Gurgaon-based former entrepreneur also had employment stints with online fashion retailer Jabong and online payments solution provider PayUmoney between March 2014 and June 2016.
Do You Have It In You?
It's not that Sharma didn't try hard to make his ventures a success. He showed tenacity, discipline and confidence — traits needed to be an entrepreneur. But still something was missing: the ability to "accept failure and persevere", as TV Mohandas Pai, a former Infosys board member, puts it. While ordinary human beings may possess a smattering of such qualities, entrepreneurs have loads of it.
Entrepreneurs are a rare breed, explains Pai, who has turned angel investor and is founder of venture capital firm Aarin Capital. You should be able to ideate, have a risk-taking ability, plenty of passion, demonic energy and focus. "These are rare qualities, and few have it all," he adds. According to Pai, there are three hard-hitting questions one must ask before taking an entrepreneurial plunge: Do I have the risk-taking ability? Can I survive on water and fresh air? And can I stomach failure? "Well, look in the mirror and size yourself, it is a tough job," says Pai.
Amit Jain knows how tough it is. The cofounder of GirnarSoft, the parent company of auto portals CarDekho, Gaadi and ZigWheels, worked for eight years in large IT firms, including TCS, before taking the entrepreneurial plunge along with his brother, Anurag. The first foray was a disaster. Jewellerydeals, an online store targeted at the US market, had to shut down because of intense competition.
Next came EkKaDus.com, a virtual stockmarket that had an alluring proposition: invest Rs1 and earn 10 times your investment. This too did not work. Other subsequent failed ventures were ShopDekho.com, an ecommerce site, TweetsDekho.com, which aggregated celebrity tweets, and FutureDekho.com, a site on astrology. The turning point came in June 2007, when Jain cofounded GirnarSoft, an IT outsourcing firm from Jaipur.
A year later, CarDekho.com was born, a venture that established Jain as a successful entrepreneur. CarDekho has bagged $90 million in funding so far from investors such as Sequoia, Ratan Tata and Google Capital, has an employee count of over 3,000 and is operationally profitable, claims Jain.
What looks like a cakewalk now wasn't quite easy early on, especially for a bootstrapped company that got its first investment only in November 2013 — $15 million in a round led by Sequoia. So when Jain identifies "persistence and agility" as the top two qualities that an entrepreneur must possess, he knows exactly what he's talking about. After all, he persisted despite a string of failures, and he was agile enough to keep changing business ideas and models.
What's more, he learnt plenty of lessons from the previous flameouts. Perhaps the biggest lesson Jain learnt was the importance of improving consumer experience, something he put to good use at CarDekho. For instance, in 2015, the new and used car portal introduced 'Feel The Car', a unique online tool that gives a 360-degree view of the interior and exterior of a car and explains its features with videos. It even has car sounds (ignition, engine revving, horn) that allow users to have an immersive experience of a model before they even visit a showroom.
A lesson to be learnt from Jain's startup journey is that funding alone is not an enabler of success. After all, Jain bootstrapped GirnarSoft for six years before he got his first round of funding — for those six years he relied on funds from the software development division to gain scale and start up new ventures. "Not simply relying on funding from investors is the key to success," says Jain. Rahul Singh would agree.
The 45-year-old founder of Beer Cafe perhaps knows more about the value of every penny than most present-day entrepreneurs who have been splurging on investors' money. The seed capital for Singh's business came from mortgaging his house, exhausting his personal savings, which he had accumulated over a decade of his employment, and taking a personal loan at a high rate of interest.
"Financially, I had lost everything. Emotionally, it was very taxing," recalls Singh who was a failed entrepreneur for five years till he decided to open Beer Cafe in April 2012. Every night, the nagging thought of the bank seizing his home if he failed to repay haunted him. There were only two options: make one more attempt and try a little harder to make the startup work or go back to the corporate world. Singh chose the former. Entrepreneurs tend to be shameless optimists, which is why quitting is never an option.
"Pain is temporary, quitting lasts forever," says Singh, who has had a remarkable four-year run. The Gurgaon-based beer bar chain has raised Rs55 crore till now, has a headcount of over 600, claims to have clocked revenues of Rs100 crore in 2016 and to be profitable. Singh's message to wannabe entrepreneurs: "Think big, act small." "Take rapid baby steps rather than big jumps," he says.
Vipin Pathak might do well to heed that advice. A year-and-ahalf ago, Pathak cofounded Care24 in Mumbai, a home healthcare startup that has been on a tear, raising two rounds of funding so far from investors such as India Quotient and SAIF Partners.
For his part, Pathak believes he possesses the trait that he thinks is the most crucial for an entrepreneur: an unshakeable conviction in one's idea. He shares an anecdote to illustrate his selfbelief. While working on an idea of sending medical personnel to homes, Pathak was cautioned by all. "It's not only stupid but too risky" was what he was told by everyone, for many reasons, the biggest being an oversupply of such personnel.
However, Pathak went ahead. Today, Care24 helps more than 500 patients in Mumbai every day. "It's good to have crazy convictions," says Pathak, who worked at PricewaterhouseCoopers and Ernst & Young for over eight years before starting up. Perseverance too is a trait that Pathak is familiar with. During the early days of the startup, he banked on word-of-mouth publicity. Then he started distributing pamphlets to pharmacies to get customers.
Nothing worked for the first 45 days. Then he got his first customer who paid Rs200 for his services. The floodgates didn't quite open after that, although things started picking up. "You have to be a badger to keep fighting," he says. For entrepreneurs who have had trysts with failures, fighting and fighting back are par for the course. Consider, for instance, the journey of Vinay Singhal, who was a serial failure before cofounding a viral content startup, Wittyfeed, in Indore in September 2014. His first venture was Vatsana Tech, an IT services company to build websites in 2010.
Then came FollowMe247, a startup to bridge the communication gap between teachers and students without internet, apps or mobiles. This too didn't work. The third was perhaps badly christened, to begin with: thestupidstation.com, a visual content blog. It didn't prove to be the cleverest idea. The last failure was evrystry.com, a platform to publish content.
With the almost two-year-old Wittyfeed, Singhal may be onto his most successful venture yet. Since launch, it has had some 60 million unique visitors and 250 million page views per month. "Our cash flow is positive, and our revenue was Rs 30 crore for 2015-16," he adds. Singhal believes that for entrepreneurial success an imperative is a great team. Which means "having excellent man-management skills helps".
Last year, when a big advertising network blocked the payment of Wittyfeed, mistaking it for a spammer, Singhal ran out of money to pay salaries. Surprisingly, employees offered their savings to keep the company running. They even worked for three months without pay. "They could have easily deserted a sinking ship," says Singhal, adding that they believed in the company. "It's not easy to hire such employees."
Ask him the reasons for the ongoing bloodletting in the startup ecosystem, and he is quick to pinpoint the reason for the pain: most are in the business to get funded. "That's not the right reason to start a business," he says. Peter Thiel, American entrepreneur cum venture capitalist who cofounded PayPal, hit the nail on the head when he said: "I'm nervous about people who say they want to be an entrepreneur.
That's like saying I want to be rich or I want to be famous."
So what are the right reasons for becoming an entrepreneur? The answer is simple and may sound even trite, but it may be the best one ever; as entrepreneur Guy Kawasaki once put it: "The best reason to start an organisation is to make meaning — to create a product or service to make the world a better place."
Having the right reason, however, doesn't guarantee a smooth ride. Amit Bhartiya, an employee for 16 years who worked in four startups before turning entrepreneur in May 2015, quotes Tesla CEO Elon Musk to illustrate the perils: "Being an entrepreneur is like eating glass and staring into the abyss of death." Curiously, it was Bhartiya's last stint at a failed grocery venture, LocalBanya, that prodded him to turn entrepreneur; he cofounded DoSeat in Mumbai, an online marketplace for certified motorbikes. "Why not own the glory or the fall entirely?" he asks.
That may be advice that most wannabe entrepreneurs should take. Then again Bhartiya may be exhibiting a trait that's pretty useful in the world of entrepreneurship: the ability to think unconventionally and not like the rest of the herd.
Entrepreneur or Employee?
Take this test to find out what you would be best at
You have been given a task to perform, which people say you only have a 20% chance of success. The promised payback, though, is mouthwatering. You choose to:
A: Let it go B: Decide to test the waters, but not go the whole hog C: Decide to plunge headlong and take your chances
You've got to meet a deadline in 24 hours. Which of these three options would you choose:
A: Seek an extension to the deadline B: Work till 7 pm and then decide to pick it up early next morning C: Work through the night till the task is complete
You consider yourself to be a person who is:
A: Well aware of one's weaknesses and is striving to improve B: Aware of one's strengths as well as weaknesses C: Supremely confident of one's strengths and don't think about one's weaknesses
You apply for an entrance examination but don't make it to the final list. How would you react?
A: Take the failure to heart, and withdraw into your cocoon B: Curse the education system, as you are confident that you had fared well C: Decide to write the exam again the following year
Your idea of work-life balance is:
A: Working 9 to 5, and then hitting the club B: Working 10 hours a day for five days, and letting your hair down on weekends C: Work-life balance is a myth
Your goal in life is:
A: Earn well to take care of the family, and save for a peaceful retirement B: Have multiple houses and cars, investments in multibagger stocks and crores in insurance C: To be remembered for building something from scratch
Your ideal way of earning a living would be to: A: Be very good at one skill, and average at a few others so that you can have multiple revenue streams B: Pursue a job and further education at the same time in the hope of bagging something lucrative in future C: Be very good at one skill, and keep the focus on getting better at it
You see people smarter than you at your workplace. Your reaction is to: A: Compare and feel insecure B: Believe you are better or at least as good as them C: Accept they are smarter, and think about the possibilities if you were their boss
You have been asked to do a task that takes you out of your comfort zone. Your reaction would be: A: I wasn't hired for this, so can't do it B: Give me a raise and I will give it a shot C: Relish the prospect
You are heading a team that loses in a business competition. Your reaction would be:
A: Look for weak links in the team to pin the blame on B: Spare the team, and blame the organisers and format C: Take the onus for the loss
For every C, give yourself 10 points, 7 points for the Bs and 5 for the As
85 and over: You have it in you to start up - the focus, risk-taking ability, fire in the belly and ability to inspire; 60-84: You have some entrepreneurial skills, but that may still not be enough; take this test after a few months and check your score again; Under 60: Stick to that job