“I want to become an entrepreneur”, “I want to disrupt”, “do the new”, “break rules”…All of us in the business world have surely heard this and in recent times, ever so often. Not just heard, but now also know, of a significant number of people who acted on this intent, took the plunge and became an entrepreneur. All types of people — kids just out of school, professionals from big corporates/ MNCs, professionals from startups breaking out and starting up.
It is exciting to witness this wave, to be in the midst of this value creation. Truly good for our country. But in the midst of this elation, the clouds of apprehension creep across the bright blue sky of opportunity. Is it really easy to be an entrepreneur in today’s world? A world of fast changing markets, fast changing competition, fast changing capital flows, well fast changing — Period.
One could argue that it was never easy, so what ‘s new? In fact, there is “so much opportunity” today in India than ever was. So, what’s this fuss all about? So here are some of the fear factors.
Today competition can intensify oh, so rapidly, hit you from unexpected corners with more capital, better technology, better product, better price etc. etc. The ability to replicate a winning proposition is so easy today that the entrepreneur is having to deal with a much larger number of competitors. The classical “first mover advantage” is more often than not, morphing into a “first mover disadvantage.” So, now the entrepreneur has to go through the create-build-disrupt yourself cycle in an excruciatingly short time frame.
The axiom of “great people make great companies” is as valid now as it was earlier. But in today’s gold rush, entrepreneurs have to deal with a huge scarcity of good and relevant talent. This scarcity implies that the entrepreneur has to be a superlative people person and can no longer rely on “I am your employer so do as I say”. She/he has to be a people magnet so as to attract, has to have super clarity on roles, compensation, etc. so as to retain and have the courage to delegate and move on, so as to grow. All of the above was true earlier too, but today, the need has magnified exponentially.
Raising capital is a totally different ball game today with companies having to raise large amounts of capital much earlier in their lifecycle. With the attendant issues of: valuation highs and lows, multiple investors in multiple rounds, managing expectations across types of investors and dealing with the uncertainty of the next round. All this, of course, if the entrepreneur is “lucky to raise money”. And God forbid, if a less deserving competitor manages to raise more capital much earlier! Capital raising strategy has become as crucial as the business strategy, often times more, to ensure survival.
So it is tougher, more complex and more uncertain today. But what is also true today is that entrepreneurs are very competent, adaptive and nimble. If they can heighten their awareness of their operating environment, be more aware of the endemic risks in their business and accordingly attune their strategy, the number of successful entrepreneurs is sure to rise.
Guest Author
The author is senior managing director at VC firm New Enterprise Associates
