Entrepreneur Population growing

Courtesy: TOI


With a great job at Infosys that offered a long-term relocation to the UK, life couldn’t have gotten rosier for Santosh Rao. But Rao (29) gave it all up for an idea that caught his fancy while at B-school — to offer cost effective web portals for educational institutions. He quit Infosys last October to set up Vrixx Education Solutions in February and was soon joined by fellow Infoscian Arvind Singh (27). Today, they have a basement office in Indiranagar with three employees — all in their 20s. “We’re not very cash rich and projects are trickling in by and by. But it doesn’t seem like work to Arvind or me. This is what we enjoy doing,” says the IIM-Kolkata grad. Like Rao, there are an increasing number of young professionals — mostly in their 20s — who’re quitting cushy jobs for the challenge of entrepreneurship. “There is no official record of the number of entrepreneurs in the country, so there is no way one can get exact figures on the increase of entrepreneurs. However, there are many indicators that one can look at to see the increase in entrepreneurs,” says Laura Parkin, executive director of National Entrepreneurship Network, a body that seeks to promote entrepreneurship by bringing together students and entrepreneurs. “For one, there has been a heightened participation of students in NEN — from 500 five years ago to 55,000 today. Another is the number of entrepreneurship societies that have been formed.” Clubs like Kickstart, Mobile Mondays, Proto.in and Open Coffee Club (OCC) have opened in the past five years across the country and the membership numbers in each city run into hundreds. “Out of the 50 core entrepreneurial members in our club, at least 40% are below or around 30,” says Amarinder Singh, co-ordinator of OCC Bangalore. “There is also great interest from students and professionals who come in wondering if they’re up to taking the plunge.” Venture capital companies too have noticed a marked increase in projects that flow in. “From about 10 projects in a month, we now look at around 50 every month. And although there has been a marked interest in entrepreneurship across board, there is certainly much more buzz from the age group of people in their early 30s,” says Kanwaljit Singh, MD of Helion Venture Partners. VC companies estimate that there has been almost 40% increase in young professionals who have quit their jobs to be their own bosses. “I met an IIT-Delhi grad a couple of weeks ago who came to me with a project. He told me that 80% of his batchmates are now entrepreneurs,” says Anjana Vivek, founder of VentureBean Consulting. Delhi, Mumbai and Bangalore are leading the entrepreneur brat pack, with Pune and Hyderabad catching up. In Bangalore, most of the entrepreneurs are in the technology, internet, mobile and telecom space, while Chennai sees more action in the service and software product segment. Mumbai’s entrepreneurs gravitate towards internet companies and non-technology ventures like retail, particularly F&B retail. “At least 40% of today’s entrepreneurs in the mobile and internet space is dominated by people in their late 20s and early 30s. Mobile related applications see huge interest in India because of the enormous market size,” says T C Meenakshisundaram, MD of venture capital firm IDG Ventures India. “The quality of deals has gone up. We now see more organized projects, greater products and better business models.” It’s mostly corporate executives — with average experience of eight to ten years — from IT services companies like Infosys, Wipro and TCS who are turning into entrepreneurs. “But I would like to see more people from companies like Google, Yahoo, Microsoft and Nokia. We need more product-based companies rather than service companies,” says Meenakshisundaram. Yet to mature However, entrepreneurship and the venture capital (VC) community in India is not a mature segment. “Most start ups lack organizational and managerial skills. They want to start their business but lack professional management. When a VC comes in, the young guys find it hard to share their space with someone senior from the industry,” says Harish Gandhi, executive director of Canaan Partners. “Along with our funding we bring in professional management, which the start ups can’t always handle.” Murugavel Janakiraman, CEO of Consim Info (formerly Bharat Matrimony), reminisces his initial days of VC participation in 2006 with a smile. “I was not used to answering anyone for the eight years that I ran the company alone. And suddenly you find yourself facing a board of directors,” he recalls. “It’s not easy. But you learn to appreciate their experience, which enables them to give you great advice in times of crisis.” The network and contact base of the more experienced members too is an advantage that young entrepreneurs take time to appreciate. VCs feel that most start up teams are either an all-techie bunch without much business acumen or are a marketing team without much knowledge or understanding of technology. “To find a complete team is the biggest challenge with new companies. I would rather fund a great team with a good idea than a good team with a great idea. A great team can quickly learn the market nuances that make a successful venture,” says Meenakshisundaram. When Sunil Maheshwari (33) and his partner Lekh Joshi (32) floated Mango Technologies two years ago, the biggest challenge was to get funds to start their venture. The company provides mobile applications platform for low cost devices targeting emerging markets. “Most of the venture capital firms are US-based. Their mindset is different so while funding they think in terms of the US business environment,” says Maheshwari. “They need to understand that the way business functions here is totally different. Entrepreneurs who have only lived in India and not in the US, display a cultural difference in their estimation of money required for a venture and utilisation of funds. Getting angel funding is not difficult in the US but in India it’s not easy to get even Rs 20 lakh to 30 lakh.” Maheshwari faced challenges in accessing seed money to start the company and do the initial setup. “The product market is a longterm game and you need to understand that every product may not be successful but returns are also very high for a successful product,” he says. “Seed money was a constraint, but all of us at Mango have really enjoyed going through this phase. It gave us the strength to save every rupee and give our best in a constrained environment.” At the end, nothing succeeds like success. “The concept of entrepreneurship has been romanticised a lot. A lot of people jump in thinking it’s ‘cool’. But it’s a lot of hard work and it takes a strong team to stick it out,” says Rao. MORE STORIES 1 Praveen Jain (29) quit KPMG to start E-Media Genie — a retail marketing firm to install LCD screens in pharmacies — in August 2007 with childhood friend Naresh Kothari (29) and already has 100 pharmacies as clients. 2 Anand (30) quit Amazon to join hands with Aparna Sharma (28) and Prashant Gyan (25), both of whom quit Oracle, to start Kuliza Technologies, an offshore product development firm in September 2006. Today, they have 40 people on payroll and generate profits. 3 Jay Gupta (33) plunged straight into retail after college and four years ago started discount store The Loot on banker support. Today he runs 30 stores in 15 cities. 4 Prodipto Ghosh (35) quit KPMG and started Math sQuotient, an operation consulting services firm, in 2004 and has Tata Tele Services and Siemens on his client list.

Corporate Governance: Satyam Story

Leaders redefine entrepreneurship: Employee Attrition

Courtesy: The Economic Times

This article speaks about the ability of an entrepreneur as leader.
Dwight D Eisenhower, the 34th US President and Supreme Commander of the Allied Forces in World War II, described leadership as ‘the art of getting someone else to do something you want done because he wants to do it’.

For an entrepreneur who has a startup the most difficult challenge is to retain employees. If they are true leaders, they will successful is inspiring their employees with their vision.
Here are a few extracts from the article posted on Economic Times.

Leadership is a blend of several qualities; it’s a role that demands multi-tasking. That’s exactly what a successful entrepreneur does.

If entrepreneurship is about utilising a market opportunity to create a business, leadership is about building the right team and getting it involved in achieving the business goals.

A good leader is able to take his team along with him; it is not so much about people management as it is about understanding people and inspiring them. Organisational structures are necessary to facilitate smooth operations. But they are good enough only as long as they work as enablers and not become impediments. Good leaders understand this and also recognise the importance of providing a healthy work environment where employees can express their views and ideas irrespective of their position in the organisational structure. Good leaders are good listeners who pay attention to what their employees say.

Featured on Money Today- An Indis Today group magazine

I am happy to announce that I have been featured in an article called "Dad likes deposits, I like equities" published in the Money Today magazine.

"I do not liquidate investments frequently, but some stocks are deliberately picked up with a target price in mind. Once it is achieved, I book profits. This ensures that my overall strategy is not disturbed,” says Nischala Agnihotri. No, she isn’t a greying market veteran. She’s a 21-year-old marketing associate based in Bengaluru.
There are many others like Agnihotri—young investors who not only understand that equities give high returns, but also how the stock market works. They know when to get in, when to get out and what to buy. “I am an investor not a trader,” says 25-year-old CJ Sathya, a Hyderabad-based business development manager. Most young investors echo this sentiment.
They are not interested in day trading or making a bundle during temporary market swings. They know that the longer you hold equity investments, higher are the returns. The majority of the investors we spoke to make careful bets that will yield rich rewards in the future. A 40-year-old might leave the decision to a financial planner.
But not these young people. For instance, 24-year-old Pramod HS, a Bengaluru-based software engineer, has been investing since he was 22 and relies on his judgement alone. “I discuss the market buzz with my broker. But the final decision depends on the calculations in my notepad,” he says. What are the parameters of their choice?
Sandeep Upadhyay, Delhi, assistant managerAge: 27Income: Rs 38,000 a monthAge at first investment: 25First investment: Tech Mahindra IPOInvesting strategy now: Invests nearly 50% of his income. Invests in stocks every month: large caps for long term and mid- and small-caps for short term“I started dabbling in stocks in college. The experience is very useful now”
CJ Sathya, Hyderabad, business development managerAge: 25Income: Rs 40,000 a monthAge at first investment: 23First investment: Equity-linked saving schemesInvesting strategy now: First meets investment target for the month and spends the rest. All investments are in equities. Started with equity funds, then large-cap stocks and now invests in mid- and small-cap stocks Equity Corpus» Rs 1.7 lakh in mutual funds and shares“I realise that I have a high risk appetite and want to exploit it fully”
Pramod HS, Bengaluru, software engineerAge: 24Income: Rs 32,000 a monthAge at first investment: 22First investment: Birla Long-Term Advantage FundInvesting strategy now: Invests everything he saves. Does elaborate analysis of each stock and fund to achieve investing targets“Only if there is no opportunity in the markets do I have some money in my savings account. Else, everything is invested”"For stocks, I consider the sales growth of the company for the past four years, the current price to earnings ratio, comparison of the stock price movement with its average and a few other figures of the company’s order book. Only when they conform to my criteria do I invest in the stock,” says Pramod. Like many of his contemporaries, Pramod understands capital markets and puts this knowledge to good use.
Delhi-based assistant manager with Bharti Airtel, Sandeep Upadhyay, 27, started investing with Tech Mahindra’s IPO. “I invested about Rs 10,000 and it has grown about eight times since then,” he says. Upadhyay keeps an eye on high-growth sectors and invests in companies that have a line-up of good projects. In addition, he does some technical analysis to determine a stock’s current price evaluation. “I compare the figures to other companies in the sector and then make a final choice,” he explains.
This expertise is not restricted to investing directly in equities. Most people invest through mutual funds because they do not understand the way the market works. But these young investors use mutual funds in a scientific manner. “The first consideration is the mutual fund’s objective. Once I zero in on the funds that have a goal consistent to mine, I compare their returns in the past five-six years. The record of the asset management company and the fund manager’s achievements are next on my checklist. Finally, I look at the fund’s portfolio, especially the proportion of investments to specific sectors before making the final decision,” says Dalal.
These parameters are not inflexible. Young investors do make an exception for gut instinct. Says Pramod: “I believe that the capital goods sector will earn high revenues in the coming years. So though Bhel had a high PE ratio of 34, I still bought it.” In other cases, cold logic dictates the choice of investment. So even though Upadhyay fancies mid- and small-cap companies, he invests in large-cap stocks for better diversification and lower risk.The passion for equities is carried on even when buying insurance or when planning tax tax saving investments. When it comes to insurance, they pick unit-linked insurance plans rather than pure risk cover. And equity linked savings schemes (ELSS) are all the rage as tax-planning tools.
What’s more, almost 90% of the young investors we spoke to are eager to learn about the even riskier derivatives market. Agnihotri has already started to read about futures and options in a bid to accelerate her portfolio’s growth. Not that she isn’t aware of the high risks involved. But who’s afraid? Certainly not these informed investors who take calculated risks.
WHAT YOUTH CONSIDER BEFORE INVESTINGStocks
Sector growth Better prospects mean higher stock prices in future
Corporate earnings The higher, the better. Profits should be consistently high, indicating sustained growth
Price evaluations A high price to earnings ratio makes stocks less attractiveGovernment policies If they favour a sector, better for companies operating in it

Design Entrepreneurs

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