The real problems of grass root entrepreneurship

I have been away from this page for a fairly long time, and trust me, its not because I didnt want to come back. Its just been crazy this past month or so. The Red Herring Global Top 100, took me for the first time to the US, and I got to understand exactly why the Silicon Valley is a hotbed for innovation and entrepreneurship. To drive a convertible mustang on Highway 101 to Vegas is another world experience. Thanks Mr. GPS inventor! I could go on – but this post is not about the US or Vegas. Its about the learning that I had at the RH Global 100, becoming a finalist at the Mobile Premier Awards and more recently at Proto.in. I will present here the key issues that are being faced by entrepreneurs in building businesses (as I see them at the grass root level) + I will mention one specific Idea that I came across (and the reason I put it here).

The real problems faced by Entrepreneurs in India: In order of importance are

a. Gathering the right team: At the IAN discussion at Proto – 75% of the questions were about the team (maybe because thats the single most important thing that investors look at). It struck me that people become entrepreneurs – and they dont really even know what type of a team member do they require. Sutra HR does a good job of helping you find the right guys. Not sure if they can help you identify what talent you require though. Jay and I have had some discussions – and their new product is something that I would use (again).

b. Pitching it right: I met some incredibly brilliant guys who have some really cool stuff happening – but I had to dive into what they were saying to figure out their business. One advise that I would like to give is to keep practising the pitch. To customer one – x pitch (30 secs). To customer two – y pitch (40 secs). To investor – z pitch (60 secs). Remember – before you pitch anything, know the pain point / sweet spot of the person you are pitching to, and focus ONLY on that. Not on YOUR product – but his sweet spot. If you have a demo – dive into that and let your product do the talking. <— this is relevant to the last part of this post

c. Knowing what to ask, and having the balls to ask it: I came across innumerable entrepreneurs who wanted to ask some hard questions – to whatever their audience was, but very quickly fell into the ‘community and validation trap’, where you tend to ask what everyone else also wants an answer to, and frankly you already know the answers to. ‘If I dont have a tech guy in my team for a web based business – is it ok?’ (errr.. NO) , ‘We are two graduates and got rejected from a bplan competition because we didnt have relevant experience – is that important?’ (errr.. duh), and so on are about 60% of the questions being asked. The harder questions like ‘How many startups have YOU invested in which were a napkin idea’, or ‘Whats your typical investment ticket size’ will tell you more relevant stuff about the investor you are talking to, and place you as an equal to him rather than you being subservient and asking for validation from him

d. Understanding the difference between a fundable business vs. I want my website funded: This one has a link to all the above. A fundable business (depending on the stage) would to my mind be one that has put together the building blocks of a business. Forget tech, forget product. A business. Management, Sales, Marketing, Finance, Operations, Logistics, Customer service – or whatever it is that your business requires. Websites dont get funding – businesses do.

e. Access to capital: There is capital out there. We all know it. Its about how you have tackled the first four points that will define whether your 60 sec pitch to the (right) investor you meet at the next proto.in or Headstart conference extends to 20 mins and then to further meetings. I wont bore you here with the names of the various angel networks and stuff – but they are there, and you know it.

f. Mentoring: I mention this last, because this realization came to me at 8.00 PM last night, while I was sitting at the IITB canteen swatting away life sucking mozzies . I was approached by a young couple. They introduced themselves and we sat down to talk. They wanted some advise on their business. I wasnt quite sure why they chose to speak with me – but I was all ears. They dived into their pitch about the product and we waded through it for a good five mins, but I wasnt able to understand what they wanted to tell me. Then at some point, the guy took out a rough cardboard sheet and 10 thinner peices of cardboard (Yes Cardboard). He proceeded to demonstrate his product to me and the results that it could produce in children – and my eyes opened wide. www.dewink.com is the company – and they have one of the most mindblowing products derived out of their own creativity and logic, and it increases the creativity in children by as much as 50%. An 8 year old with the creativity of a 12 year old. I saw the drawings and stories done by children – and being a father myself, I told them “If you have a product – Here is Rs. 2000 right now. I want one”. I will offer to help them in any way that I can – mentor them as much as I can and help them bring their product to market. The reason for this short story is simple – There arent enough mentors around, but also – entrepreneurs dont approach enough people for thoughts, validation, and are hesitant to get mentors on board. Big mistake. My one question to them was – can you imagine your product. Whatever you can imagine – someone will be able to make it happen. They had never thought of it like that – and maybe thats what is required for this company to create a product that has a clear market of over a billion dollars, and a ready need. Think BIG, THINK.

Comments welcome!

M