Thursday, 4 September 2008

Entrepreneurship - It's not about the money

I recently began writing a monthly column on entrepreneurship in The Mint. My first piece is reporduced below. What this means is that I will post on my blog at least once a month.

Entrepreneurship is a much more celebrated term today than it was till the eighties. The world has turned around to look up at people who have executed innovative ideas to create value. Entrepreneurship as a career choice has gained social acceptability among the educated middle classes in recent years. I have been on this path for nearly twenty years now. Friends have always ribbed me about the fact that I preach entrepreneurship, but we started a job site - Naukri.com.

Today entrepreneurship is going beyond mere social acceptability and even getting to be fashionable as a career choice. A large number of people are doing start ups – many of them out of a sense of herd mentality, after getting inspiration from hearing the stories of entrepreneurs who founded successful companies. This is a worrying trend.

There is a misplaced sense of romance about entrepreneurship. I would like to caution those considering doing a start up that the early days of struggle of successful entrepreneurs seem romantic to observers only in hindsight. When you are actually going through it – there is a lot of pain. And for every poster boy success in entrepreneurship there are a hundred who are still struggling. The failure rate is high.

The first thing to understand is that entrepreneurship is not about getting rich. Sure if the company you start does become successful chances are you will make money. However that is a happy incidental outcome. It should not be the main object of the endeavour.

If you want to be an entrepreneur in order to become wealthy – my suggestion is don’t. There are very few entrepreneurs I know who succeeded without a longish period of financial struggle, belt tightening and personal sacrifice.

More often than not success will take longer in coming than you think. There will be times when at the end of the month there will not be enough money to pay the office rent and employee salaries – but you will somehow scrape though. There will be times when you yourself will not be able to take home a salary for months. There will be years on end when you will be financially the worst off person in your batch from business school. During these years you will need to make compromises on your life style – the house you are able to afford, the car you drive, the holidays you take, the restaurants where you eat and the schools your children can go to.

And all this without any guarantee of success, in search of the big idea, hoping for venture capital funding – years without any light at the end of the tunnel.

During times like this only your passion, your commitment to the idea and your stubbornness will see you through.

So before making the jump ask yourself a question – will I love doing this for the rest of my life even if I am not financially successful? If the answer is a clear yes – then you have passed the first test of commitment.

Then, when is entrepreneurship a worthwhile career to pursue. If one in hundred will succeed surely it is an irrational thing to do.

You should become an entrepreneur only if you believe that that is how you will find fulfillment.

Entrepreneurship is about freedom, creating, a chance to build a brand, an institution, showing the world a new way of doing something, being your own boss, creating a legacy that will outlive you, identity, making a difference, obsession, ego, having a shot at something big, doing what you love, innovating, doing things your way……..

Whichever way you want to put it – it is about finding meaning in your life.

Yes it is an irrational thing to do – if you are well educated and you have a good career ahead of you as a professional manager.

It is an article of faith. A bit like religion. Or as my friend Nikesh Sinha eloquently put it – it is like falling in love.

It’s an irrational choice.

8 comments:

The Big K said...

What an amazing article! I loved reading it! I know what you are saying - because it reflects my beliefs.

I see lot of engineers (the community closest to me) actually think if you want to be rich and make millions - be an entrepreneur. The focus for most of them is money.

I believe entrepreneurship is about creating value. Money follows - because it has to. But once you keep your eye on money, you become blind.

I believe obsessiveness about money is the primary reason why most startups fail.

Soumya said...

Sir;

It is great to read your post and to hear about the fact that you will be writing for The Mint. I missed your posts and once a month I think is a good deal!

I have been a student of yours earlier and realy value your posts. You are right when you say that entrepreneurship is different and irrational.

At some levels I think it is also a very cultural thing. In foreign lands like the US for example, a lot of people start 'doing their own things' set up shop fairly regularly. An entrepreneur setting up a job site may be an irony to a lot of people but running a mail order business is like an everyday thing for a lot of people in America.

Is it perhasps about the fact that they have easy access to credit? Often people use their credit cards to start businesses there. In India if you roll over your credit card bills, the charges can be usurious in nature.

Indeed people like you who have taken that leap of faith and set up a succesful business are far more than just irrational they are also a courageous lot.

Abhilash said...

My friends started a company called Ideacts Innovations. They have a product called clinck. It was really good to read when they received their first round of Venture funding.

They are in it for the money and making a bit now.

I am personally not cut out to be an entrepreneur, unless circumstances are ideal. Although being a part of a startup with good plans in place is more up my alley.

PS: Are the golf clubs still for sale?

Abid said...

That's an amazing post. I am an entrepreneur myself.. It was a pleasure reading that.

Cheers to entrepreneurship..

cricketcrazy said...

falling in love with your dream and getting a chance to live it on the net.. for me, that's entrepreneurship.. when somethign inside you bubbles, when something in your gut, in your bones pushes you to do it because they know it's gonna work.. and you are compelled to do it..that's entrepreneurship for me and by that definition, i'm an entrepreneur:) Thanks for your lovely post. You were speaking from the heart, not merly writing a column..

Himanshu Nautiyal said...

Great article, as always.

Two points...

"There will be years on end when you will be financially the worst off person in your batch from business school." - My impression was that a lot of founders in the current crop in India were engineers who were inspired by successful technology startups in the US and jumped in hoping to achieve similar outcomes without worrying too much about the market, the competition and the ecosystem. Are you now seeing more people from business school founding companies - the assumption would be that they do a more thorough job of analysing the likelihood of success and looking at past data rather than relying purely on technical innovation.

Secondly, I think it is the right time for a book on your experiences. I would particularly want to know your thoughts on how the elements of one's personal life are crucial to entrepreneurship. Or to any search for fulfillment for that matter. Maybe this blog is leading to that book?

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Anonymous said...

Good Article..

Yes, there is a certain romantic feeling associated with a start up.

Agreed that it is not all about money, nevertheless money is a huge factor.