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 Capital
is essential to start a business, but there are many more significant
factors that make it a successful venture. MOHAN BABU explodes a
few more myths about entrepreneurial success
In the previous two parts on entrepreneurship
and ventures, we explored and exploded some of the most common myths.
We will continue this series in the same genre.
Myth: Throw enough money at an idea and one can
make it big.
Reality: Money is definitely a key to any entrepreneurial
venture. However, it is not a substitute to the other ingredients
like persistence, having the right combination of skills and innovation.
Merely acquiring capital to put into a venture is not a recipe for
success. A classic example of this is the thousands of e-commerce
and dotcom ventures that fizzled out inspite of the billions of
dollars that were invested in them. What happened was that capital
began chasing ideas instead of the really good ideas jousting for
capital.
 I
can recall several mails—including the one I talked about
in my previous column—I received from Indian ‘entrepreneurs’
who had invested hundreds of thousands on data centres, call centres
and BPO companies without having viable orders. As mentioned earlier,
I am not in a position to secure orders for any venture; even if
I were, I would be extremely wary of giving a crucial BPO or call
centre management to some unknown person whose credentials are not
vetted and whose only claim to fame is the fact that he was able
to invest some funds in a few dozen PCs, networks, etc.
Myth: I conceptualised the killer-idea, so I know
how to run the business to milk it.
Reality: Many entrepreneurs suffer from the not-invented-here
syndrome. They sometimes feel “No one else understands the
underlying logic, workings, etc, so I am the best person to run
the show.” Though they should take pride in their entrepreneurial
abilities and skills, founders should also realise that they may
not always be the best people to lead the organisation after it
begins to grow. Research has proven that innovators and entrepreneurs
make very poor managers since the skills required to operationalise
an organisation is very different from skills of innovation. After
an idea is conceptualised, entrepreneurs should seriously consider
getting professional managers to lay the foundation for an organisational
structure, including strengthening financial controls, HR and people
management, logistics related to operations, sales marketing, etc.
Myth: I saw my friend/colleague/cousin make it
big by selling an idea, so I too can do it.
Reality: There is an abundance of success stories
in the business media to make one’s adrenalin pump; corollary
to this is that for every success story, there are going to be dozens,
if not more ventures that got waylaid. For instance, during the
heady dotcom days, everyone knew someone or their cousin who had
raked in big by evangelising the ‘next big idea.’ This
in turn led to a gold-rush since those observing the hyped-up drama
wanted a piece of the pie. Of course, the rest is history. The factors
that contribute to the success of a venture may have to be carefully
analysed in totality and due-diligence undertaken to ensure that
the same factors are replicable. The business world is littered
with stories of one-trick ponies that are unable to scale up or
replicate in light of changing circumstances.
Myth: ‘Software Apps,’ ‘ERP’,
‘Biotech’ is the next big thing.
Reality: Fear of missing out on a trend should
not be a motivation to go entrepreneurial. When event management
gurus and seasoned entrepreneurs find it hard to prophesise what
the next wave is going to look like, what is to say that you or
I can do better? It is easy to look back on a rearview mirror and
say exactly how the trend one is looking at shaped up, but to see
the forest for the trees when the trends are actually shaping up
is something very few can profess to know.
The best one can do is not to bet on the future
but to consistently try and outperform the present trends. Successful
organisations are good at this. For instance, the much hyped up
Infosys or Wipro phenomena did not happen overnight. It took over
two decades of consistent grit and sweat to take the organisation
to the billion dollar mark. Yes, these two companies were in the
thick of the ‘next big thing’—Y2K, e-commerce,
dotcom and outsourcing—as they happened, but that was just
incidental to the grind of routine business. The companies did not
go chasing the trends just so that they could grow. Growth happened
due to diligent planning and repeated execution, not merely because
they were able to cash-in on a trend.
The aim in sharing some of these thoughts and
insights on entrepreneurship was to articulate some of my personal
observations along with feedback received from readers, business
leaders and managers. What really makes a venture tick, what really
contributes to the success of a new business idea and secrets of
successful business ventures are all topics covered by endless books
and articles.
In this series we explored some of the most common
myths associated with entrepreneurship. I am sure to receive feedback
from readers on this series, something I will continue to share
with them.
Mohan Babu is a US-based software consultant trying
to find the ‘sweet spot’ where IT meets business. E-mail:
mohan@garamchai.com
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