Some Observations on Entrepreneurship

1. Some Observations on Entrepreneurship Prof Parameshwar P. Iyer Indian Institute of Science Bangalore piyer@mgmt.iisc.ernet.in

2. Outline • Who is an Entrepreneur? • Risks and Execution • Need for Focus • Revenue, Profits, Returns • Technology is the means to an End • Business side, Opportunity, Customer • Power of clear Marketing Strategy • Power of Teamwork and Networking

3. Who is an Entrepreneur? • Assumes the risk of a business, and is rewarded with its ownership • Take calculated risks, and create success Money is a result, not the sole objective • Is an Entrepreneur born, or is she made? IIT KGP School of Entrepreneurship? • Need burning desire and passion to succeed

4. Risks and Execution • Have to take calculated risks • Money is the result of Entrepreneurship; not the sole objective • By itself, the Power of Ideas is not enough • Require various other ingredients to convert the “powerful idea” into a “profitable venture” • Age no bar: Dr Krishnaswamy founded Aravind Eye Care at the ripe old age of 67

5. Need for Focus • Create the core value first, based on your core competency • Be clear about your strategy; Normandy Beach head model? • Glocalization – think “globally” but act “locally” • Establish credibility and confidence at smaller scales, then compete globally

6. Revenue, Profits, Returns • VC looks for returning invested money multiplied several times over; X-> 10X • VC really not into “venturing”; want to minimize risks; look for high level returns • Financials and economic viablility are absolutely important • Build a reasonable level of competence” Income Statement; Balance Sheet; and Cash Flow Statement

7. Technology is the means to an End • Most start ups are produced by “technologists”; go technology “out”; most often, technological “solutions” trying to find “problems”; inverted model • E.g. Interactive IP System to replace Video Conferencing; identify what is the level of interaction, and customer benefits • Don’t think technology; think opportunity; • Understand the need(s) of the customer; how to solve problem(s); articulate vision; articulate benefits

8. Business side, Opportunity, Customer • What does your business/ solution do for whom? How much is it worth? Who is going to pay for it? • Business Model <__> Revenue Model • Internet is “free”: where is the revenue going to come from? • Would you (as entrepreneur) pay to buy your own product/ process/ service?

9. Power of clear Marketing Strategy • Need clear “real” marketing strategy • This is the “make or break” scenario • Needs analysis of “customer” • Very strong marketing needed • Use all your real world “contacts and influences” • Get that “first real paying customer” • Try marketing inwards into your organization

10. Power of Teamwork and Networking • Need a well balanced team • Typically, one “expert” each in Technology, Marketing, and Finance • Successful entrepreneurs always have “powerful networks” • Use the power of your fellow Alumni, and the reach of your Alma Mater • Participative management principles to build team work