Our prime minister started a very aggressive program called make in India. For the success of that program one thing is very important. Reforms, skill development, investments, etc. are required but there is something on which which this program truly depends on and that is entrepreneurship. There can be many kinds of entrepreneurships like social entrepreneurship, economic entrepreneurship, ancient entrepreneurship but it is very sad that when I ask you to name a few entrepreneurs you will name Steve Jobs, Bill gates, Larry Page, Warren Buffet, etc. but not Kailash Satyarthi who received a noble peace prize for protecting children rights. The reason he is not an entrepreneur for us is because we don’t understand what entrepreneurship is.
Professor Angus Maddison said an entrepreneur is a person who can put a thought into action. So any person who puts a thought into action is an entrepreneur. The famous word ThAct comes from here.
Everyone can think. After 3 billion years of evolution the one thing we can do is think and it is truly funny that Indians feel extremely proud of themselves when they come up with an idea, but how many can think about the actions to place the thought in reality. Very very few can put a thought into action.
Take the example of Mu Sigma itself. The founder saw that India has tons of talent. We all know that India has a lot of talent, there is nothing new in this, but none of us made Mu Sigma. The founder saw that in America a lot of data was being formed and with the coming of smart phones the amount of data has proliferated. But the biggest thing he saw was that the companies did not know what to do with that data and that data was just sleeping in the servers. Then, he connected the dots. He thought about bringing the data to India and making the talented people here look for patterns in the data and make trend charts because ‘they’ do not know how to do it but we do. He connected everything, billion dollar company Mu Sigma was formed. This idea must have come to thousands of people but only one could give life to the idea. Such a person is an entrepreneur. The founder did not ask for funds from the government he said I will do it on my own. He brought the people and business together and started from level zero. Value creation or primary wealth creation is the second name for entrepreneurship.
So entrepreneurship is all about identifying gaps or problems in existing system and offering effective and profitable solutions. Google is another great example. Larry Page and Sergey Brin saw a huge mass of data proliferating and people were trying to find something in it. His search engine was nothing more than a precise solution and AdWords and AdSense were nothing more than profitable solutions. So the definition of entrepreneurship is that it is the art of applying in which business and financial smartness is converted into a profitable solution.
There are four factors of production, we all have learnt them in class 5. The first factor is land, the second is labor, the third is capital and the fourth which India desperately needs is entrepreneurs. It is very disturbing that in India people can not afford to fail. In countries like the U.S people wear the badge of failure with pride but in India the society despises failures. In the U.S if someone has failed in examinations all throughout his life but is talented or has done many projects but failed every time his chances of getting into a good college is equal to that of a person with good marks. While in Indian colleges the admission committee just looks at two things namely, SC/ST quota and marks.
This is the reason we have no choice but to disregard all things irrelevant to the exams because in the end if you want to live in India your life starts with an exam and your performance in that exam more or less determines your remaining life unless you are truly unique or your parents have good contacts. Anyway the reason I told you all this is that this race for getting good marks in higher classes does not allow a child to look beyond the main career fields and when a child works so hard for getting a good job he never thinks about being an entrepreneur. The people who end up being entrepreneurs are those who don’t get jobs. But it is nice that Mr. Modi realizes that entrepreneurs are essential for a countries development. Ah, enough sentimental and diplomatic talks.
So how do entrepreneurs make raise capital? The first person who invests a good amount in a startup is called an angel investor. Angel because they are actually like angels, before them you had nothing more than an unperfected product and before them you had no reputation. You say I am studying in Harvard; an investor will say so what 10,000 more are studying there. You say, sir I have an idea which has huge potential! Then he might say, “alright, here this is a cheque of ten thousand dollars.” So now you reach the first phase. The process which keeps your company alive is called business incubation. Business incubation is a unique and highly flexible combination of business development processes, infrastructure and people designed to nurture new and small businesses by helping them to survive and grow through the difficult and vulnerable early stages of development. In other words, a hen sits on her egg 24/7 and takes care of it, this is incubation. Now, big investors get interested in your business, these investors are called venture capitalists or VCs. Your angel investor can also be a venture capitalist. They can make you an over night success. But it is funny, how many nights of hard work is required to become an overnight success. Anyway, when you survive the primary phase and become a successful business, large investors get attracted. Companies like Flip kart and Snap deal have single tickets worth over 500 crores in todays date because they don’t want any more dilution. 4 years ago their ticket size was only 20 crores. If they survive today, then they will not talk below 5000 crores a few years from now because that is the size amazon is. In the last stage you can list your company in the stock market, it is mostly up to the founders.
I have been going on and on about online businesses. Let us talk about real world businesses. Raymond Croc used to sell mixers. He saw that outside McDonalds hundreds of people were standing in line to get lunch. He was shocked. He entered the restaurant and realized that the only thing sold there was burgers, French fries and shakes. He bought the entire chain, there were two or three restaurants. After buying the chain Raymond croc applied his systems and processes on the restaurant. Today there are 30,000 McDonald restaurants. This story can take up an entire blog and hence it is better to keep it aside for the while.
So if you think you are a problem solver and a person who can put a thought into action please do NOT become an employee become an employer. The country needs entrepreneurs.