Entrepreneurship: 'Don't take failure too personally'

Do you know what does it take to make a successful entrepreneur?

Is it a good team under an able leadership? Is it about getting capital to ramp up scale? Or is it a grand vision that helps you convince your employees and die-hard critics about your venture's success?

Or is it failure and how you cope with it makes up for a successful entrepreneur?

In a chat with with Get Ahead readers on December 7, Ranjit Shastri, co-founder of PSi, Inc and a member of the Indian Angel Network discussed these and other issue related to starting a business, taking it to the next stage and converting an idea into reality.

For those of you who missed the chat, here is the transcript.

Tinku asked, Hai Ranjit How r u? My Question is Which the best Business in Bangalore To Start A Business? Plz Let Me Know, Rgt Know Myself and My Friend Running A Placement Consultancy in Bangalore & But We Want Run Another Business Along with That.

Ranjit Shastri answers, Hi Tinku. The best business in Bangalore depends on who is running it. In other words, pick a business where you think you have a special edge. Also, you need to think about whether you want this to be a small business to support your short term goals, or whether you want this to be a large business. A lot depends on how much capital you have and whether you would like to invite others to invest with you (and if those people are ready to back you). If you are already in the placement business, you may want to look for other businesses which are synergistic. For example, manpower outsourcing or HR consulting.

Benaki asked, Please tell us how to grow, unit a team and become sustainable. As an Enterpreneur in consulting its difficult to hire first before getting business. Getting business is affected by people in your team. So pls tell me what is a minimum efficient scale? And if I don't have money to invest even in minimum scale then?

Ranjit Shastri answers, If you don't have capital, you'll have to find another way to attract a team. If you can inspire others with your vision and a chance to share in the profits, that can be enough. Too often, I find that entrepreneurs are not willing to share equity with their core team, but they are willing to share equity with investors. From an investor's perspective, that's a "red flag". Regarding minimum efficient scale, that depends on the business...each business has a different minimum scale. Very often you can reduce the minimum scale by initally outsourcing the capital intensive elements of the business process.

Sachin asked, Hello I started a business at 23 with an aim to start small and make it big now at 30 i think i am a still the same not much achieved only satisfaction that i manage to meet both ends at the end of the day. what does it actually take to take a leap in business?

Ranjit Shastri answers, This is a question about how to "scale up", a very important question. There are many factors involved: first, you need to ask yourself whether you are in a business which can become big (is the market big enough? is there too much competition? are barriers to entry too low?). Then think about your systems -- do they allow you to handle large volumes of work or production? Also consider your process for customer acquisition -- is it efficient? Do you have enough capital to increase capacity as the business grows? And do your personnel policies enable you to attract and retain good people? So there is no single factor at work here...but lots of factors that can force your business to remain small.

hsshukla asked, Looking for an opportunity in a rural area, related to agriculture. Any idea?

Ranjit Shastri answers, There are lots of opportunities here, involving many related sectors, such as biotechnology, bio-fuels, food processing, food distribution, etc. Think about what you can do to make a difference -- is there anything special about your background which makes you uniquely qualified to compete in any of these types of businesses? Also, what kind of business do you want to build -- a big business that requires large investment and risk or a small business with less risk. These "internal" factors will help you determine which of the many options out there are best for you.

prashant asked, Hi, I am working as a software professional but not satisfied with the job. I want to set up my own business which was my dream but i am in great confusion what should i start? i dont want to do software business. I thought let me go into rice or flour mills, opening chain of restaurants, cement industry ,garments, retail but everything require a lot of money and since i dont have this much money i'll go for bank loans but then everyone says that it is not easy you will fails and destroy your life. First collect money and then start your business but till i 'll be able to collect some money from job which i know will never be enough, till i think i'll loose my enthu. Please suggest what can i do? I want to start something very early. thanks.

Ranjit Shastri answers, Hi Prashant. I just answered your question, but it seems to not have gone through. At the risk of repeating myself, let me just say that you have many more options. You've only given two options: be an entrepreneur or not be one. Perhaps you can consider other options...like taking a leave of absence and giving entrepreneurship a try, or helping a friend with his entrepreneurial venture. It seems you are not considering the richness of the options before you.

Kunal asked, Dear Sir, I look forward to following my passion of sports & start a sports related entrepreneul venture ... what basic steps or precautions need to be taken?

Ranjit Shastri answers, Every situation is different and I would not want to be prescriptive because you understand your own capabilities better than I do. However, the basic things that the Indian Angel Network would look for are things like understanding the customer, the market, competition, regulations, economics of the business. You also want to make sure you have a great team, with members who get along well with each other and whose skills are complementary. You also need to make sure you have enough capital or other resources to sustain you until you are able to get the business off the ground.

entrepreneur asked, When the starts to show revenue and the team has to be built. One approach is to build a team "top down" (Hire an Ops head ) and then build it downwards or another approach is to build "down - up". What is right as per you?

Ranjit Shastri answers, I think you are better off hiring your leadership team first, because it's harder to impose new leadership later on, and in the beginning what you need are leaders to help you build the organisation. So in my own experience, "top down" is more practical.

entrepreneur asked, Boot Strap (OR) lose control to get money (from Angel, PE etc). Whats your advice?

Ranjit Shastri answers, I've seen some great businesses that have been boot strapped (www.schooltrainer.com and www.sternfisher.com) and others that have done very well because of angel funding (www.designpresentation.com). Ultimately, every large business will eventually seek capital from the markets (even IBM and Google raise money in the capital markets), so a lot depends on the stage of the company in its life cycle.

sanzay asked, Positive approch & attitude, is the key to success?

Ranjit Shastri answers, Well, there are a lot of keys to success. Usually you need a lot of keys, and in my own experience luck is always one of them! Take the example of SmartAnalyst (www.smartanalyst.com). Luck played a major role, in terms of free publicity that we received when the CEO was invited to speak on CNN. Or in the case of ElectronicTender (www.electronictender.com), the company managed to prevent two major attempts to steal its software (the attempted theft was bad luck, and the prevention was good luck).

mamu asked, Dear Sir, I want to start my own business. I want to start my own travel agency that will cater only to the online world. What should I do and as a first-time businessman? what precautions should one need to take? Plz answer. Thanks in advance.

Ranjit Shastri answers, First, make sure that this is really the business you want to enter. There are many business opportunities out there, so ask yourself why you should pick this particular business. Do you have some special qualities that give you an edge in this line of business? If you are sure that you want to enter this business, make sure you understand the travel agency business and the online consumer. If you don't, then make sure you have people on your team who do. Put together a business plan which you, your partners and your investors can all agree on. Also, be prepared for the real possibility that things may not go according to your plan. Have a back up plan in case you fail, and don't take failure too personally -- after all it's a learning experience, and therefore never completely a failure.

winner asked, we have to wait, to achieve some thing in life..correct me if am wrong?

Ranjit Shastri answers, That's a very philosophical question...I suppose that's true for some people, but not for others. Some people have such difficult childhoods, that just the fact that they've survived childhood is a major achievement in itself. It also depends on what one's goals are.

Some people have very simple goals, which are easily achievable. Others are more ambitious, and therefore must be more patient. I'm sure one could write more than one book just trying to answer this question! From a practical point of view -- from the perspective of an investor or an entrepreneur -- I think it's good to be a little impatient. Too often the oft repeated suggestion that "one should be patient" is an excuse for inaction or failure. One has to strike the right balance, and achieve "reasonable" goals within "reasaonable" timeframes.

Ranjit Shastri says, Thanks for all you good questions. It was a pleasure interacting with you all, and I wish you all the best in your ventures.