'To set up a successful business, one must have a solution to an existing problem or a better way of addressing the current solution.'
According to Silicon Valley-based techpreneur Sanjeev Chitre, entrepreneurship is a lot similar to the Periodic Table.
Just like how a Periodic Table helped streamline the chaotic characteristics of elements and materials into a predictable science that is easy to comprehend, Chitre believes a manuscript is essential to understand how entrepreneurship works.
"One cannot learn What Not to Do unless guided by some predictable events or theories," Chitre explains about his inspiration for his book What Not To Do in Entrepreneurship.
In What Not To Do in Entrepreneurship, Chitre has interviewed dozens of successful and unsuccessful entrepreneurs from India and abroad and blended their collective guidance and wisdom along with his personal insights.
The guide, which he describes somewhat as a toolbox, aims to explain why some of the best start-ups fail and what entrepreneurs should NOT do to avoid failure.
"The traditional entrepreneurship pathway with a '10-to-20-year planning' is now a mirage. With fast changing technologies, it is much more rational to think of 3-5 years or at most a 7-year journey. Hence, all predictions can be made only with this timeframe," Sanjeev Chitre -- pictured left, below, founder of The U-Group LLC, a strategic and M&A advisory firm -- tells Divya Nair/Rediff.com in the first of a multi-part interview.
How would you compare the start-up culture in Silicon Valley versus India?
What lessons can one learn from India and the rest of the world?
I cannot say that I am familiar with the start up culture in India. However, due to my recent experiences with start-ups and innovation centres in Indian universities, I can share the following observation:
Start-ups in India, tend to fall in two categories -- urban and rural.
Urban start-ups and their teams are quite familiar and comfortable with the risks of launching a new venture. They are more committed to transforming a project into a product or service which becomes the basis of their start-up. These start-ups, also have the auxiliary infrastructure needed to enable this transition both in the capabilities and mentorship.
Rural start-ups have the basic challenge of convincing their family members into supporting their desire to transform the project into a product as the families see entrepreneurship as a very risky career move.
Additionally, the transition of project to product is also a huge hurdle due to the lack of resources and guidance. Such challenges do not exist across the USA and especially in Silicon Valley.
In evolved markets, failure is considered fundamentally as a learning experience and not as social stigma of less capital and credibility of the founders. This diversity in social perception is a contrast between Silicon Valley start-ups and those in India.
The rest of the world, loves and accepts the need for entrepreneurship for jobs and wealth creation but doesn't do it on a national priority basis where in, I believe India is leading.
In India where employability is still a rising concern among young graduates, how can we create and nurture young entrepreneurs?
Building the ecosystem has to be the first step. For example, enabling micro loans, through banks or educational institutions directly to young graduate students for transforming their projects into products will fuel the passion to potentially seek commercialisation of their concepts.
This will be a first major step to driving employability and the bridge to nurture entrepreneurship.
We must remember that entrepreneurship is a preferred pathway to creating jobs and wealth for individuals and the society that is agnostic to age, religion, education, languages, culture, social status.
In recent times, we have seen a meteoric rise in edtech and Web3 start-ups. In your opinion what are some of the businesses or ideas that will create more jobs and entrepreneurs in the next 10 or say 20 years?
Let's understand that the traditional entrepreneurship pathway with a '10-to-20-year planning' is now a mirage.
With fast changing technologies, it is much more rational to think of 3-5 years or at most a 7-year journey. Hence, all predictions can be made only with this timeframe.
Start-ups that are emerging in Web 3.0 or ED Tech, are fueled by herd mentality, partly due to ease of access to capital from local, national and international sources.
There could be disruptive entrepreneurship in religion for example, which can also be a part of EdTech in countries like India.
Technology entrepreneurship is multi-dimensional and feasible in all aspects of life -- not just the 5% that is discussed commonly, in this case Web3 our EdTech.
The true value created will be through success of small enterprises who can move molehills rather than mountains.
For example, in transportation a plethora of start-ups will evolve in areas such as power management, self-driving cars, healthy foods, waste recycling and digital money which will drive job creation never seen before.
Broadening the canvas of entrepreneurship would be truly disruptive.
For most first generation entrepreneurs, the first step -- be it quitting a steady job or taking a huge loan -- is always the most challenging decision.
But once you have crossed that bridge, how does one evaluate if you are on the right path? And what are the signs you should shut shop and move on?
I have always maintained that entrepreneurship is not a game of roulette. It all begins with how you define a business or enterprise.
It's not just a project -- which is a place or tool for learning. It is the transformation of a product/service which has been identified to solve a market problem.
To set up a successful business, one must have a solution to an existing problem or a better way of addressing the current solution.
'Solutions that are looking for a problem' have the highest probability of failure and must never be the basis of a venture. Hence, they must be shut off as soon as possible or pivoted to address a different problem.
A solution solving a problem must have a user or a customer who is willing to pay for the value received.
This transactional capability must also be scalable, to be called a business. Hence the founder must address these basic questions, which I have covered in the book to ensure, he or she has done the research in the market to confirm that such a customer exists.
If the venture fails and the team is incapable of executing on the market needs, it is time to change the team or shut down the venture.
