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Article by Mohan Babu


Money alone cannot ensure business success

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.





About the Author

  • A Bio and profile of the author, Mohan Babu, can be found at his homepage
  • Mohan has authored a book on Offshoring and Outsourcing (Publisher McGraw Hill, India), a link to which can be found here
  • Mohan has also authored an Online book on "Life in the US," available for free download.
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    For FAQ, Trivia and Information on Life in America, visit the Ask-A-Desi section

    ©Mohan Babu: All Rights Reserved 2005

    Mohan Babu is an international consultant trying to find the ‘sweet spot’ where IT meets business. E-mail: mohan He is also the author of a recent book on "Offshoring IT Services"

    All rights are reserved. Mohan Babu ("Author") hereby grants permission to use, copy and distribute this document for any NON-PROFIT purpose, provided that the article is used in its complete, UNMODIFIED form including both the above Copyright notice and this permission notice. Reproducing this article by any means, including (but not limited to) printing, copying existing prints, or publishing by electronic or other means, implies full agreement to the above non-profit-use clause. Exceptions to the above, such as including the article in a compendium to be sold for profit, are permitted only by EXPLICIT PRIOR WRITTEN CONSENT of Mohan Babu. 

    Disclaimer: This document represents the personal opinions of the Author, and does not necessarily represent the opinion of the Author's employer, nor anyone other than the Author. This Article was originally published in Express Computers


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