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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.
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