• Insights

Entrepreneurship is no doubt an inspiring concept. It fascinates many people and has an aura of romance and mysticism surrounding it. Notwithstanding such allure, the transition to entrepreneurship from a salaried job or taking the plunge into entrepreneurship is probably not as straightforward or easy as one may like.

I recently conducted an exercise with management students who had substantial professional experience. I asked them to write about their entrepreneurial inclinations. Many of these students touched upon the same theme: “I would like to be an entrepreneur because I believe that it can be personally very satisfying and rewarding. However, I don’t know where to begin. More specifically, I don’t have an idea that I consider worth committing to as an entrepreneur.”

So there we are—getting off the starting block seems to be the biggest challenge for most aspiring entrepreneurs. But it needn’t really be this way—not if we think about it in a systematic manner. We are a country of a billion-plus people, and the consumption patterns of essential goods and services by a significant part of the country’s population is currently well below a healthy average. In addition to this, the ranks of the consuming middle-class continue to be swelling.

In such an environment, opportunities to create value through creative ideas and well-executed plans should be available in plenty. It is not without reason that when C.K. Prahalad pointed to The Fortune at the Bottom of the Pyramid, it caught the imagination of business people and experts all over the world in no time. When former president Dr. Abdul Kalam championed the idea of providing urban infrastructure in India’s rural areas, he was also pointing to the immense potential for entrepreneurship and innovation in an aspiration-rich but problem-ridden emerging economy.

So, irrespective of whether the landscape is urban or rural, the business opportunities are plenty—if only we care to look closely. The devil, of course, is in the details.

One of the most effective starting points for every individual who is searching for a business idea to launch into an entrepreneurial pursuit is a keen observation and understanding of one’s own immediate environment in terms of the people, their wants, and the obstacles they face in satisfying these wants.
For example, the observation that many Indian women with a modest income (such as domestic helps and construction workers) would like to use a shampoo but cannot afford to buy a half-liter bottle of the product out of their meager wages gave rise to the Rs.1-shampoo sachet. This innovation propelled CavinKare into a multi-crore consumer product company.

The insight that millions of users of low-cost mobile phones would like to use many of the features available in high-end handsets encouraged Mango Technologies to develop a software platform—an IP asset that was eventually acquired for a substantial value by one of the world’s largest mobile technology players.

The recognition that the most penetrative advertising medium, the television, has stayed outside the reach of local, small-time advertisers propelled Amagi to develop a technology and an innovative business model that would help local advertisers that were operating within a city to expand their radius and reach their target audience through national television channels. The realization that the country’s public libraries are not keeping pace with the sophisticated demands of an increasingly diverse set of readers—adults as well as children—prompted JustBooks to set up a chain of technology-enabled community libraries that provided book enthusiasts with never-before levels
of convenience.

There are perhaps many more such examples that can be quoted. But the point is essentially this: If one is stuck for ideas, the best way to start is by observing relentlessly what people around you need, but don’t seem to get.

This is particularly relevant in the Indian scenario wherein the purchasing power of at least the middle-income consumers is steadily increasing, but their aspirations of wants and attaining a certain lifestyle are not being satisfied effectively.

The picture does not change much even if one were to look at this scenario through a rural-urban lens—many of the products and services cited above can be targeted to both the rural and urban markets alike.

It is also important to note that in all the examples mentioned above, technology only serves as an enabler and not the starting point. None of the entrepreneurs cited in these examples had the technology in hand and were then looking for a problem to solve. Rather, they identified the problem first and then developed the technology solution to solve the problem.

Needless to say, an idea is only as good as it is implemented. The challenges of execution in a developing economy like India are formidable and, in fact, qualitatively different from those in developed economy settings.

True, the sheer diversity of the consumer base and the less-than-optimal hard and soft infrastructure available in our economy enhance the level of uncertainty normally associated with new ventures. Since this is not likely to change much in the short run, entrepreneurs have to be realistic in their approach in dealing with this formidable challenge and move their ventures along the path of progress.

In practical terms, an entrepreneur in India has to rely on his own personal and social capital to set up a series of experimental steps to prove the viability of his or her business idea so that other stakeholders—be it customers, employees or investors—perceive a lesser level of risk in the venture and feel confident to come on board.

Entrepreneurs would also do well to defer their PowerPoint campaigns and, instead, adopt a one-point agenda—of proving the viability of their ideas through demonstrable action in as short a time as possible. This principle is practiced uniformly by successful entrepreneurs all over the world.

However, the instances of early stage risk capital scripting the success stories of visibly successful ventures in many developed economies seem to be distracting many entrepreneurs in India.

While entrepreneurs who are exposed to urban settings tend to flock to professional investors with half-baked ideas, entrepreneurs in rural settings look to the Government and other public resources. Such an approach will not only delay progress but could also render success elusive.

Entrepreneurs need to be determined to put their skin in the game—at least up to the point of proving the viability of their business ideas with some degree of certainty.

The views expressed here are personal.

K. KUMAR is Professor of Entrepreneurship and Chairperson of
N. S. Raghavan Centre for Entrepreneurial Learning (NSRCEL) at the Indian Institute of Management Bangalore (IIMB). Mango, Amagi and JustBooks, mentioned in this article, are ventures incubated at NSRCEL.

©Entrepreneur April 2011

Tags:
business idea, K. Kumar, N.S. Raghavan Centre for Entrepreneurial Learning, NSRCEL