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India is a country with a new-found fervor for entrepreneurship. It’s not to say that it’s a new concept in any way. Statistics put the number of SMEs in this country at around 32 million. Most of these enterprises are family-run and have been built and scaled the way businesses have been built in this country in the past. Building businesses with other people’s money (via investments) is the new trend—one that is yet to take root.

Whenever communities and nations grow out of the developing mode to a more developed mode and trends set in, they tend to create a certain leapfrogging effort. For example, take the case of the telecommunications revolution where we skipped landlines and went straight to the mobile phone, or the fact that we have skipped desktop PCs and are driving sales in laptops and Netbooks. That said, not everything can be fast-tracked—the understanding of how to build products would be one of them.

One of the fundamental problems with startup entrepreneurs in India seems to be the mismatch that exists between what is being offered as a product or service and the demand in the market. This is also the main reason why investments are so hard to come by, since the reality is a bit skewed and venture capitalists can spot these irregularities a mile away.

The background of our entrepreneurs and the lack of a knowledge base about building products and companies are also against us. We are learning how to be enterprising and, at the same time, we are learning how to build products. We are also learning how to build great products, while witnessing a massive revolution take over the way products are built and the emphasis of design in all things new. We have to admit that there are a lot of moving variables in this equation.

It is said that we all must try once. If we don’t succeed, we should try again and again, till we succeed. Perseverance is touted to be the trait of a true soldier and entrepreneur. Failure is said to be the best teacher. No doubt, it teaches every entrepreneur, innovator and enterprising spirit a thing or two about life and humility, but it doesn’t teach us much about the way forward.

Success begets success. So, where then is the direction for first-time entrepreneurs who  are looking to build a product and company in India? There are two kinds of products in this world. The first is the kind that solves your own problem. The second is the kind that solves someone else’s problem.

Finding a problem that you really would like a solution to is fairly easy. Finding a problem that others are going through, putting yourself in their shoes, and then coming up with an elegant solution, especially one that would make sense to a whole lot of others is a slightly complicated process—one that would require some experience, clout and a reality distortion field.

All said, if you are one who is at that crossroad where you are trying to figure out what to provide as a product or service and make a company out of, start with one that is an aching problem for you. Solve it in the most elegant way possible. Find others who are similar to you—usually your friends—and, soon enough, you will have a community of first adopters for your product.

Step two is to just listen to them using the product or service, and to the feedback they give to make it better. Take heed of what they say and feel, and they’ll take you the rest of the way.

VIJAY ANAND is the Founder of Proto.in and Vice President (Incubation) at IITM’s RTBI.

©Entrepreneur June 2010

Tags:
SME, startup, Vijay Anand