Vikrama Dhiman's Blog

Long before Katie of GigaOm discovered that it is finally cool to be an entrepreneur in India, I had written a post working for yourself or someone else and India is inherently entrepreneurial. Friends, acquaintances and everyone else, in India, have been thinking of starting their "own thing". That "own thing" can be : a tech startup, a user group, a blog or a community. At the recent #swdel (Startup Weekend Delhi), people from all over India (Hyderabad, Gurgaon, Lucknow, Bangalore, Mumbai) and the world (Croatia, France, US) pitched interesting ideas. From mobile apps to profitable social causes to hospitality to communities to even magazines, there was everything. When I look around I see people increasingly taking the plunge aka the first step (either full time or as a side job). We are apparently getting a lot of what I call "cool entrepreneurs". Or, are we?

Who is a cool entrepreneur?

Articles like the one in Gigaom, call being an entrepreneur "cool". Saying that being an entrepreneur is cool is probably the right way to put it. This also helps visualize the typical view of an entrepreneur covered by 'most' mainstream events and media : educated (or drop out from a top school) or privileged background. That's cool entrepreneurship. There is nothing good or bad about this other than this being non-inclusive. For instance, "cool" does not include the story of the villager who came to the city and set up a shop and start earning Rs. 10,000 a month after overcoming all the hurdles. Being an entrepreneur is not about being "cool" and hence, latter is a better metaphor for entrepreneurship : overcoming hurdles, embracing constraints and making your presence felt by offering an incredible value (service, price or availability).   

Is it really cool?

Every step is a tough one, not just the first one. The cool entrepreneurs (in India) are now realizing it. Entrepreneurship is anything but cool, especially if you are not successful. And, there are many who do not succeed, not only the first time but in any attempt. They will never get any audience, forget funding, traction and everything else associated with cool.

Unfortunately, success stories like Flipkart, Snapdeal, MakeMyTrip, ClearTrip etc play the cool quotient more than problem solving, hardwork and innovation. All of these are also first time success stories. For people diving into entrepreneurship, unless role models who slogged the hard way from failure to failure without loss of enthusiasm (to quote a definition of success) emerge, most will continue to think its 'cool', rather than hardwork.

Is this a problem?

Not really. Some things happen only with time. This is a nascent stage for entrepreneurs in India. As more of them take the plunge, more will succeed and more stories will emerge. Hence, we'll need to give it time. That, and this:

• More events like the ones at #swdel 
• More support from people who have done it themselves
• More talented people opting to take the plunge

And when I say "more", I mean more by a factor of hundreds of thousands. A few incubators and venture capitalists in 6 cities in India along with 10 examples from rest of India, is a start, but not a trend.   

I was getting a Tikki Bandh packed from road side mobile stall. When I told him I want the Tikki Bandh packed, he looked at me, then looked at the packing material, did a quick calculation of his margin and told me that will be Rs. 30/-. In a low margin product like this every thing counts. For every sauce, onion, oil, packing material you add, the margin reduces further. And this being a daily business, you also need to plan for the risk of strike, illness and zero income. As I was analyzing this business model, I looked around and saw examples of Indian entrepreneurship everywhere - Photostat booth, fruit stalls, juice stalls, soup stalls, chat shop, leather shop. With over 1.2 billion people and only fraction of them in organized employment, majority run their small businesses, mostly in unorganized sector. That is, if you care to look beyond the entrepreneurship defined by college drop outs in Garages.

If you are looking to start something, you don't actually need a million plus users (who pay you nothing) but a few hundred paying customers. Here is why:

• If you had 400 paying customers, paying you $10 a month, you would make $48,000 a year. In market terms, this could get you a valuation of a million easily. Isn't that just great for a startup?
• Sooner or later, you will need to demonstrate value to people who will be paying you. Why not do it sooner than later?
• If you are only focused on getting paid customers [and not the free ones], you'd be focused on one thing and your chances of doing it correctly increase significantly. Won't you want the lesser risk strategy?
• If you are making money, you won't probably need VC funding. How cool is that?
• Focusing on getting paying customers, helps you focus on entire value chain -> marketing, branding, sales, strategy, development and not just development. Why would you want local optimization when you can optimize for the whole from the start?

While this approach may not work in all scenarios, it is definitely an approach you want to consider while deciding your product strategy. It is not really revolutionary, per se - just ignored and not considered often enough, in this age of The Free Plan. Why?

• Perhaps, it is a bit too upfront about putting the money at the center of it.
• Perhaps, it is not as sexy as "we are building a platform for the future".
• Perhaps, it is the harder problem to solve and the human brain delays solving this problem for later.