Startup eSeries: How to Incubate Your Dream Venture - Common Sense Living Newsletter
 
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Startup eSeries: How to Incubate Your Dream Venture

Entrepreneurship
Life
Sep 27, 2014

 

Smart entrepreneurs-the chickenhearted ones like me-work hard to reduce uncertainty. They want uncertainty to be as little as possible before risking serious time and money.

Start-up businesses need neither dreamers nor accountants. They need idea-generators, marketers, and profit producers. Most of the time-during the first year or so of operation-one person will play all three roles.

These words by our wealth coach Mark Ford could be echoed by most in the business of entrepreneurship. Entrepreneurs wish to minimise risks, lessen uncertainty... They want to ensure they haven't thrown up careers and invested so much money for nothing. Moreover, they need assistance and advice in the early days of entrepreneurship.

And this is right up the alley of today's featured entrepreneur Ateet Sanghavi. His enterprise Purple Ventures is a business incubator for startups in the country. In this interview, he talks about the issues facing entrepreneurs and demystifies several entrepreneurship concepts.

How does Purple Ventures aid startups?

Entrepreneur Ateet Sanghavi
The venture was started to help entrepreneurs get funding and put processes in place. Consultants will come, research and go, and other incubators may create a prototype of the business and then leave. But at Purple Ventures we handhold entrepreneurs for three to five years.

Many entrepreneurs come to us with a seed of an idea, they may want to do something but don't know how to. Still others need a team or an external party to evaluate the idea and check its sustainability.

An entrepreneur shouldn't have to quit his job and then see his idea go nowhere. So we understand the idea, and then create a business model for it. All future strategies emerge from the business model. We also develop marketing strategies, revenue models, expenses, estimates and make projections for the next 5-10 years.

Other steps include identifying the differentiators of the business and understanding what will make it niche. And then structuring the company, right from branding to implementation and capacity-building.

What are the initial hurdles faced by entrepreneurs in India?

The planning stage is often overlooked in India. Within six months of starting out, one will see inventory issues and HR issues like retaining staff. So we work with ventures to develop structured deals for employees, like offering them a revenue share or equity to make them feel more vested. An entrepreneur may also face tax issues, for which we hire consultants.

Most Indian entrepreneurial ventures are sole proprietorships and hence may need to get incorporated and become more professional. They also need help forming advisory boards, which are very useful in networking and getting more business. Additionally, entrepreneurs need assistance in finance and account services as well as technology consulting to ensure the enterprise is more process-driven.

Another shortcoming of Indian entrepreneurs is that they cannot talk about their businesses. When on stage, they are at a loss for words. They aren't confident about being entrepreneurs. So we actually train them for a year and advise them as to which networking platform to be on. Because finally social networking is what brings in the business!

What are the winning qualities of an enterprise?

We choose enterprises on a list of criteria but mostly for their ability to scale. We see if they are sustainable, and if you can unlock value from them in the long term.

The entrepreneur and his team also play a big role. An entrepreneur's ability to execute fast, his mindset, his understanding of the business are all determining factors.

The motivation of an entrepreneur is also crucial. It takes at least a year or two to see the money start coming in. This can be demotivating for many and may make them move out. So they should be 100 percent sure because entrepreneurship is risky.

What are the different kinds of entrepreneurs you see in India?

The first kind are those in their 20s, they are not employed yet, have nothing to lose, and entrepreneurship comes to them naturally. The second, are those who have worked for 5-10 years and then embark into entrepreneurship. They have experience and savings to bank on.

The younger lot is often seen starting out in teams, their friends join them in the venture, while the older entrepreneurs tend to go solo.

The third kind are family entrepreneurs, they already have the backing but wish to diversify from what the family is currently doing. They want their own baby and want to grow it in their own way.

What are the pros and cons of entrepreneurship?

The biggest plus is the ability to become a millionaire or billionaire faster. At a job you may take much longer. The flipside is that you have no time, especially in the early years. And this applies to both the funded and non-funded entrepreneurs.

As an entrepreneur you're always working... on Saturdays and Sundays and after office hours. You can't take breaks as you're either checking the work being done by employees or putting strategies in place and planning ahead. Clients can call you at any time and you have to show up.

How can entrepreneurs get better equipped?

Unless you have a vision and a road map, it's difficult for a venture to sustain itself. The road map may change but you need one to begin with. You may find different routes to meet your targets but the long-term vision should never be compromised.

A lot of market research and time should be spent on creating a good product and understanding the industry better. The best way an entrepreneur can assess his enterprise is through numbers, from ranking and rating employees to monthly targets, you can evaluate everything from a number perspective.

In addition to a business plan, an entrepreneur should make a monthly business model. This helps you know your targets better. At the end of the month, you can just check what all has been achieved and what hasn't and then assess what's going wrong, what are the issues you're facing. Be organized and ethical from the start. Because otherwise you won't get loans later and you're long-term growth will get affected for sure.

What does it take for an enterprise to grow exponentially?

An entrepreneur always needs to be in a fundraising mode because that will ensure growth. You cannot afford to sit back and feel satisfied. Investors also want to hear a growth story.

You must also constantly evaluate the market and find out why there is a demand or not. Track the industry and its trends for the last few years and see what you may need in the future.

All entrepreneurs should read extensively about their industry, be a part of associations and learn what is happening currently. Focus on the deals taking place in the industry and understand which sectors or businesses are on the rise.

Tips to budding entrepreneurs

  • Your passion or belief in your business idea is important, but also pay attention to meticulous planning.
  • Don't just focus on money, focus on value creation, that's when your venture will become a success.
  • A business needs continuous innovation, keep working on doing things differently.
  • Transparency is key in any business, the more messes you create, the more you will have to clean up.
  • Entrepreneurs have many ideas, but are unable to recollect them when needed, so keep writing them down.

Which stage of entrepreneurship are you at?

  1. Seed stage: You have an idea, you evaluate it and create a prototype
  2. Startup Stage: You start the enterprise, run it for a year and gauge its profitability.
  3. Growth Stage: Once you know how much revenue a product can make, you increase production.
  4. Expansion Stage: After you have been successful with one product, you expand the product range.
  5. Exit Stage: You assess if you can further scale up or if you would like to exit and sell the enterprise.

 
 

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5 Responses to "Startup eSeries: How to Incubate Your Dream Venture"

Abhishek Dhumal

04 Jan, 2015

Hello, I'm at stage 1... Starting a very conventional business, "a property investment firm". But I've no business background nor any experience. And I know I'd be needing heavy funding because of type of business. What should I do? Can I approach VC's or should I take help from consultants like purple ventures?

Like (1)

shivnair

01 Jan, 2015

I am not in the chart. Started one. Lost heavily forced quit it for a living. GO for Job again! Still looking for a new try May be in rebirth stage

Amarendra Mishra

30 Dec, 2014

Want to start venture but no idea which one to start.

Dilipkumar Roy

05 Oct, 2014

I am now on 'Growth Stage'.

Manotosh

05 Oct, 2014

Like to start a venture at iit kgp business incubation center through my son and wife.

Like (1)
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