[Editorial notes: This is one of the most candid piece of advise a new Entrepreneur can ever get. Before you dive in, read this piece of insightful suggestion].
1. On Value of Being Profitable: The most important trait of an entrepreneur is ability to churn profits. Whatever a true entrepreneur does, he does it profitably. Profitability is a habit, and habit shows early. Profits is the only secure source of growth of enterprise. If the enterprise is always profitable, it proves that all factors in enterprise design are working in coherence, in music, and long-term success is guaranteed. Profits are the only indicator of correct Business Model.
2. On Business Model Evolution: It is impossible to get your business model right at the start. Whatever you plan at the start, you will plan on assumptions, and the truth will invariably be different. That truth lies somewhere in marketplace. You have to go in person, and on a small-scale, try out your assumptions, and fix the errors in assumption. Business Model is an evolving process, and it takes years sometimes to get it right. To be able to survive financially while the business model discovery is happening/going on, in ultimate analysis determines whether the Entrepreneur will be successful. The business model can be said to be evolved when stable profits from core operations have been achieved, and those profits are growing every year, and gives the Entrepreneur affordability for a decent quality of life
3. On Getting Funded: There are only two fundamental ways getting funded. By Earning or by Borrowing. I think earning yourself is a superior method of funding for obvious reasons. You are not dependent externally, you are not spending months chasing finance, and if you do get it, you are not spending sleepless nights as to how would you return the money, and you will prevent your interest to become junior to the borrowers interest. The most important function if not taking funds is that it gives an accurate mirror of what you are doing, and whether you need to fix a problem. Tonnes of easy available cash prevents problems to come to surface, and prevents evolution of business model.
4. On Initial Funding Design: So if you are not going to take funds externally, how are you going to get funded. You have to put in initial funding design in place. Just as source of funds for your funder could be anything, source of fund when you are funding yourself could be anything. If you are funding by earning yourself, you must create totally independent sources of funding to keep you going. Don’t let notions of core focus deviate you. Between Cash and Focus, cash is more important. Short terms acts like one day events, talks, or anything that can give you running cash are perfect for this function. As your main business model picks up, you can let go of Initial Funding Initiatives.
5. On Ego being an enemy of Entrepreneur: Ego is an enemy of Entrepreneur. Entrepreneur is not driven by how many number of people he is commanding, how many people are saluting him, how many people are taking notice, how many magazine covers he has appeared or whether he is driving a Mercedes Benz, or what is his net worth. Ego also interferes with Entrepreneur bonding properly with the employees. A successful entrepreneur will identify it, and shun such social taxes on his enterprise.
6. On Cost Control: An entrepreneur will do whatever it takes to cut costs initially. if need be he will travel in buses, live in 1 Bed room houses, stay in cheap hotels, use cheap phones. There is no shame in that. In fact it is an honorable act if the Entrepreneur does it. It demonstrates his commitment to cost control, and profitability. every penny saved is a penny earned, and extends the time available to entrepreneur to work out his business models.
7. On smallest entrepreneurship being more valuable than the best jobs: When you are an entrepreneur, you have the power of choice. You can hook yourself into possibly profitable avenues as and when they evolve. This freedom is lost even if you are in the best of the jobs. You will only end up doing what your superiors ask you to do, and over years, you will settle down, and loose the raw vitality needed to get back to become a genuine entrepreneur. This will of course effect net remunerations of the job seeker, and you will find, even though an Entrepreneur starts small, at some time he will catch up with the best paid in jobs. Of course after that the Entrepreneur will beat Job Seeker in net remunerations handsomely. So I really wonder when bright college kids fall over themselves to apply for the assumed best jobs, when in reality, they are foreclosing millions in remunerations. They celebrate getting into that job they cannot get out of. In effect those bright kids are getting wildly happy on picking lakhs, and rejecting crores, and then cheering it as well. From my eyes, it is plain stupidity, plain idiocy.
8. On Value of starting small: Every start is small. It is no different for an entrepreneur. Howsoever big the concept, the start will necessary be small. You have to appreciate it, and not get desolate when you see your non-entrepreneur peers going places at the same time. All you need is patience and self-belief. Your time will come. Even the Ganges river which is enthralling and mighty in the plains starts with a drop.
9. Better fix mistakes when you are small: The time for reconfigurations, re-plans, redoes, fixes is when you are small. You don’t want to make mistakes when you are very big and public. The beauty about being small is that you get the same qualitative information on your business model as when you are a giant. So there is value in being small, and learning about your own business and its environment. Identify the problems early, and fix them early. Trees cannot be replanted, seedlings can. Don’t hurry into growth.
10. Get in the game to know rules: Unless you play, you will not learn the rules of the game. Entrepreneurship is a different experience from inside. No outside view can ever give what a day inside would do. So play you must.
11. There is no hurry: There is no way by acting super busy, or in hurry you are going to accelerate events. Time takes it own course. Tortoise beats the hare. Always.
12. On Persistence making difficult task easy: Persistence is a virtue. Persistence is more valuable than Intelligence. Entrepreneurship is a long haul game. It is a marathon, not a sprint. With persistence, the most difficult task and accomplishment becomes a series of small easily doable set of steps. Persistence is a great simplifier of difficult journeys. If you cycle 2 hour a day for 6 months, you will cycle from Kashmir to Kanyakumari.
13. On Long periods of Enthusiasm: You have to be enthusiastic over long periods of time. Enthusiasm is the only engine, only driver that an Entrepreneur has. There will be bad days, deals not going through, self doubt, societal pressures. Only your enthusiasm will keep you motivated.
14. On Scalability: Even though you start small, you must have a clear view of scalability in your business. Your business must be able to grow and accommodate thousands or millions on the same basic business model you evolve. If it is not scalable, retune the business models. By making small changes, you should be able to add scalability.
15. On non-competitiveness: Competitiveness reduces profits. You will never become rich by competing. Which ever field you operate, there is a possibility of finding non-competitive spaces. Find those spaces, and focus there. I put it like this: Drive a tunnel of non-competitiveness in competitive spaces.
16. On Greatness showing itself locally: If you end up developing something great, the evidence of it will come in local markets. Google search engine was rage on Stanford campus the very first month. Facebook brought down servers in Harvard when it was launched.
17. On Selling Experiences: Experiences fetches premiums. Never sell products. Sell experiences. McDonalds, Starbucks don’t sell burgers and coffee. They sell experiences.
18. Value of Relationships, Initiatives and Monetizations: If you can view your business as Experiences, then the whole job breaks down in Relationships, Initiatives and Monetizations. Relationship is which people you engage with, and what relationship you build with them. initiatives are what unique initiative you are taking to satisfy your relationships. Monetization is the act of securing revenue out of your relationships. In Experience view, Designing the right set of Relationships, Initiatives and Monetizations is then the definition of Business Model
19. Developing your own parameters of judgment: You will be told tonnes of things by your parents, your teachers, your friends, and in this case even me. However, nothing can replace independent thinking. Never accept things on reputation. Always make your own judgments, and trust your own judgments.
[About the author: The above post is from a talk given by Mr. Rohit Tripathy, Founder, Intricap to Entrepreneurship Development Course students of NITIE under Prof T. Prasad who are making a live company called Componentika. He can be reached at email@example.com ]