This is a response to Sanjay’s post on whether or not Indian startups are thinking big enough. (Because it is a reaction to different points he made, I have traded flow for succinctness.)
First, a story of my own:
A practical joker (read: PJ master) friend of mine once came up to me and asked me to think of a number. I must have said 20. The guy quipped back – hey, you can’t think big! Think of a number like 124,368 (or something like that).
If I were an entrepreneur pitching to a bunch of investors in a biz plan competition, I would keep things simple and practical. I’d tell them about the revenue potential of the product, about the people in my exec team, do a 4-6 year financial forecast, and tell them how I plan to grow my business, and so on. Do you expect to hear the intentions of world dominance in a biz plan competition? Of course not – this is the chance to make an impression to get started and you don’t want to blow it up by stating that you want to be a billion dollar company in 10 years. Your financial forecasting will be torn into shreds.
Even if you aren’t competing in a contest, you’d have you break your grandiose vision into do-able pieces. Scale, global appeal and are things you keep building at along the way.
Did Infosys or YouTube or Google or Alibaba know how they would grow from day 1? No. For instance, we all know that the Infosys IPO was undersubscribed. I know of people who (sadly) tell the story of how they were offered Infosys shares at par during the IPO and refused to take up the offer (these are I-bankers, by the way). Point is, it is extremely hard to tell at the start whether you are going to be the next killer or not.
The VC community however, is supposed to have the experience to ensure that the “innovation” becomes a superstar. Like Sequoia put Steve Chen and Chad Hurley in an office and got them to hack away at YouTube. That’s why they get to judge the biz plan competitions .
I think entrepreneurship is matching capital (and other resource) availability step for step. As more capital investment flows in, there are more enterprises being created.
Look at RouteGuru, Redbus, MineKey & TringMe for example (there are more, but I don’t want to make this a link list). Each of these companies has the potential (product-wise) to change the way we think about currently existing equivalences. They are currently in “innovation” mode. The scale mode will come just around the corner – and scaling innovation is a different ball game altogether. (Following the Skype story?)
Anyone heard of SKS Microfinance? Non tech, it received $11.5 MM in funding from Sequoia earlier this year. The CEO was named one of the 100 most influential people on the planet by TIME magazine in 2006.
I believe the Indian entrepreneur is thinking big.
I don’t mean to launch a personal attack, but pay close attention to the line drawn from the post. “Remember to reach for the stars if you want to reach for the tree-tops (Emphasis mine).” Isn’t that thinking small, Sanjay?