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It is amusing, though probably not surprising, to find that many business
schools and even some engineering and technology institutions today are holding
seminars on entrepreneurship. As though the joy of starting a new business is a
discovery that needs to be made and shared with thousands of prospective
management and technology graduates. The truth is that jobs are few in every
sector. So, entrepreneurship may be one way of getting students out of the
placement challenge. And while this may sound rather cynical to the starry eyed
Steve Jobs wannabes in our industry, new entrepreneurs must be clear that they
are getting into a venture with their eyes wide open.
Consider the rather gloomy and risk averse statements being made by many
members of the venture capital community today and contrast that to the
proclamations of early stage investing and concept funding that were being made
from the rooftops not so long ago. The talk today is all about risk
minimization, with market size and scale risk, competition risk, market growth
risk, and team completeness risk added to the overall risk of weak return on
investment that has always been a worry for any investor. It seems to be almost
a throwback to the late nineties in the country where Indian VCs had begun to
approach equity funding from a debt perspective, asking for order book and
customer lists before funding would be contemplated. This meant that idea
merchants were invariably left by the wayside. One VC candidly says that the
markets are down, and hence, concept stage funding is no longer feasible and
its only early growth stage players who will be candidates for funding. Are the
lines again getting blurred between VCs and private equity providers?
While the statistics reported in a recent surveytwenty-seven deals amounting
to just under $120 mn in the first six months of the year as compared to
sixty-seven deals totaling over $410 mn in the same period last yearmay not
sound too encouraging; there is still money for ideas which are well though and
based on a realistic rather than overly optimistic assessment of buying
inclinations of the target market. Apart from the dreams of making products for
the global market in areas ranging from gaming to wireless to new financial
services, the declared intention of the Government of India to make substantial
investments in e-government projects and other key areas like agriculture,
healthcare and education should open up significant opportunities for
entrepreneurs willing to research these markets and build compelling value
propositions for an inclusive India agenda.
The e-agriculture agenda is a compelling one, given the fact that over 60% of
the countrys population is employed in the farming sector. Affordable
applications for the bottom of the pyramid are needed in a host of areas ranging
from weather forecasting to geographical information systems to bring additional
areas to water management, flood control, etc.
ICT applications with vernacular and local content will have to be deployed
and R&D centers in various parts of the country would need to focus on better
innovations in ICT usage for this vital sector of our economy. As new business
models such as contract farming evolve, ICT applications need to be available to
optimize efficiencies and specialized finance schemes for installing ICT
equipment will have to be simultaneously thought of to avoid a digital divide
between the haves and the have nots in the agricultural community.
The rules of successful entrepreneurship have not changed even if they are
being applied with more rigor today in a tough funding environment. A scalable
idea, a team with the ability to implement as well as innovate and a clear path
to growth as well as profitabilityand if this simple list is easier said than
done, who said entrepreneurship is for the faint hearted?
Ganesh natarajan
The author is Vice Chairman & MD of Zensar Technologies. He can be reached
at maildqindia@cybermedia.co.in Page(s) 1
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