|
Dream
projects: The risk factor
Entrepreneurs
sometimes get so involved in their dream projects that they
lose touch with the reality of the marketplace. Building the
next killer-app or gadget should not be the sole goal behind
embarking on an entrepreneurial venture, says MOHAN BABU in
the second part of his series on entrepreneurship
In
the first part of this series on entrepreneurship and new
ventures, we looked at some of the trends shaping up and set
the stage for a discussion on entrepreneurship. The reasons
for a person to take up entrepreneurship could be many. The
idea behind this write-up is to continue to examine some of
the most common myths, explode them and to get the reader
to examine the core motivation behind the urge to embark on
a path towards ventures.
Myth:
Build it, and they will come.
Reality:
This catch phrase may have been okay in the movie Field of
Dreams but real life is not a dreamy movie with a mushy-mushy
ending. Entrepreneurs sometimes get so involved in their dream
project(s) that they loose touch with reality of the marketplace.
Building the next killer-app or gadget should not be the sole
goal behind embarking on an entrepreneurial venture. The American
landscape is littered with ‘dream projects’ where individuals
spend their hard-earned savings on personal projects, hoping
to sell it and make it big.
The
American dream personifies such entrepreneurial dreams where
‘making the next million dollars’ is the thing to look forward
to, even if it means sometimes thr-owing caution to the winds.
The fact remains that serious questions like analysis of Return
on Investment (RoI), evaluation of different scenarios and
a serious market analysis should precede any new venture.
Myth:
We cannot conceptualise an idea without a dream-marketing
team.
Reality:
This is a corollary to the previous myth: “Build it, and they
will come.” Though good marketing is a key to success, that
alone cannot be a driver. Investing in a dream-team of marketing
professionals at the conceptualising stage may sometimes negate
the creativity involved in entrepreneurship.
Striking
the right balance between an awareness of market’s need and
incremental innovation is perhaps one of the keys to success.
Let
us take an example to discuss the two myths articulated above:
A businessman from Satara in Maharashtra wrote to me a few
months ago. His mail was simple and crisp. He had absolutely
no knowledge of the medical transcriptions business, but on
a friend’s advice had leased a huge commercial space and bought
50 PCs with all the paraphernalia, including high-speed Internet
connectivity, etc.
His
mail talked about his plight and pleaded for an ‘order’ for
medical transcriptions which I could procure for him.
Now,
most readers of this column know that I am a technologist
with a ‘day job’ as an techno-biz consultant. I only have
cursory knowledge of the medical transcriptions business,
but sufficient to say, I intuitively realised that Mr Businessman
from Satara was in deep trouble. With absolutely no knowledge
of the business domain, he had plunged headlong into a venture
and was now under the misconception that marketing his ‘venture’
was his biggest problem.
For
those curious on my follow-up: Well, I sent Mr Businessman
a polite but firm mail excusing myself and asked him to seek
professional help ASAP and to plan an ‘exit strategy’.
Myth:
I can feel the pulse of the market, so I know it will sell.
Reality:
The examples quoted to articulate this myth include that of
Tom Siebel who famously walked out of Oracle to found the
Customer Relationship Management (CRM) software giant after
gaining insight into the need to manage relationships.
Not
all entrepreneurs are this finely tuned to the pulse of the
market. And even those who are astute enough to know about
market conditions may not have the entire big-picture mapped
out.
Knowing
the pulse of the market is just one part of the equation.
Realising how the trends will shape up and impact the future
course of businesses is more an art than a precise science.
Myth:
Big-bang theory.
Reality
is that most big ideas start small. Even successful entrepreneurs
sometimes fail miserably before the ‘dream’ takes off. Therefore,
it is foolhardy to think that one can get a million (or billion)
dollar idea and throw enough resources at it to make it big.
Most
prudent entrepreneurs test the waters by going in small before
committing resources, time and effort into a venture. Risks
inherent with entrepreneurship can be mitigated by doing so.
However, there are some ventures like laying undersea cables
across continents, launching TV or radio channels that are
resource intensive. Of course, these kinds of expensive ventures
are not for everybody.
The
ideas presented here are indicative of some of the most commonly
occurring themes and I wish to stir some debate with readers
by articulating these along with some anecdotes.
In
this column, we looked at some myths behind new ventures.
We will continue this thread into the third and concluding
part of this series in the forthcoming column.
|
