Minding your own business

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By A booming economy with a changing socio-economic environment is giving birth to a growing crop of young Indians who would rather build their own Infosys than join one. Tessy Koshy reports
  • Published 7.01.07

The Chemalamudis could not understand their son, Sasikanth. After graduating from BITS Pilani, Sasikanth, unlike many of his classmates, did not want to go to the United States for further studies or sit for the civil services or an MBA course. To top it, he had rejected a plum offer from IT giant, Infosys. And then when he started talking about starting an entrepreneurial venture from home, his Hyderabad-based parents — both government employees — were baffled.

But that was two years ago. Today, the Chemalamudis couldn’t be more upbeat. And why wouldn’t they be — it is not everyday that a 23-year-old boy from Hyderabad gets a nomination in Business Week’s list of Asia’s best entrepreneurs under the age of 25. His edutainment company, Habits, is going places with its first recruitment drive and a trendy lounge, where people have access to books, music, food and people. And Sasikanth, not surprisingly, is ecstatic. “I always believed in self-employment as it gives me the opportunity to do what I am best at,” he says.

A booming economy, easy availability of funds and a changing socio-economic environment is giving birth to a growing crop of young Indians such as Sasikanth who would rather build their own Infosys than join one. As a result, entrepreneurship is no longer the secret dream that everyone once cherished across campuses and corporate boardrooms. Indians today are realising that ‘doing your own thing’ is very much doable.

Business: Tekriti Software, provides offshore development expertise to its overseas clients

And that is why Indian Institute of Management-Ahmedabad (IIM-A) students Debashish Chakravarty and Vineeta Singh rejected a Rs one-crore salary offer from Deutsche Bank and decided to set up a business venture with their batchmates. The two, along with Bhushan Dabir and Vishal Prabhukhanolkar, plan to float a lingerie designer unit with in-house branding and retailing. Undoubtedly, the challenge of entrepreneurship seems more exciting for these young managers than the comforts of a well-paid job.

The winds of change at B-schools across India have been blowing stronger than ever before. The number of management grads rejecting lucrative placement offers to pursue dreams of their own has been steadily increasing every year. At the IIM-Lucknow, 2006 saw as many as nine students — including the batch topper — opt out of the placement process to pursue their dreams. This was in sharp contrast to the number of students who opted to be entrepreneurs at this B-school in earlier years. No one chased such dreams from 2002 to 2004, while there was just one wannabe entrepreneur who opted out of placements in 2005.

The trend is visible in most B-schools. A recent in-house survey at IIM-Calcutta revealed that almost 25 per cent of its management students would eventually like to set up their own enterprise in the near future.

Business:Habits, an edutainment company in Hyderabad

All this passion and enthusiasm means some innovative business ideas. So, while 24-year-old IIM-Bangalore pass out Kunal Mahipal runs Kriti Lifestyle, a Delhi-based company that is making designer wear accessible to the man on the street, IIM-A batchmates Nikhil Vaswani and Rohit Shankar are heading Be Positive Wellness Services offering health programmes for their corporate clients in Gandhinagar. Management graduate Prakash Mundhra of Mumbai runs Sacred Moments manufacturing customised Puja Kits for Diwali, Griha Pravesh and other occasions.

And it is not just B-schools that are turning into breeding grounds for entrepreneurial dreams. Both students and training programmes at the Guwahati-based Indian Institute of Entrepreneurship (IIE) have been steadily increasing every year. From 120 programmes with 3,500 participants in 2003-2004, the numbers increased to 155 programmes with 5,300 participants in 2006. Originally envisioned as employment generation programmes for the unemployed youth in 1994 the institute now gets professionals such as doctors and engineers enrolling for their courses. What’s more, Business Baazigar — a reality contest on Zee TV for the best business idea — saw entries to the tune of 2 lakh out of which 50 eventually faced the jury.

The bold prediction is that there is an attitudinal shift in the Indian youth today to move from a ‘secure and well paying job’ towards entrepreneurship,” writes entrepreneur Ashish Kumar in his blog latestinindia.com. This change in mindset according to Kumar — an active blogger and firm believer in the spirit of entrepreneurship — is partly because of the easy availability of jobs that guarantee a fallback in case of failure and double incomes that give one partner the choice to take a risk.

“I think this is just the beginning of this shift. With time more and more people would want to either start a company or join good start-ups,” feels 27-year old Kumar. And he should know. The techie left a promising career in Microsoft to start his own software company Tekriti in 2005 along with two friends. From three members, Tekriti — which provides offshore development expertise to its overseas clients — has more than 30 employees today.

So, what’s prompting these young Indians to pursue entrepreneurship, traditionally considered to be ridden with more risks than benefits? Most wannabe entrepreneurs stress that though money and fame were the initial motivating factors, somewhere down the line they found a larger meaning behind their entrepreneurial aspirations. Take for instance management students Mintoo Kakati and Jayant Sharma of Delhi University who have been motivated by the prospect of becoming employment generators. While Kakati has his eyes set on a retail venture after B-school, Agra boy Sharma wants to revive tourism in Mathura and Vrindavan.

Or take Mayank Jain, an IIM-Bangalore student and would-be entrepreneur, who believes that starting off on his own gives him the opportunity to leave a legacy behind. “I want to create an impact and make a difference, which as a salaried employee I would be unable to achieve,” says Jain, who dreams of opening a consultancy firm. Agrees Ashish Kumar, “I felt that my work was not making an impact in the organisation, I was just another employee. The kind of passion I have for my work today is amazing. But entrepreneurship does not mean I can go for a movie or a date whenever I want to. It means a lot of discipline and dedication.”

Giving flight to the dreams of these aspiring entrepreneurs are several forums and bodies that promote entrepreneurship today. The National Entrepreneurship Network (NEN), for instance, helps member-institutes to initiate and expand their own entrepreneurship programmes. With over 75 top-tier academic institutes in India as its members, NEN’s entrepreneurship related education programmes are reaching out to over 40,000 students in India.

Then there is Dhriiti, a Delhi-based non-governmental organisation which runs the EoT (Entrepreneurs of Tomorrow) programme for school students to motivate thoughts of innovation and discovery in young minds. The Kashmir University in Srinagar is also planning to start an MBA course in entrepreneurship

The B-schools themselves are igniting entrepreneurial thoughts among its students. From channelling entrepreneurial aspirations in e-cells to nurturing viable business ideas in incubators, students now have a thriving support system. Business plan contests see the likes of Raman Roy, father of the BPO industry in India, CEO and co-founder of naukri.com Sanjeev Bikhchandani and Rediff CEO Ajit Balakrishnan mentoring would-be entrepreneurs.

“There was a time when if you were a student in MIT and you had a great idea, you could think of starting a company the next day. Though things are not that easy in India today I am optimistic that the future belongs to those fireflies — the small-time entrepreneurs,” says Debashis Chatterjee, management guru and faculty at IIM-Lucknow.

Though there have been spurts of great entrepreneurial interests since the 1970s — IIT alumnus Satish Kaura, for example, set up Samtel in 1973, a company that is worth over Rs 1,400 crore today — the environment has never been this conducive for business.

“There is a lot more awareness about starting your own business today. More opportunities with a booming economy and a changing mindset where failure is no longer a stigma,” says Vishnu Varshney, MD and CEO of Gujarat Venture Finance Limited (GVFL). Varshney himself went through an unsuccessful entrepreneurship attempt in the 1970s. After his MBA in the US, he returned to India in 1975 with dreams of opening up an electronics unit in Kanpur. But the struggles he encountered to just get his land application cleared buried all his dreams. And that is why his future association with GVFL had him mentoring many aspiring entrepreneurs.

The good news for today’s entrepreneur is the rising number of venture capitalist funds in India. The young Indian is waking up to the fact that if you have a good business plan there are very high chances that there will be investors willing to finance your project. “India is today the focus of venture capital funding. It means that there is easy availability of early stage funding and investment of seed stage capital,” points out Digbijoy Shukla, manager of The Indus Entrepreneurs or TiE, a body that promotes entrepreneurship.

Agrees M.K. Sharma, deputy general manager of the Delhi branch of the Small Industries Development Bank of India (SIDBI), “If you have a bankable project then money is not a problem.” In the last one year SIDBI has funded over 1,200 projects all over India.

Statistics show that the venture capitalist (VC) scene is heating up in India. According to the Indian Venture Capital Association (IVCA), fund raising activity for the Indian market continues to remain strong with firms — both existing and first-timers — announcing the launch of venture funds targeting over US$8.7 billion. On the other hand, private equity (PE) firms invested about US $2,085 million in 75 Indian companies during the quarter that ended in June 2006. The amount invested during the latest quarter was five times higher than that during the same period in 2005.

“VC investments today are much more realistic than they were six years ago during the Internet boom. US-based VC and PE firms are now seeking to invest heavily in start-ups and early-stage companies in India,” says Apoorv R. Sharma, manager, IVCA, which is the apex association of VC funds in India.

If you thought the funding was all happening in the IT sector, think again. IVCA figures show that during the latest quarter with 17 deals worth about $200 million, the manufacturing industry overtook the IT and ITeS sectors as the favourite among PE investors. Also out of the new VC funds worth $3 billion that were closed during the quarter about $1,970 million went into real estate funds.

“We foresee more entrepreneurial ventures in mobile technology, mobile applications, outsourcing, retail sector, consultancies, real estate, event management, travel and tourism,” says Shukla, who points out that only 10 per cent of TiE’s 500 members are from the software sector.

With increasing availability of funds the focus is on bigger businesses. “I see people going in for much larger businesses than five or six years ago. They are optimistic and confident that they can do it,” notes Alok Mittal, who founded jobsahead.com and is today involved with two venture capitalist organisations — Canaan Partners and Band of Angels.

But not everyone is thinking big. Take for instance 31-year-old Juhi Sahai. She left an enviable job at the British High Commission in Delhi a few months ago to start Saleswise, a communications consultancy firm, and without any investments. All she had was nine years of work experience, a laptop, car and mobile phone. “I am more satisfied today. My work is challenging and enjoyable at the same time,” says Sahai. Delhi-based software company Magnon Solutions Pvt Ltd too had a humble beginning. Magnon, a web design company run by Vineet Bajpai, began with just Rs 50,000 and two rented computers in a garage six years ago. Today the client list at Magnon includes the who’s who of the Indian corporate and government sector.

Though their numbers are steadily increasing it is not all that rosy in the world of entrepreneurs. The flip side to this story are the number of business plans that don’t get funded and entrepreneurs who score high on technical know-how but are low on marketing skills.

“As part of a global funding team, we have 15 investors spread across India, Israel and the US. Among them we get close to 100 plans daily and if you look at the overall picture the quality of projects in India is the lowest,” says Mittal. “I see entrepreneurs getting lost in little operational details which take the focus away from business strategy and plan,” adds Shukla.

Entrepreneurship has its own way of choosing its winners. But, as they say, people who are crazy enough to think they can change the world are the ones who often do so. Entrepreneurship, after all, is all about taking that crazy plunge.