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Starting Up - What they did not teach you at B-School
 

Starting Up - What they did not teach you at B-School

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A session by Rajesh Venugopal at BarcampKerala6, Ragiri College, cochin

A session by Rajesh Venugopal at BarcampKerala6, Ragiri College, cochin

http://www.youngkerala.org

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  • Bill gates, Steve jobs became what they are when they were sub 30
  • Cost of Private Ltd Co and Compliance.

Starting Up - What they did not teach you at B-School Starting Up - What they did not teach you at B-School Presentation Transcript

  • Starting up Rajesh Venugopal Creator Young Kerala Facebook Group www.youngkerala.org What they don’t teach you in B-School
  • Disclaimer
    • Not competent to teach
    • It’s a discussion in the unconference mode
    • Don’t want any one to agree with me
    • Sharing and learning from each other
    • Not complaining
    • Format – talking about failures more than success
    • Not using company logos
    • Not naming anyone alive
    • There is no right or wrong
  • Personal Reason
    • When you deviate from conventional paths, you can be extremely lonely. It helps talking to support groups
    • Young people need a lot of benevolence to become fearless risk takers
    • Young people are naïve and upright for the ways of the world
    • Young people are constantly ostracized impeding their self confidence to dream big or handle failures
    • If we cant provide them capital, provide them knowledge capital and inspiration
    • An ecosystem which is tolerant of failures , will discuss failure and will learn from it. Learning, collaborating, sharing will be the norm in that ecosystem
    • Wished if an angel from heaven came to help
  •  
  • The sapling has to be nurtured to grow up to be a mature oak tree. Along the way, it weathers many rains, wind, seasons, drought, flood. Some environments, even human interventions, help, some don’t.
  • Lets understand
    • Young Mind
    Input Output
    • It’s the process which is flawed never the person
  • Unhappy Young Mind Leads to low Self Esteem Negative Inputs Negative social economic output Feudal norms abuse Constant criticism No emotional support Brain Drain/Migration Suicides Alcohol Abuse Happiness drugs Violence & Terror
  • Late G.A.Menon
    • Was a dream Angel for a Young Keralite
    • Harvard Alumnus, Chairman of 14 Companies, some were Billion$ corporations, lived in Beverly Hills
    • Didn’t invest in the business plan, he invested in me.
    • Would follow his instinct, risk his name for his mentee, do opposite of what people told him.
    • Talked about the virtues of being a perennial optimist and playing to win
    • HR ‘process’ -> input management approach for better output
    • Felt that “Sir” and “standing up” – a common malayalee fad was unproductive
    • Died in the 4 th month of investment – not factored in the B Plan
    • A positive input on your life is always revered
    • Making your mark on the world is hard. If it were easy, everybody would do it. But it's not. It takes patience, it takes commitment, and it comes with plenty of failure along the way. The real test is not whether you avoid this failure, because you won't. it's whether you let it harden or shame you into inaction, or whether you learn from it; whether you choose to persevere.
    • Barack Obama
  • Happy & Confident Young Person Positive Social Economic output Self Esteem Break Feudal traditions Mentor and foster Support Groups Fearless leader Productivity Innovation & Risk Taker Benevolent Society Economic prosperity & non financial investment in young persons
  • Getting Started
    • Start as Proprietorship /Partnership firm
    • Get a SSI Registration
    • Dont mortgage your only home
    • Nationalized Banks are better
    • There are specialised branches for SMEs – avoid retail branches
    • Everything else is a waste of time , get customers
    • There will be surprises !
    • Funding should not stop you from starting a business
    • Some one else not agreeing with you should not stop you from starting a business
    • Don’t be rigid in the face of revenue
    • Don’t get into business if you don’t have emotional intelligence
  • First few years
    • You will typically be a single, at best a 2 client operation
    • If your first customer doesn’t cover cost, you need to fund it. It’s the choice you have made.
    • You will be everything in the Company.
    • May not get the respect you think you deserve.
    • You are never able to pay salary on a set date
    • Take defaulting customers to IFC a tribunal set up by SSI on arbitration
    • You find employees are not sticking with you
    • Most of us are begging for money most of the time
    • You realize back stabbing is a corporate way of life
    • Oh, man!! there are rattle snakes out there!!
  • Scaling up
    • Scaling up is a pain, some times it is better to be small and profitable
    • Scale up only if you have track record of 18 months continuous profitability
    • Your existing customers must have given you stability for the last few years
    • Let the scaling up request and commitment funds come from the customer
    • Borrow debt on CGTMSE Scheme
    • Do not borrow on personal loans – the repayment tenure is too short for a startup !!
    • Reschedule loans if you are unable to repay
    • Don’t borrow if you can help it
    • This is the time to register as a Private Ltd Co
  •  
  • Customer is king!
    • Whats a business without a customer?
    • Wear a sales cap from the time you wake up till you get on with routine, making that Cold call gets you the entry
    • Even big customers may not manage projects properly
    • Be patient:Negative managers with the customer leave, because they will be negative internally
    • Customer’s do advance money – you have to take a stance on it
    • Seek other types of revenue from the customer even if not connected directly with your line
    • Let the customer yell, make your staff take it. You stay behind the bush, come out when the fire works are over, try to diffuse the negative energy
    • Be extra nice to difficult customers – just agree to what they want and SSS on them
    • Sack the unethical and unscrupulous customer
    • Get out if the business is being commoditized!!
  • Kerala Advisors: Full glasses Spill
    • Ecosystem lacks understanding of Startups
    • Warning: Lawyers/Auditors look at you as a ‘Customer’.
    • KELSA, free legal aid, an alternate dispute resolution mechanism.
    • You have to do your own research, find solutions around the Ecosystem issues
    • If possible avoid localized advice. Reach outside the well
    • Web 2.0 forums, are better source in a Kerala type ecosystem
  • Negotiating
    • You have power only when the customer really needs you. (usually the startup has no power)
    • Your only chance to get good terms is before signing the contract (you have been salivating for long, and want to get done with it)
    • Long term is only for individuals, in today’s world no Corporate can guarantee anything long term especially certain sectors
    • Apply the Mind of a Cheater trick
    • Most often very long drawn and runs you out of patience
    • FEAR is the only reason we give in.
  • Simple tricks
    • 5 Why’s
    • PEST analysis
    • SWOT analysis
    • Infy’s website – PSDP model (predictability, sustainability, dependability, profitability)
    • Fixed cost & Variable Cost understanding is MUST
    • Financial ratios – gross margin, return on equity help
    • Rajesh’s survival tricks-
    • Mind of a cheater
    • Behind the bush trick
    • Austerity
    • Kissing the frog trick
    • Bomb shelter trick (avoiding negative emotions of others)
  • Communication
    • Key factor
    • Sit in front of the customer to know his next move!!
    • Be assertive, firm, but smile
    • Emails copied to superiors may get your relationship in trouble
    • Chat on MSN and Skype may cause misunderstanding
    • Even letters can cause misunderstanding
    • Face 2 Face and telephonic are the best
  • Employees
    • It’s a punt, some times you get it right, some times you get it wrong.
    • Shake hands and part ways even in hard situations
    • If given a learning opportunity, freedom and new wave of thoughts, they cherish working with you. (its an afterthought, but a feel good factor later in life)
    • Using your network to place them on better positions earn you a lot of goodwill
    • SSS – is feudal baggage creating a barrier between you & the employee
    • We cant tie an employee to our company, once you stabilise, the team stabilises. All this just happen as you go along – don’t worry abt it
    • Emotional upheavals are usual in startups
    • Unfortunately, ecosystem issues invade, peer and society pressures force them to leave your snake and ladder board game
    • Interns are good idea
    • Why do you want to employ, take temps
    • Do not expect loyalty
    • Employees are not born proactive. You have to tell them what to do
  • Stability
    • Team members been with you 5+ years
    • Customer been with you for 5 years
    • Your entity has been around for 8 years (HBR Article)
    • You have different revenue streams, your business model is robust
    • Your knowledge is now transferable to other businesses
    • Customer has his skin in your business
    • Margin improves, there are invisible margins now
    • You have full control, even if you are away
    • You loose your cool may be 4 times a year
    • Your mobile doesn’t ring that much
  • Looking after yourself
    • Pay your self first, only then you can take care of others and the Company
    • Work in and Work out – stay fit to avoid a heart attack
    • Show up only in positive circles where you can learn and connect with
    • The negative circles wear you down – IGNORE people who are talking ill of you, the revenge must be with yourself
    • Ping ‘The Secret’ - it works (there is a lag!!)
    • Things will happen, the snakes get older and tired and you start outsmarting the snake, then luck turns in your favour
    • And you will be an entrepreneur!! (start another company and roll your dice again, if you wish)
  • Everyone screws up..
    • I didn’t know what margin’s where. Never understood fixed cost and variable cost until recently.
    • Upped my stake from 10% to 26.05% on personal loans
    • Acted very corporate when I was a proprietor after Menon’s demise
    • Didn’t ‘manage’ my customers, lost temper , yelled
    • Mortgaged everything I have. I only have 2 companies
    • Didn’t handle pressure gracefully
    • Gave in to threats easily until I was pushed to the wall and nothing further to loose.
    • I pay every one else first particularly staff I realized just yesterday FEARLESSNES is a virtue I need to have
    • A life spent making mistakes is not only more honorable but more useful than a life spent in doing nothing.
    • - George Bernard Shaw
  • About Young Kerala
    • Mentoring is the bedrock of a progressive society
    • A mentor creates mentors and that goes on, the reverse is very true!!
    • It comes from a feeling of abundance of resources
    • Aimed at creating self confidence in the mentee
    • If I share my learning with Young friends, I learn from them in return
    • We don’t fund, we are just there for you in a virtual world
  • Young Kerala Facebook Group
    • Aimed at 15 to 30 year olds
    • 500 odd member – make it the biggest K group on FB
    • Free benevolence and no expectation or obligation
    • Group of NRK’s willing to help Young people
    • NRK’s have better exposure in bigger ecosystems
    • Proposal creation, Presentations
    • Moral support group – don’t feel alone
    • Every success depends solely on yourself
    • Keep mind and body positive
    • It is not the critic who counts, not the man who points out how the strong man stumbled, or where the doer of deeds could have done better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly, who errs and comes short again and again, who knows the great enthusiasms, the great devotions, and spends himself in a worthy cause, who at best knows achievement and who at the worst if he fails at least fails while daring greatly so that his place shall never be with those cold and timid souls who know neither victory nor defeat.
    • Theodore Roosevelt - From a speech given in Paris at the Sorbonne in 1910
  • Ecosystem 20 72 50
  • Kerala needs productive young people & this World needs people like you to make a difference!
  • With love, Yours, @raj241071