|
ENTREPRENEURSHIP
Braving The Storm
Laisram Indira looks at some entrepreneurs who are facing the slowdown well.
These are depressing times. The markets are shaky, banks are going broke and customers are scarce. But for a motley group of entrepreneurs, the downturn is a great time to prove their mettle.
Sathya Narayanaswamy is one of them. After graduating from Chicago GSB in 2000, he worked at multiple startups before starting Parentree, an online parenting community, this year. He justifies setting up his company in a year when everything around is collapsing by saying: "In a downturn, quality becomes increasingly important as the sheen wears off the pretenders. At Parentree, where we deliver a high quality experience, we will find it easier to get our message across to our community and eventually our customers."
His company gives out information on various aspects of parenting in India. "In India health information is easily available as healthcare is cheap. But the the practical aspects of parenting, like things to do with children, fun trips, discussions on children's behaviour, parenting tips, school and preschool reviews, are only available from fellow parents. And a trusted online location, where parents could share this information, was missing. So we started Parentree, to be a parenting community where Indian parents could easily interact," says Narayanaswamy.
Aloke Bajpayee, founder of iXiGO, a search engine for travel, is also reveling in the challenge for a start up that comes hand in hand with a global financial crisis. Baypayee started his company two years ago when the times were good. But he actually feels that this year will be even better for business. "For a small capital-efficient startup like ours, it's a great time to focus on customers, build traction organically (like we have always done) and roll out some great products in a time where our competitors would be cutting marketing and product budgets. Since the problem we solve saves distribution costs for our suppliers, iXiGO becomes more relevant to airlines and hotels in the current business environment."
Like Bajpayee and Narayanaswamy, a number of other entrepreneurs are relishing the fight that starting up in tough times involves. With the support of parents, siblings and friends Anjali Gupta started Lipikaa, an easy-to-use interface for typing in Indian Languages. "A little insanity and a healthy dose of optimism is all it takes to start off in any part of the world," she says. "What's missing in India is the social tolerance to failure, to being on your own and to persisting until one gets it right. Silicon Valley has earned its good luck over the last century by embracing failure and earning the fortune that comes with repeated attempts. Entrepreneurship is not about the one idea that worked but about the many ideas and the inexplicable pain it took to find the right one."
Nandan Kamath, founder of GoSports, is braving the heat as well. He finds the global credit crisis worrisome but adds, entrepreneurs live in an environment where they have shown that it is possible to achieve great things going about business the right way and that inspires us as a company."We have been self funded that will probably have to change if we are to have the significant impact that we seek", says Kamath, who studied at the National Law School, the University of Oxford and Harvard Law School before setting up GoSports in 2006.
"We invested our own savings because we think it is important for us to have our own skin in the game and the hunger to make our venture work. We were also lucky to have a reasonable support structure around us to give us a start. An entrepreneur faces so many questions - commercial, legal, ethical - and generally limited access to mentorship and support structures. But today we live in an environment where entrepreneurs have shown that it is possible to achieve great things going about business the right way and that inspires us as a company."
There is tinge of apprehension, though, in all this brave talk. All of them agree that fund raising has become difficult in this year of global doom. Says Narayanaswamy, "Many talented people who would have started a new venture in the boom time, may hesitate to do so now. Many large corporations may also feel the same way and instead of venturing into newer areas, they may choose to invest only in their core areas. This gives us a little bit of elbow room to differentiate ourselves, and allows us to grow and position ourselves nicely for the next boom. Partnerships will become easier to execute, as everyone will need to leverage synergies and reduce costs of publicity and marketing."
"The global financial crisis was a much needed correction of inflated valuation and credit cycles," says Bajpayee, who graduated from Insead, Paris before starting iXiGO. However, like all crises, investor sentiment has gone from +ve to -ve in a matter of days and it might take years to be back in the +ve zone. So, the next few quarters will be tough and will impact demand once the dampening liquidity shows up in slower salary growth, less job creation, and conservative spending habits throughout 2009."
"The online travel market in India, in the long-term, will still be one of the most exciting environments to be operating in, and our belief in its growth and sustainability hasnt changed much. Compared to when we started, we are much better equipped to face this environment since we now have a proven business model and stable revenue growth, specially on the hotels and buses side of the business."
At GoSports, the revenue model is an evolving one. Says Kamath, "We see ourselves as a hybrid asset management and venture capital firm (where the assets are sportspersons and the ventures are sports careers).Today, some of our more established athletes pay us monthly retainers for management services and, we are happy to note that sponsors are willing to pay us for managing the younger athletes. Sooner or later the government is going to realise that public-private partnerships are the way forward in sports as well and, with our track record, we are well placed to make a difference there. The realisation is dawning on many that it is not merely a funding gap that Indian sports suffers from but one of appropriate usage of the right types of funding. In that regard we play the role of guardians and managers of valuable assets being paid to make these appreciate in value. At the same time, we take a contractual stake in our athletes' future earnings and to that extent act like venture capitalists in their careers. Once we have a larger diversified portfolio, we are confident that we will have a few major successes and that this will drive further growth."
For Lipikar's Gupta, "The hardest thing now is finding like-minded senior partners and cofounders, and hiring startup-friendly employees. Traditionally everyone wants to work for a known brand and have assured salaries." But that has not deterred her from setting her targets. "We will be adding many languages very soon, especially languages spoken in other countries in Asia, Africa and the rest of the Sub-continent," she says.
"But venture capitalists are investing for the long term and if they believe, like the rest of us entrepreneurs that things will turn around in two to three years, there is no reason for them to stop investing," says Narayanaswamy.
Given their confidence, this will hopefully help them remain standing once the storm passes.
indira(dot)bw(at)gmail(dot)com
|
Sensex rises 61 points in opening trade 
