Some Stumbled, To Rise Again

The unfortunate suicide by Café Coffee Day Founder V. G. Siddhartha raises many uncomfortable questions about entrepreneurship, risk taking, the tax authorities in the country and the overall business environment. We look at some very eminent names who too had stumbled in their first business venture but emerged as shining stars in subsequent endeavours. We also seek views of experts on the lessons entrepreneurs need to learn from such instances

N.R. Narayana Murthy
Founder, Infosys
Infosys Founder N. R. Narayanmurthy’s first venture in 1976, ‘Softronics’, did not quite succeed. He began looking for opportunities elsewhere and started working for Patni Computers.
Then, along with Nandan Nilekani, N. S. Raghavan, S. Gopalakrishnan, S. D. Shibulal, K. Dinesh and Ashok Arora, all former Patni employees, he founded Infosys. The rest, as they say, is history.

T. P. G. Nambiar
Founder, BPL
T. P. G. Nambiar’s medical equipment startup did not earn him handsome returns. He then had a consumer electronics idea, and thus was born the consumer electronics giant, BPL.
 
Sunil Bharti Mittal
Founder and Chair, Bharti Enterprises
Even as a teenager Mittal had an inclination toward entrepreneurship. He started a small bicycle business with borrowed capital of Rs 20,000 with a friend. By 1979, he sensed that the business would remain small. He moved out of Ludhiana and went to Mumbai.
 
When the government decided to untie mobile licencing in 1992, he tried his luck in Delhi with the French Vivenidi group. His ventue began with those heavy rotary phones. Airtel was formed in 1995, marking the beginning of a remarkable journey.  

 Rajnikant D. Shroff
Chairman & Managing Director, UPL 
Shroff was born in a well-off family and tried his luck with multiple experiments during the 1980’s, none of which succeeded. At one point, he almost gave up. But he persisted and struck gold with agrochemicals, leading to the advent of the agrochemicals conglomerate, UPL.

Rahul Sharma
Co-founder, Micromax
Rahul Sharma and three of his friends, came up with an idea in 1999. They began Micromax Software. Sharma wanted to ride the dot com boom, but things did not quite work out for him in the long run. He then came up with the idea of starting India’s home-grown mobile phone venture, Micromax. After an eventful run, he has launched the ambitious electrical vehicle bike.

‘Fewer regulatory hurdles’
Mohandas Pai, Chairman, Manipal Global Education:
If the first venture of an entrepreneur fails, he must step back and evaluate why it failed and then start again. A person doesn’t do business to fail. But if you happen to fail, learn the lessons from your failure and then decide what you want to do. In Siddhartha’s case, the lesson that people must learn is that every entrepreneur should have a few friends he can confide in. So, a person facing challenges, must meet people, talk to them, confide in them and find solutions.

Secondly, an entrepreneur must distance his business from his personal life. Thirdly, a person musn’t  take the stress of his business home. Lastly, an entrepreneur must know how to manage risk well. It is very difficult to do, but he must keep it in mind.  
 
The government should create a very positive atmosphere. It must work toward ensuring  proper availability of capital to help structure startups. The government must ensure that there is ease of doing business wherein there aren’t many regulatory hurdles for entrepreneurs. Lastly, it must improve the velocity of business by having good policies which promote economic growth.

‘Single window for all licences’
Sunil Alagh,  Former MD & CEO, Britannia Industries:
An entrepreneur should never give up. However, key learnings should be established and a Plan B for the same business or a second business, should be considered at a lower scale so that the entrepreneur does not lose too much money. He must see small success in the business before scaling it up. The key is to have small failures so that they don’t kill you.  But, an entrepreneur must continue to take risks.  Challenges that entrepreneurs face in the initial days include lack of a business plan with milestones to achieve it, cash flow planning and outstandings from customers.

The lessons that one learns from the Siddhartha episode are that scaling of business should be at a measured pace, keeping in mind that a company always has an obligation to pay back external funding, such as debt or equity. Prudence should precede passion while scaling the business. Personal finance should never be mixed up with corporate debt. At a psychological level, one must learn to discuss problems with family and a few mentors. There should be no terrorism by lenders and authority. And above all, failure of a business should not be treated as a criminal offence.  

The government should help entrepreneurs by encouraging a single-window for all licences. Local banks should give loans easily at lower interest rates. Stringent regulation is required to protect entrepreneurs’ intellectual property rights. Finally, entrepreneurs need to be given incentives in the way of lower taxes for three years, compared to corporations, after an initial period of zero tax.

 ‘Guidelines for first-timers’
Rajnikant D. Shroff, Chairman & MD, UPL:
There are many cases where entrepreneurs fail in their first venture. They should find out the reason  most often they are external situations rather than the project. They should also find a partner with some commercial background. Then only are they bound to succeed.
Indian entrepreneurs have too many hurdles and problems, like tax inspectors, for   instance. There should be some guidelines for first-time entrepreneurs. Also, first time entrepreneurs should work in some industry for a year or two before starting up any venture.

‘Balance is most important’
Vamsi Krishna, Co-Founder, Vedantu:

Entrepreneurs should continue to persist. Firstly, before going into anything, aspiring entrepreneurs should do proper research and   understand the market potential. If an entrepreneur is able to do that, the chances of success are much higher. Discussion with people in the industry on market dynamics is often helpful. External circumstances, like the funding market drying up, could also be a reason for a startup not working well.

Balance is most important for an entrepreneur. Balance  both at the personal and professional front  is extremely important and we all should strive for that balance. We should be able to manage time and prioritise things. We need to have a very strong co-founding team who complement one another. Investing in getting the right people together is important.    
(Compiled by Prabodh Krishna and Sheena Sachdeva)