In a country where failure is seen as a blemish on one’s career, serial entrepreneurship first needs a mindset change
It is a hunger. “I see a huge opportunity and potential that excites me and makes me lose my sleep. I’m restless to start the business,” says K Ganesh, founder of Tutorvista, a serial entrepreneur, who is into his third start-up — an e-learning venture — that is attracting the global who’s who of the private equity (PE) industry for a stake.
Quite a few Indian entrepreneurs are spinning their managerial magic a second and third time around, albeit not on the same scale as in the US. Despite India attracting lot of attention from global venture capital and PE players, serial entrepreneurship is still at a nascent stage and at times tough, given the basic fabric of Indian businesses and entrepreneurship.
Says Sanjay Anandram of JumpStartup, which works with a clutch of start-ups: “The joke is that in India, company ownership is sexually transmitted; selling a business that one has started is not yet widespread — there are socio-cultural issues tied to this.”
“Entrepreneurship in India is largely a family affair; companies are like family heirlooms and, hence, entrepreneurs stay with the company or create new spaces within existing entities, which become conglomerates. This, I’d argue, is also serial entrepreneurship, though perhaps not in the classical sense,” Anandram adds.
There is also a lack of an eco-system to nurture such a development. First, there are no companies like Cisco, which is always on the lookout for new technologies that can be acquired and sold as part of its portfolio.
Then there is an inherent product and services divide in India. Explains Shyam Shenthar, CEO & MD at transactions advisory firm O3 Capital: “In a product play, it may be easier to find serial entrepreneurs. If someone is very conversant with one area of specialisation, it is easier for him to create a cutting-edge product, which can be acquired by a larger company, and then create a new company in a related area. In a good services company, on the other hand, it takes a few years to exit. Given India is more a services play, as opposed to (Silicon) Valley, which is more a product play, there will be differences.”
There is also a need for a paradigm shift in mindset. “Failure is seen as negative and permanent. The statistical probability that a start-up will succeed is less than 5 per cent. This couples with the way society reacts to failed ventures, which makes Indian professionals risk averse and unwilling to go outside the well-trodden path. Even when people do start off, they prefer the relatively safe services model or time & material ventures rather than product development or disruptive ideas that have high risk, but can be pathbreaking,” says Ganesh.
Moreover, a supporting eco-system of angels, mentors, venture debt and opportunities to sell start-ups to a large company and move on to the next one all contribute to fewer instances of greenfield ventures and first-time entrepreneurs — and even fewer serial entrepreneurs.
But, some of that is beginning to change in India. For serial entrepreneurs to exist, there first needs to be a large pool of first-time entrepreneurs — more importantly, entrepreneurs, who taste success. Capital is increasingly available, multiple new opportunities are emerging, talent is slowly becoming more widely available, entrepreneurship is no longer taboo among educated professionals, and M&As are no longer anathema.
“I’d argue that educated, middle-class-propelled, first-generation, across-the-board entrepreneurship activity is about 10 years old in India. This is too short a time for a generational shift to emerge. Silicon Valley has had the culture of entrepreneurship from the time Hewlett and Packard started HP back in the 1940s,” says Anandram.
Will India have to wait 70 years for serial entrepreneurs to sprout? That’s quite unlikely in the age of the Internet. “India’s burgeoning economy, growing markets, large population and the insatiable desire for education — all of this is just waiting for entrepreneurs to exploit,” says Ganesh.
ENTERPRENEUR
K Ganesh has an exceptional track record of starting greenfield ventures and helping them develop into robust and successful entities. He began his career as founder & CEO of IT&T, an information technology and network services company that he took public in 2000.
After eight years at IT&T, he went on to become CEO of Wipro British Telecom/Bharti British Telecom, where he turned it around into a cash break-even company. His next venture was as founder & CEO of CustomerAsset, later acquired by ICICIOneSource, one of India's top BPO companies, whose staff strength he grew from zero to 4,000.
Today, leading global PE players are vying to pick up a stake in his third venture, Tutorvista, which is an e-learning venture.
ECO-SYSTEM
So, what are the key levers to crank up the Indian eco-system for serial entrepreneurship? “Create start-up and incubation funds, allow banks to fund early-stage companies without the standard personal guarantee and collateral, celebrate instances of serial successes and showcase them to create positive aspirations, provide mentoring through experienced entrepreneurs and allow tax breaks and benefits to people starting new ventures,” advises Ganesh.
Adds Sridar Iyengar, who has been nurturing entrepreneurs thanks to his active association with The Indus Entrepreneurs: “The Indian entrepreneur has to persevere longer to bring his venture to success and sustainability because early-exit options are not readily available. That said, the number of entrepreneurs starting new ventures is growing. In time, we will have a larger number of successful serial entrepreneurs.”
While the eco-system will take its time to fall in place, it is the mindset that has to change first. “Risk-taking ability and willingness to burn your fingers and start over; being able to overcome the fear of failure and society frowning on failed ventures; and a mindset that is constantly looking for challenges and fresh mountains to climb. These are key differentiators,” adds Ganesh.
But things are improving, according to Srini Rajam, a noted entrepreneur, who quit as India head of Texas Instruments to start Ittiam, an embedded software & systems design firm: “We could see a shift in this pattern soon, with very young entrepreneurs coming up now in India, who are keen to achieve things in a much shorter timeframe and look for the next big thing in their career.”
