Interview with an Entrepreneur (Part 2)

[Continued from my previous blog post at http://udayshankarab.blogspot.com/2011/03/interview-with-entrepreneur.html]

Seizing The Opportunity!

[Image Courtesy: http://pixdaus.com/single.php?id=281651]

"the entrepreneur always searches for change, responds to it, and exploits it as an opportunity." Peter F. Drucker

He used to invest in a share fund locally run by his landlady for quite a few years. It was running all smooth and fine, as it was visible outside, until one fine day when hell broke loose and the landlady defaulted. She ran in to many people who did not repay the loan and hence as a ripple effect defaulted to all her investors. She very soon lost her face and hence stopped running the fund.

It was this time that he saw an opportunity, luckily for him very soon also supported by many friends and potential investors. He was a knowledgeable and trustworthy person among his circles and hence when this incident occurred, he rose up for the opportunity and claimed to run a new fund with better returns, favorable interest rates and loans terms.

Synthesis: “Keep looking for opportunities and the under-served/un-served segments. You see a market gap then that’s one of your opportunity window”

He ensured that he garnered people’s interest in his venture by reducing loan interest rates, and at the same time he also reduced his risks of having defaulters by allowing membership only to very close and trustworthy set of individuals. Soon, he had many people coming to him also because the segment was underserved. He rose up to the opportunity and seized it.

Synthesis: “Garner Support, Form Alliances, Have a Compelling Selling Point on why your customers should come to you”

Many may ask why he felt freelance electrical wiring was not scalable. I did that too! So when I asked this question, I very soon learnt that it was an intelligent and tactical decision, to not to scale up in this. To scale up and work completely on this it required a license to operate from the government (which was by itself fine) but the important thing was that he could not work in his factory on his full time job if he gets a license. He will then have to forfeit a job, which promised him a safety net and continual income. He realized that he could not take such big a risk since he had many people dependent on him, it wasn’t just him, he thought about lot more people depending on him.

I then asked if risk appetite was low then how come he was getting in to a business which failed miserably at the hands of an earlier owner, and in which financial implications are huge? What came out was something that had not run through my mind.

Though he did not want to take much risk he was aware that starting any business does require considerable risk taking, and hence he believed in calculated risk taking. In terms of calculated risk, the requirement to take a license and then quit a permanent job was an absolute NO for him and hence a very high risk activity. However, the running of the share fund did not necessitate quitting of his job. It also required less amount of time and was an intellectual function that could be done from his home rather than having to travel to multiple places as opposed to electrical work. In electrical contracting work he had to go to houses in remote places wherever they are being built, and as he scales up manage his own work force and also hunt down more and more customers in a segment that was already being filled with competition.

In running the share fund, he was aware that he will need to start as small as possible to reduce risk and test the waters, and with success have people come to him rather than he having to approach them for investment. It was a well thought out and deliberate plan.

Synthesis: “Risk is an inevitable element in any entrepreneurial activity you cannot eliminate it but can always alleviate it. Calculate Your RISK appetite before taking the plunge”

In my next and last blog in the "Interview with an Entrepreneur", Watch out for "Architecting, Growing and Transforming: The Second Beginning"

Interview with an Entrepreneur

"What were your success factors?" I asked him and he answered "it is about trying, never giving up and learning from things around you" and I knew how true he was, because I had seen him practicing it.

I had many more questions lined for the call I had with him. It was after a long time that I had spoken with him so much, asking him, knowing him, learning from him and reliving with him some of the experiences he had many years ago.

I was to write a research paper on an entrepreneurial event, describing and analyzing the event and the entrepreneur. After having thought for a long time, I did not want to write it for Google, Microsoft, or Apple, I knew there were enough written about them. I was looking for an entrepreneurial activity that was different, that I could closely associate to, that I could feel and really explore with. I did not want to Google for information of a company, understand what was written by someone and re-analyze it. So that's when I remembered about a financial venture locally run at my home city, Bangalore, India.

The list of questions I had lined up were,

Why did you start this venture? What inspired you?

What was the trigger, the exact story that made you start this?

What was your motivating factor? What were the environmental factors?

Did you have prior experience and did you have a business plan?

Why did you choose to do this rather than anything else?

Who helped you?

Did you lose control or get scared somewhere in between?

Were there any cynics or people who discouraged you and how did you deal with it?

If you were to look back in to past what would you change? What could you have done better?

Why did you not scale up?

What were some of the mistakes you think you made?

What were some of your biggest challenges?

Were you successful in this venture? If yes (I knew he was!), what were your success factors?

How have you helped others in this journey of yours?

What are the results, personal, financial and social?

How has business changed over time?

I really wanted to dig deep down in to his story, which sadly I had not done all these days. I knew what he did and how he did but had not explored his past and how it all started.

The Entrepreneur I am talking to was a son of an average village farmer who then lived in a hut, with a big family of 11 brothers and sisters. He was born in 1942 in a small and remote village called Aghalaya in Mandya, Karnataka, India. He was the eldest son of the family, which meant responsibilities of running the family were bestowed upon him only second to his father. It was a customary tradition in the Indian families where in the eldest children’s are expected to carry most of the responsibilities of running a family along with their father.

Living his early life as a farmer, assisting his dad at the farms he was able to complete a moderate schooling in his village. He cleared SSLC, 10th Grade, which was a big academic achievement for a farmer’s kid those days, but very soon realized that there is more than farming that he wanted to do. So with the dreams of at least making a moderate survival he moved in to the city of Bangalore during his early 20’s. He signed up for a vocational training for being an electrician and soon landed up in a job with a large Indian PSU.

However, it soon struck to him that the salary in the range of tens of rupees did not help in making things better since he had to also support his parents, brothers and sisters in the village helping them in their needs for health, food, daily life along with saving money for the marriage of his sisters. Hence he started to continuously look for opportunities to invest and earn. His first step in having a business was of selling buns in his factory during lunch time, by which he made a few paisa of profit for every bun he sold. He also started working as a freelance electrical worker during weekends, and late nights after his regular factory job. However, both of these did not work out as a scalable model for him, and hence he was, continually seeking.

“I had to make my own living and my own opportunity”, Madam C.J. Walker and yes, he was on his way to make his own opportunity.

More to narrate in my next blog...