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Total Number of Subscribers: 1626 |
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Date:27th June 2010 |
Compiled by: M Sathya Kumar |
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To
somebody who is starting off right now, what would be your advice? First
of all, he or she must have an idea whose value to the market can be expressed
in a simple sense. Not a complex sentence, not a compound sentence. In other
words, it has to be something like reduce cost or reduce cycle time or
improve productivity or improve customer comfort or improve customer base
etc. That is the first requirement. Second,
the market must be ready for the idea, which means, you have to do some test
marketing. Or at least hold some dialogue with the relevant community. I know
several ideas which were wonderful but the market was not ready and they did
not succeed. The
third is—you need to put together a team of people that have complementary
strengths. You need people who understand technology, marketing, sales,
finance, human resources etc. Generally what happens is that technology
people come together, or marketing people come together, or finance people
only. Such projects generally don’t succeed. Fourth,
you need a good common value system. In the journey of entrepreneurship, the
initial years are always going to be very tough. Pradeep (publisher of DARE)
knows it, I have gone through it… You have to sacrifice a lot, you have to be
away from your family; the monetary benefits are very very low; the friction
in the business is high. So you need a common good value system. The team
should have the same, wonderful common value system. And, I would say,
finally finance. Finance generally comes if you have the first four that I
talked about. For
somebody who is starting today, which sectors would you recommend that they
look at? Which are the hot sectors in your opinion? See,
in a country like However,
what is needed is – you have to pick up such ideas, which are aimed at people
with reasonable disposable income, in the beginning. If the idea is aimed at
people who have no money, it is no value, however good your idea is. So it is
very important in You said, “reasonable
disposable income…” Yes.
The important thing is you should come out with such products and services
that people with a reasonable disposable income in It
is well documented that you had a very small capital base to start with. You
went on to build one of the biggest brands in global IT. For somebody
starting today, can they do something similar and what is the key to building
of that big brand? First
of all, the market is difficult for a general expertise company – a startup
company which focuses on some kind of a generalized expertise like project
management, software development, etc. On the other hand, if a startup was to
focus on a niche area like embedded systems for automobiles, or let us say,
systems for improving the quality of water, or designing software for
handling risks in derivatives… any of these. In other words, it has to be a
focused niche area. There they will be able to perform better than an
Infosys. Because they have something tangible that we did not have, they can
establish credibility with customers more easily than we could. In addition,
they can provide other services. The name of the game is to create a niche
market, in a specialized area. Second,
my belief is that brands are created by doing unusual things. . For example,
when Pradeep created Dataquest, there was no such magazine in Can
you start on a small base today or do you need a large capital base? No,
as long as you are in the service business, as long as you have a wonderful
idea, it is possible to go to the customer and because of the idea get an
advance from the customer. That is exactly what we did. We got advances from
our first customer and that sustained us. We also made sure that there was a
milestone every month. Once you define milestones every month, and you raise
invoices when you complete these milestones, there is a steady inflow of
cash. So these two principles are very important. One – have an idea which is
so good that the customer is willing to pay advances. Second - create
milestones every month so that there is a steady cash flow. This is for services.
However, if it is a product idea, then obviously you need venture capital. You
mentioned ‘common value system’ for the team that starts off… you had a great
team of entrepreneurs starting off Infosys. Any tips on how critical is that
there be partnership instead of an individual? One man show versus a team of
partners, what is the big difference? Nothing
can be done by a single individual. In fact, if a leader has to succeed there
will have to be followers. I don’t think anybody can succeed individually.
You need a team that has complementary strengths. I believe that in today’s
context, an entrepreneurial team, rather than an entrepreneur will succeed
better. That is where you can bring complementary strengths. That is where
you can bring people with expertise in human resources, sales and marketing,
finance, technology, etc. I believe in a team, rather than an individual. At
what point should an entrepreneur hand over operational management to
professionals? How do you prepare for a management transition? Right
from day one, an entrepreneur should conduct himself in a manner that
professionals would appreciate, professionals would feel happier about. Doing
that requires not bringing in non-merit based family members into the
picture, making sure that all decisions are taken objectively based on data
and making sure that there is no asymmetry of roles between the founders and
the non-founders. Now when should you bring professionals – you should bring
in professionals from day one. Because, as long as you can conduct yourself
in a manner that raises the confidence, the hope, the enthusiasm and the
energy levels of professionals, then why not? The only difference would be
somebody may not be able to take the risk saying that ‘Look, I don’t want to
take the risk, I want a decent salary, because that is what I am comfortable
with’. So you have to pay that professional a lot more than what you get as
an entrepreneur. The only difference between a professional and an
entrepreneur is that an entrepreneur is willing to take risk and accepts
deferred gratifications whereas a professional does not want to take the
risk, and wants to be rewarded immediately.
If you were to start
afresh today as an entrepreneur; what would you do differently? First
of all, I would use the same people – perhaps with a few more people that
have worked with me in Infosys, the same co-founders, plus a few more in the
senior management. I would do the same thing. Differently, I don’t know,
because we are an enlightened democracy. Here, every issue is discussed and
debated quite a lot. The good thing about a democracy is that you avoid major
disasters. It may not be as efficient as you would like, but you avoid
disaster. So, I am not very sure I would do many things differently. Can
there be another Narayana Murthy? How would you inspire a person to emulate
you? Oh
I am sure there will be thousands more. What I believe is required for an
entrepreneur is first – he has to have a vision, wherein the entire team
finds value. One which is seen as a rainbow by everybody else, and they must
be sure that they can catch a part of that rainbow. That is extremely
important. Second, because the initial journey requires lot of sacrifice, the
leader has to lead by example. The leader creates trust in other people,
saying that ‘look if this guy is willing to sacrifice all of this, I too will
do that’. Third, the leader must be impartial. Because the team is small, the
team is making tremendous sacrifices; the leader cannot create cliques or
groups. He has to be seen as impartial and fair. Fourth, the leader has to be
confident. Because at the end of the day when there are so many problems, to
continue on that marathon they need somebody who will infuse confidence every
morning. They should feel an inch taller than they are in your presence. The
leader should also be optimistic. There will be many inputs that keep coming
in saying, ‘no no, there is this problem, that problem’ etc. To fight all
those and still persist, you need optimism. Article was earlier published in one the reputed magazine. |
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