ENTREPRENEURSHIP: How to treat the opportunity dissonance

Throughout history there have been two categories of people – those who create wealth and those who consume it. To consume wealth we require little qualification however the creation of wealth is altogether a different proposition. Luckily for us, a classic high decibel noise generating topic among the budding managers of our country is entrepreneurship. While that is cool to hear, the cognitive dissonance is that hardly 2-3% of the Young MBAs from our talented pool take the leap every year.  Now that speaks some humble numbers. Not that these so called ‘Best in the country’ make the entrepreneur-par- excellence’s of the world but considering the climate of our times, one feels that they have the best shot at making a real socioeconomic impact. The idea of ‘entrepreneurship for everyone’ is admittantly chimerical but what the hell, these numbers suck for a land of immense opportunities like India. So I guess we need to dissect why Indians just don’t have the kick for entrepreneurship and put perspective on how Indians can get into the entrepreneurial Fast Track – Capital F Capital T!

An Indian Dilemma: What is an Entrepreneur?

Just for the uninitiated, ‘Entrepreneur’ is a loanword from French coined by economist Jean-Baptiste Say (in 1800) meaning “One who acts as an intermediary between capital and labour” which essentially means a person who is in possession of a new enterprise or venture or idea and assumes significant responsibility for the inherent risks and outcome. Now that is just a bland definition rather unromantic.

” Entrepreneurs in my perspective are people to whom freedom, individual and capitalism are not words but a way of life.”

It is exactly the kind of mental conditioning that makes them what they are. Unlike the popular social mindset it is not only the corporate Mercedes owners who are entrepreneurs; your neighbourhood smalltime vegetable shop owner is one too. I see both these people in the same light because I consider these ideals (Freedom and individual) above anything else. I’ll give you this in writing- even some of the best educated or the people in plum cushy jobs can’t run a vegetable shop with success if he doesn’t have the spark! Yea, let’s accept it; entrepreneurship requires a much higher level of individual and social conditioning than what India’s ‘Trained –for-job’ education can give.

As we dig deeper into the Indian entrepreneurial dissonance, I feel there are fundamentally 4 questions that can lead us to an answer:

1)      What is the Indian entrepreneurial legacy?

2)     What social impact is an entrepreneur capable off in the Indian context?

3)      What is the skill set required at the individual level?

4)      What can we do to promote entrepreneurship?

The Creation Of Wealth: Indian entrepreneurial Legacy

First, we have to accept the fact that considering the huge opportunity that is ‘India’, we produce too few entrepreneurs. Well, the reasons for this could be that for starters, we have been trained generation after generation to be cog-in-the-wheel people by society and education. Another is fear. Yes, a popular theory goes like 5% of all startups survive for five years and 5% of these survivors survive more than 10 years. He implies that only 0.25% of all startups eventually taste blood. We can’t question the veracity of this theory but I can say that there is a logical fallacy taking temporal succession for causal relation for failing entrepreneurs. Let me elucidate.

India 200 years ago:

For the contemporary Indian, the pain of losing money (or the drudgery of a high paid slave) is greater than the joy of not only being successful but also absolutely free! But that certainly was not what Indians 200 years ago thought. Then making their own way was natural to Indians. Few of us know that back in 1750, India & China made for 60% of the global trade of which India accounted for 25%. Now we contribute on 1.5% of global trade. Look beyond 200 years and we understand the inevitable position we were in.

So what happened to Indians?

It is probably the influence of 200 years of working for somebody else clubbed with the middle-class social norm of risk aversion. Yes, damage has been done to the quality social fabric of India and a dreadful precedent of a job crazy society has been established. But we must understand that small time entrepreneurs are the back bone of an economy. By the time they reach their retirement years, half of all working men in the United States probably have a period of self-employment of one or more years. Yep! The point I am getting to is that Indian contemporary entrepreneurship quotient has been knowingly lowered by the society but that is a temporal state. Our history says entrepreneurship was natural to Indians. It is just a matter of getting back to our own ways!

An Entrepreneur’s Social Impact: the Indian Context

This is a clichéd topic but is unavoidable considering the theme of the article. The question is what is the role of the entrepreneur vis-à-vis the Indian context.

a) The Creation of Wealth:

Back in 1874 Jamsetji Nusserwanji Tata floated a company with the dream of India one day becoming a world power in mind. Yes, entrepreneur’s like Jamsetji were nationalists even before this word had any great significance. Albeit it was a silent revolution powered by the idea of creating wealth for a nation. This is fundamentally what differentiates an entrepreneur, he creates wealth. Others consume it by providing support services which tantamount to a smaller contribution. There is a significant difference to what an entrepreneur and what a cog-in-the-wheel can do!

b) Saving by indigenous produce:

We all know that telecom is the happening place in the Indian economic space. Do you know how many telecom equipment companies India has? ZERO! The telecom equipment business is ruled by two Chinese companies Huawei and ZTE. Search your souls friends, isn’t this purely a case of lack of entrepreneurial imagination in a technical sound country like ours? Think!

c) Efficiency into systems:

Entrepreneurs generally spot a gap and fill it in. In the process they bring in efficiency in different business domains. For example consider social entrepreneurship. There is a limit to the kind of effect a politically motivated and rigged government can do. Things like MGREGA come like once in the history of the world. But entrepreneurs have no such limitation.  They can bring their ideas to social relevance monetizing it the process. The reach is beyond imagination reaching win-win situation which are here to last.

I can go on and on about this but highlight is that the range of social contribution of an entrepreneur is unfathomable. In the Indian context it a matter of being able to see our population as our biggest opportunity economics wise!

The Skill Set: Dissecting the individual behind it

The 3^rd point of contention is understanding the individual in the entrepreneur. Edison said after he invented the light filament:

“I have successfully discovered thousand ways to NOT make a light bulb!”

It is gives a sneak peek into what we call the entrepreneurial mindset. I am not going to take this question at the physical level which I am sure most my readers will be able to work out (Leadership, Money….etc). I feel this question needs to taken at a psychoanalytical level which is certainly beyond the range of this author as a run-of-the-mill engineer! Nevertheless with the Wikipedia as Friedman said the world is flat. Here check this out to bore yourself with the – Entrepreneurial Mindset. One thing is for sure, there is certainly a cognitive dissonance between excellence in academics and entrepreneurship. The aforementioned model stresses into 4 factors which they name Existentialism, Axiology and Telelogy , Pragmatism and Ethics and Sustainability. Further elucidation is beyond the scope of this article but I’ll give us this entrepreneurial mindset might exist in cooking just as well as web-2 innovating, it is the philosophy and the action it generate that counts – not the context. Just that you guy’s don’t feel left high and dry hear Howard Roark Speech (Ayn Rand) on objectivism philosophy it really gives a feel of how individualistic an entrepreneur might be:

Promoting Entrepreneurship:

An entrepreneurial venture is a scientific experiment – it may or may not succeed. One of the biggest realities of entrepreneurship is imminent failure whether it is at the start up stage or in a well established stage like Subhiksha. Entrepreneurship too is like the different stages of a human being – before birth, infancy, toddler, adolescence, teenage, adult and so on. Each level craves for a different kind of treatment. To make big time entrepreneurship a reality there are many factors that can contribute to ameliorate the economic favourability.

a) Funding mechanisms :

The most crucial and difficult part of an entrepreneurship is the first 10 years. It’s a matter of surviving. Financial bootstrapping is biggest challenge. Venture capital and angel funding seeking returns of 20-30% are the only go. But the catch is here, to get a VC you got to show your academic credentials. It is their kind of security. So even though academic excellence and Entrepreneurship have hardly anything in common your funding depends on it. What an irony! This has to change, you have got see opportunity and vision rather than certificates. This is why is said earlier the climate of our times favours the educated entrepreneur.

b) Efficency at the govt level

A typical example was in 1967 Tata Chemicals prepared a unique fertilizer project to indigenous production. Unfortunately the government opposed it and in the subsequent years the imports of fertilizers went up from a few 100 to a few 1000cr. Ultimately it was India who lost in the bargain. See, just because our markets were opened up in 1991, entrepreneurship has not proportionally gone up. To get a fair chance we need proper regulation and quality control so that brand India sells in the world. This is the best service the government can do to its people in the long term perspective.

c) Incubators at IIM, NGOs & science parks

We need Knowledge entrepreneurs in research, political entrepreneurs for a just democracy and social entrepreneurs for social upliftment and economic entrepreneurs for converting a social economic situation or need into greenbacks. Each of these institutes of excellence were found with a social objective. The incubators at these places have great role in giving orientation so that success is democratized!

d) School level

This is where the conditioning of people takes place. It is here that the relevance of changes in education system has to show relevant improvement. Children should get into the habit of questioning rather than forcing them to accept. Avoid programming kids for a job at this impressionable age. Give them the best teachers possible and also introduce them to the world of books. This can influence their ideas and change their understanding of the world.

The Verdict:

Understand that our legacy is not of a consumer but of a creator of wealth. Entrepreneurship is in the blood is just a matter of rediscovering our ways. India becoming a world economic power in 2020 is a dream all Indians carry close to their heart. Entrepreneurs are the facilitators for this dream. It is time that the youth start understanding people like Ayn Rand and move out from the mediocrity of social security and move into a realm of individual power. Let there be more puppet masters and fewer puppets from the educationally empowered!

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