Every employee who gets reprimanded by his/her boss thinks of only one thing… ” I should quit and start my own company…then I will show my boss that he is wrong…” Most of these thoughts remain thoughts and they never actually become an entrepreneur(I googled and found the right spelling… in rest of the article the spelling may be wrong…) entrepreneurs are of 3 types. I read it in an article..but I do not remember the name of each type. So the names Forced,Serial and Generational are my names. The explanations are correct though :-) The 3 kinds of entrepreneur are –
1) Forced – These people are forced to start their own business either because of lack of employment opportunities or because they love the freedom they get when they are their own bosses. Forced entrepreneurship is the most common kind in India. Most of these businesses are set up to provide income to the entrepreneur’s family. They are not meant to last beyond the current generation. ex:- local grocery stores, freelancing of any type etc.
2) Serial - these people get a high on starting a new business, see to it that grows to a considerable size and then selling it for a profit. They do not have emotional attachment towards their enterprise and can quickly move on to start another new business.
3) Generational – These people have an emotional attachment towards the business they start. They start and build a company from scratch. Also,they build up the systems and management so that the company lasts beyond the current generation. These people form the core of any country’s industry. ex:- Tata,Birla,Ambani et etc.
Since our typical disgruntled employee falls under the first category, I shall explain some parts of Seth Godin’s Bootstrapper’s bible here. Bootstrapping in business means to start a business without external help with respect to capital. Bootstrapper manages to run the business with his/her own capital and with the use of utmost caution while spending. I have not read the complete book, but the manifesto itself was very informative. I will definitely read the full book some time in the future. Most of us believe that we have an entrepreneurial nature in us, but we believe that we are just waiting for that one brilliant idea before we start our own business. The first thing Seth Godin says is that most businesses are not based on brilliant idea. In fact, he claims that more brilliant the idea, less chances of it succeeding. He says most businesses are boring. Most successful entrepreneurs copy an existing business plan and execute it better than competitors. Some of the tips the book gives are –
1) Never mix personal and business money. Always keep separate accounts so that if a business goes down, it does not impact your personal financial situation too hard. This is the mistake most of the people to in India. Even Amitabh Bachan mixed his personal finances with ABCL corp and faced bankruptcy. Thankfully, for him, he had enough charisma and acting talent to make a successful comeback and saved his family from ruin. He has started the company again, but this time he has vowed never to mix his personal money with the company.
2) Start a company and then look for business. Most of us are waiting for the brilliant idea. Seth Godin says, you should start a company and see how to make the company profitable. He says most preconceived ideas fail. He gives the example of 3M. Their original business plan was to buy a corundum mine and use the stones for grinding industry. In fact 3M stands for Minnestota Mining and Manufacturing. However, they were duped into buying a anorthosite mine.After their initial business failed they innovated and started manufacturing waterproof sand paper with the stones from the mine. The rest is history. They now have 55000 products(source: wikipedia) with sales of 25 billion and net profit of 3.5 billion dollars.
3) Never offer equal partnership – Most of us will not have the complete skill set to implement the idea we have. ex:- I have a brilliant idea for a product in telecom domain. However, I do not have enough domain knowledge. My friend works in Huawei. Since, he is a friend, I offer 50% stake in my idea for him to give domain knowledge. Seth Godin says this approach is wrong. Since the only job of my friend is to provide domain knowledge, he should be given a lesser stake. 50% should be offered only for equal partners.i.e if my friend is willing to spend as much time as me in building,testing and marketing the product only then should he get 50%. I was watching the movie Rocket singh yesterday and this point came rushing to my mind. The hero offered equal partnership to all new partners. His stake in the company quickly dropped from 100% to 20% even though he does most of the work. Even the guy who just assembles PCs( you can hire a guy for 10000Rs/month to do this) gets 20% of the company!!
4) Partnership – Always look for partners who can offer complementary skills to yourself.Never start partnership just because you are friends. Analyze critically what you and all your friends can bring to the table. If you are really close friends you will know what each one can offer the team. See if they are complementary and then only start a partnership.