Entrepreneurial Opportunities in India

Where do Ideas come from?

IDEA GENERATION:Sources of Business Opportunities

Change as a Source of Opportunity• Status-quo is good for incumbent players (established

companies) – they have products or services, smooth operations, established business models, loyal set of customers, functional teams ……

• Change brings in disruption – that in consumer tastes, cost structures, business models, expectations, level of expertise needed, distribution channels, payment mechanisms, availability of finance

• Change produces a level-playing field which is actually loaded in favour of a new player because of his flexibility, adaptiveness

Examples of Entrepreneurs Exploiting Change

• Japanese car manufacturers (1973)

• Microsoft (1976-78)

• Amazon and Dell (1990s)

• Infosys (1989)

From Idea to Opportunity• Rehan Yar Khan of the Indian Angel Network • Founded flora2000.com • An 'idea' is of course the beginning of an opportunity. Let's

take the example of Tata Nano, which in the beginning was essentially just an idea. And then one man, one entrepreneur Ratan Tata decided to bet on that idea and this trait of betting big on an idea can only come from an entrepreneur.

• You have these big global automotive giants like General Motors, Toyota and the who's who of the world. But one guy with a pretty small company compared to these global giants had that entrepreneurial bent to convert an idea into reality. He saw an opportunity here: billions of people, no proper motor transport, we got to find a solution for this. And he did it!

Broad Categories of Change• Demographic – whole population (age distribution)

• Economic – Emerging markets

• Socio-Cultural -- Value systems, role models

• Technological -- Variety, performance, cost

• Political – democratic, authoritarian/totalitarian regimes. Free market vs socialistic policies (Britain in early 1980’s)

• Legal and Regulatory -- liberalization (internal and external), enforcement of IP protection laws

India in the New Millennium

• “Young” country with rising literacy and prosperity

• GDP growth rate of 7-8 % per annum

• Growing middle class

• Liberal, business like values, pursuit of wealth

• High unemployment, imbalance in the development

India in the New Millennium• Passages of IP laws (new patent regime)

• Respect in the global community (functional democracy)

• Atmosphere conducive to business -- no xenophobia, no insularity, no misplaced importance to “self-reliance”

• Well developed “Institutions” – judiciary, capital markets, stock exchanges, media (free and independent), educational institutions, regulatory bodies (SEBI, FDA, ISI)

Analysis of Existing Entrepreneurs

• Truly new, novel and innovative ideas: 3-4%

• Rest 96%

– Enhancement -- improvement / refinement of features – cheaper, better, faster, more user-friendly

– Extension to features

– Specialization -- niche’ creation

Examples of Enhancement

• DOS to Windows• Mechanical watch to quartz watch• Modem to ADSL modem• Ordinary TV to a flat screen TV• Desktop PC to a laptop PC to a tablet PC• Propeller engine to a jet engine

Most industrial innovations

Examples of Extensions• Toothbrush with a built in toothpaste• Pen with a torchlight• Mobile handset with camera, FM radio,MP3 player ….• Memory sticks with MP3 players• Wristwatch with a calculator• Cinema Multiplexes• Day care centers (crèche) with tuitions• Swiss army knife

Examples of Specialization

• Low cost airlines (Ryanair, Easyjet, Air Deccan)

• Boutique financial advisory services

• Super-specialty hospitals

• Finishing schools

• Executive search firms (CxOs only, finance professionals only)

Possible Service Opportunities

• Schools

• Restaurants

• Travel agency and tour operators

• Pet shops

• Bookshops

• Gyms / weight loss clinics

• Oxygen bars

Sources of Information: New Business Ideas

• Similar-enterprise owners• Machinery suppliers• Raw material suppliers• Customers• Packing material suppliers• Dealers• Consultants• Employees in similar enterprises• Bank officials• Regulatory-agency officials (e.g. Drug Controller office)• Promotional agency officials (DIC)• Associations of manufacturers, dealers, customers, raw material suppliers in

relation to a given product

Assignment -2• Interview any 1 entrepreneur in your

neighbourhood.• He/She must have a shop.(Any shop)• Ask them the following questions:1- How did they start this occupation?2- Why are they doing what they are doing

now? (How did they identify the opportunity?)3- Why do their customers buy from them and

not others?4- Do they have any plans to expand?