The Next Generation of Entrepreneurs Seminar II

8/14/2019 The Next Generation of Entrepreneurs Seminar II

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The Next Generation Of EntrepreneursAuthor:Brian L. Pruitt

According to a recent survey, it indicates nearly 70% of American teenagers wanted to learn how to starttheir own business. However studies have shown that an alarming number of high school seniors only

achieve an average score of 40% on basic economic literacy tests!

Results like these should give educators and parents alike the heads up that their children, our futureleaders and entrepreneurs of the world, are not getting the skills required to become successful.

That means we as parents and educators must take control of the education our children are receiving andsupplement with books, tapes, games, and likeminded conferences. This responsibility must also be realizedby our children and they must take the initiative to strive for those additional skills that they will indeedrequire in their quest for success.

There are endless resources on the world wide web that are good, well-rounded, and educational for ourchildren. Yes, I agree the web has, in some ways, become twisted. However with some due diligence on ourpart, as parents, and close supervision we can still provide safe tools for our children on the web. There aremany sites that can provide infinite resources of inspirational material for our children.Here are some, just to name a few:

Our children have more resources then ever before to assist them in learning and developing theirindividual skills. The key is support. It is vitally important that we encourage and support our children'sdreams. Yes, they may change their mind on their focus but each and every time they reach and stretchtheir minds towards an endeavor, they learn and grow. This is vital experience that no teacher, book or evenus parents can give them. This is first hand experience that can be of so much importance in building afoundation on which to build a successful and prosperous future.

Looking back, years ago, when I first began to learn to fly an airplane it was evident that it was the support Ireceived that allowed me to reach that dream from within. Although my dreams, visions, and goals have nowchanged direction, it was a learning process that will be with me forever. My first solo, the completion of myprivate pilots license, my first flying job, then the achievement of flying the fastest corporate jet in the world.Yes, all these feats along the way have been learning processes that will allow me to take my achievements

and experiences within aviation and apply it to my various business endeavors. So, I encourage each andeveryone who reads this article to be a leader and mentor to those around you. Whether it be a child,teenager or adult, each and every one of us has the ability to reach out and touch a life that is around us. Bea mentor, a teacher, and a friend.Keep Reaching, Keep Dreaming!

First time Entrepreneurs (FTEs) Building Businesses in India

Just read the couple of articles written by Paul Graham : Y Combinator(answers whatexactly does YC do? or Seedcamp, Techstars, MVP etc ) and Equity (explains why

should you give 5-6% equity to a program like YC)

The thoughts expressed got me thinking about how should First Time Entrepreneurs

(FTEs) go about building businesses in India. While a lot is in common between theapproaches of YC, SC and MVP there are a bunch of things unique to the Indian

Ecosystem which FTEs should consider.
http://www.paulgraham.com/ycombinator.htmlhttp://www.paulgraham.com/ycombinator.htmlhttp://www.paulgraham.com/equity.htmlhttp://www.paulgraham.com/ycombinator.htmlhttp://www.paulgraham.com/equity.html


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Uniqueness of India

First things first, only during the last 10 years India has started seeing bootstrapped or

garage startups by talented, educated, experienced and passionate folks who dont haveaccess to a lot of capital but have the skills, will to solve problems and the staying power.

The number of successes out of these have been limited and have not been reallypublicized for folks to get inspired by or learn from.

The VC industry is just about 8-10 years old in India as compared to 50-60 years in USand Europe; among them majority of the funds in India are under 5 years old. VC being a

long gestation industry we are a good 5-10 years away from seeing major VC success in

India. Most of the firms are focusing on the existing pipeline deals in the market and

there are quite of few of these available companies by serial entrepreneurs, companiesstarted by Executives (CXO, VPs) from large companies, some of FTE companies where

the traction is fairly significant, also since PE sector has performed very well and the

bigger funds are shifting time and money to PE deals. Clearly all of the above are the

right things to do for the Indian VC firms, since the firms need to perform for theirinvestors. None of this directly supports the FTEs, which is where the gap that needs to

be filled in. We need to create new pipeline of deals that will become successful startupsand will feed into the VC pipeline 1-2 years later. Thats the role folks like MVP,

iAccelerator, Upstart.in and others are attempting to play.

Another dimension of difference is IT / internet. The penetration of Internet and PCs in

India is quite limited (9 computer for every 1000 people, as compared to 700 for every1000 in USA). On the other hand the awareness and usage of IT in companies, specially

SMEs is limited as well. There are a lot of other fundamental needs to be fulfilled in India

(remember we are a developing country).

FTEs in India: What to focus on ?

First thing to ensure is to build a cash flow positive business within the initial capital that

you have managed to raise (self, friends, family, fools). Keep lowest possible costs and

create early revenues. Expenses should ideally be below 50,000 INR and in no

circumstances higher than 1,00,000 INR a month.

Dont think of funding as a validation for your venture. Be prepared to wait longer, to

build your business to the 50-100 crore revenues in 7-10 years, with VC funding coming

after 2-3 years of being in business or no VC funding at all. If this does not appeal dont

do a startup.

Internet only business models targetting indian market are not going to viable for atleast 2

years ( or more). View internet as a cheap way to build products and get the initial users

with zero marketing budgets. From day one build alternate channels : mobile, call center,SMS, kiosks , shops , sales team into your model. Use technology as a enabler to drive

costs down and to drive quaity upwards, but do not depend on customers using it directly

via internet.


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If your idea only lends itself to internet, think about doing it for developed markets like

US and Europe. India still has lower costs and we are very bullish on build here sell to

the developed world model.

So while you take into consideration the universal wisdom of building businesses, paying

attention to the uniqueness of India can make an big impact on the outcome of yourventure.

Family businesses: growing the next generation of entrepreneurs

How easy is it to become an entrepreneur in India if your family has a strong

entrepreneurial heritage? The conventional wisdom is that you have a massive head start.Your familys reputation, connections, brands, and capital are all at your disposal.

If your familys name is well-known in Indian business circles, you gain immediateacceptance and respect. Your family will provide you with a first-rank education, wise

counsel, introductions, and trusted advisors. You have the opportunity to start a businessat a much younger age than most because of all these advantages. Or do you?

Many children born into famous business families will tell you that there are at least as

many disadvantages as advantages if you want to start enterprise. Will your parents give

you free rein to choose a business that suits your passion, or will they constrain you tofollow in their footsteps? Will they encourage you to start a business that fits todays

India, or are they locked into yesterdays wisdom and yesterdays opportunities? Will

partners, customers, and employees take you seriously as an independent CEO, or will

they assume that you are merely your parents agent? Do they believe you actually builtthe business or do they believe you were handed every advantage and havent actually

accomplished anything on your own?

Family businesses are the bedrock of almost every economy in the world. Even in regionswith advanced capital markets and a deep pool of professional managers such as the US

or Europe, the vast majority of companies are started, owned and operated by sole

proprietors and/or their families. A significant proportion of companies listed on theworlds biggest stock exchanges are controlled by one family or a few families, and in

many cases the founders family is still active in daily management.

However, family businesses can be fragile. Few survive hardly even ten years after thefounder dies or turns the enterprise over to relatives. Even fewer survive into a thirdgeneration. Clearly, family businesses enjoy some major advantages when compared to

corporations that are publicly owned and professionally managed, or they would not be

so prevalent in every country. But just as clearly, managing the transition from onegeneration to the next is a hazardous enterprise. It isnt as easy as one might imagine, to

succeed by inheriting a thriving company.
http://www.dare.co.in/strategy/business-essentials/family-businesses-growing-the-next-generation-of-entrepreneurs.htmhttp://www.dare.co.in/strategy/business-essentials/family-businesses-growing-the-next-generation-of-entrepreneurs.htm


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For centuries in India, the duty of children born into a commercial family has been to

carry on their fathers work. Certain regions and jatis are famous for spawning one

generation after another of children who build upon what their parents bequeathed them.A popular theme in fiction and non-fiction is the conflict between passion and duty that

arises when children have no interest in their family business but, nonetheless, feel

compelled to carry on the family tradition.

Certainly, carrying on in ones parents' footsteps is still considered the norm by many inmodern India, but many of todays entrepreneurs who were born into enterprising

families are charting their own course. Consider Shamit Bhartia. His grandfather, ML

Bhartia, established his familys business in Calcutta shortly after partition, focusing onbasic manufacturing. Shamits father Shyam Bhartia is the co-founder, Chairman and

Managing Director of Jubilant Organosys, a leading pharmaceutical company based in

Noida, and his mother Shobhana is the vice-chairperson and editorial director of theHindustan Times. Upon returning from the US in his mid-20s, Shamit helped start the

Monday to Sunday hypermarket chain in Bangalore, which is now a thriving division of

Jubilant Organosys. Each generation of this family has pursued a different opportunity ina sector and region that seemed most promising at the time the founder was ready to starta company, instead of seeing his mission as merely perpetuating his inheritance.

What are some of the different paths that the entrepreneurial scions of Indias business

families are pursuing today? Although there are many avenues taken by entrepreneurswhose parents were themselves entrepreneurs we profile in this article three different

paths: diversifying the family business; starting a new company that may someday join

the family enterprise; and striking off independently.

Sarvesh Shahra: Diversifying the family business 26 year old Sarvesh Shahra was born at

about the time when his father and uncle created Indore-based Ruchi Soya Industries(www.ruchisoya.com), now at the heart of the Ruchi Group conglomerate. Ruchi Soya,

whose managing director is Sarveshs father Dinesh Shahra, focuses on edible oil, soya

foods, and specialty fats and is especially well-known in India for its flagship brandNutrela. Nutrela is a heritage brand, a house-hold name in India and the leader in its

product categories, says Shahra. I have started a new venture which will focus on the

health and wellness offering. I plan to take the Nutrela business beyond the originalfamily business by offering different categories of health foods and beverages under this

brand.


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Sarvesh Shahra has taken charge of a

separate company within the Ruchi

family and is independently responsiblefor it. The new venture will focus on

the health and wellness offering, he

says. Until now the family businessnever took advantage of the health

benefits of soya when marketing the

Soya line of food products. We plan tomake Nutrela the dominant force in the

Health and Wellness business and

unlock the value within the brand via

this brand extension into new upcomingfood product categories.

As one of Indias leading agri-business

and food companies, Ruchi SoyaIndustries has identified the countrysHealth & Wellness (H&W) opportunity

as a major area for growth for its value-

added food business. Shahras ventureplans to open up this market for Ruchi

starting with functional health

beverages that are rich in calcium andprotein. He then plans to add healthy

snacks, nutritional supplements, health cereals, and nutraceuticals under the Nutrela

brand with new individual product category brands. He explains, We will use high

quality raw and packaging materials for our products, and are setting up an entirely newpan-India sales and distribution network to sell these products in modern retail and A-

class outlets. Our overall goal is to provide nutrition you can enjoy.

Entrepreneurs usually perform best when they bring passion to a business, and Shahraexudes enthusiasm when he explains why he chose to lead this venture. I studied in

Singapore and US and was exposed to health foods at a very early age, so I always knew

I wanted to do something in this area, he says. Ive always lead a healthy lifestyle

myself. I practice yoga and exercise regularly and hence I wanted to develop productswhich reflected my values.

The next generation

I wanted to unlock the brand value in thefamily business by offering a line of health

food and beverages that provide value-addedfood in the premium, mid-to-low and nascent

consumer categories. Growth in the packagedfoods business is about 35-40% per annum in

India, and consumers today are enjoying and

are ready for such products." SARVESH SHAHRA


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This is especially true when it comes to entrepreneurs. Granted, past generations spawned

a handful of (usually) men who became leaders of industry while the rest of the nation

toiled hard but was quietly content to keep their families afloat. Certainly some, likeRockefeller and Ford, were entrepreneurs, but like all pioneers, they were few and far

between. It is the baby boomers who revolutionized entrepreneurship, flooding through

the barriers, erecting businesses in record numbers. And as somewhat of a haughtygeneration, we boomers often wring our hands in distress as we worry about leaving the

future in the hands of the nation's youth. Well, relax! I've seen the future leaders of

America, and we have nothing to fear.

I have just returned from one of the most overwhelming yet exhilarating experiences ofmy life - the annual Students in Free Enterprise (SIFE) International Exposition - and I

truly will never be the same. SIFE is a nationwide student organization (with

international aspirations and goals) dedicated to, in the words of its president AlvinRohrs, "helping everyone become better consumers, workers, citizens and leaders." In

their spare time, the students of SIFE create projects to promote free enterprise. At the

heart of their projects is community outreach, tutoring and mentoring, and enriching andstrengthening those that live around them, especially the young.

At the 1997 SIFE Exposition (site of the semifinal and final competitions), students from

94 colleges and universities presented the results of their programs to a panel of judges

(many are top executives from America's largest, most successful corporations) to seewhich team most effectively spread the gospel about free enterprise.


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I was honored to be a judge this year. And I was dazzled, not just by the winners - Bucks

County Community College in Newton, Pennsylvania, in the two-year competition and

La Sierra University in Riverside, California (pictured below), in the four-yearcompetition - but by nearly every presentation I witnessed. In their very first year in

SIFE, the students at Northern Arizona University in Flagstaff helped sixth-grade Navajokids start their own small enterprises. The runners-up in the four-year category, from

Pittsburg State University in Pittsburg, Kansas, partnered with a local bank to create theLooney Tunes Savings Club to teach the importance of savings to elementary school

youths. The team from Alverno College in Milwaukee so impressed me because they not

only created their projects while attending school but worked full-time as well! As for thewinners from La Sierra: They simply blew me away with the depth, range and

professionalism of their numerous projects.

Today SIFE, founded in 1975, is booming. There are chapters on more than 500

campuses nationwide and a burgeoning international presence. SIFE needs help - and

who better than entrepreneurs to provide it? You can donate money or volunteer time as abusiness advisor. Both are not only needed - but well-deserved. For information on how

you can help, call SIFE's national headquarters at (800) 677-SIFE.

Former British Prime Minister Benjamin Disraeli once said, "The youth of a nation arethe trustees of posterity." After my two days with SIFE, I truly believe our tomorrows are

in very secure hands.

The Next Generation of Entrepreneurs Seminar II

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