Anilesh SethIdeator, Co Founder & CEO, KROWwww.krow.in

Strategic Advisor to the Qatalys Group of CompaniesMentor at the KYRON incubatorVisiting Faculty at CMR IT Exec MBA programEx-CEO/MD: LGSI, Qatalys & Supervalu India

www.slideshare.net/anileshhttp://In.linkedin.com/in/anileshsethanileshseth@hotmail.com

ENTREPRENEURSHIP MANAGEMENT SESSIONS 1 & 2

Objectives of the programme

• To develop an understanding of the concept of entrepreneurship in different contexts with a common outcome based objective

• To develop an appreciation of entrepreneurship through examples and a project

• To create an understanding of the ecosystem that exists • To understand and imbibe some critical aspects of

managing the entrepreneurial journey• And finally, to create an entrepreneurial mindset that can

be applied in pretty much any situation

Course assignment

• The class will be divided into two groups – A and B• Each group needs to identify a value-creating idea and pitch it

to potential investors/decision makers in the last session of this course

• Group leaders will be identified upfront• Each group will present its assignment in the form of a PPT

not to exceed 10 slides (not including any title slides, content slides or thank you slides). This limit is important and will play a role in your gradation

• The ppt should address at least the following: The idea, what problem it is solving or what need it is addressing, whose problem or need it is addressing, an implementation plan, competition if relevant, associated financials, impact

Project evaluation

Parameter Weightage

Group leader’s assessment on participation by individual team members

30%

Class participation and attendance 20%

No of slides 10%

Content and final presentation 40%

Session 1: So what is entrepreneurship?

https://www.youtube.com/watch?v=a10Vg50Pzkk

Dr. Steve Gedeon of Ryerson University

Entrepreneur

16th century : military expeditions carried out by Frenchmen were called “entrepreneurs”.

Derived from FRENCH “Entreprendre”

So what is entrepreneurship?

Viewpoint• Seeing opportunities• Bringing about change

Viewpoint• Organizing a business

venture• Assuming the risk for it

Seeing opportunities – within or outside – assuming ownership – assuming risk

Creating value! Creating Impact!

Entrepreneurship according to Peter Drucker

“An entrepreneur searches for change, responds to it and exploits opportunities. Innovation is a specific tool of an entrepreneur hence an effective entrepreneur converts a source into a resource.” http://en.wikipedia.org/wiki/Entrepreneur

Types of entrepreneurship

Political

Social

Intrepreneurial

Commercial

- Founding a new party- Founding a new political project- Lobbies

Create & sustainsocial value

- An “inside” entrepreneur- Reduced risks

Wealth creation

Types and examples of entrepreneurship

SOCIAL FINANCIALRETURN

RESIDENT’S ASSOCIATIONSNOT FOR PROFIT - TIEIIT ALUMNI CLUBOLD AGE HOMEAAM ADMI PARTY VINOBA BHAVE

COOPERATIVES – LIJJAT PAPD(SRI MAHILA GRIHA UDYOG)NEXT WEALTHBIHANI

(IMPACT ENTREPRENEURS)

APPLEMICROMAXBIG BASKETREDBUSGOLI VADA PAVAIR DECCAN

KINGFISHER AIRLINESWIPRO(scion of established business)KEN KUTARAGI(intrapreneurship)YANTRA(corp incubated)DCM TOYOTA(corp diversification)

AZIM PREMJI FOUNDATION

IND

IVID

UAL

S/G

ROU

PCO

RPO

RATE

INIT

IATI

VE

E CHOUPAL

What are entrepreneurial traits? What is entrepreneurial leadership?

What are entrepreneurial traits? What is entrepreneurial leadership?

Entrepreneurial Leadership:“Achieve a

common goal” or “See an

opportunity”

Innovator

Risk Optimizer

OwnershipManages Change

Leader of people

Entrepreneurship in turbulent times

• When the times are good, is risk taking at an all time high? Or when the times are bad?

• Recessionary situations restrict opportunities in the wage/salary sector

• Higher local unemployment rates are found to increase the probability that individuals start businesses

http://ftp.iza.org/dp5725.pdf

Managing in a turnaround environmentCASELET:

• Supervalu Inc is an over 140 year old company in the grocery business – both retailing and supply chain. With major strengths in supply chain, it acquired several retail brands along the way and to make it one of the top grocery retailers in the US, it acquired Albertsons in 2006 which practically doubled its revenues to around 40 Billion

• 2007 onwards saw the US responding to the first signs of recession and therefore reduced consumer spending

• With margins under pressure and the need to service debt, SUPERVALU was facing challenges – not the least of which was managing change in a post acquisition scenario

• The then CEO (Jeff Noddle) retired in 2009 and a new CEO (Craig Herkert) was appointed

• In 2013, Supervalu announced the sale of the earlier acquired Albertsons stores and a new CEO (Sam Duncan) was appointed

• In 2013 Supervalu announced annual sales of 17.1 Billion dollars and a net loss from continuing operations

Is this an example of where an entrepreneurial style of leadership is required?

Getting under the skin of the entrepreneurial struggle

• So what is really important?

I, Me, Myself

The Team

The Plan

The Value Proposition

Customer Acquisition

Competition

I, Me, Myself

• This isn't about ego! Its about conviction• Its about sacrifices – and majorly so for the family!• Its about turning on a dime• Its about being in it for the long haul• Its about synergies• Its not about “being right”• Its about really really hard work

ITS NOT ABOUT MONEY (well it is, but if you have the above, you’ll find a way)

The team……

Mentor/CoachCo-FounderAdvisorCore TeamDevelopersMarketingSalesetc

At what point do you need each role?The needs will change

Why do you need each role?

Map your needs. Be clear about why you need some roles

Role When Why Short/LongMentor/Coach Idea - Confidence

- Bounce off ideas- Network- Help find

investors- Help find talent

The type of person you are looking for may change over time

Co-Founder Idea? - More the merrier- Share the risk

and reward- Builds

confidence- Synergistic

Advisor Seed/Funding stage - Approach investors

- Resume building

May be in place just for this specific objective

Core team Idea/Seed - Take on key responsibilities

Ideally long term – but be prepared that your own idea of the right person may change

Other team members Seed and beyond - Need based skills There will be peaks and troughs – these tends to be skills that are more abundantly available

Mapping whatyou think you needwill force you thinkdeeply

This step is crucialas it enables you to devise a plan to attract the right people

Note: this is an example only and is not meant to be prescriptive

So how do you convince someone to join you….an unknown startup….?

Prestige/VisionMoney

Motivators

Abundant skills

Tough to find

Rare/Industryfigure

Wealth

Your strategy will depend upon a combination of:- Who you are looking for- What motivates that person- Is it a long term or a short term need

A different combination of motivators will therefore need to be configured

Role Your conviction

Vision Importance accorded

Wealth building opportunity

Technical thrill

Aggressive stock plus some money

Some stock, mostly money

Mostly money

Mentor/Coach

Co-Founder

Advisor

Core team

Other team members

Note: this is an example only and is not meant to be prescriptive

What can you leverage?

What you have going for you• Your vision• Your conviction• Your network• Your business plan and

willingness to part with stock to create wealth building options for those willing to invest in you and your idea

What you may not have• Upfront cash• Upfront company

valuation

What you have far outweighs what you don’t……..

And remember, if you sell to their families, you have a high probability of a sale!

Some maxims….• Your strongest selling point is your vision and conviction• Ensure a match of objectives……and values……• Be clear about short term vs long term roles – why give stock for short term

roles or non-critical ones?• Remember stocks are difficult to value – sell the value on vision…but also

remember that stocks don’t pay bills. Some people need to do that• Look at family background – does the person have a “cover”?• Don’t hire for skill alone – value fit must be there. Be clear : are you looking

for a thinker + doer or only a doer. Would you part with stock for just a doer?• Be prepared to invest a fair amount of time in recalibrating everyone's

commitment – and in reinforcing and in adjusting the formula for the right person

• Build relationships with the family – the start up must be an extended family; share the joys and sorrows of life in general

• Involve the wider company – don’t get closeted with a coterie and leave the rest out

• Communicate, communicate, communicate – in various media, whenever you get an opportunity - visibility motivates across the board

And finally its all about execution…..

Session 2: The entrepreneurial cycle and support system

IdeateBounce

off

Team set up

Initial capital

Validate

Fund

Scale

Realize value

- The process of ideation/refinement is ongoing- Value realization is very subjective – for commercial enterprises some would say it is synonymous with the promoters “cashing” out; for a VC, for the company to go IPO or get acquired

Commercial value realization examplesCompany Established Exit Bought by Consideration

REDBUS 2006 Acquisition Goibibo (2013) 600-700 crores

JobsAhead.com Acquisition Monster Worldwide Inc

40 crores

Indiaworld1994

Acquisition Sify 500 crores

Spectramind 2000 Acquisition Wipro 460 crores

Indiagames 1999 Acquisition UTVlater acquired by Disney

65 crores500 crores

Makemytrip 2000 IPO 2010 502 million

Just dial 1997 IPO 2013 4,700 crores

But how do you measure social value?

Examples of start ups that have modified their direction

Name of company More info Changes

makemytrip http://en.wikipedia.org/wiki/Makemytrip#History_and_Growth

Founded in 2000 it started by providing air travel options for the US-India corridor for Indians. Today it provides additionally holiday solutions and is a big player in India

redbus Brick and mortar outlets.

paypal http://chargify.com/blog/6-companies-that-succeeded-by-changing-their-business-model/

Cryptography company to means of transmitting money via PDAs to online payment system

YouTube http://mashable.com/2011/07/08/startups-change-direction/

Started as a dating site called "Tune In Hook Up,“ & morphed to simply sharing videos online

MingleBox http://www.nextbigwhat.com/indian-startups-that-pivoted-successfully-297/

Started as a social network & transformed into an educational content company

Flipkart http://www.nextbigwhat.com/indian-startups-that-pivoted-successfully-297/

Moved from selling books to everything

The role of Government policy in India

• Complex and outdated labour laws• Too many windows for registration• Monies locked in service tax, tds

refunds• ….trade license, environment,

shops and establishments, various taxes …various laws

• High level of taxation • Difficult to obtain finance: issue of

credit worthiness• Labour pool not very motivated to

join startups due to the above issues

• Confusion around taxation of share premium

http://taxmantra.com/five-things-indian-government-can-do-for-start-up-eco-system.html/ www.msmes.com

http://www.nasscom.in/nasscom-partners-government-karnataka-inaugurate-first-coworking-facility-bangalore-startup-warehous

• With accelerating inflation and dipping growth, entrepreneurship is the way to go to contribute to employment and growth in the economy

• The MSMEs ministry needs to view this as an opportunity

• Legislation needs to favour risk taking

Examples of labour laws in India

• Workman’s Compensation Act (1923)• Trade Unions Act of 19226• Payment of Wages Act of 1936• Minimum Wages Act of 1948• Industrial Employment (Standing orders) act of 1946• Industrial Disputes Act of 1947• Minimum Wages Act of 1948• Industries (Regulation and Development Act) of 1951• Employees Provident Fund and Misc Provisions Act of 1952• Maternity Benefit Act of 1961• Payment of Bonus Act of 1965• Payment of Gratutiy Act of 1972

The fallout……

• The complex laws and lack of transparency and the perception that monies are locked in government taxes can prompt shortcuts … can this result in “under-reporting”?

• Ignorance/clarity about labour and other laws can prompt shortcuts and may result in defaults that may not even be known

However there are still great examples of successful entrepreneurial ventures – Air Deccan,Infosys, Biocon etc. Isn't that what Entrepreneurship is about? Finding ways to unlock value?

Examples of Governmental support– DST (Department of Science and Technology)

• Estd 1971• http://www.dst.gov.in/

– KITVEN (Karnataka Information Technology Venture Capital Fund• Estd 1999• State and central govt FIs backed VCF• www.kitven.com

– CVCFL (Canbank Venture Capital Fund Ltd)• http://www.10000startups.com/

– SIDBI (Small Industries Development Bank of India)• Estd 1990• http://sidbi.in/

– Startup Warehouse (NASSCOM and Karnatak Government Initiative)• 2013• http://www.10000startups.com/

Business Incubators

Business incubators are organizations geared toward speeding up the growth and success of start-up and early stage companies.

– Some are located in an actual physical – Others operate on a virtual basis.– Incubators sometimes call themselves accelerators instead, often when

they’re geared toward jumpstarting businesses that are more developed.– Many have potential capital to invest, or links to potential funding sources.

One of the most prominent incubators is the Y Combinator (http://ycombinator.com/

based out of Mountain View, CA)– Founded in March 2005, since then over 550 companies have been funded

such as Scribd, reddit, Airbnb, Dropbox, Disqus and Heroku– Twice a year they invest a small amount of money in a large number of start

ups and invite them to Silicon Valley to undergo a 3 months acceleration program

What's the difference between an incubation and an acceleration programme?

Business Incubators in IndiaName Location Details URL

The Hatch Gurgaon and Chandigarh

The Hatch has both physical and virtual incubators and accelerator programs. The incubator program is 52 week long and included 13 weeks of accelerator program. 

https://angel.co/hatch-incubator

Technology Business Incubator, IIT Delhi

Delhi  Some of the startups that have come out of IIT Delhi’s incubator include VirtualWire, which works with wireless technologies and Mechartes Researchers Private Limited, which provides engineering solutions. 

http://www.fitt-iitd.org/tbiu.aspx

Amity Technology Incubator

Noida Amity Innovation Incubator offers a range of incubation services to nourish entrepreneurial talent such as - Business Planning, Company formation, Legal & IPR assistance, Managerial Support, Technology Support,....

http://amity.edu/aii/index.html

Business Incubators in India..cont’d

Name Location Details URL

Microsoft Accelerator

Bangalore 4 months of accelerator program with intake of two batches – summer batch(applications start in Nov) and winter batch(applications start in May). 

http://www.microsoft.com/en-in/accelerator/

NSRCEL, IIM Bangalore

IIM Bangalore 

Support included subsidized facilities like office space, power and infrastructure and services like finance, legal, HR etc. Offers seed funds under DIT TIDE scheme.

http://www.nsrcel.org/

The Morpheus Chandigarh Morpheus Startup Accelerator focuses on “super-early stage startups” in a program for 4 months. The accelerator has a strong network of over 100+ graduated companies from previous portfolio

http://themorpheus.com/

TLabs Delhi A startup accelerator by Times Internet Limited. Investment of Rs. 10 Lacs for 10% equity.

http://tlabs.in/

Name Location Details URL

Kyron Bangalore Lalit Ahuja, John Cook and Larry Glaeser. $50 million accelerator with $100,000 in seed funding for a 10 % equity in the startup. Plans to invest in two batches of 10 startups each year and to incubate 125 companies

http://kyron.me/home.php

Venture Nursery 

Mumbai A physical business accelerator program called BOOTCAMP is run for 13 weeks, minimum twice a year. Maximum of 8 starts are selected at a time

http://venturenursery.com/

Start-up village

Kerala Public Private Partnership with Govt. of Kerala. Rs.100 cr for 1,000 student startups over a span of 10 years.

http://www.startupvillage.in/

http://inc42.com/magazine/resources/50-amazing-startup-incubators-and-accelerators-in-india/

Business Incubators in India..cont’d

Angels

• An angel investor or angel (also known as

a business angel or informal investor) is an

individual who provides capital for a business start-up,

usually in exchange for convertible debt or ownership

equity

• Angels tend to access investment opportunities either

through their own network or through Angel funds

Examples of Angel Funds in IndiaName Location Details URL

Chennai Angels Chennai Seed Funding for start ups in Tamil Nadu. http://www.chennai.tie.org/

Indian Angel Network New Delhi  India’s first Angel network with successful entrepreneurs and high profile CEOs interested in investing in early stage businesses across India.

http://www.indianangelnetwork.com/

Mumbai Angels Mumbai Platform to start up and very early stage companies; helps in bringing them face to face with investors, mentoring, inputs on strategy.

http://www.mumbaiangels.com/

TIE Entrepreneurship Acceleration Program

Bangalore Ecosystem of Angels, Investors and VCs to provide Series A round of financing for Start ups.

http://www.bangalore.tie.org/

Hyderabad Angles Hyderabad http://hyderabadangels.in/

Harvard Angels  Bangalore Vision is to provide the next generation of India's most promising entrepreneurs with the right level of financial capital, strategic guidance and mentorship and in many cases, deep technical advice.

http://www.hbsalumniangels.com/article.html?aid=137

Examples of Angel Investors include: Kanwal Rekhi, NS Raghavan, K Ganesh

Seed Funds

The seed stage is the setup stage where a person or a

venture approaches an Angel or an early stage fund (like

an Angel fund or an early stage VC for funding the

idea/product

Name Location Details URL

Blume Ventures Mumbai Blume Ventures provides seed funds to early-stage tech-focused/tech-enabled ventures

http://www.blumeventures.com/

Angel Prime Bangalore It provides startup capital to companies operating in India and seeks to invest in mobile payment, e-commerce and smartphone application services sectors

http://www.angelprime.com/

SRI Capital Hyderabad SRI Capital investment include e-commerce platform Shopo.in, education services startup Edutor Technologies and fast food chain Big Dosa, among others.

http://sricapital.in/

Examples of early stage funds

Examples of early stage funds..cont’d

Name Location Details URL

Ixora Ventures

Delhi Invests $25,000-$500,000 in early stage companies. The fund appears to be sector agnostic

http://www.ixoraventures.com/

Blu Sky Venture Fund

Bangalore It invests both in offline as well as online entities. The company is looking to invest in one company per quarter. The ticket size and per-stage funding depends on the requirements of startups. 

https://www.bluemountaincapital.com/

IndiaQuotient Mumbai It invests in companies operating in consumer-facing businesses targeting mass markets. The sectors include food, fashion, education and healthcare. 

http://indiaquotient.in/

Examples of early stage funds..cont’d

Name Location Details URL

KAE capital Mumbai Kae Capital invests in early stage companies which bring about innovative solutions for the existing gaps in the markets, all backed by a great team capable to execute and build a large business.

http://www.kae-capital.com/

Catamaran Bangalore It is venture capital firm specializing in startups, early stage, mezzaine stage, and late stage investments. The firm seeks to invest globally with a focus in India.

http://www.catamaranventures.com/

http://techcircle.vccircle.com/2013/05/30/10-new-early-stage-investors-for-indian-tech-startups/

Venture Capitalists• Any individual or institution that provide funds as well as value in the form

of networking and possibly board membership.• Types of rounds typically funded by VC organizations are:

– Series A :• The first round of financing undergone for a new business venture

after seed capital. – Series B:

• The second round of financing for a business.• Generally take place when the company has accomplished certain

milestones in developing its business. – Series C:

• The third round of financing once the company proves its mettle.• For capturing major market share, acquisition or to develop more

products and services. • Different VCs may focus on different stages (means different levels of risk)

and some may tend to focus on narrow spaces/sectors

Examples of VCs in IndiaName Location Stage/Sectoral focus URL

Helion Ventures Partners

Delhi, Bangalore It invests in early to mid-stage companies in India in sectors such as Outsourcing, Internet, Mobile, Technology Products, Retail, Education and Financial Services.

http://helionvc.com/

Sequoia Capital 

Bangalore, Mumbai The firm seeks to invest in all sectors with a focus on services including financial services, healthcare, internet, outsourcing, retail, wireless, energy etc

http://www.sequoiacap.com/india/

Intel capital India

Bangalore, Mumbai, New Delhi

Intel Capital invests in a broad range of companies offering hardware, software, and services targeting enterprise, home, mobility, health, consumer Internet, semiconductor manufacturing and cleantech.

http://www.intelcapital.com/

IDG ventures Bangalore, Delhi Target sectors include:Digital Consumer – Internet, Mobile, Media and Technology Enabled Consumer ServicesEnterprise Software – SaaS, Software Products and Enterprise servicesEngineering – Medical Devices, Clean-tech and IP-led Businesses

http://www.idgvcindia.com/

Inventus capital

Bangalore They focus on financing early stage companies with some customer validation in the following areasInternet, Mobile, Cloud/SoftwareServices

http://www.inventuscap.com/

Venture capital

Chennai, Hyderabad Focuses on life sciences, technology and emerging sectors and manages a $300-million (Rs 1,634.7 crore) fund

http://www.ventureast.net/index.php

Additional resources• TIE (www.tie.org)

– TiE (The Indus Entrepreneurs) is a global nonprofit dedicated to fostering entrepreneurship. TiE has 61 chapters in 17 countries, with a total membership exceeding 15,000.

– TiE's sponsors include nearly every venture capital firm in Silicon Valley. • NEN (http://nenonline.org/ ) focuses on fostering entrepreneurship in colleges

NEN focuses on fostering entrepreneurship in colleges– Is a non-profit initiative by the Wadhwani Foundation.– The NEN was co-founded by five of India's premier academic institutions:

•  IIT Bombay,•  IIM Ahmedabad,•  S P Jain Institute Bombay,•  Institute of Bioinformatics and Applied Biotechnology (IBAB), Bangalore• BITS Pilani

• Venture intelligence database (http://www.ventureintelligence.in/products.htm– Launched in 2002– Leading source of information and analysis on privae equity, venture capital and

M&A in India

References

• The High Performance Entrepreneur – Subroto Bagchi

• Simply fly – Captain G. R. Gopinath• Social Media Marketing - Times Business Series• The 4-Hour Workweek – Timothy Ferriss• Entrepreneurship: Successfully Launching New

Ventures – Bruce R Barringer and Duane Ireland• Entrepreneurship – Robert Hisrich, Michael Peters

and Dean Shepherd

Thank you!