The Age ofEntrepreneurship

1995-201611995 20166

Vol 5 | Issue 1 | Jan 2016

There have always been entrepreneurs in every part of the world and in every era - challenging the status quo and bettering society through their innovation.

Entrepreneurs in pre-liberalization India were up against several constraints, including policy shackles and limited technology. Still, influenced to a large extent by Nehruvian ideals of nation building, many went on to build enduring businesses that also sustained the communities they operated in.

Arguably, there has not been a better time than now to be an entrepreneur in India. And a new breed of them has emerged, with more ambition and a

The Ties That Count:The proprietor of a partition era company talks about what is important and what is non-negotiable in running the business.

How Good is Your Story?:How new age entrepreneurs can add zest and depth to their narratives.

Whither the Communication Function?:A look at the evolution of corporate communication over the last two decades and the implications for startups.

Talking Points for Impact Startups:A perspective on the communication challenges of impact entrepreneurs.

Alterpoint: The Riveting Lives of Entrepreneurs

greater appetite for risk than in previous generations. But they also face increased market and investor pressure to show results in a shorter span of time. And that has shaped the priorities of India’s young entrepreneurs.

This issue will look at some important shifts in the business landscape over the decades and how these have influenced the operating and communication strategies of entrepreneurs. We also look at how the formal communication function has evolved in organizations as a result of changes in the environment. Lastly, we examine the unique communication hurdles of enterprises focused on social impact.

Entrepreneurs:Then. Now. And Beyond. In this issue

The Ties That CountThe story of how one small but hardy business uses solid relationships – rather than digital technology and connections – to weather its ups and downs.

The company began as a trading operation in Karachi, dealing in a few aromatic and perfumery compounds that were used as manufacturing inputs in various industries. It was started by a maternal uncle who shifted his base to Delhi soon after the partition. Its name – the Azad Bharat Chemical Company – was apt, given the historic events playing out at the time.

The general outlook for businesses was bleak in the midst of all this upheaval. It was hard to survive, let alone grow in this environment. The company was low on funds and it was all we could do to stay afloat in those early years.

However, the company managed to survive and achieve a level of stability over the decade that followed. My father and his brother took over the business in 1958 and began some consolidation efforts. They also set out to actively widen the customer base across industries and regions within the country.

Their strategy paid off, in large part because they were willing to tolerate low margins while keeping their product quality and delivery standards very high.

Simultaneously, they worked on building a network of suppliers who could meet these standards. Through such concerted relationship building, the company slowly began to be recognized as a small but quality-focused player in the industry.

I joined the company in 1976 and eventually took over as the acting proprietor in 1980. The License Raj held sway over the business landscape at the time and red tape was accepted as an unavoidable part of doing business.

Still, as the third owner of a family-run enterprise, I was fortunate to assume charge at a point when all necessary permits had been granted and the company was running like a well-oiled machine.

However, employee welfare had not been a priority until that point. And it was beginning to show. Our workforce was largely unskilled and most members did not have too many years of schooling. Attrition was high within the group as they left in search of greener pastures in larger companies.

I realized that they needed reasons to stay and worked on ways to reduce attrition and improve loyalty. We introduced incentives, initiated salary hikes and provided gym access and medical coverage as we sought to build a reputation as an employer that takes care of its people. Today, we

full-time employees and fifteen to twenty workers in the manufacturing facility we opened in 2009. However, our customer base is large and diverse. Interestingly, just as I am the third member of the family to run the business, we have many customers who are three generations into their association with us.

In retrospect, it boils down to the relationships you cultivate – with your employees, your customers and your suppliers. We talk to our customers often – daily with some, and at least two to three times a week with most of them. Sometimes, this involves picking up a phone but, more often than not, we go in to meet them to find out how our inputs can be customized to improve their end products.

The Azad Bharat Chemical Company doesn’t have a website or a substantial online presence apart from a static directory page. That may possibly change now that my nephew (the fourth generation) has also joined the business. But there is a number for prospects to call me directly. I am always happy to talk and discuss what we can do for them.

have employees who have been with us for more than thirty years.

As economic liberalization took hold in the nineties, we encountered both challenges and opportunities. The market was expanding but many international players were entering to stake their claims to it. It had already evolved into a buyer’s market in the eighties and as the government loosened its controls, competition further intensified.

We took stock and made some changes. This included streamlining our structure and ramping up our sales and marketing efforts. We also reached out to international players to explore agreements or partnerships.

We went back to the drawing board to evaluate our quality and customer satisfaction levels. Industry norms were changing and we had to update our offerings in order to address these and meet market demand.

Since the inputs we supply are used to create widely used and consumed products in cosmetics, pharmaceuticals and bakeries, the quality of these inputs becomes critical.

Quality is one of the two things my father taught me never to compromise on. The other one is integrity. Holding on to these principles may have cost us some business over the years but we would not have had it any other way.

Through all the goodwill built over time, we have been able to hold our own in a buyer’s market. We are still a small operation – with about eight

Kanwaljit Singh is the proprietor of the Azad Bharat Chemical Company, a dealer and manufacturer of aromatic chemicals, perfumery compounds and essential oils.

- As communicated to Viewpoint

How Good is Your Story?In a frenzied and competitive environment, startups can improve their narratives by focusing on the audience, the experience they provide and their human side.

At a recent panel discussion that I had a chance to host, the audience of about 400 listened quietly as one of the three entrepreneurs in the group described his startup and his journey at length. At the end of his monologue, a few members of the audience slowly raised their hands. They wanted to know the name of his venture and exactly what it was all about.

The incident highlighted a problem that I believe is endemic to India’s entrepreneurial scene. This is a landscape filled with smart and capable individuals who have procured funding for their compelling ideas. But when it comes to articulating these ideas, they sometimes lose the plot. The other aspect they often overlook is the nature of the audience. An audience looking for life lessons at a spiritual retreat in Bangalore is different from a gathering of CMOs at a South Mumbai conference. This, in turn, is different from a group of engineers mulling over architecture issues at a tech meetup in Pune.

The story has to be modified in order to relevant for each of these groups. This is a basic tenet of communication but many of us lose sight of this in the rush to be heard.

Another charge that is leveled against today’s entrepreneurs is that they are somehow short-term in their orientation and are not out to build enduring businesses. However, this is an oversimplification, in my view.

The reality is that we are living in a world that thrives on immediacy and quick results. With most VC investment horizons spread over ten years at most, this money is not being pumped in to build the next Coca Cola or Tata. The dialogue around startups today revolves around activity and turnaround - who has raised a lot of money, who is spending, who has a lot of customers, and so on. It is hard for entrepreneurs to swim against these currents. Still, many of them are trying to make a dent by building serious businesses and are displaying incredible persistence and perseverance in the process. There may be a few who begin with the primary goal of exiting but this mix has probably existed in all entrepreneurial eras, including the dotcom period of the late 90s.

India is a tough market to do business in, mainly because it is so competitive. Any viable business idea or model is sure to spawn a large number of clones trying to chase or copy it. It is in our blood to be doggedly competitive. The intensity around competitive entrance

alert and ready to respond, swiftly and appropriately.

The upside of all this exposure is that companies now have an opportunity to be real and genuine in their communication and win both consumer mindshare and goodwill in the process. Since there is nowhere to hide, startups have to be ready to open up and share more. It works as long as the brand personas that develop as a result are consistent across the many platforms out there.

In Bollywood movies of the 70s and 80s, the heroes were largely macho men who were ready to jump in to save everything from the world to the honour of the women in their lives. Times have changed. A movie like ‘Tamasha’ today shows Ranbir Kapoor in pain and willing to wear this on his sleeve. And the audience laps it all up – his tears, his flaws and his vulnerability.

The same trend is playing out in the startup world. If you reveal your vulnerability as a company, display your battle scars, and talk about the mistakes you have made, people are likely to respond positively. This may take some recalibration on our part since we are conditioned, in India, to hide our pain rather than talk about it.

examinations such as IIT and IIM is a perfect example of this national trait.

How can a startup rise above the crowd in this environment? While product, service, engineering and technology can be viewed as hygiene factors, what will really prove to be a differentiator is the experience provided to customers. And if that experience is backed by clear and consistent communication, then it can make all the difference in the world.

I believe there is a tremendous opportunity here for companies in India. For example, Flipkart’s road to profitability is now a favorite discussion topic across the country. However, it was only seven to eight years ago that they first entered mainstream conversation with their promise of speedy home delivery in a country that was not used to this experience. In this context, Flipkart and other startups have a huge opportunity to shift the narrative focus back on experience and other topics that really matter to their target audience.

There are plenty of tools for them to effectively do this. If there is one thing that sets today’s startups apart from those of a previous era, it would have to be the crazy and powerful influence of social media. With everything being online, companies are now exposed on a 24X7 basis. If employees are unhappy, for example, there is no dearth of platforms on which they can vent. And so companies have to be on constant

It essentially boils down to telling a story – one that is cohesive and that rings true. By being more open and authentic in their storytelling, startups can show the world that they are more than the sum of their technology, products and funding. They are also human at the core.

Shradha Sharma is the Founder and Chief Editor of YourStory.com, a platform for stories on entrepreneurs and startups.

- As communicated to Viewpoint

Whither the Communication Function?The nature of corporate communication has changed over the last couple of decades and is continuing to change as a result of shifts in both the economic and media landscapes in the country. What are the implications for startups today?

I have been fortunate to belong to a generation of communication professionals that had their careers almost equally split between pre- and post-liberalisation India. When I started out in Public Relations in 1979, many did not know what this profession really entailed. It was seen as an adjunct function to related fields like Marketing or HR that could be performed by anybody.

Enterprises did not interact much with the media in pre-liberalisation days as they largely operated in the public sector and were mostly monopolistic in nature. Communication was minimal with press notes mainly pertaining to visits by government dignitaries or new facility launches.

Internal communication was also confined to a quarterly four page newsletter that was heavily biased towards the management. Corporate social responsibility had not yet come of age and unions with political affiliations called the shots for the most part. Proactive media was confined to disputes, negotiations

and settlements between managements and unions.

Publications were far and few in between. All India Radio (AIR) was a prime source of information while television – still a nascent medium at that point – had Doordarshan as the sole functioning channel. And since this was government-owned and controlled, it provided little in the way of independent commentary or analysis.

A Paradigm ShiftIndia’s economic liberalisation, begun in 1991, brought about a paradigm shift, changing the socialistic economy to a more market-oriented one by expanding the role of the private sector and inviting global giants into the country. The far-reaching changes that were initiated included a reduction in import tariffs, deregulation of markets, reduction of taxes and greater foreign investment. Many economists credit liberalisation for the high economic growth recorded by the country in the 1990s and 2000s. It is heartening to note that the overall direction of liberalisation has remained the same since, regardless of which party is in power.

The change from a near-monopolistic to a highly competitive business environment resulted in the Indian consumer being faced with a surfeit of choices in almost every product category. Gone were the days when one had to wait for years to buy a scooter, or to get a landline telephone connection, or to even get a wrist watch of one’s choice. The

focus definitively shifted towards the consumer.

Communication as a Key FunctionThe need to grab consumer mindshare became increasingly important. This was the time when communication started to get its due status in the new business ecosystem. Doordarshan’s monopoly ended with the entry of private television channels and FM completely changed AIR’s banal way of broadcasting content. While these new entrants provided new-found opportunities for companies to advertise their products and services across the country, they also introduced a competitive way of disseminating news and views to the public. From just once-a-day coverage through newspapers, news gradually evolved into a 24X7 cycle.

The Dotcom BubbleThe period from 1997 to 2000 was marked by the launch of several new Internet-based ventures. A combination of rapidly increasing stock prices, market confidence, individual speculation and widely available venture capital created an environment in which many investors were willing to overlook traditional metrics in evaluating these companies.

Communication evolved further with companies taking the Internet route to convey their messages to a global audience. MSN, for instance, launched its MSN Mobile 4.0, a version of its wireless service that

delivered customizable information services to interactive pagers, mobile phones and handheld devices.

But with the US Federal Reserve increasing interest rates in March 2000, the global economy began to lose speed. Over the next twelve months, many hitherto high-flying internet startups burned through their cash and went bust. A majority of the dotcoms ceased trading after going through their venture capital, with many never having made a net profit.

Personality-Centric CommunicationAround the same time, however, Indian companies were riding on the wave of liberalization, particularly in the IT sector. Early entrepreneurs like Infosys’s Narayana Murthy and Wipro’s Azim Premji began proactively reaching out to the media, lending the colours of their personalities to their organizations’ communication. Today, many CEOs have taken to this route and corporate brands have been built around the CEO’s image. Some examples are Biocon, led by CEO Kiran Mazumdar Shaw, and ICICI Bank that came into prominence largely due to the proactive communication skills of its CEOs, K V Kamath and Chanda Kochhar.

The Rise of Social MediaA recent ING global study reveals that 81 percent of PR professionals feel that they can no longer operate without social media while 62 percent of journalists feel that the quality of reach is higher via social media than

through traditional media. The study also reveals that a large number of journalists (55 percent) feel that social media is becoming the main source of information and that the consumer’s opinion is more reliable than a statement issued by an organization. This statistic does not bode well for the future of old-style corporate PR.

But new age online retail companies such as Flipkart and Snapdeal have quickly adapted to this shift and are connecting with their stakeholders through social media. With most consumers going mobile through affordable smartphones, the next push in communication is bound to be through that medium.

With social media, companies – particularly young startups - are seeing the advantage of directly connecting with their target audiences without the help of intermediaries. We have entered an era of what I would like to call the “Twitterization” of news.

CEOs and founders are tweeting and blogging themselves and journalists are increasingly seeking out these sources to build their stories on a given company. Perhaps due to this trend, Twitter is now looking at expanding its maximum post length to 10,000 characters. The latest buzz is about Free Basics, a Facebook initiative that places the Internet within the reach of more people by giving them access to a range of free information services spanning news, maternal health, travel, local jobs, sports, and local government. But with a debate raging over whether

K S Narahari is a Senior Media Consultant at The PRactice

Talking Points for Impact StartupsBusinesses that target consumers at the base of the pyramid first have to establish that they are more than just socially motivated. Beyond that, they face the same communication challenges as any other business – with some minor differences.

Ever since CK Prahalad and Hart talked about the ‘fortune’ residing at the ‘bottom of the pyramid’, other academicians have tried to fine-tune this theory with their views of exactly how this can be tapped. In the meantime, many entrepreneurs in India, convinced that the proof of the theory lies in its execution, have thrown their weight behind ideas designed to spur social progress while also generating financial returns.

There are many examples of such innovation. We hear about one or more of these every day. There are digital platforms to deliver interactive learning products to young children across the country. Solar powered cold storage solutions allow smallholder farmers to reduce agricultural waste and increase their monthly incomes. Mobile solutions enable timely and relevant updates on everything from medical conditions to commodity prices.

Given the aspirations of the target audience and the scaling power

this could compromise net neutrality, we have to wait and see if this proposal will pan out.

The Return of the CommunicatorGiven the freewheeling culture within the innumerable startups that are coming up today, a formal communication function would be a force fit in them. These companies are not hierarchical in structure and every employee is a de facto spokesperson. However, this scenario changes as soon as they go public. Suddenly, the consequences of not thinking through strategies in this area become more severe. With growth and the addition of many more stakeholders, comes a greater sense of responsibility. This has brought the quick thinking and social media savvy communicator back into the picture to deftly manage the requirements of both traditional and digital media.

However, there is no denying that changes in the media landscape are making some practices less relevant. And nobody is more cognizant of this than Prime Minister Modi who

has been a big user of social media since coming to power. He regularly tweets all his updates even while on the move!

of technology, a large number of these ideas have taken root and grown into viable enterprises. Individually or collectively, they have the potential to ignite social change and mobility across broad sections of the population.

But when it comes to communication, this desired outcome may actually be a hurdle for these entrepreneurs.

Most descriptions of impact businesses and those who invest in them dwell on their expected social and environmental impact while relegating the commercial results to a sidebar. Entrepreneurs then have to overcome the perception that they are more socially than financially motivated.

It is best to set the record straight on this count as early as possible. Communication can then change based on the business focus and goals.

First and foremost, an entrepreneur is an entrepreneur regardless of which markets he is going after. Any business that seeks to weather marketplace elements needs to be based on a common set of strong fundamentals. Therefore, an entrepreneur who is innovating for the masses will approach his business in the same way as someone focused on a different market segment.

The founders of an impact startup will mostly likely focus early communication around business messaging. They will talk about why the product or service is necessary and how it can solve a presently unaddressed and real problem. The

primary challenge becomes one of demonstrating why this represents a very exciting business opportunity that should not be ignored.

As the business grows, the focus can and will shift to the impact created. There is a strong and direct link between the success of the business and its impact on lives and livelihood. This is also why the opportunity to build businesses for the mass market is so rewarding.

Along the way, there are other communication opportunities and challenges that keep the journey stimulating and interesting.

As bootstrapped ventures, these businesses have a powerful communication channel and marketing tool in social media. This is a double-edged sword, however, as this also means that they will be evaluated in real time and need to be prepared to respond quickly and effectively. The boundaries between personal and business communication have blurred, with everything that is said or left unsaid representing an opportunity used or lost. With constant tracking by customers, competition, and investors, communication has become edgier and more critical to success than ever before.

An impact or social entrepreneur has to further contend with a complex and diverse consumer base that is not necessarily unified by a common language. There are finer nuances of culture and regional flavours that they have to speak to. Therefore, communication has to be agile,

dynamic and simple and, at the same time, more focused. There is little time to build extended campaigns but instead a need for immediate and effective communication.

On the other end of the table, an impact investor will evaluate and scrutinize these business ideas in much the way as she would any other idea. The most important question to ask would be whether the potential for mass market impact is inherent or a force fit in the business. If the answer is the latter, then it is less interesting although there have been cases where entrepreneurs who were really targeting consumers at the bottom of the pyramid began by first creating traction within the middle and top layers before expanding.

These are early days in impact enterprise. The lure of easy money may draw many into the ring but only the committed and truly serious ones will persevere. And as this shakeout happens, we are likely to see more formal communication strategies evolve in this area over the next three to five years. Thanks to technology and globalization, these entrepreneurs can aim for a level of scale and reach that was not possible

Sandhya Thukaram is Director, Marketing and Business Development, at Unitus Seed Fund India.

in the past. Their narratives will show us how vision, savvy and focus can combine to move everybody involved – the business, consumers, and markets – forward.

We all love a good story – one that has all the elements of human drama and personal struggle. Movies or books in which the main characters fight hard and prevail against all odds are up there in terms of entertainment value.

That is why the lives of famous and wildly successful entrepreneurs are such gripping story material. There are many biographies that chronicle the trials, tribulations and triumphs of these individuals.

Some accounts, like Walter Isaacson’s tome on Steve Jobs are painstakingly assembled through interviews with the main subject and those who know him. Others are unauthorized ‘tell-alls’ that paint a complex portrait of the individual.

The Riveting Lives of EntrepreneursBetween biographies and the movies, we have all the human interest aspects of entrepreneurship covered.

By the same token, there are also many stories of fictional entrepreneurs and their journeys that are equally riveting. But if we were to juxtapose a few of these with real life stories, we might find that fact is sometimes stranger than fiction.

Clearly, when it comes to depicting drive, ambition, passion and other intense emotions behind entrepreneurial endeavors, art draws heavily from life with filmmakers seeking inspiration in the tumultuous world of business for their characters and plots.

The scenarios that follow make it hard to distinguish one from the other.

There is the story of a brilliant inventor and businessman whose maternal grandparents lived in Canada’s Saskatchewan province before moving to the suburbs of Pretoria. Addicted to flying their single engine plane around the countryside, their freewheeling attitude to life in general may have trickled down to infect their grandson, who was bright but socially awkward as a child. As an adult, he put aside memories of a troubled

- As communicated to Viewpoint

childhood, as well as his own marital difficulties to become one of the most successful entrepreneurs in the world today.

As Elon Musk prepares his two ventures, Tesla and SpaceX, to strive for new heights in automotive engineering and space exploration respectively, we once again ponder the question of whether entrepreneurial ambition of this order is a result of genes or environment. Ashlee Vance’s account of this 45 year old’s life so far may throw some light on this topic.

If chocolate is your secret passion, then it would be hard to pass up both the book and movie on this confectionery manufacturer who is on the lookout for a qualified individual to take over the reins of his enterprise. His test for unsuspecting candidates includes many points on the factory floor designed to tempt and trap them. Willy Wonka, the eccentric owner of the chocolate factory, is not perfect. He is judgmental and narcissistic to a large degree. But he also knows what he wants in his successor and is benevolent towards his employees, the disadvantaged Oompa-Loompas. A mixed portrait of the owner emerges, not unlike what one would find outside this genre of fantasy fiction.

Unbridled ambition and the ruthless pursuit of power are the primary themes of yet another story on an initially idealistic writer who goes on to become a powerful newspaper magnate. The plot follows the graph

of Citizen Kane’s life through political scandal, extramarital affairs, and a growing sense of megalomania to his eventual downfall. Kane’s character, played by Orson Welles, is widely believed to be based on the life of publishing tycoon William Randolph Hearst who spearheaded the trend of ‘yellow journalism’, among other innovative practices.

There are many other examples such as these, in life and in fiction. It is natural to wonder if some mix of unconventional upbringing and adversity is needed to draw out the entrepreneur within. As we delve into some of these stories, we get a sense for how tenacious these individuals are and how committed to their mission, even if it is somewhat misplaced as in Hearst’s case. Musk and others of his ilk will probably agree with this feel-good quote that is attributed to author Norman Vincent Peale:

“Shoot for the moon. Even if you miss, you’ll land among the stars.”

Viewpoint is a quarterly thought publication produced by The PRactice. Please send your views and feedback to viewpoint@the-practice.net | www.the-practice.net

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