People often seek advice from others on Entrepreneurship. While a lot of those who do advise on such matters are obviously experienced people (having been there and done that), there is a general lack of broad guiding principles for an aspiring young entrepreneur who wishes to have a long term view of things. Keeping this in mind, I list below my learnings on the topic. The advice here will suit most businesses generally.
Before I begin, I must warn that what follows is not for the faint-at-heart. Enterprise creation is an adventure that's all-consuming. It cannot be done part-time, and it surely won't be successful that way.
The 1000-days principles in Entrepreneurship
The process of enterprise creation is a long one. But a structure does seem to work well, if followed rigorously. I feel that the following steps will stand a young first generation entrepreneur in good stead, as she tries to build her enterprise from scratch. The least it will do is minimise waste and senseless effort. Here goes!
The phases mentioned below are from the entrepreneur's perspective. The organisation will evolve on its own also, in parallel. As you cruise through this, it will be a good idea to remember the poetic punch that "A man who follows his heart does not expect the world to follow his point!"
A. The first 1000 days - Customers and Cash phase
For the first one thousand days of the enterprise being built, the only focus should be getting customers, and generating cash to meet the survival needs of the system. There can be no other pressing objectives. Since the issue of survival of the enterprise to the next level is the only one that matters here, hence these two objectives should override all other considerations. During this phase, if you are unmarried, good for you. If you are married, try getting your spouse onboard as well. During the first 3 years (1000 days), an entrepreneur should
- Live with the simple driving dictum - Get customers, get customers, get customers
- Focus on day-to-day revenues and cash generation activities
- Personally interact with as many customers as he/she can to really understand their needs, offer on-the-spot solutions to problems, and build the first level of brand-confidence
- Realise that 24x7 availability for customers (at least through phone) is a boon not a bane
- Avoid thinking too much about profits - they usually won't happen now
- Not think about other softer and grander issues - they'll follow later if you'll survive
- Remind himself constantly that "if I don't survive through these 1000 days, it's all over. I'll be dead."
- Get up early, reach office much before anyone else will, and not leave for home in the late evening until all followups for the day and next day's preparation is made
- Make do with not more than 6 hours of sleep every day/night
- Realise that work-life balance is possible provided he treats work as life!
- Do not at all think about fancy software, fancy hardware, costly manpower, big a/c offices. The time is not ripe yet (even if you have enough money somehow)
- Give up almost all "luxuries" of life that cost too much - take a train if flight is too costly
- Realise that all that he/she does is creating a brand automatically - so branding, marketing and PR is actually happening without consciously being done under those 'verticals' and 'divisions'
B. The second 1000 days - Quality, and Systems and Processes phase
Congratulations! You have survived the first phase. Barely 10% entrepreneurs make it to the second phase, so obviously there's something special about you. I know what that is - total dedication you've shown to the cause of enterprise creation. So it is obvious that your customers have noticed it as well. Now you must realise that what you did on your own single-handedly through these first 1000 days needs to be institutionalised somehow, at least at a basic level. That's precisely where you need a quality culture to be created, and systems and processes to be built. This is what Raymond Kroc of McDonalds understood early in the evolution of the company, and hence went to extraordinary lengths to create the "Hamburger University" to train his people! Thus, in the second phase (the second 1000 days), an entrepreneur should
- Constantly repeat what made him/her a success in the first phase
- Start building a quality culture through his now-growing enterprise
- Articulate a formal quality policy that's simple to understand yet powerfully worded
- Tell everyone in the team what is simply not acceptable in terms of customer happiness and product quality - this is THE PHASE when your long-term culture will be created - mess with it now, and you have no culture left to bank upon and defend later
- Realise that as the scale and scope of your business grows now, you need formalised systems and processes that capture the essence of what you as an individual did wonderfully well in your first phase, and which others in your team now need to do
- Start communicating a lot, and aggressively (not impolitely) with his/her team members about the need for repetitive good experiences for customers (and that's possible only through processes and systems)
- Realise that he needs to sit down on a PC personally to start documenting the various processes and systems that were used to reach this place
- Create what we call the "Operations Manuals"
- Realise seriously that this is the time when the very long term foundation of the entire business is being laid - it's not a joke, and do not treat it like a joke
- Keep a parallel eye out for talented people, who will now start getting attracted to your enterprise (through market's word-of-mouth), and think of how you will recruit and retain them
- Do not at all think about fancy software, fancy hardware, costly manpower, big a/c offices. The time is not ripe yet (even if you have enough money). Go for basic essential stuff only.
- Avoid listening too much to costly "consultants" and fancy "management gurus" who can generally only talk big things, but can hardly deliver real value for money to struggling and upcoming entrepreneurs (like you are, at this stage) {remember what Dr Peter Drucker said - "I suspect the media calls me a guru because they find charlatan too much space to print!"}
- Resist the temptation to expand aggressively - lots of people will praise you and show you the golden path to prosperity through rapid expansion! But listen ONLY to your heart - does it sound intuitive and ok to expand? Can you handle it, resourcewise? If no, then it's no!
C. The third 1000 days - HR and Team-building phase
Wonderful! You survived the second phase also. You have guts, and glory surely awaits you. For the six precious years of your life that you just invested in enterprise creation, now comes the time to build the next step for a bigger game ahead. In the third and very crucial phase of your enterprise creation adventure, you need to now religiously focus on building a core team of professionals, who are vertical specialists, and gel them together for a long play. Dhirubhai Ambani gave precisely this advice to both his sons, and also the liberty to create teams that they thought were best for their respective domains. In this third phase, you have to focus primarily on
- Building a team that will stay with you for a long time ahead (at least 10 years)
- Find vertical specialists who will create the "departments" or "divisions" or "verticals" that will define the key parts of your enterprise for all times to come (at least for next 10 to 15 years)
- Get these key team members involved in the documentation and systems-design process - and be ready to face resistance, it's not easy!
- Start focussing on HR processes that will sustain on their own without your personal intervention always
- Make sure you interact with each new joinee at least once before he/she is approved by the "HR dept" and reserve your veto on their joining (or not joining) - nobody knows the enterprise's DNA better than you do
- Start focussing on your personal wealth. This is the first time you will be doing so
- Get a very good wealth-manager (advisor). A regular CA alone won't do. You need someone who is monetarily and asset-wise rich - only he/she can advice you on wealth matters (if that person happens to be a CA, good!)
- Continue motivating the team for the things that made you reach the third phase
- Keep interacting closely with all key business partners. No one should say you have grown big enough to not interact with them!
- Do not indulge in vulgar displays of your wealth. It will adversely affect your image and make enemies out of friends. So if you can make do with a smaller car, no need to think of the Mercedes yet!
- Be on the watchout for frauds - people who are trusted by you, but are actually not worthy of that. You will have your fair share of experiences; learn quickly!
D. The fourth 1000 days - Expansion, Branding and Finance phase
Now the game turns serious. You have an organisation that's beginning to stand on its own, you have revenues and profits (hopefully!), you have team-members whom you can trust, you have a decade of experience (how time flies!) and you have seen ups and downs to even out your animal spirits to a reasonable level (again, hopefully!). Having successfully done it at the national level, Sunil Bharti Mittal is now passing through this phase in terms of global expansion for the company. So what should you personally focus the most on, now? Three things basically.
- Start thinking of expansion, if your business model allows for it
- Expansion can take place in any manner - more offices, more locations, bigger teams, newer business venture(s), etc.
- Since the organisation is likely to have a lot of positive energy at this stage, you are most likely to get good results from expansion
- The biggest caution - keep a watchful eye against systems dilution. That can kill your brand in the long run otherwise
- Secondly, focus on concerted efforts regarding "Branding and PR"
- Become media savvy - start appearing for media interactions, press-meets, national PR and TV coverage
- Get a really good PR agency to work for you, and if possible, develop a long-term relation with them
- Get your branding language consistent and right. It's going to reap rich rewards for you soon!
- Thirdly, focus on big-ticket Finance. It may be the time to go for private equity (PE) or a public issue (IPO)
- At the same time, it may not be! All depends on your personal ambition regarding growth
- These three areas are all strategic - and must be handled personally by the entrepreneur as much as possible
- If done right, the fifth phase can be a totally different experience altogether for the organisation and the brand!
- By the way, this is also the time when some serious investments will need to be made into creating the I.T. backbone for the organisation. Again, the magnitude of investments depend on what you expect from I.T. for your organisation
If you navigate these four stages properly and successfully, you can then focus on your personal life and wealth, and enjoy it to the maximum. After all, you are the elite member of probably less than 1% of those who started this journey several years ago.
Company-specific exceptions to the above description will always exist - WalMart invested aggressively in creating an aggressive I.T. backbone much before it expanded globally.
These are the most crucial four stages for any enterprise. Most of the embroynic action happens here. Of course, the years ahead are also full of action, adventure, suspense and drama! But the start-up phases get over with these four I have described.
Finally, let me say this - if you are not the adventurer-type, please don't go in for all this. Your hair will turn white in a decade, your personal life will be messed up and all happiness and cheer will be lost - you truly need to have the unending passion and insanity in your DNA to be able to do all this, and live life to the fullest while doing this. It is not easy at all - so the next time you see a successful entrepreneur, salute her!
Wishing all young, budding entrepreneurs success in life!
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I recall a project started by a huge consortium of telecom companies led by Motorola way back in 1996-97 to launch consumer satellite-telephony. It was titled "The Iridium project" and was launched with outstanding fanfare, with advt punchlines claiming "Geography is History". The project had IMMENSE resources allotted to it, with all major brands supporting. The project failed spectacularly in just 2 years. Analysis revealed that the overconfident project managers failed in the most basic planning - consumer comfort with pricing. I suspect that this happened due to a false sense of "resource security" that the always-flowing taps ensured.
Review performance regularly. See if you have overshot resource allocation.
