Volume 2, Issue 3

Sneak Peak • How to Write a Bplan - Page 2 • Innovation Speed in Start-Ups - Page 3 • Mr. Shwetang Jain interview - Page 5 Sow a thought, reap an action; sow an action, reap a habit; sow a habit, reap a character; sow a character, reap a destiny - Chinese Proverb

20 Aug, 2008

DOES INFLATION SPELL DOOM FOR INDIA’S ENTREPRENEURSHIP BOOM ?
On the 15th of August 2008, for the first time ever, a consul general (Neelam Deo for India) rang the closing bell at the US stock market. As recognition of the fast growing Indian economy, the giant billboard overlooking Times Square also had the Indian Tricolour being displayed with the text ‘India Independence Day’. The recent upheavals in the market notwithstanding, it can be clearly seen that the Indian economy has been on a steep rise since the past 5 years and is brimming with promise to accommodate more influx to synergise this growth. In a country of billion odd people like ours, where millions live below the poverty line and millions more are unemployed, where do we start to bring about a change so that the country keeps surging ahead? One of the obvious answers is to get more jobs for people. To do this, there is need for enterprising individuals among us who will be responsible for generating wealth from within the country. Entrepreneurship is a critical element of a growth economy, and many believe India is poised to unlock a Silicon Valley like entrepreneurial boom through the next 10 years. The beginnings are already in place, steps have been taken in the right direction and change is afoot. But what about the problems brought about by inflation? India has produced the most impressive set of corporate results anywhere in the world, in the recent past. However government policies and nature of coalition government, deprive India of more encouraging economic policies. So what are the entrepreneurial options left for a young Indian? Going deeper into understanding the nature of India’s entrepreneurship and the current economy will give us a better idea about the future prospects of an aspiring entrepreneur. Mrs. Sramana Mitra, a successful Indian entrepreneur in the Silicon Valley, believes that the excess capital chasing Indian start-ups and the lack of fundable deals is clearly manifested in India’s entrepreneurship today. Going by past trends, consumer internet turned out to be a big trend from last year, for India, while Sramana feels that non -tech sectors like retail and real estate are also big m o n e y making opportunities in the future. Talk about retail and real estate hogging the limelight in the future; it seems to be universally accepted. Land has, from ancient times, been deemed as a symbol of wealth. Even today, its one of the most orthodox yet sure-fire commodities to invest in. Mr. Michael Sexton, President, Trump University also seems to agree.. Continued on page 4

KHARAGPUR

ENTREPRENEURSHIP

The Entrepreneur

CELL,

IIT

Have you considered these points while writing a B-plan? - PAGE 2

Key factors that determine innovation speed in Start-Ups - PAGE 3

A few of the upcoming events to look forward to - PAGE 4

Recent activities have keep spirit of entrepreneurship soaring high - PAGE 5

Page 2

THE ENTREPRENEUR

The successful person makes a habit of doing what the failing person doesn’t do - Thomas Edison

How to Write a B-Plan
Writing a business plan is a fundamental step to enHow many outlets will you have? How much passive suring your business has every chance of succeeding. income will it produce for you in the future? How many Common statistics state that 9 out of 10 businesses customers on your database will you have? What will fail on the first 5 years of operation, and of the rebe your geographic area of influence? These goals will maining 10%, 90% fail in the following 5 years be a combination of your personal goals for your own Why? There may be a number of reasons - from poor life blended with that of the life of the business. Step 3 - Define your USP customer service, In order to stand out form the crowd, it is imperative inadequate product, poor logistics manthat you know and define your USP Unique Selling Proposition. What it is that you offer and provide that agement and cost control. However, the is different to other people in the market? It may be number of businesses that you offer additional services to your core product; that do not define it may be that you have a more personalized customer service approach; it may be your after sales service and their goals and map out their path to warrantee on the product. What is it that your customer will be attracted to above other success is phenomenal. Taking the step to define your business goals, Business planning is a vital businesses offering the same service plan where you want to go and component of starting and or product? Once you know this, then what you want to achieve will place growing a successful enter- you can use it as a focus for your cusyou in an increased position of fu- prise. Many different varia- tomers to recognize you and rememture success and realization of your tions of business plans ex- ber you. ist, so you must carefully Step 4 - Know your market dreams. Below is a list of the areas you need choose the right one that Have you ever thought up a brilliant to consider when writing your busi- serves your purpose and idea and began to investigate it, only ness plan. These steps will help enterprise. A well-executed to find out that another business has define the business goals, the rea- business plan will enhance already started with that exact same son for existence (of the business), the odds that your venture idea? This happens daily to many peoand define the direction you will will take a successful path ple, but do not be discouraged. The and satisfactorily fulfill your marketplace is huge and can support a take. goals. Step 1- Define your vision number of businesses providing the You may know inside your head same service. Look at petrol stations why you want to start a business, and what business and dry cleaners as an example. So, get to know the it will be. However, your staff will not know this informarket your market. How many competitors are there? mation, and after a time, you too will also forget What do they offer? What have the trends been in the industry? What might be the future trends and presome of the details. Write down what your mission is dicted growth/decline of the industry? Are there any your purpose and vision for the company. This sets the tone for all business and actions taken on a daily benchmarks you can base your business performance basis, working toward achieving your mission and on, such as profit margins, expected turnover per business size, and so on? Once you have a broader picture purpose. Step 2 - Set your goals and objectives for the busiof the market you are entering into, you will be better equipped to handle and maximize your potential business Think big. Do not let your own limitations impact on ness growth. Contd… what you think your business is capable of achieving. Define what you short (less than 12 months), medium (1-3 years time frame) and long term goals For further reference : http://www.powerhomebiz.com/082005/ (usually 3-5 years timeframe) will be. Think of topics businessplan.htm such as how much revenue do you want to generate?

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THE ENTREPRENEUR

Failure defeats losers, failure inspires winners. – Robert T. Kiyosaki

Innovation Speed in Start-Ups
Research-based start-ups are new business start-ups that develop and market new products based on proprietary knowledge or skill. Such startups form the basis of technopreneurship, which has received a great deal of attention from academics in the last couple of years. Although considerable research has been done in the field of resources, strategy and industry environment of new firms, little attention has been paid to the factors which control the speed of innovation in startups. Innovation forms the heart of every technopreneurial venture and hence it is essential to study the forces which affect it. It is widely accepted that tangible assets such as starting capital and the stage of product development at founding and intangible assets such as team tenure, experience of founders, and collaborations with third parties are important antecedents for innovation speed in startups. Intuition suggests that starting capital and stage of product development encourage innovation speed. Moreover, its understood that team tenure and experience of founders lead to faster product launch. And of course, alliances with third parties should also affect innovation speed positively. But research says otherwise. Now why is innovation speed so important? Innovation speed is directly related to the time required to market or time between firm founding and product launch. This might seem strange but it takes months to market the product even after product creation. Especially for new ventures, time to market is a crucial factor for these reasons (i) gaining early cash flow for greater financial independence, (ii) gaining early market share, and (iii) to increase the likelihood of survival. Moreover slow product development leads to increasing costs and no immediate financial returns. There are several ways in which a firm may obtain the required financial resources, such as selffinancing, loans, obtaining angel-investments and venture capital, and of course grants. It is seen that most firms which have to expand quickly go for venture capital. However, surveys indicate starting capital has no significant affect on innovation speed. This discrepancy is best described by the following reasons, (i) v e n t u r e capitalists may push firms to ramp up their commercialization efforts, diverting attention and investments from R&D toward marketing and sales, which may delay product completion, and (ii) venture capital and high amounts of initial investments might be associated with more ambitious projects, which inherently face longer development times. Higher stage of product development significantly reduces the time to market the product but this is true only for non-software firms. Surprised? For software firms, it is seen that the launch of a beta version considerably delays product launch. This is obvious because customer involvement leads to repetitive modifications to the product which ends up delaying product launch. This situation does not apply to non-software products probably because for such products repetitive modifications are often impossible or pricey and hence customers don't get to dig in their noses too much! Thankfully, team tenure and experience counts and assists innovation as predicted by common sense. A better team shall always lead to more efficient product development. But alliances with third parties may hinder innovation speed. Collaborations with private firms show no effect on innovation speed. Collaborations with universities slow down innovation speed but this must not be taken as a setback because such collaborations can be considered a long term investment and may show profitable results in the long run. Reference : J PROD INNOV MANAG 2007;24:303–31

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THE ENTREPRENEUR

Failure defeats losers, failure inspires winners. – Robert T. Kiyosaki

Does inflation spell doom for India’s entrepreneurship boom
...Continued from page 1 ..to the above thought, suggesting investing in real estate as a way of benefiting during the current heavy inflation period. It’s what the millionaires and billionaires are doing today. So, is future of entrepreneurship in real danger? Does the current inflation spell doom for those willing to establish start-ups now? Clearly, the answer is no! Despite facing innumerable challenges, the entrepreneurial energy that now radiates across all activities from almost all parts of India is greater than what one has seen over the past four decades. Mrs. Sramana is indeed very optimistic about India’s entrepreneurial potential. The enormous successful growth of most existing Indian companies, as also the promising start and rise to fame of many young Indian entrepreneurs both domestically and abroad in a very short span of time, is a very encouraging sign to say the least. So, the answer is not to bide your time waiting for the tide of inflation to ebb down to manageable levels, its infact to try to use inflation itself as a stepping stone to get a head-start. But will this trend last? Certainly for the next few years, says Mr. Omkar Goswami, in a BW article. He believes India’s entrepreneurship is now second to none. So, maybe you are indeed in the right country for entrepreneurship at the right time. References : http://indianeconomy.org/2007/03/27/entrepreneurship-in-india/, http://www.trumpuniversity. com/blog/post/2008/07/benefit-from-inflation.cfm, http:// www.businessworld.in/index.php/Of-Entrepreneurship.html

IN THE PIPELINE...
Concipio is the annual b-plan competition organised by Entrepreneurship Cell, IIT Kharagpur. First round submission deadline for this event is 31 August, 2008. Selected teams from this round get exposed to a one and a half month mentorship period , mentored by successful and seasoned professionals which include successful industrialists and alumni of IIT Kharagpur, before going on to present their final plan at E-Summit ‘08.
http://www.ecell.iitkgp.ernet.in/concipio/

Envision, the Product Design competition organized by Entrepreneurship Cell, IIT Kharagpur aims to provide a platform where participants can showcase their ideas of next-generation products. A brief technical summary of the product is to be submitted online before 31 October, 2008.tHowever, teams will have to present a working model or assembly parts of their products during the final judging at E-Summit ‘08.
http://www.ecell.iitkgp.ernet.in/envision/

Eclairez, is a Social Entrepreneurship Challenge aimed towards those individuals who have the gumption to
empower those at the bottom of the pyramid as well as earn profits for themselves while doing so. First round submission expects participants to submit an online summary of their idea before on or before 25 October, 2008. The participants will then get a chance to perk up their business plan with our mentorship board, comprising of Social Entrepreneurs and Venture Capitalists, and finally convert it into a successful social venture, after a brief presentation at E-Summit ‘08. http://www.ecell.iitkgp.ernet.in/eclairez/

Pensez, is the annual Case Study Competition organised by the Entrepreneurship Cell, IIT Kharagpur. This years problem statement is “Analysing the impact of web-based technologies on technology start-ups“. Preliminary round expects a brief write-up of about 500-700 words is to be submitted before 17 October, 2008. A final
presentation of the dossier and report will have to be given at E-Summit ‘08. http://www.ecell.iitkgp.ernet.in/pensez/

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THE ENTREPRENEUR

A man’s worth is no greater than the worth of his ambitions – Marcus Aurelius Antoninus

A KGP alumnus’ tale from student to CEO
On the 9th of August 2008, we were honoured to have Mr. Shwetank Jain, CEO P2P Power Solutions, alumnus IIT Kharagpur, amongst us answering queries to a jam-packed gathering of 1st year students at V1 auditorium, on the occasion of Fresher’s Induction Program. Shwetank won Conipio 2005 through which he got his start up initially funded. 90% of the young audience said they too would like to have a start-up of their own at some point of time!! These are a few excerpts from the question-answer session with Mr. Shwetank on that day. 1.Please tell us something about P2P Power Solution? A: It basically developed from my b-tech project which I did in 2006.It deals with power handling, improving efficiency of machines & reducing grid pollution. 2.Whom does your industry caters? A: It caters to basically steel industry, paper mills, printing press any hardware industry and even the medical industry. 3.When did you think of starting a company of your own? A: I wanted to do something of my own since my 2nd year of my college & was actually looking for a good idea which I got in my third year from Prof. Poddar. 4.How did you manage the initial funding? A: The initial seed loan was provided by IIT Kharagpur. Now I have some funding from the WB mutual funds but they have only been sanctioned not issued. 5.At what stage is your business sales currently? A: At this time I have sales order of Rs.60 lakh with around 30 lakh implemented and we aim to take it to 1 crore by the end of this year. 6.What role does the MBA play in business? A: For doing business you don’t need to do MBA because its mostly theoretical knowledge and that doesn’t help you anyways it’s just your brain which comes for your rescue at places. Even I joined XLRI last year because of persuation from my parents but I had to leave it anyways because I couldn’t do the two things simultaneously. 7.Whats the advantage of opening your own company? A: You directly become the CEO of your company what else? And once your company starts doing well you become independent . 8.Does one need a great personality to have a start up on his own? A: As far as I think, it’s not needed that much, It’s your mind which actually works but yes, you should be confident and be presentable to others.

Entrepreneurship Pledge
On 14th August 2008, eve of India’s 61st Independence Day anniversary, Entrepreneurship Cell organised Entrepreneurship-Pledge, 2008,a pledge to inculcate the spirit of entrepreneurship. The pledge was to be followed by a discussion on “Is the present Indian Economic scenario viable for Entrepreneurship?” The event commenced with a small presentation on the functioning of Entrepreneurship-Cell which was followed by a speech by Prof. Dhrubes Biswas (Prof In-Charge, Incubation & Entrepreneurship Programmes ,SRIC) in which he not only outlined the various facets of an entrepreneur’s personality but also talked about the “Education – Enterprise Model”, and the foundation of E-Cell. To make this model functional, he added that it was important for students especially from institutions like IITs and IIMs, to venture into entrepreneurship. Subsequent to these inspirational words was the E-Pledge where all present pledged to contribute to the building of an enterprising India. We had the good fortune of having one the most vibrant and revered professors of IIT Kharagpur Prof. G.S.Sanyal share with us his honest opinion on the importance of entrepreneurship in the growth and development of our nation and the ways to encourage IIT graduates to view entrepreneurship as a serious career option. To oblige us with their august presence and valuable opinions, we had the honour of having Prof. Amit Patra (DEAN Alumni Affairs), Prof. D. Biswas , Prof. Kalyan K. Guin (Vinod Gupta School of Management), Prof. Gautam Sinha (Vinod Gupta School of Management), Prof. Suman Chakraborty (Dept. of Mechanical Engineering) and Prof. K.D. Raju (Rajiv Gandhi School of Intellectual Property and Law) to serve as the bench of panelists for the discussion.At the end of the discussion, the panel entertained queries from students to clarify their doubts and dilemma. The discussion was concluded with the playing of the national anthem.

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