Want to be an entrepreneur? Don't miss this!

Vijay Mahajan, chairman, Basix, a company involved in microfinancing and providing and sustaining rural livelihoods, spoke about various stages of an enterprise and different evolutionary stages of an entrepreneur at the Gurukul Session at the TiE Entrepreneurial Summit '10, held in New Delhi between December 21 and 23.

An IIT Delhi and IIM Ahmedabad alumnus, Vijay established Basix in 1996. His firm has the distinction of being the first microfinance company in the world to attract debt and equity. In 1983, he also formed Pradan, an NGO, that specialised in microfinancing and rural livelihoods.

At the Gurukul session, Vijay spoke about 'managing your psycho-dynamics' (a phrase Vijay claims ownership to), various ways of managing it, and why managing it plays a crucial role in an enterprise's success. Over to Vijay

"The central issue in entrepreneurship is managing your own psycho-dynamics or psychological dynamics.

"By psycho-dynamics I mean your emotional ups and downs, the energy that you sometimes feel from inside and sometimes you have to pump from outside, and managing that energy is part of an entrepreneur's psycho-dynamics. It plays a very big role in making or breaking an entrepreneur.

"It also deals with managing your motivation levels. Now, I have been an entrepreneur for more than 20 years but once in a while even I ask this question: Why am I doing it?"

. . . 

"When I was young I used to think why should I spend my entire life working in a dehaat (small village), and now that I am 56 I think why should I continue doing what I am doing with just about four years for my retirement.

"The reason why you don't throw in the towel keeps varying through your entrepreneurial cycle but the urge to throw in doesn't go away. I believe it's true for most entrepreneurs.

"What happens is we don't throw in the towel; we are Teflon characters; nature selects us for it.

"But the problem is the process of not listening to your inner voice. I can end up making wrong choices to a point where you can stop recognising your own motivations.

"You go on an autopilot and then a day comes when a single thing that actually drove you has been left far behind.

"As an entrepreneur life is going to continuously throw challenges at you."

. . . 

"As a microfinancier, I am facing a lot of challenges right now. The sector as a whole is close to its death. Forget about my own enterprise. But that's not the reason I want to throw in the towel.

"It could be for several other reasons. But the problem is if you don't listen to your inner voice -- by which I don't mean your conscience only. It can be whatever that motivates you.

"Don't leave it far behind you. Because when the chips are down that's the only thing you have as your true equity. Everything else is leveraged.

"So how do we nurture this core (psycho-dynamics) of an entrepreneur? How do we ensure that the core doesn't get damaged? I am going to tell you about three things -- there can be more even -- that will help you not throw in the towel.

"One of them is to have few -- not one or not too many -- mentors. Beware of the single guru. No one person will be full of vision and the world today is so complex that one single person cannot help you face the ups and downs of entrepreneurship.

"At the same time, beware of too many gurus because you will go mad listening and following everybody's advice and suggestions."

. . . 

"In my sense having three to four people as gurus should settle the matter and an entrepreneur must nurture those relationships so that even if they are at a distance from you or your interactions with them are infrequent, the warm up time should be less.

"The relationship should be such that even if you haven't spoken to your mentor in six months and one fine night if you call him (her) you should be able to have a long chat about problems you are facing.

"Now, what kind of people could your mentors be?

"They don't have to necessarily be from the same field or even business people. They should just be people who should have lot of experience and they should have the willingness and ability to share their experience with you and the patience to listen to your problems with a reasonable level of detail.

"People from your family too can mentor you and they too can play an important role in how your entrepreneurship shapes up. The advantage of having a mentor from your family is there is nothing you have to live up to.

"The third set of people could be professional friends. All of us are now so busy that it's very hard to maintain relationships with them who are doing completely other things. But having a mentor who understands your field of operations is always an added advantage."

. . . 

"In essence, managing your psycho-dynamics become easier if you have a network of people who have known you over a period of time and would be willing to continue to support you.

"They should be able to listen to you non-judgmentally and won't be offended if you disagree with them or don't implement their ideas and advice.

"Now this is important because whatever they are going to do is going to take a long time. I am sure you must have heard a lot about instant success stories but behind them there is ten years of hard work. You hear only that part of the story when an entrepreneurship takes off but not about the time when they struggle and try to fend off challenges.

"It is this period between starting up and taking off that you need a lot of support from your mentors.

"But you also need mentors when you become successful because you start facing other aberrations. Because while there is no issue about making tons of money there are some more acceptable ways of making money and some less acceptable ways of doing so.

"Eventually society has the way of getting back to people who cross their lines and this line is not a very dark and black Lakshman Rekha (the mythological dividing line between the doable and undoable) that an entrepreneur is able to see properly."

. . . 

"It is here again that your mentors will help you remain on the straight and narrow Lakshman Rekha and help you make money the acceptable way while being successful.

"You have the success stories of Infosys and the general IT success stories

"In my own field Vikram Akula (of SKS Microfinance that is in the midst of a political controversy involving suicides by borrowers in Andhra Pradesh), for who I care a lot, a young entrepreneur whom I mentored a lot has gone through many ups and downs in a very short period and part of it has to do with the fact that he comes from a slightly alien environment and didn't quite understand what are the Lakshman Rekhas in this field.

"I am not defending him but I think demonising him is also completely wrong. I am giving you this example not to point fingers at anybody, but since this is so much in the public domain today, it can help entrepreneurs learn quickly.

"The third time when the psycho-dynamics of the entrepreneur is important to manage is at the maturity stage.

"For me entrepreneurship is not all about building something from scratch and nurturing it. But it also involves eventually giving it up at an appropriate time."

. . . 

"For two reasons: One is for its own growth and evolution and second for your own growth and evolution.

"Take the obvious analogy of a three-stage rocket that is used to launch the satellite.

"Stage I is when you need the maximum boost, the first few minutes and once you reach a certain height Stage I is jettisoned. But if that stage says that I won't go anywhere, I am going to stay with you till the end then the whole rocket will find itself in the Arabian Sea.

"The jettisoning of the first stage then releases the energy and the creativity to move on to the next stage. This ultimately catapults your enterprise into a new, steady orbit.

"Here one must think of serial entrepreneurs who have learned to exit their ventures at the right time."

Why is building a personal brand is key for entrepreneurs? Read on to find out what Anand Pillai, head of talent transformation at HCL Technologies, has to say. . .

. . . 

"God has made each of us a first class original. Do not die a second grade copy," said Anand Pillai, head of talent transformation at HCL Technologies in his session on personal branding at TES 2010.

"We live in the age of minor differences. The difference between company A and company B is minor," said Anand Pillai, senior vice president and head of talent transformation at HCL Technologies, as he started his power packed session on building a personal brand for yourself. "You have to create differentiation as a person, as a company."

As an entrepreneur, it becomes even more important to establish a personal brand. Unlike an executive in a company, an entrepreneur has a wide variety of people to influence: his team, customers, prospective investors, and shareholders.

Without a differentiating presence, an entrepreneur could find it hard to make an impact.

So how is this personal brand or your identity? Anand gave the audience a few pointers to set them thinking.

"Your identity is defined by what you are going to be remembered for, when you are long gone," he said.

. . . 

It's not about the situation you are in, it's about the approach you have towards that situation that will stay in people's minds. For instance, we remember Mahatma Gandhi for the approach he took to handle the British rule.

Your identity is not about how you look. "It's more about your desire, your yearning to leave a stamp on earth," said Pillai.

You identity is not about your achievements. It's about how you have impacted people's lives, he added.

Pillai spoke about creating a personal leadership brand, which he says is a simple statement of who you are. This means that you should be aware of your strengths and weaknesses, passion, drivers, etc.

The idea is to create a positive brand. For that, it is critical for you to have pride in yourself. "People who are negative about themselves will not create a positive brand," added Pillai.

He also urged the audience to reflect on some questions. Which of my strengths are manifest when I lead? Which strengths influence and inspire others? Which strengths do I want to leverage more? Which strengths could I have and become better at?

. . . 

So how does one establish his personal brand? You can study your business to map your passion. This means uncovering the unmet needs and areas of dissatisfaction of your customers. Then you must connect the dots using your passion.

Then you become your own competitor and create a big entry barrier for others to follow. Identify the threats perceived by your rivals and build on your strengths. You have to learn to reinvent yourself.

The one thing we tend to do is to move away from things we don't like. Pillai said, instead you must move towards what you are good at, rather than running away from what you consider not good or right. Set yourself a target you can be passionate about.

Do not network for the sake of doing so. Network with value adders, he said. Spend as much time as possible with people who can give you different perspectives on how to address gaps you have identified. Develop relationships with real value creators.

Then identify what creates value for you. Focus continually on creating high value at low costs. If there are areas where you are able to create high value at high costs or efforts, raise the bar there; it will be a tough act for others to replicate.

Reduce activities that are low value and low cost, and eliminate those that don't create value but still cost a lot.