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Conquer the fear

Conquer the fear : Distilled wisdom from the entrepreneurs who have been there and done that - from The HBS entrepreneurship conference 2003, by Arifa Khan

How does it feel to be a ‘Desh’ DeshPande – one of the most successful VCs of the Internet era, and founder of Sycamore Networks that revolutionized broadband, or an Atul Nishar, the founding father of digital education and Aptech, and now Hexaware Technologies? One did not know until one donned the hot shoes of entrepreneurship oneself. Well, Wharton changed all that. Being here means you can demand to get under their skin, to know about their failures and their earth-shattering insights.

“Entrepreneurship is not just about the impolite five letter word ‘greed’ but about making an impact, be it at a large organization, at your start-up, in a broader community, or anywhere” pondered Gurcharan Das. “If you want to succeed as an entrepreneur, find the best person in the industry you are targeting for sales and make him the CEO. He will get you the first customer and the rest.” Increase your threshold of pain and take more risks if you want to increase your chances of success, goaded Deshpande. While Atul Nishar drew on an example of coy fish that grows in size according to its environs, from less than a feet in a pond to over 10 feet in a flowing river. So he argued, we MBAs have an entire ocean to swim in, in a borderless economy and that we must really think BIG.   One learns to ascend the precipitous inclines of entrepreneurship, by conquering the fear of the unknown. “An African Impala, which can jump up to 10 ft high, is curtailed by a wall merely 3 ft high as it hates to touch down on an unknown territory.

The challenge for an entrepreneur is to court the unknown. If I can do it, Narayana Murthy of Infosys can do it, so can each one of you” inspired Atul.   But, for those who did not inherit a business to run or money to render VCs redundant, how exactly do you ensnare the elusive VC if he does come in your ambit of influence, say in an elevator?   Give him THE perfect pitch - your story on how you cannot sleep before you see your baby up there in the Fortune 100 or whatever hallowed list. However, desist from all temptation to talk about the solution you have discovered to the billion-dollar problem plaguing your chosen industry, and instead talk about the problem advises Dr Nick Morgan of HBS. “The lower the need your message is based on, in Maslow’s hierarchy, the more viscerally effective it gets!” In any event, you perhaps have only a couple of minutes in your first chance-encounter, just enough to arouse the VC’s curiosity for your idea!   In the process of captivating the VC in a protracted courting, don’t forget to give him an exit option. You can even get away with a moderate return of say 30% with a exit option as it is bound to excite him more than the one with a 200% return with no exit. Contrary to popular perception, VCs do chase entrepreneurs, at times even when the entrepreneur in question doesn’t have an idea. Gil Hechst, the founder of Savantis systems, for instance claims a VC spotted him and offered him the moolah to go start a business! There does seem to be light at the end of the tunnel, and hopefully it’s not of a train that cometh to run over the entrepreneur!  

How hard is getting that last buck from a VC? It depends on how much control you are willing to lose for mitigating your risk of not being able to raise all the capital you need. ‘Beware the angel who promises you 100% funding’ caution some who have just embarked on their entrepreneurial ventures, for the angle may not be as angelic when it comes to his deadlines and stipulations. He may lay down terms and shove down decisions your throat that may not be all too palatable. Just as businesses like to spread risks across several vendors, we must extend our bowls across many VCs, angels and perhaps other sources. The lesser each one contributes to your venture, the more you are in control of your baby!  

It was an impressive confluence alright. Of brilliance, practical wisdom, and of an acute naiveté to discard even a remote possibility of failure. But, isn’t that what entrepreneurship is all about? Enterprise and gumption with abandon was there for all to see. Take the battle of business plans for instance where the theatrically gifted HBS grads locked horns with the technology obsessed MIT grads with their ‘next best invention after sliced cheese’ in 30 seconds flat. If you have doubts about your ability to pull it off in 30 seconds, seek out Noah Shanok, WG04, who battled it to the top 10 ideas with his Axis 360, a novel idea for snowboarders. Some call it ‘fire in your eyes’; the phrase literally helped a budding entrepreneur clinch the deal from right under the nose of the likes of the mighty IBM.   I witnessed the business pitches that got their message through in 30 seconds at The battle of business plans, and made it to the 3 minute second round and finally to the “Let me invest” round by real VCs. More perplexing was the revelation by “how to make the perfect pitch” presenter that "the best way to start a pitch is with a fable!" And, all stories can be slotted into five categories: Quest, Stranger in a strange land, Boy meets girl, Revenge, Rags to riches. He promises a $1000 to anyone who can invent a sixth story type that meets with his approval. Frankly, I wouldn’t bet my success with a VC on a pitch starting with any story, despite all my hard-to-camouflage raconteur instincts.  

The key take-aways, of course, were the networking strategies by Keith Ferrazzi – the networker who got invited, even as a student, to present at the national level business federation conferences where his senior partners at the top 5 consultancies never got to -despite their best attempts. All because he networked!   The piece de resistance was from my celebrated alum Desh himself “ Entrepreneurship is like juggling with several balls like family, friends, work, life balance. Most of them are crystal and break once you drop them, the only rubber ball among them being work which you can pick up anytime and get going.” So, the lesson is do not drop other balls for a rubber ball which is unbreakable anyway!  

Arifa Khan, Wharton MBA 2004

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