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How to kick-start your own venture, successfully
"Entrepreneurship is not a career. It is a way of life," insists Sramana Mitra, Silicon Valley-based technology entrepreneur, strategy consultant and author of the series, Entrepreneur Journeys, which offers deep insights into the individual journeys of a cross-section of entrepreneurs.
It also takes a close look at 'bootstrapping' as a means to kick-starting your dream venture. A respected name in entrepreneurial strategy today, Sramana started out in 1994, a freshly minted graduate from MIT, with hardly any knowledge or first-hand experience of the world of business.
Needless to say, her professional learning curve was steep. Her experiences -- as founder of three start-ups and later, as strategy consultant -- were her greatest teachers.
Read about how to kick-start your own venture, avoid going bust and prevent turning into just another statistic amid the increasing entrepreneur mortality rate.
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How to kick-start your own venture, successfully
Bootstrap now: Entrepreneurship and innovation as the only sustainable path forward
As I developed the series Entrepreneur Journeys, the 2008 financial crisis came upon us. Capital started drying up. Entrepreneurs were left with little option but to bootstrap.
That's where the idea for the second volume -- Bootstrapping: Doing More With Less -- came from. We have to rebuild. We have to reconstruct. Entrepreneurs have to play a critical role in this process. Learn from the masters. And not give up!
Wall Street has caused a crisis of value. They have speculated disproportionately, and without integrity or conscience. This crashed the global economy, and has created enormous unemployment.
In America, we have an unprecedented 10% unemployment. India and China are doing better, but need to keep growing at aggressive rates. Either way, whether to put people back to work in America or Europe, or for the emerging markets to grow, entrepreneurship is really the only viable strategy.
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How to kick-start your own venture, successfully
What is bootstrapping?
Bootstrapping allows you to keep control of your equity, while venture capital is designed for investors to gradually take control of more and more of your company's equity.
Also, bootstrapping is appropriate for businesses that don't necessarily have to be going after large market opportunities, whereas, venture capital is only appropriate for businesses that have the potential to get very large.
So does bootstrapping work only for small businesses?
I can give you numerous examples of entrepreneurs, who have built large companies via bootstrapping.
Frank Levinson and Jerry Rawls of Finisar's bootstrapped venture went public at a $5 billion valuation.
Sridhar Vembu of AdventNet, is taking on Google, Microsoft and Salesforce.com with no venture capital.
Girish Navani of eClinicalworks, has built a $100 million healthcare IT company with no outside financing.
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How to kick-start your own venture, successfully
Bootstrapped entrepreneurship is 'the true weapon of mass reconstruction' because . . .
. . . of two reasons: one, it is difficult to raise money. Credit is tight these days. Equity financing has moved to the later stages with venture capitalists acting as bankers. So, to get a business off the ground, you have no choice but to bootstrap.
Secondly, most businesses don't fit the venture capital model because they are small, niche ideas. A $5 million-a-year business idea or even a $50 million business idea is not interesting to investors. But these make fantastic small businesses!
Especially, if you own 100%, by yourself, or with a small group of partners, you have an excellent situation.
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How to kick-start your own venture, successfully
Tips to avert failures (especially for entrepreneurs who are in their most vulnerable, i.e., pre-$1 million revenue phase.)
Well, based on what I have experienced by coaching hundreds of early-stage entrepreneurs, a good 25% of entrepreneurs don't bother validating their ideas.
They build products without talking to prospective customers first, and hence, more often than not, they build the wrong product. If we can simply plug this basic gap, we can improve their chances of success dramatically.
Another 25% are immediately interested in raising money. Again, raising money without validating the business is pretty much impossible.
These entrepreneurs go bumping from door-to-door, getting refused repeatedly, their emotional energy draining each month, their resilience eroding slowly but surely.
This is a pattern I am seeing constantly. If we can address it, we have a chance at significantly impacting infant entrepreneur mortality.
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How to kick-start your own venture, successfully
Reducing excessive infant entrepreneur mortality
Such immense entrepreneurial energy, instead of being squandered through these failed ventures, needs to be harnessed and put to GDP building and job creating work.
The answer is education. That's the education and coaching that I am trying to provide through my round tables, the Entrepreneur Journeys book series, and the bigger 'One Million by One Million (1M/1M)' movement. The mission of 1M/1M is to help a million entrepreneurs reach a million dollars in annual revenue, create ten million jobs, and build a trillion dollars in global GDP.
Advice to people looking to start (and sustain) their own business
My advice to people is to 'do it'. Entrepreneurship is very, very challenging, and also very, very rewarding. If you have it in you, it is better to start early and learn the business.
There is a tremendous amount to learn. It is a complex way of life, it is a complex business, but very worthwhile. And if it is in your DNA, it will never leave you alone, so may as well get it out of your system, rather than pushing off your dreams.