– As published by 5000 cities
“Entrepreneurship” is not a new term. It started many 100s of years back when Spanish, English, Dutch, Portuguese traders used to have their colonies across other continents, used to establish their den where they identified opportunities for businesses, could use the local resources, exchange products, exploit market conditions.
Even now the concept remains the same. But the major changes we now see are in the speed of communication, transportation, access to information and customers’ mindset.
As Chief Mentor of Racehorse Business Consultation and with my team across India — Mumbai, Bangalore, New Delhi — we were recently awarded as one of Silicon India’s Top 10 Prominent Business Coaches.
We provide comprehensive consulting and mentorship services to startups, helping them from the ideation phase to market entry and beyond.
During my consultation and management of programs, I ensure guidance of business operations, projects in the areas of mentorship for tech sectors, new business & research initiatives.
The most important factor of entrepreneurship is the problem which is getting resolved by startups, the importance of the problem and if there is a strong sense of need.
Dr Roy of Bangalore
Another major factor which impacts the startup is sustainability of the solution: the world is changing much faster with it’s population, social and economic change. Change, adoption and transformation should be by default properties of any startup’s proposition — otherwise they can’t sustain for long.
Having done extensive research, we found that some 80-90% of global startups face major setbacks due to multiple external and internal business factors. Businesses have very little control over most of the external factors (competition, culture, legal process, climate, media, politics, corruption etc.). But businesses are required to work on their internal factors — org culture, management & leadership, technical skills, operations — which in turn help them to handle the volatility of external factors.
To develop the right approach, entrepreneurs need to develop the skill, attitude and their behavioural factors. An entrepreneur should identify the value opportunities, create entrepreneurial activities for value addition or transformation — and eventually create products/services which can be exchanged with higher value transaction.
Let’s consider an example:
In India, raw wheat cost is some 0.4$/kg. When you transform the wheat into bread/buns, pizza or cake the value changes to ca 2$/kg or 5-6$/kg, respectively. So, an entrepreneur is a change agent who transforms resources into useful/highly valued goods and services.
Panoply of projects
So far 120+ business initiatives & related project investments were under my consultation and management. Those projects were mainly related to innovation, sustainability, transformation for multiple business functions like customer development, supply chain, marketing, digital transformation, IT services and HR functions.
Initially, most of the projects were seeking funds to develop new solutions, but the global investment board or investors were not very happy with most of the proposals made by each project team. There was not much clarity on the success, there was chaos, gaps in understanding, ambiguity in declarations, a vast scope of assumptions.
My initial couple of years were quite challenging making functions to adhere to a process. But the global investment board was not ready to invest without absolute clarity of “RoI” — favourite concept for any investor: “Return on Investment”.
During the process of my consultation and mentorship, I reviewed the 360% of views from across tables, started putting in multiple pieces of elements from global teams: portfolio management, local business functions, project teams — and then created a structure which I have been following for all my projects.
The innovation projects which were seeking funds from multiple companies were related to either improving the FMCG product distributor management systems, creating business analytics models which will synchronise the market demand and production dynamically, process intelligence solutions to enable efficient enterprise decision-making abilities or HR people and culture management solutions, among others.
Startup idea and its operational boundaries
Many startup ideas fail because most of the time the founders do not have an idea of the idea’s operational boundaries and related exceptional parameters — the team look only at the very basic concept of the idea from a high level. So, their project or business plan lack many major elements which are very much required for innovation and market entry.
During my consultation, I structure the project portfolio management and then we create a formal way to represent such business cases.
Let’s have a look at one such case.
One of the businesses wanted to create a localised version of a distributor management system with much enhanced and made dynamic the capacities of data capture, transfer and analytics capabilities, to fulfil retail customer demand effectively. When they approached me to consult & enable the funding process I found the proposal was filled with gaps.
During the consultation, I set up my focus on the most critical sections:
- Business case alignment with all necessary data/info, to approve the case for possible funding and investment
- Review, understand, justify and fund the project
We will look at step 1 which is the most important factor to ensure that the program/project is having enough potential for investment.
My team started evaluating and challenging the business team:
“What is the background of this project? what made you think your solution is important and how important is it?” Answering this question brought the areas like existing ways of working and the gaps, the issues, the impact, the demands of the market & high-level view of the proposed solution.
During the discussions, we have identified that the new solution will reduce the retailers wait time to almost 70% and will leave a tiny chance for competitors to identify opportunities in the “empty rack” & fill-up the gaps with their similar products.
“Did you identify the market? Local, regional, global, what is the distribution of the demands? Answering this question, brought into the limelight the way the team approached the existing retail B2B customers. Based on the success, they will expand local reach and post that — regional B2B reach. This was further challenged with “implementation approach” since not all B2B customers might agree to the solution as they have less awareness of technology and don’t follow modern trading processes.
The team working for B2B scope within Indian states of Karnataka, Tamil Nadu and pilot in Bangalore + nearby B2B retailers was almost 22,000, which comprise small-medium-large businesses. For the pilot the number was 3,000 of large and medium retailers. The large retailers were only 700-750 out of the total 22,000.
Further the consultation was analysing the business objective and scope which defined vision of the business (80% of the existing organised B2B customers will be under new system by 6 months), the types of customer segments, eligibility under adoption.
“What are the deliverable functions, what was there and what changes will replace them?” This focus brought the unique selling proposition of the solution and it’s elements like: new solution of capturing data from individual shops and directly sending it to distributors.
A. Easy capture of products required to fill for a shop’s product display racks
B. Size and quantities required by retailers based on sales
C. Urgency of requirements
D. Issues if any (why certain types of sales are less, which size preferred by consumers? replacements)
E. Payments
One major question was: what are the quantitative benefits for the companies that will implement this solution? Will there be manpower reduction? Less logistical cost? Supply quality improves? Less wastage in delivered products due to damage?
Given a quick decision-making analytics feature, how will all of this create a quantified benefit? The mentee defined that overall min 50% reduction on logistical cost has been achieved (reduction of multiple trips to the same shop) due to quick analysis of demand. Almost 1/3rd manpower cost will come down due to zero paperwork and calculation. 50% of the cases lighter logistical vehicles will be used as per supply load, this will result in less damage and improve performance of delivery and improve customer satisfaction. The overall process of supply process: almost 20% reduction on transport cost and 50% reduction on damage and wastage.
We did a deep dive on the operations resources and funds required, their segmental usage on people, operations, technology, infrastructure. The estimation of overall cost, the process of estimating elements like people cost, technology adoption cost (h/w, s/w, hosting), travel, specific vendor service, training customer support, retailers & distributor agents, market specific cost, taxation. The team had to revisit their estimation multiple times —and we observed, the reduction on estimation was almost 30% from initial demand.
We also discussed the team involved and aligned the right resources in the proposed solution, the business requirement team, architecture of the solution and earlier experience, IT team’s capabilities, information security compliance team, the owner of the project and their connections to local market and reputation. During the discussion, we proposed to involve another team’s expertise to ensure there is no gap in implementation.
We asked specifically about the adoption of technology and it’s sustainability for the next 5 years to ensure minimal maintenance cost, technology change management and adoption cost to ensure minimal risk is impacting the adopted solution. The cloud hosting, 4G/5G bandwidth requirements, mobile hotspot supported solution, lightweight transfer protocols, quick response time at retailers’ locations, quick customer support, the supported hardware and the tie-up with handheld device companies.
During the discussion with the mentee, we also looked at MVP creation with 60% of must-have features and absolute capability — which will deliver at least 70% of the benefits.
We identified certain areas of constraints, risk and impact that play major role for any project. We started by analysing the factors like, what are the limitations the team is having. We have established that, “IT team can’t be located nearer to main office and they are working remotely, so communication and initial management will face some challenges”, also “without having this solution, how it will impact business competitive position in market?”. “How the current SLA with distributor partners is executed, how the technology team’s turnaround time will impact the release of product in the market”. We asked the team to identify P1 and P2 priority risks and related impact, and the mitigation plan that should be approved by team management.
Then we looked at the innovation funnel and solution development lifecycle, we asked the team to work on two phases:
1. Pilot phase to develop the prototype/MVP and
2. Building 100% capability.
The team was then asked to define the phases of development and milestone dates and delivery management, acceptance criteria (Alpha and Beta versions).
Post Consultation
We aligned to release multiple minor adjustments in the overall plan with more data and quantification, which built confidence for investment authorities.
The forward loading of the fund was analysed and estimated and fund release took place in three phases:
1. During the Pilot phase 40% of funds were released,
2. During full cycle development or capability, another 40% was released and
3. During rollout the remaining 20% of the funds released on training, development and hardware acquisition. The product was a success in multiple markets and able to deliver the benefits.
Last but not least
Entrepreneurship has never been an easy game to play. For example: an entrepreneurship strategy for a manufacturing start-up will have certain challenges compared to an IT tech startup, in the areas of labour law, health benefits, pollution control, infra setups.
During my research and analysis, I found that the elements like business specific technical capabilities, leadership & management skill, org way of working culture, marketing play very critical role in business internal factors and these factors are like the immunity of business body to create strategy to handle the external elements like market competition, political & legal conditions, social outlooks where business has less control and which are dynamically changing.
Currently, I am working with startups evaluation and program management process for identifying best possible business cases for probable funding from investor groups. I am also helping fundraising companies to drive the process of identifying the best possible startups for investment.