The Next Generation Of Entrepreneurs

Author:
Brian L. Pruitt

According to a recent survey, it indicates nearly 70% of American teenagers wanted to learn how to start
their own business. However studies have shown that an alarming number of high school seniors only
achieve an average score of 40% on basic economic literacy tests!

Results like these should give educators and parents alike the heads up that their children, our future
leaders and entrepreneurs of the world, are not getting the skills required to become successful.

That means we as parents and educators must take control of the education our children are receiving and
supplement with books, tapes, games, and likeminded conferences. This responsibility must also be realized
by our children and they must take the initiative to strive for those additional skills that they will indeed
require in their quest for success.

There are endless resources on the world wide web that are good, well-rounded, and educational for our
children. Yes, I agree the web has, in some ways, become twisted. However with some due diligence on our
part, as parents, and close supervision we can still provide safe tools for our children on the web. There are
many sites that can provide infinite resources of inspirational material for our children.
Here are some, just to name a few:

Our children have more resources then ever before to assist them in learning and developing their
individual skills. The key is support. It is vitally important that we encourage and support our children's
dreams. Yes, they may change their mind on their focus but each and every time they reach and stretch
their minds towards an endeavor, they learn and grow. This is vital experience that no teacher, book or even
us parents can give them. This is first hand experience that can be of so much importance in building a
foundation on which to build a successful and prosperous future.

Looking back, years ago, when I first began to learn to fly an airplane it was evident that it was the support I
received that allowed me to reach that dream from within. Although my dreams, visions, and goals have now
changed direction, it was a learning process that will be with me forever. My first solo, the completion of my
private pilots license, my first flying job, then the achievement of flying the fastest corporate jet in the world.
Yes, all these feats along the way have been learning processes that will allow me to take my achievements
and experiences within aviation and apply it to my various business endeavors. So, I encourage each and
everyone who reads this article to be a leader and mentor to those around you. Whether it be a child,
teenager or adult, each and every one of us has the ability to reach out and touch a life that is around us. Be
a mentor, a teacher, and a friend.
Keep Reaching, Keep Dreaming!

First time Entrepreneurs (FTEs) Building Businesses in India

Just read the couple of articles written by Paul Graham : Y Combinator (answers what
exactly does YC do? or Seedcamp, Techstars, MVP etc ) and Equity (explains why
should you give 5-6% equity to a program like YC)

The thoughts expressed got me thinking about how should First Time Entrepreneurs
(FTEs) go about building businesses in India. While a lot is in common between the
approaches of YC, SC and MVP there are a bunch of things unique to the Indian
Ecosystem which FTEs should consider.
Uniqueness of India

First things first, only during the last 10 years India has started seeing bootstrapped or
garage startups by talented, educated, experienced and passionate folks who dont have
access to a lot of capital but have the skills, will to solve problems and the staying power.
The number of successes out of these have been limited and have not been really
publicized for folks to get inspired by or learn from.

The VC industry is just about 8-10 years old in India as compared to 50-60 years in US
and Europe; among them majority of the funds in India are under 5 years old. VC being a
long gestation industry we are a good 5-10 years away from seeing major VC success in
India. Most of the firms are focusing on the existing pipeline deals in the market and
there are quite of few of these available – companies by serial entrepreneurs, companies
started by Executives (CXO, VPs) from large companies, some of FTE companies where
the traction is fairly significant, also since PE sector has performed very well and the
bigger funds are shifting time and money to PE deals. Clearly all of the above are the
right things to do for the Indian VC firms, since the firms need to perform for their
investors. None of this directly supports the FTEs, which is where the gap that needs to
be filled in. We need to create new pipeline of deals that will become successful startups
and will feed into the VC pipeline 1-2 years later. That’s the role folks like MVP,
iAccelerator, Upstart.in and others are attempting to play.

Another dimension of difference is IT / internet. The penetration of Internet and PCs in

India is quite limited (9 computer for every 1000 people, as compared to 700 for every
1000 in USA). On the other hand the awareness and usage of IT in companies, specially
SMEs is limited as well. There are a lot of other fundamental needs to be fulfilled in India
(remember we are a developing country).

FTEs in India: What to focus on ?

First thing to ensure is to build a cash flow positive business within the initial capital that
you have managed to raise (self, friends, family, fools). Keep lowest possible costs and
create early revenues. Expenses should ideally be below 50,000 INR and in no
circumstances higher than 1,00,000 INR a month.

Dont think of funding as a validation for your venture. Be prepared to wait longer, to
build your business to the 50-100 crore revenues in 7-10 years, with VC funding coming
after 2-3 years of being in business or no VC funding at all. If this does not appeal – don’t
do a startup.

Internet only business models targetting indian market are not going to viable for atleast 2
years ( or more). View internet as a cheap way to build products and get the initial users
with zero marketing budgets. From day one build alternate channels : mobile, call center,
SMS, kiosks , shops , sales team into your model. Use technology as a enabler to drive
costs down and to drive quaity upwards, but do not depend on customers using it directly
via internet.
If your idea only lends itself to internet, think about doing it for developed markets like
US and Europe. India still has lower costs and we are very bullish on build here – sell to
the developed world model.

So while you take into consideration the universal wisdom of building businesses, paying
attention to the uniqueness of India can make an big impact on the outcome of your
venture.

Family businesses: growing the next generation of entrepreneurs

How easy is it to become an entrepreneur in India if your family has a strong

entrepreneurial heritage? The conventional wisdom is that you have a massive head start.
Your family’s reputation, connections, brands, and capital are all at your disposal.

If your family’s name is well-known in Indian business circles, you gain immediate
acceptance and respect. Your family will provide you with a first-rank education, wise
counsel, introductions, and trusted advisors. You have the opportunity to start a business
at a much younger age than most because of all these advantages. Or do you?

Many children born into famous business families will tell you that there are at least as
many disadvantages as advantages if you want to start enterprise. Will your parents give
you free rein to choose a business that suits your passion, or will they constrain you to
follow in their footsteps? Will they encourage you to start a business that fits today’s
India, or are they locked into yesterday’s wisdom and yesterday’s opportunities? Will
partners, customers, and employees take you seriously as an independent CEO, or will
they assume that you are merely your parents’ agent? Do they believe you actually built
the business or do they believe you were handed every advantage and haven’t actually
accomplished anything on your own?

Family businesses are the bedrock of almost every economy in the world. Even in regions
with advanced capital markets and a deep pool of professional managers such as the US
or Europe, the vast majority of companies are started, owned and operated by sole
proprietors and/or their families. A significant proportion of companies listed on the
world’s biggest stock exchanges are controlled by one family or a few families, and in
many cases the founder’s family is still active in daily management.

However, family businesses can be fragile. Few survive hardly even ten years after the
founder dies or turns the enterprise over to relatives. Even fewer survive into a third
generation. Clearly, family businesses enjoy some major advantages when compared to
corporations that are publicly owned and professionally managed, or they would not be
so prevalent in every country. But just as clearly, managing the transition from one
generation to the next is a hazardous enterprise. It isn’t as easy as one might imagine, to
succeed by inheriting a thriving company.
For centuries in India, the duty of children born into a commercial family has been to
carry on their father’s work. Certain regions and jatis are famous for spawning one
generation after another of children who build upon what their parents bequeathed them.
A popular theme in fiction and non-fiction is the conflict between passion and duty that
arises when children have no interest in their family business but, nonetheless, feel
compelled to carry on the family tradition.

Certainly, carrying on in one’s parents' footsteps is still considered the norm by many in
modern India, but many of today’s entrepreneurs who were born into enterprising
families are charting their own course. Consider Shamit Bhartia. His grandfather, ML
Bhartia, established his family’s business in Calcutta shortly after partition, focusing on
basic manufacturing. Shamit’s father Shyam Bhartia is the co-founder, Chairman and
Managing Director of Jubilant Organosys, a leading pharmaceutical company based in
Noida, and his mother Shobhana is the vice-chairperson and editorial director of the
Hindustan Times. Upon returning from the US in his mid-20’s, Shamit helped start the
Monday to Sunday hypermarket chain in Bangalore, which is now a thriving division of
Jubilant Organosys. Each generation of this family has pursued a different opportunity in
a sector and region that seemed most promising at the time the founder was ready to start
a company, instead of seeing his mission as merely perpetuating his inheritance.

What are some of the different paths that the entrepreneurial scions of India’s business
families are pursuing today? Although there are many avenues taken by entrepreneurs
whose parents were themselves entrepreneurs we profile in this article three different
paths: diversifying the family business; starting a new company that may someday join
the family enterprise; and striking off independently.

Sarvesh Shahra: Diversifying the family business 26 year old Sarvesh Shahra was born at
about the time when his father and uncle created Indore-based Ruchi Soya Industries
(www.ruchisoya.com), now at the heart of the Ruchi Group conglomerate. Ruchi Soya,
whose managing director is Sarvesh’s father Dinesh Shahra, focuses on edible oil, soya
foods, and specialty fats and is especially well-known in India for its flagship brand
Nutrela. “Nutrela is a heritage brand, a house-hold name in India and the leader in its
product categories,” says Shahra. “I have started a new venture which will focus on the
health and wellness offering. I plan to take the Nutrela business beyond the original
family business by offering different categories of health foods and beverages under this
brand.”
Sarvesh Shahra has taken charge of a
separate company within the Ruchi
family and is independently responsible
for it. “The new venture will focus on
the health and wellness offering,” he
says. “Until now the family business
never took advantage of the health
benefits of soya when marketing the
Soya line of food products. We plan to
make Nutrela the dominant force in the
Health and Wellness business and
unlock the value within the brand via
this brand extension into new upcoming
food product categories.”

As one of India’s leading agri-business “I wanted to unlock the brand value in the
and food companies, Ruchi Soya family business by offering a line of health
Industries has identified the country’s food and beverages that provide value-added
Health & Wellness (H&W) opportunity food in the premium, mid-to-low and nascent
as a major area for growth for its value- consumer categories. Growth in the packaged
added food business. Shahra’s venture foods business is about 35-40% per annum in
plans to open up this market for Ruchi India, and consumers today are enjoying and
starting with functional health are ready for such products."
beverages that are rich in calcium and – SARVESH SHAHRA
protein. He then plans to add healthy
snacks, nutritional supplements, health cereals, and nutraceuticals under the Nutrela
brand with new individual product category brands. He explains, “We will use high
quality raw and packaging materials for our products, and are setting up an entirely new
pan-India sales and distribution network to sell these products in modern retail and A-
class outlets. Our overall goal is to provide ‘nutrition you can enjoy.’”

Entrepreneurs usually perform best when they bring passion to a business, and Shahra
exudes enthusiasm when he explains why he chose to lead this venture. “I studied in
Singapore and US and was exposed to health foods at a very early age, so I always knew
I wanted to do something in this area,” he says. “I’ve always lead a healthy lifestyle
myself. I practice yoga and exercise regularly and hence I wanted to develop products
which reflected my values.”

The next generation

This is especially true when it comes to entrepreneurs. Granted, past generations spawned
a handful of (usually) men who became leaders of industry while the rest of the nation
toiled hard but was quietly content to keep their families afloat. Certainly some, like
Rockefeller and Ford, were entrepreneurs, but like all pioneers, they were few and far
between. It is the baby boomers who revolutionized entrepreneurship, flooding through
the barriers, erecting businesses in record numbers. And as somewhat of a haughty
generation, we boomers often wring our hands in distress as we worry about leaving the
future in the hands of the nation's youth. Well, relax! I've seen the future leaders of
America, and we have nothing to fear.

I have just returned from one of the most overwhelming yet exhilarating experiences of
my life - the annual Students in Free Enterprise (SIFE) International Exposition - and I
truly will never be the same. SIFE is a nationwide student organization (with
international aspirations and goals) dedicated to, in the words of its president Alvin
Rohrs, "helping everyone become better consumers, workers, citizens and leaders." In
their spare time, the students of SIFE create projects to promote free enterprise. At the
heart of their projects is community outreach, tutoring and mentoring, and enriching and
strengthening those that live around them, especially the young.

At the 1997 SIFE Exposition (site of the semifinal and final competitions), students from
94 colleges and universities presented the results of their programs to a panel of judges
(many are top executives from America's largest, most successful corporations) to see
which team most effectively spread the gospel about free enterprise.
I was honored to be a judge this year. And I was dazzled, not just by the winners - Bucks
County Community College in Newton, Pennsylvania, in the two-year competition and
La Sierra University in Riverside, California (pictured below), in the four-year
competition - but by nearly every presentation I witnessed. In their very first year in
SIFE, the students at Northern Arizona University in Flagstaff helped sixth-grade Navajo
kids start their own small enterprises. The runners-up in the four-year category, from
Pittsburg State University in Pittsburg, Kansas, partnered with a local bank to create the
Looney Tunes Savings Club to teach the importance of savings to elementary school
youths. The team from Alverno College in Milwaukee so impressed me because they not
only created their projects while attending school but worked full-time as well! As for the
winners from La Sierra: They simply blew me away with the depth, range and
professionalism of their numerous projects.

Today SIFE, founded in 1975, is booming. There are chapters on more than 500
campuses nationwide and a burgeoning international presence. SIFE needs help - and
who better than entrepreneurs to provide it? You can donate money or volunteer time as a
business advisor. Both are not only needed - but well-deserved. For information on how
you can help, call SIFE's national headquarters at (800) 677-SIFE.

Former British Prime Minister Benjamin Disraeli once said, "The youth of a nation are
the trustees of posterity." After my two days with SIFE, I truly believe our tomorrows are
in very secure hands.