Having started my business career at the age of 16, I had a great
handicap, the handicap of not knowing many of the basic fundamentals
of business and finance. What I was doing during my early days could not
really be classified
as business. I would call it a way I had adapted, to keep paying for my
pocket money, a source of income I had created to fund my hobbies and
have fun with my friends.
In 1999, I was approached by a company which I thought was into plumbing
and water supply. They gave me a proposition which according to
them was irresistible. The company was Price Waterhouse Coopers and their
plan was to help me raise venture capital for my big ideas. Having not
knowing what venture capital was, I rejected their proposal to get me
‘a loan’. I only accepted to work with them when they told me venture
capital was like a loan I never had to return. And they would help me
make a business plan. Basically a spreadsheet which would help
investors see why my business is a great place to invest in and get
amazing returns.
After spending some time with the investment bankers they were able to
create probably the most complicated excel sheet I ever saw. It had
over 10 sheets all interlinked with each other, all the numbers would
change by changing just a few numbers on the master sheet. It had
graphs and columns which were in 2 currencies and was spread out to
cover 5 years of my grand vision. I was told to quickly mug-up some
numbers for the meetings and nod my head at certain points of the
presentation. And since I was really great at Q & A and BS, voila my
first business plan was ready at the age of 22.
I was amazed to see how all the major VCs who saw my plans were
getting super excited on the business plan. Some even took copies of
the excel sheet and added their own columns and connected sheets to
it. Soon I was looking at term sheets from multiple investors with
many complex formulas and terms which I had not heard from Adams.
That was the time I had to hire a lawyer.. I quickly found one in the
bowling alley- a senior in college, Somashekhar (Soma) Sundereshan who
had just completed his law studies and was a qualified lawyer, just the
trusted friend I needed.
Having no understanding of what valuations, cap table, liquidation
preference and just a basic concept in mind that I am going to get all
the money in the world to fulfill my dreams. It was a easy negotiation.
I agreed to all the terms after Soma explained me one concept – the
investors won’t screw me till I do my job well!
Ever since my first business plan I had made many such business plans
and even without fully understanding the plan have not only achieved
them but in certain cases exceed them.. Now you will ask me how?
A. Compass and not a navigational map
For me the business plan was always more of a compass which guided me
towards the general direction I should take in case I got lost, ask
strangers and make the journey to turn the business plan a great
adventure. It was not perfect but I got there. Most people in my
opinion take the business plan to be some kind of a Google
map which would take them to their destination forgetting that
business is an uncertain terrain which not even Google has mapped!
B. People and not numbers
Happy and motivated employees and satisfied customers is what it takes
to make a great business. Companies which are run by accountants and
managers who measure everything on numbers IMHO are average not best.
People are not robots, they respond more to emotion and not process.
Excessive processes can KILL your people and make them just head counts.
C. GUT not the BRAIN
Gut is my primary brain and has the power to override the confusions
and uncertainty which complex plans bring to the table looking
at large historic data. In fact it’s the GUT which gives an entrepreneur his
vision and the ability to see into the future. Unfortunately in our
current business environment gut calls are a taboo and business plans
are credible if presented with past research and predictions by some
stupid research agency. Businesses have only been able to be
successful by GUT calls….
D. Trust v/s qualifications
Many a times you have to make choices in business based on advice from
people who are extremely qualified in their jobs and people who may
not be as qualified but are people you trust. While it may sound
counter intuitive but business is about balancing both and it’s
important to have both sets of people around you and let your gut take
the final call. However on pure personal preference I tend to always
go by people whom I trust.
E. Journey not the destination
Running a business is a journey. Every time even before a goal is
reached another impossible goal is set this is what keeps people
excited and going forward. For people whom business is all about
making money, they surely get successful in the short run but are
really never able to go beyond the initial success. A business which
claims it has met all its goals has failed!
F. Story not a Formula
A successful company is always a story. A story of ups and downs, a
story of fights and friendships, a story of how you did the
impossible, a story of patience and passion. No two stories are alike.
There are many authors and management consultants who try and make
successful businesses into formulas and many young entrepreneurs make
the mistake of applying such formulas to their businesses with
disastrous results. If there was any truth in these formulas by now
we would have had numerous Googles, GEs, Apples and Bhartis. Therefore
think of your business like a never ending story and not a finite
formula.
G. Relationships and not deals
The biggest currency a business and an entrepreneur has is
relationship. Business is not all about deals, it’s not about winning
or loosing. Sometimes you have to lose to win and sometimes you have
to win to lose. A lot of companies and their managers get so
arrogant with their success that for them every partner and customer
they are dealing with has to work on their most unreasonable terms.
Even though most of the people for no other choice start working with
these companies, the bottom-line is they will be the first to desert
these companies the minute they get a glimpse of an alternate
choice. Companies are doing only one sided deals without giving a
win-win situation to the person on the other side thus failing to build
a relationship. In your toughest and best times, it’s these relationships
that count.
When I started, I was naive and probably that is what got me here. If I too was a MBA or Accountant I would have been still digging my
heals on some spreadsheet creating crappy businesses.
