Wealth Issue 2017: Essay

What the Perfect Portrait Does Not Say

Lakshmi Pratury is founder and CEO of INK, which runs a forum for entrepreneurs to share their experiences
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I have yet to know a successful entrepreneur who has not felt lonely, lost and hopeless at some point. They stand where they are today because they kept moving forward

Family portraits are always perfect. In a typical portrait, the parents are seated regally, the children draped around them rather lovingly; the background is perfect, the clothing matches and the overall scene is that of peace and tranquillity. Have you ever seen a family portrait where you can actually see the temper tantrums of the kids or the disagreements of couples or a dishevelled look that we all usually carry? Just as the portrait is not a perfect representation of what really goes on in a family, media hype about entrepreneurship is not an accurate depiction. Entrepreneurship is not easy. While great thought and market opportunity are necessary conditions, they are certainly not sufficient for success. It’s an entrepreneur’s ability to keep the fire in the belly alive despite all obstacles, at all times, that separates the great from the regular. Here follow a few stories and lessons that I have learnt as an entrepreneur who has interacted widely with many others.

The team

The word ‘entrepreneur’ itself is rather deceiving. Since it’s French, it has a sound of elegance that, say, ‘data entry clerk’ or ‘kirana dukaanwaala’ (shopkeeper) do not possess. But please do not be dissuaded by the name. It means that you are the ‘jhadoowaala’(sweeper), ‘dukaanwaala’ (shop keeper) and ‘paisa bheekh maangne-walaa’ (one who begs for money), ma aur baap (mother and father)—all rolled into one.

The best ones are those who can attract the most talented people to work for them, when they have nothing to show for it. To have someone leave a guaranteed income to join the initial unknown journey is the first true test of entrepreneurship. In the late 90s, there were many search companies—Yahoo, being the largest, followed by Excite, Alta Vista, Ask Jeeves—all funded by legendary investors. This was a time when Intel was one of the most sought-after companies for employment. So imagine my surprise when a young woman in my team asked me what I would think of her leaving Intel to join a search company starting out in her garage. She was married, pregnant and had a good job at Intel. I cautioned her about her next steps, and thank goodness, she threw caution to the wind. The credit goes to the young founders, Sergey and Larry, who started Google in the face of many established companies and could convince people like Susan Wojcicki to leave her well-paying job at Intel to join their venture. It’s not just the intelligence of the entrepreneurs but their ability to build a strong ecosystem that makes them successful. To have such belief in your dream that you can attract the best talent even if they have far better options—that’s the first sign of the entrepreneur’s ability to counter common wisdom. Susan kept her sharp eye on a good deal intact and led Google’s success in advertising and major acquisitions. Currently leading YouTube, she is recognised as one of the most powerful women on the internet.

Passion and profit

When you say something like ‘I want to follow my passion’, your parents get a slight palpitation because this means that all the investment they made in you is now at stake. It also means that their plan of ending their financial commitment towards you with your graduation, just got a long renewal. Because ‘passion’ often—and probably always—means a profession that will not make you any money in the first few years. Then when you say ‘garage’, you mean your parents’ living room, where you fast deplete the rationing of food aided by your co-founders, team members and sundry others who drop by to support you. To be truly successful, you need to put your passion aside and see if this passion has a purpose, an audience that is willing to pay for it over and over again, and finally, the most important thing that many new-age businesses seem to have forgotten—profit potential. To stay afloat, you must be able to afford your own apartment and be able to take your parents out for dinner once in a while. And before you buy that new car to celebrate the first round of funding, you should repay your parents by buying them a nice house, sending them on a great vacation or whatever it might be, to thank them for being unquestioning investors in your life. It’s best to keep the passion as a part-time thing if it cannot professionally support you, or be willing to change your plan to suit what might actually be needed by a market. Alternately, tap into another passion of yours that might be more needed.

Ken Lacovara used to be a rock-and-roll drummer playing at clubs and travelling across the US. One day, he realised that this was not the path he wanted to follow and decided to pursue his other passion—palaeontology. The rest, as they say, is history. Today, he is the real-world ‘Indiana Jones’, who excavated the largest dinosaur in the world and was instrumental in Rowan University buying out a mine in New Jersey that is home to rare fossils. Soon you will see this scientist as the founder of Edelman Fossil Park of Rowan University, which could be a vacation destination for many of us. When we hosted him in India, he was happy to jam with all the musicians on stage and rock the show, and remains a world-class palaeontologist by profession. It is this ability to know which aspects of your talent could be your profession and which could be your passion that is the key to surviving the tough road ahead for any entrepreneur.

Such belief in your dream that you can attract the best talent even if they have better options is the first sign of the entrepreneur’s ability to counter common wisdom

Angel funding

Let this title not fool you either. Angel investors are not those beautiful people with flowing hair and wings who will magically appear to turn you into Princess Cinderella with the touch of a wand. They are the ones with tough questions; often their rejection could be a test of your faith in your idea. They are giving you part of their hard-earned money to support your dream, to get you off the ground. The best ones don’t just give you money, they open up their network for you, they take you to who you need to meet, and they support you, talk about you to the right people and make sure that your life changes because you met them.

When someone like Rajan Anandan of Google or Debjani Ghosh, who until recently was leading Intel India, or Saurabh Srivastava of Indian Angel Network invest in you, they are opening up one of the most powerful networks to you. The Late Rajeev Motwani, who was professor to Google’s founders, was a prolific angel investor. He would hold office hours at his university café in Palo Alto to give advice to any entrepreneur who asked for it, free of charge. If he liked them, he even gave money and often forgot about it. His wife, Asha Jadeja, keeps up that practice, with over 100 investments. She says she looks for an ability to bounce back from adversity in the entrepreneur. You know that the business plan is going to change, the market might shift, but if that entrepreneur is a go-getter, then her bets are on.

How persuasive you are to get that appointment with an angel investor and how clever you are about the ways in which you can get an appointment is a clear sign for the angel to know the tenacity of the entrepreneur, which is the main characteristic they think is worth investing in. One of my friends told me about how he called the investor’s office, found out that he was going on a trip, took the help of his secretary (who took pity on him after his frequent calls with a pleasant disposition) to find out the flight he was taking, and bought a business-class ticket with the money he had been saving, manoeuvred his way into a seat next to the investor, and then pitched his idea. Thankfully, the investor was in a sociable mood and talked to him. To risk all that you have to get a ‘chance’ to talk to someone without knowing the outcome is a sure sign of a resourceful entrepreneur.

Venture capital

When you go to a Venture Capitalist (VC), you are entering a long- term commitment, not just to try an idea, but to have it return the money with healthy multiple responsibilities to your investors. While the angel investor invests his or her personal money, the VC is investing others’ money as well. This could be money taken from sources such as pension funds, funds of funds, and high net worth individuals who trust the VC to invest large sums in multiple ventures. They are answerable for the performance of their investment portfolio. So when these investors question you, suggest you to do something that you might not want to do—or even worse, ask you to leave—they are doing so because they are accountable for the money that they gave your company. Receiving the first cent from outside is an agreement to give up control and do something that is focused on the company and not on any individual.

Angel Investor Asha Jadeja, who has over 100 investments, says that she looks for an ability to bounce back from adversity in the entrepreneur

Vani Kola is one of the most successful Venture Capitalists in India and I asked her what she looks for in an entrepreneur before she puts in money. She said that she looks for certain leadership qualities that are often untested in a first-time entrepreneur. What she looks for is clarity of thought, an ability to manage different opinions and yet build a consensus, and most importantly, openness to feedback. I had an opportunity to witness what she means with Ashish Goel, founder of Urban Ladder. One of my product designer friends was visiting and he had a major disagreement with the approach Urban Ladder was taking. I let Ashish know about it and instead of ignoring it, he wanted to meet my friend and understand his point of view. I hosted both of them in my living room and over chai and snacks. Each expressed their positions and had a very passionate and healthy discussion. I don’t think either of them changed their point of view, but they agreed to disagree. It is this ability to take the time to listen to differing opinions that can keep his thought process current and give him an edge in his business.

Board of directors

One of the most important steps in an entrepreneur’s journey is putting together the Board of Directors. While investors have a negotiated seat at the table, it is important to bring diversity of thought to it. One of the most important aspects is to ensure gender diversity in the boardroom. Anjali Bansal, who was the MD of TPG Private Equity and led Spencer Stuart’s India practice, is a champion of bringing more women in. To her, it’s not just an idea but an essential ingredient of success. She spends much of her personal time volunteering at FICCI and other organisations to get women on corporate boards.

It’s also important to have experience diversity. While young turks can think out of the box, a seasoned executive is needed to coach and cultivate opportunities. Google brought in Eric Schmidt as CEO, Facebook brought in Sheryl Sandburg as COO, Airbnb had expert hotelier Chip Conley as its consultant for the first few years, Phani of Red Bus had strong board members like Raju Reddy; the list goes on. The key to growing from a medium to a large company is to be brutally honest in recognising areas that the entrepreneur is not good at and bringing in the best people and giving them the freedom to take the company to the next level. The ancient adage of ‘stoop to conquer’ is an important aspect for success. The true longevity of the entrepreneur depends on what he or she is willing to give up to grow.

Sell out or go on?

Once your company gets the traction and starts doing well, there comes a time when you need to make a decision whether to sell out or go for an IPO. When an offer comes to buy you out, it’s a very emotional period not just for the entrepreneur but also for the whole team. When I asked Phanindra Sama, founder of Red Bus, if he regretted selling his company instead of waiting for an IPO, he was clear in his perspective. He said that he was happy to buy his personal freedom. Since selling, he has taken the time to attend a diverse set of courses from psychology to sociology and delve into a few technologies at institutions around the world to add to his learning. He also started a sandbox along with his investor, Raju Reddy, in their native place of Nizamabad to nurture growth in the region through entrepreneurship.

Sometimes stepping away gives you an opportunity to take a new direction and offers the space to exercise another aspect of your talent.

Andy Grove told me he rated himself B+ as a CEO. A leader’s goal, he reasoned, was not just current success but to prepare a company for it after his departure

The long road to success

When we read about an Olympic win, an IPO or eradicating a major epidemic, the road is long, hard and unfathomable for years. It’s probably not an exaggeration to say that at least over a billion Indians know about the Olympic medal that PV Sindhu won. While Pullela Gopichand became a household name across the globe when his student Sindhu took the silver medal at the Olympics in 2016, it was not easy when he started his academy in 2001. There was a moment when all the corporates turned him down; as a family, they decided to sell the house to sustain the building of the institute. Eventually, they did not sell the house but took a mortgage on it and continued without having to go to a corporate house. He said that it gave him renewed strength and determination to succeed because his family had faith in him. It’s that obsessive belief that you are going to succeed when nothing seems to work which is a must for every endeavour. I believe that results ought to be measured every decade and not every quarter to make a meaningful progress.

Growth

While starting something from the ground up is exciting, increasing what you have is equally important. As a 28-year-old taking over a $1.6-billion business after the sudden demise of his father, Kumar Mangalam Birla grew the business 26-fold to jump to over $40 billion in two decades. After pursuing his passion for filmmaking at Harvard, starting as a management trainee under the guidance of his father and uncle, Anand Mahindra raised a multi- billion dollar business. Both of them took what was given to them and made it much larger and diverse under their leadership, by bringing in professional help and delegating authority. It is important to bring the right level of leadership at the right time for a company to reach its potential. For an entrepreneur, the company is like a baby. Like all good parents who need to let their children leave the nest to fly on their own, an entrepreneur needs to bring in the right help at the right time to let go of being the sole decision maker.

A legacy that lasts long after you leave

Finally, we come to the one thing that differentiates building a company for a few years versus an institution that can last for decades, even centuries. Intel has been around for almost 50 years and Andy Grove has been the COO, CEO or chairman for over 25 years. Under his leadership, the company’s market capitalisation grew from $4 billion to $197 billion, and the brand went from being a mere chip maker to one of the world top 10 brands. I interviewed Andy a few years after he retired as chairman. Andy is my personal hero and I always rated him as an A+ leader. When I asked him what grade he gave himself as a CEO, he said B+. That answer surprised me but his reasoning was that the role of a CEO was not only to make the company successful, but also to spend enough time outside the day-to-day business to watch trends and prepare the company to be successful much after the leader leaves. He felt that he was too busy with running the business and did not see far enough to make Intel keep up its exponential growth after his leadership. To this day, his clarity of thought and his ability to grade everything with utmost objectivity inspire me and make him an iconic leader across the globe. Be it a financial wizard in the entertainment space like Herb Allen or business icon like Steve Jobs or prolific investor like Ben Horowitz or a young leader like Mark Zuckerberg—they sought Andy’s inputs till he passed on. It is that ability to put the larger purpose ahead of any personal bias that ought to be valued by every entrepreneur who wants to stand the test of time.

Being an entrepreneur is not just about valuations and a personal bank balance, it is about learning constantly, evolving and keeping up with the times. It is about surrounding yourself with people who are smarter than you, whether you agree with them or not. Intel and Apple had the most diametrically opposite philosophies. Intel went for an open architecture while Apple went for closed. Andy Grove and Steve Jobs famously disagreed on their approaches. And yet, those of us at Intel’s headquarters in Santa Clara would often feast our eyes when the lanky blue jeans and black turtle neck clad young man stood in the cafeteria line along with Andy and would strain our ears to listen to their conversation. They were archrivals that took the time to keep in touch and exchange ideas.

As an entrepreneur, after you go through all the above-mentioned stages, after making a million mistakes, turns and pivots, you will get your perfect portrait to hang on your wall. As you watch those portraits, remember the tough journey that preceded that perfection. I have yet to know a successful entrepreneur who has not felt lonely, lost and hopeless at some point in their career. They stand where they are today because they kept moving forward with a lot of help till success chased them.

Remember, the goal is not to win with no glitches; it is to get up faster every time you fall, without losing momentum. Here is to surviving all the bruises, hurts, rejections and setbacks, after which you may have a story to tell about your entrepreneurial journey and a pretty picture to hang on your wall.

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