Subroto Bagchi is one of the co-founders of Mindtree Consulting, another star from Indian IT and Global Services stable. Along with Tech Mahindra, it is one of the new darlings of stock market – its IPO was oversubscribed a whooping 104 times. Ashok Soota is another face of Mindtree.
I usually avoid books on running a business etc – the types of 101 steps to win, 7 Golden rules of customer Service etc. But Subroto’s book on Entrepreneurship is in a different league. Also, I picked this book because I like and respect his thinking.
His interview has appeared in Knowledge@Wharton. Part 1 & Part 2
I liked a few of his thoughts and I am reproducing some of them:
High Performance Entrepreneurship
Anybody can set up a “mom and pop shop” and become an entrepreneur. You have the multitude of small- and medium-sized organizations which come and go. High-performance entrepreneurship, on the other hand, sets itself apart by a multiple of things. One is the size of the ambition. The second is the sustainability. So, high-performance companies, high-performance entrepreneurships, are ones that will build unusual value for a long time, for a large number of stakeholders. And fundamentally, they differ from any other entrepreneurship in terms of size of the ambition and how much of a long view of time they are taking.
Opportunities In Unusual Places
Let’s pick the example of the founder of Air Deccan [G. R. Gopinath]. This is an Army captain who quit the Army. Then, he got into biofarming. Once he was into biofarming, he thought that he would basically do farming on a piece of land that his family had been given in compensation because their land was taken away by a dam project by the government. And while doing that, this man used to come to the nearby city occasionally to visit his daughter.
There, he met another Army colleague who used to fly a helicopter in the Army and was a very successful helicopter pilot. He had just come out of the Army and this friend tells Captain Gopinath that he has found a job. So, he said, “What kind of job?” So he said, “I found a job as a Regional Manager in a courier company.” First, he felt happy that his buddy had found a job. And then it was a moment of intense unhappiness for Captain Gopinath, because he thought, “What is a career helicopter pilot doing in a courier company? Why can’t he be a helicopter pilot? That’s what he is trained to do.”
Subsequent to that, however, he went back to his farming. And then he led a delegation of farmers to China. On the way to China, he read about a Vietnamese lady who had set up a helicopter company in Vietnam, because she wanted to do something for Vietnam, having fled Vietnam during the war. She had set up a helicopter company in Vietnam because she felt that was what an infrastructure-poor country like Vietnam required.
So, two and two came together in Captain Gopinath’s mind. He thought about his army buddy and said if Vietnam needs a helicopter company to overcome its infrastructure problems, what about India? That’s how he created a helicopter company. From a helicopter company he [saw] another apparition, because entrepreneurs many times see the future in pictures and in visuals. This apparition happened when he was flying low from Bangalore to Goa in his helicopter. While his helicopter was flying over huts, he found cable-television antennae on top of these huts. He suddenly thought, “Oh my God, here is opportunity. It’s not a country of a billion people waiting to be fed. But here is a country where a billion people could fly.”
So, entrepreneurs are unique animals, because what they can do is work opportunity backwards, as opposed to [working] a problem forward. If you cease to be problem-forward in your orientation, you will see opportunities everywhere. So, here is a man who is seeing a billion poor people. No, he is not seeing a billion poor people. He is seeing a billion people who can fly. Why can’t they fly? So that’s what I meant by saying that entrepreneurs look for opportunities not in the “usual places,” but they have to look for opportunities in the unusual places.
Qualities of A Startup Team
First and foremost, what is very critical, extremely critical, is a shared view of the future and a shared vision of the future. Many times it is taken for granted when friends jump into entrepreneurship. Just because you are close friends, you think you have a shared vision. That’s not necessarily true. It’s important to sit together and delve into some detail on [the question] why are we are trying to do what we are trying to do? What is in it for us, individually and collectively? The term “shared vision” is about the collective view of the future. So that is very important. That’s number one.
Number two, and the next important and very critical thing, is complementarity. If there are two friends who are trying to do business together and both of them are extremely good at the same thing, they probably should not be doing business together. So, the startup team must have a high degree of complementarity. If somebody is good in marketing, the other person had better be complementary in terms of finance or in terms of, let us say, delivery or in terms of managing people.
When that complementarity does not exist, that is the first signal to step back and probably bring in that talent. Sometimes entrepreneurs hesitate to do that. That’s the difference again between entrepreneurship and high-performance entrepreneurship.
In a high-performance entrepreneurship, mental insecurity does not exist. The control orientation is less. You want to control a large outcome; you don’t want to control the intermediate steps. So, if I don’t understand finance, or I don’t understand delivery, it’s okay for me to bring the right person on board on the right terms. And do it early on, so that you guarantee an enormous amount of success right up front. So, look for complementarity.
I think the third element that is very critical is mutual trust. I always say, if you look at the 10 co-founders of MindTree, we come from three different national origins. We come from three different professional backgrounds. Some of the founders had never met each other physically before we started the company. But if you look at my own personal domestic issues — if tomorrow I am not there and I need things to be handled, you know, [for example] I need my daughters to be taken care of, I can just blindly trust these other nine co-founders.
That trust is very important, because trust, in my opinion, is not a warm and fuzzy thing. Trust is something that reduces cycle time. When you don’t have trust, you try to derail each other’s communication. The other important reason why trust is critical is that the high-performance entrepreneurship is like running a marathon. Like a noted poet once said, “Long-distance runners bear segmented pain.” So when you’re running long-distance, it’s not a sprint, it’s a marathon. You not only have to budget for pain, but in different laps of the run, you’ll experience different kinds of pain. When that pain — the inevitability of that pain comes in — unless you really trust each other with your lives, that is where things will fall apart.
Interestingly, a study indicates that globally, most startups fail within the first year of their coming into existence, not for technical reasons, not for managerial reasons, but they fail because the founding team goes different ways. When the trust is there, then you will not second-guess intentions. And, of course, the other interesting thing is that you’ll make mistakes. When you make mistakes, there will be no blame. When you have the trust, you know that the other person is doing his or her best under the circumstances. Collectively you bounce back, you learn. So in summary, I think it is very critical to look for shared vision, look for complementarity, and look for abiding trust.
Size of Mindset, not Physcial Size
Look at Singapore. It takes two-and-a-half hours to enter Singapore from one end and get out at the other end. That’s the size of the country. Look at Israel. Countries like Singapore, or Israel, or Finland, are world leaders in many ways. These are developed countries. These countries are at the top-end of GDP. But they are so tiny. They’re microscopic when you compare them to countries like India or Pakistan. Many of the African countries are significantly larger.
In today’s world, physical size does not guarantee success. What is important is mental size. Nokia was created out of Finland. Singapore’s GDP is way bigger than the GDP of India, and … the population of Singapore is half the population of Bangalore.
It’s very important to understand this because I think entrepreneurs suffer from an inferiority complex. They think that the world is going to favor size. No, today’s world is not about size, it is about an idea. If you have the right idea, you can take on size. So don’t be scared of size. You know, size gives you a sense of the power of incumbency, and entrepreneurship is about non-incumbency. I keep saying that in a world full of monochromatic tadpoles, if you are fluorescent it does not matter what size tadpole you are.
Why Entrepreneurs Fail?
There are many reasons why entrepreneurs fail. Sometimes people fail because they don’t take a long view of time. Sometimes they fail because they do not adapt. I think adaptability is very important. You know, you fall so much in love with an idea, an immediate idea, a product or service idea. You think that that is the be-all and end-all. When that idea itself fails, since the idea has become your entrepreneurial dream, you see the enterprise fail and then you go a different path. When you look at building an organization, yes, the first idea is important, but an organization is built only as an idea of ideas.
Look at Apple. When the company started out, if somebody had said that it would be a music company, Steve Jobs might have shown him the door. But look at where Apple has gone. Apple is not about Apple 2E; it is not about the Mac; it is basically an idea of ideas, or what is sometimes called a memeplex. The enterprise called Apple is about building that enterprise called Apple, and that has nothing to do with computing.
Resilience
The other thing that kills you is lack of resilience. You start a company and suddenly you find that you are in the middle of a messy divorce. You start a company between three friends and suddenly find that somebody has a huge domestic problem. The capability of large, established organizations to take these things in their stride is far greater; this is where the power of overhead kicks in. In a fledgling organization, the capability to rise from personal adversities is relatively lesser.
When we started MindTree with 10 of us, many people thought, “Oh my god, this is too much overhead.” But we used to say, “No, we are blessed with bandwidth.” If you look at a seven-year-old run between the starting of the company and the IPO, different people among the 10 had different problems. But because we had the collective bandwidth, when somebody dropped the stick, somebody else picked it up before it fell to the ground and ran with it. So, resilience is a very, very important thing. It is not a sprint; it’s a marathon. Any of these things could lead to failure.
Advice To Entrepreneurs
The first piece of advice is to just do it. No amount of simulation is equal to the act. You absolutely have to do it. The essence is in the act. That’s why the last portion of my book I had written that it’s like falling in love. It’s also a little like having a baby. No amount of spasm is a substitute for conception. So be seized with it, get pregnant and, for heaven’s sake, deliver.
Having said that, here is my second piece of advice, if you are 20-something, don’t be in a big hurry to be another Bill Gates. You should work for a while for somebody, because you know that in today’s world, you have 40, 50, 60 years. We started the company when one of the co-founders was in his late fifties. Three of the co-founders, including myself, were 42. The rest were about 35.
So the message here is that when you are about to build a large sustainable, successful organization for a long time to come, take your time, see the world a little bit. Understand how other people build organizations. Go try and sell to some real paying customers on behalf of somebody else. Gather all that experience and build a little maturity before you start an organization. While there is no law against starting a company when you are 19, 20, 21 or 22, by all means you can try and do it, yet you will acquire more “street smarts” and that comes only when you have walked the street.
Don’t be in a big hurry. The world will wait for you to come and change it. Go observe, absorb and then go and do something that is memorable and worthwhile. These are the two messages. Do it but don’t think that the world is rushing past – the time to do it is now. The time is now if you have done all the things right. You have done the mission, vision, core values we’ve talked about, and you have put a complementary team. You know you have a good reason why somebody should invest in you. You think you can go out and get a paying customer. Then go and do it!