Entrepreneurship and New Venture Creation

PGPJan 2008-10Term V (compulsory)

Entrepreneurship PGP 2008 2

The Batch n Course

• PGP 2 – TERM V – PG571 – Compulsory Course• (31 Marketing) + (14 HRM) + (21 Fin)= 66 Students • 2 Credits – 16 Sessions – Jan-Feb 2009• Text Book : Dynamics of Entrepreneurial

Development and Management : Vasant Desai• 16 other reference books in Library……….• Case Studies for discussion / Group Work• Evaluation : Test + Quiz + Assignments +

Presentations + Business Plan + Term End Exam

Entrepreneurship PGP 2008 3

Why this Course?

• Four Factors of Production – Economics: - Land, Labour, Capital and Entrepreneur

• Today’s business, industry and economy• Increasing National Income, Creating jobs• Entrepreneurial urge to be fulfilled• Creation, Innovation, Development and

Achievement Motive • Contribution to Society, Growth, Prosperity

Entrepreneurship PGP 2008 4

Topics to be covered

1. The Challenges of Entrepreneurship

2. Profiles of Successful Indian Entrepreneurs

3. The Entrepreneurial Perspectives

4. Developing an Entrepreneurial Plan

5. Initiating Entrepreneurial Ventures…

6. Growth and Development

7. Contemporary Challenges…

8. Putting the Plan to Work

Entrepreneurship PGP 2008 5

Who is an Entrepreneur?• An innovator or developer who recognises and

seizes opportunities; converts these opportunities into workable / marketable ideas; adds value through time, effort, money, or skills; assumes the risks of the competitive marketplace to implement these ideas; and realises the rewards from these efforts.

Entrepreneurship PGP 2008 6

Evolution• The word Entrepreneur is derived from French

word entreprendre, meaning “to undertake”.• He is one who undertakes to organize, manage,

and assume risks of business.

• Today, he is an innovator or developer who recognises and seizes opportunities; converts those opportunities into workable/ marketable ideas; adds value through time, effort, money, or skills; assumes the risks of the competitive marketplace to implement these ideas; and realises the rewards from these efforts

Entrepreneurship PGP 2008 7

What is Entrepreneurship?

• The process of organizing, managing and assuming the risks of a business

• Most powerful economic force known to humankind

• It is the new revolution, and it’s about continual innovation and creativity

• It is the future of our world economy• It is to – dream, create, explore, innovate,

invent, pioneer, and imagine………

Entrepreneurship PGP 2008 8

Entrepreneurship…2• ……….consists in doing things that are not

generally done in the ordinary course of business routine; it is essentially a phenomenon that comes under the wider aspect of leadership

• …….at least in all non-authoritarian societies, constitutes a bridge between society as a whole, especially the non-economic aspects of that society, and the profit oriented institutions established to take advantage of its economic endowments and to satisfy, as best they can, its economic desires

Entrepreneurship PGP 2008 9

Entrepreneurship…3• ……….is the dynamic process of creating

incremental wealth. This wealth is created by individuals who assume the major risks in terms of equity, time, and / or career commitment of providing value for some product or service.

• The product or service itself may or may not be new or unique but value somehow be infused by the entrepreneur by securing and allocating the necessary skills and resources

Entrepreneurship PGP 2008 10

Entrepreneurship…4• Entrepreneurship is a dynamic process of vision,

change and creation. It requires an application of energy and passion towards the creation and implementation of new ideas and creative solutions.

• Essential ingredients include the willingness to take

calculated risks – in terms of time, equity, or career; the ability to formulate an effective venture team; the creative skill to marshal needed resources; the fundamental skill of building a solid business plan; and, finally, the vision to recognize opportunity where others see chaos, contradiction, and confusion.

Entrepreneurship PGP 2008 11

What is Intrapreneurship?

• Entrepreneurial activities that receive organi-sational sanction and resource commitments for the purpose of innovative results.

Entrepreneurship PGP 2008 12

Other Glossary Items (p726)

• Angel Capital; Barriers to entry; Bootlegging; Business incubator; Business Plan; Corporate Entrepreneurship; Creativity; Dark side of Entrepreneurship; E-Commerce; Ethics; Failure prediction model; Franchise; Growth Stage; Harvest Strategy; Immersion in Business; Incubation Process; Learning Curve concept; Lifestyle Venture; Skimming… …

Entrepreneurship PGP 2008 13

Biography

• Born: December 28, 1932

• Died: July 06, 2002

• Built India’s largest private sector company

• Created Equity cult in the Indian Capital Market

• India’s first company in Forbes 500 List

• Who is he / she? Can you name??

Entrepreneurship PGP 2008 14

1. Dhirubhai Ambani

Entrepreneurship PGP 2008 15

Dhirajlal Hirachand Ambani• Born at Chorwad, Gujarat, into a Modh family• His father was a school teacher• He started his entrepreneurial career by selling

"bhajias" to pilgrims in Mount Girnar over the weekends.

• After doing his matriculation at the age of 16, Dhirubhai moved to Aden, Yemen

• Worked there as a gas-station attendant, and as a clerk in an Oil Company

• He returned to India in 1958 with Rs 50,000 and set up a textile trading company

• Assisted by his two sons, Mukesh and Anil, Dhiru Bhai Ambani built India's largest private sector company, Reliance India Limited, from a scratch

Entrepreneurship PGP 2008 16

2. JRD Tata • Jehangir Ratanji Dadabhoy Tata • July 29, 1904 to November 29, 1993• His mother was a French, father was Parsi• Educated in France, Japan and England • joined Tata & Sons as unpaid apprentice in 1925 • India's first pilot (FEB 1929); Tata Aviation in 1932;

Chairman of Tata & Sons :50 years (1938 to 1988); launched Air India International as India's first international airline 1948; Bharat Ratna in 1992

• Asia’ first Cancer hospital Tata Memorial : 1941

Entrepreneurship PGP 2008 17

JRD Tata (1904 – 1993)• Trustee of Sir Dorabji Tata Trust from 1932• Tata Institute of Social Sciences, 1936 (TISS),

Tata Institute of Fundamental Research, 1945 (TIFR), and National Center for Performing Arts (NCPA)

• He received the Padma Vibhushan in 1957• TATA Steel, TCS, TAS, TELCO, Tata Tele., TITAN• He also received the Guggenheim Medal for

aviation in 1988 • JRD Tata died in Geneva, Switzerland on

November 29, 1993 at the age of 89

Entrepreneurship PGP 2008 18

3. Amar Bose, USA

Entrepreneurship PGP 2008 19

Amar Bose (born 1929)• Born in 1929 in Philadelphia, Pennsylvania • He also completed his Ph.D. from MIT• Known for his pioneering work in acoustics• Received financial support from MIT Professor Y.

W. Lee and in 1964 he founded Bose Corp, USA• In 1968, Amar Bose invented the 901(R) Direct /

Reflecting (R) speaker system • Patents won him great respect within the industry• Has over two-dozen patents to his name • Featured on the 2006 Forbes Billionaires list with a

personal wealth of $1.2 billion.

Entrepreneurship PGP 2008 20

www.hotmail.com; www.arzoo.com4. Sabeer Bhatia

Entrepreneurship PGP 2008 21

Sabeer Bhatia (born 1969)• Birth – Chandigarh, Studied in Pune/B’lore• Father was an army Officer and mother worked

with Central Bank of India• St Joseph's College in B’lore / BITS Pilani• Dropped Ph.D in USA and joined Apple Co.• One of the co-founders of Hotmail & sold it to

Microsoft for $400 million (>50 mn users)• Poster boy of success story at Silicon Valley• Arzoo.com failed in DotCom bust…. In 2002•

Entrepreneurship PGP 2008 22

Can you name these persons?

Entrepreneurship PGP 2008 23

Some more names....

• GMR – Grandhi Mallikarjuna Rao• Air Deccan – Capt Gopinath• GVK – GV Krishna Reddy

• Sam Pitroda• Kishore Biyani• Dr TMA Pai• Jerry Rao• Ashok Soota• Vani Kola...

Entrepreneurship PGP 2008 24

Some women too.........

Entrepreneurship PGP 2008 25

And, ... SMGULP

Entrepreneurship PGP 2008 26

Sri Mahila Gruh Udyog Lijjat Paapad, Mumbai

Entrepreneurship PGP 2008 27

Indian Entrepreneurs

1. Dhirubhai Ambani

2. JRD Tata

3. Adi Godrej

4. Anil Ambani

5. Dr K Anji Reddy

6. Azim Premji

7. Bhai Mohan Singh

8. B M Munjal

9. Ekta Kapoor

10. Ghanshyam Das Birla

11. Karsan Bhai Patel

12. Kiran Mazumdar Shaw

13. K.P. Singh

14. Kumar Mangalam Birla

15. Lalit Suri

16. M S Oberoi

17. Mukesh Ambani

18. Nandan Nilekani

19. Narayan Murthy

20. Naresh Goyal

Entrepreneurship PGP 2008 28

Indian Entrepreneurs......2

21. Dr C Pratap Reddy22. Rahul Bajaj23. Ramalinga Raju24. Ratan Tata25. Raunaq Singh26. Shiv Nadar27. Subhash Chandra28. Subrato Roy29. Sunil Mittal30. Tulsi Tanti

31. Verghese Kurien

32. Vijay Mallya

33. Mallika Srinivasan

34. Naina Lal Kidwai

35. Shahnaz Hussain

36. Sulajja Firodia Motwani

37. Shobhana Bhartia

Any more Indian Names?

38. SKS Finance (Vikram)

39. …………………………

Entrepreneurship PGP 2008 29

Who is he?

Entrepreneurship PGP 2008 30

NRI Entrepreneurs

1. Amar Bose2. Arun Sarin3. Indra Nooyi4. Laxmi Mittal

5. Sabeer Bhatia6. Lord Swaraj Paul7. Vinod Dham8. Vinod Khosla9. KB Chandrasekhar

Entrepreneurship PGP 2008 31

Can you name him?

Entrepreneurship PGP 2008 32

Have your read this book?

• “The High Performance Entrepreneur”

• Golden Rules for Success in Today’s World

• Published in 2006 by Penguin Books India

• A treasure trove of perspective and advice – C K Prahlad

• Recent (2008) book : “Go Kiss The World”

• Cofounder – Mind Tree Consulting, Bangalore

• Author: Mr Subroto Bagchi, Gardener

Entrepreneurship PGP 2008 33

Contents

• 18 Chapters – 250 pages – Rs 395/-

• Took an year to write

• Book is not about how to start a company

• Entrepreneurship can be deeply rewarding simply as a journey itself

• E’ship is a creative process and when done successfully, it can give you the highest sense of accomplishment possible

Entrepreneurship PGP 2008 34

Pages 16-17I always like to think of Mother Theresa as one of

the greatest entrepreneurs of our time. She started with an angel investment of five rupees in 1948 from the Archbishop of Calcutta

By the turn of the century, her Missionaries of Charity had 602 homes in 125 countries and her band of 4,000 sisters from as many as 40 different national origins marched to the same mission, vision and core values

How did she build that institution? What was the impetus? Disease and death that crawled in

Entrepreneurship PGP 2008 35

Contents…2

the gutters of Calcutta and nudged her saree each time she walked past?

Was it the negative energy of her surroundings? Or was it the possibility of positive outcomes? Or spreading love, joy, seeing a dying destitute as an angel of peace?

It wasn’t the former. She was to recall later that she had, in fact, ‘received’ her call….

Entrepreneurship PGP 2008 36

Subroto Bagchi• Born in Patnagarh, Orissa in 1957• Started his career as an LDC in Orissa Govt• Joined as Management Trainee in DCM, ND• Shifted to Wipro Technologies, Bangalore• Moved to Lucent Technologies…• Co-founded MindTree Consulting in 1999

alongwith nine others – Ashok Soota, N Krishna Kumar, S Janakiraman, Scott Staples, Anjan Lahiri, Kamran Ozair, N Parthasarathy, Kalyan Banerjee and the baby of the team – Rostow Ravanan

Entrepreneurship PGP 2008 37

It Happened in India

• “It Happened in India” is the story of a maverick entrepreneur’s experiments with explores of business in India way

• His uncanny incite into the minds of Indian consumers and his simple ethos of – Rewrite Rules and Retain Values...

• His belief that we need to ‘look into the heritage of the country for inspiration and innovation; instead of looking beyond our borders’

Entrepreneurship PGP 2008 38

•Born in August, 1961 •Quit the family business, which supplied denim to Arvind Mills, in 1987

•Collected Rs 7 lakh and set up a small plant that produced 200 trousers a day.

• Started BARE Line of garments

Entrepreneurship PGP 2008 39

Darwin would be proud

Entrepreneurship PGP 2008 40

Back to the Future!

Entrepreneurship PGP 2008 41

•In the crowded market of readymades, Biyani learned his first lesson - to be heard, you need to shout louder than the rest

•As a result, though the turnover for his Bare brand was only Rs 7 lakh in the first year, he spent Rs 16 lakh advertising it

•Added John Miller shirts to his portfolio

•The shift from manufacturing to retail was the critical point in Biyani's career. Distribution costs were the reason brands were snuffed out in the market, so Biyani decided to rewrite the rules of the game

Entrepreneurship PGP 2008 42

•In 1993, he experimented with a small store format, and Pantaloon Shoppe was launched in Panjim, Goa, "where we could make mistakes without anyone noticing them”

•From the shoppe to the large store format in 1998 - this time in Kolkata ("If you can conquer Kolkata, you can conquer other markets too. Calcuttans, contrary to perception, have money and are loyal customers. They are emotional people and get emotionally attached to a brand.")

•Kolkata Pantaloon store became a raging success and Biyani stepped on to the turf as a super retailer

Entrepreneurship PGP 2008 43

•Read every book on Sam Walton, Macy's, Marks &

Spencer and management gurus like Tom Peters •Biyani took a leaf out of Walmart's book and appointed category managers

•Launched Big Bazaar, a hypermarket in Mumbai as a gamble, financing it mostly through a loan

•The volumes, he says, have ensured that, 50 per cent of the store products are bought directly from the manufacturers, passing on the middlemen's margins to the customer

Entrepreneurship PGP 2008 44

Challenges

•Larger challenge has been to understand the diversity in customer behaviour

•Biyani has turned the study of community behaviour into a fine science through a specialised regional

diversity tracking system. •Goes personally to people's homes, talks to local community leaders and spends weeks walking streets of bazaars to get a feel of what products should be stacked in a new store. 

•Current project is improving inventory management as it reduces working capital requirement and improves return on capital

Entrepreneurship PGP 2008 45

•2006 marked the evolution of Future Group, that brought together the multiple initiatives taken by group companies in the areas of Retail, Brands, Space, Capital, Logistics and Media

•Food Bazaar, Central and Home Town.

Entrepreneurship PGP 2008 46

Verticals of Future Group• Food – Food Bazar, Chamosa, Spoon, Brew Bar, Sports

Bar, Sports Bar & Express, Café Bollywood....• Fashion – Pantaloons, Centrals, aLL, Brand Factory,

Blue Sky, Top 10, Fashion Station, Big Bazaar, Lee Cooper Joint Venture......

• General Merchandise – Shoe Factory, Big Bazar, Navras, Electronics Bazar, Furniture Bazar, KB’s Fair Price...........

• Home and Electronics – Home Town, e-Zone, Collection i

• E-tailing (Online Shopping) – www.futurebazaar.com• Books & Music - Depot• Telecom & IT – GenM, M-Bazaar, M-Port, Converge M

Entrepreneurship PGP 2008 47

Lifestyle of Kishore Biyani

•Simplicity

• He’s never in a tie and jacket, He isn't a stickler for large cars

•He is a strict vegetarian, and is currently off cheese and fried foods

•Golf is a waste of time. Instead, he's addicted to a daily half-hour walk and does yoga twice a week

•Biyani loves films and has even produced some

•Advocates ‘Indianness’ as the core value driving the group

Entrepreneurship PGP 2008 48

“Most businessmen make the mistake of creating an environment wherein only they win. They see life only as a competitive arena and not a co-operative one. Relationships are built on principles, and not on the basis of power & position.”

Entrepreneurship PGP 2008 49

Accolades and Awards

• Awarded E n Y Entrepreneur (Services) of the year 2006

• CNBC First Generation Entrepreneur of the Year 2006

• Pantaloon Retail awarded The International Retailer of the Year 2007 by the US based National Retail Federation

Entrepreneurship PGP 2008 50

One Man ShowKB’s Charisma