Wise Men’s Words
The book is a contrarian take on entrepreneurship, backed by the authors’ num numerous years of experience.
Ashok Soota co-founded IT services firm Mindtree at the age of 58, and Happiest Minds when he was 69. Mindtree is already a public company and the latter hopes to become one sometime in the future. This alone debunks the theory that entrepreneurship is just for college dropouts. While young entrepreneurs can create new disruptions, the late-stage guys certainly have a higher shot at success because they bring experience into play.
Soota’s book Entrepreneurship Simplified: From Idea to IPO, co-authored with S.R. Gopalan, Founder of Dawn Consulting and Bizworth India Private Limited, brims with that experience. It certainly adds to the long list of books on entrepreneurship, some of which are celebratory in tone, but differentiates itself as a ‘how to do it’ book – a sort of step-by-step guide to cracking the space – from idea generation all the way to wealth creation.
As you flip the pages, you realise that this book is a sliver of sanity in the middle of madness. Its essential advice is contrary to many things witnessed in the Indian start-up space. A majority of the companies founded by early-stage entrepreneurs, for instance, had adopted pricing as a strategy. In the three years leading to 2016, they went in for reckless growth, fuelled by heavy discounting, using venture and hedge fund money. Unicorns, or those with valuations of more than a billion dollars in market capitalisation, emerged. But that party is now over; e-commerce and food-tech sectors, particularly, are replete with stories of start-ups that burnt money way too fast and could raise no further.
One of the takeaways from the book is that pricing cannot be a strategy: “It’s a mug’s game. Market entry at lower prices is only justified if your costs are lower, allowing you to sustain healthy margins”.
Many chapters, including an appendix, are loaded with Soota’s experiences as he built the two companies he founded. In ‘ Winning with VCS’, there are tips on how not to be short- changed, not fall into the trap of esoteric clauses that work against founders, and why negotiating a deal and closing it early is crucial because external factors can change quickly – Mindtree’s second round of funding was credited into the bank account one week before 9/ 11. “But for this fortuitous timing of getting the money just before the major tragedy hit the US, Mindtree could well have joined the dust heap of failed companies that collapsed with the dot- com bust”.
In ‘Entrepreneurship in the same space as your previous employer’, Soota narrates how Mindtree “intimidated” the first 23 employees who joined Happiest Minds from Mindtree – legal letters were sent for violating non-compete provisions. Noncompete law does apply if you are still in employment and solicit potential employees, not otherwise. The advice: “Conversations to attract people should be put on hold until you have formally left the company”. Of course, Soota emphasises on thorough due diligence of everyone hired. In one instance, he discovered that a country head was busy rearing horses rather than market development.
Somewhere, towards the end, the book turns philosophical. Entrepreneurship, we know, can both be lonely and draining. The question then is whether success needs to come at a heavy price to one’s personal life. The answer to that isn’t surprising. ~