Building a company from scratch is not easy, period. For a few years now, Indian media has begun to extoll entrepreneurship as that sexy thing you do to get fame and make money. Nothing could be further from the truth!
It was 10 years ago that I left HDFC Bank to start Cequity. From the structured environments of companies like P&G, Shoppers Stop and HDFC Bank, now I was learning to create something from nothing. An old Ladakhi saying motivated me to jump – "You cannot solve all problems before you start, paths will show paths."
Now, after a decade of being an entrepreneur, I have realized that creating a “sexy halo” around entrepreneurship is a big mistake. Robert Kiyosaki said something interesting – “For being an entrepreneur you need two things: ignorance and courage.”
In fact, if I knew how hard it was to grow a company, I may not have seen the trade off between the corporate world and entrepreneurship in a very positive way. And if I really knew, I may not have started.
Coincidentally, I started long distance running around the same time as I started a company. Who knew that the metaphor of the marathon runner, who battles many “internal walls” before he is successful would so mirror my entrepreneurial journey?
Running makes you strong mentally; you learn to stay the course. Many of life’s greatest learning’s have come to me on the road. I still remember that Mumbai half marathon, many years ago, when I was pushing myself to get to a sub two-hour timing. I reached Peddar road doing good time, but still a bit behind my target timing. I started climbing the Pedder road hill with another unknown runner on my side, and just as I started to open my throttle on the hill, he said something that I now remember for life. He looked at me and said, “stop fighting the hill.”
His point was to go easy on the uphill, and you will more than make up on the downhill. What a metaphor it was for me and not just for running but for life itself! Be kinder to yourself, don’t fight the hill and you can still make your target happen.
For the record, I did my first sub two-hour run in that race and now whenever I am in a tough spot, I remind myself to not fight the hill.
Ten years ago, I first decided to leave the safer environment of the corporate world and take a plunge at creating something new. At that time, starting up was not really a sexy option, and I was leaving a large corporate brand. Was I scared? I most definitely was. I think what really drove me was the passion for the area that I was going to focus on.
Remember, this was also before analytics became sexy and the word big data became wildly popular. For some strange reason, being able to effectively use data for marketing besotted me. I think it was this blind passion that kept me going right from when I started out to this day. Without that, I think I would have given up very soon.
I think we survived and then thrived because I didn’t start the business alone. Entrepreneurship is lonely and no one is perfect. Creating something from scratch needs all the skills that one can assemble! The perfect combination for a startup is when one founder is always chasing “perfection” and the other is passionately chasing “speed.” This creates a lovely natural balance, which is almost like an entrepreneurial equilibrium. Almost like a perfect ballet! One founder ups the ante on quality and the other at the same time pushes the pedal on speed. The two efforts ensure that the startup does not miss any opportunities.
It's also critical to be clear about what makes you feel like you are working – dirtying yourself in the market or getting into your company's micro moments. One founder may like to look inward and one may be more focused on the outside view. Learn what turns you on.
This is actually great for the business because the complementary passions enhance value. But it creates havoc at a personal level because both the entrepreneurs are like chalk and cheese – it was true in my case! It takes grit to go through this phase, and actually this phase never ends. Over time together, founders learn from each other. Almost like the process of osmosis, there is the gradual or unconscious assimilation of ideas, knowledge and competencies. Yet, it is incredibly important to not let your true "winning style" be eclipsed by this osmosis.
Moreover, I think that we thrived because of the people who invested in us. Sundar and Shekar Swami of the Hansa group were always superbly supportive. 2007/8 was a difficult year, and we had just started then. No one knew analytics in those days, and we struggled to find our feet. Now I realize that it takes a special quality of people who let you live your mistakes and find your feet. Hats off to both Sundar and Shekar for believing in us then and letting us evolve.
Also, a few years back we invited a private equity firm to invest in us. Again, I respect them for having trusted us and feel accountable for helping to deliver value for them, as well.
We thrived because of our mentors, too. People who believed in me gave us business. They trusted us when we didn't have the capabilities. They gave us their valuable customer data. They believed we had the gumption to make it happen.They became wonderful sounding boards for me as we created our company. They know who they are, I don't need to name them!
But mainly we thrived because of our people. We started in an office opposite Arthur Road jail – no glitzy office experience for a new joinee. But people joined us, and they were the true heroes from the early days. In the words of the great Urdu poet, मजरूह सुल्तानपुरी : “मैं अकेला ही चला था जानिबे मंजिल, मगर लोग साथ आते गए और कारवांबनता गया."
Early challenges (and successes) uniquely impacted my leadership style. Earlier I worked for large brands, now my new context shaped me as a person and as a leader. People watch what you do, and that is far more important than what you say.
My entire entrepreneurial journey reminded me of a bicycling expedition that I had undertaken in college. We took on an audacious challenge of cycling across the Himalayas, a distance of 4,500 kilometers crossing the Jalori pass at a height of 10,300 feet! It hadn't been done before at that stage. It took us 20 cycle tires, many spare parts and almost broken bones to complete the challenge.
This month I complete the 30th anniversary of this expedition, and I cannot help but marvel at the similarities with my last decade of being an entrepreneur.
I think any one who starts a company has to have a bit of madness in him or her. I learned that sometimes we stop ourselves from being audacious. This expedition reminded me about not thinking about limits. Life is beautiful when you don't let constraints imprison your imagination!
Can this be taught? I don't know but it sure can be learnt. After this expedition, the Himalayas have always reminded me to honor this madness in myself.
I break down my 10 years of being an entrepreneur into the following four phases – a) Survival, b) Making money, c) Proving your business model by creating a market reputation and a brand position and d) Scaling up.
They were not distinct phases, and they seemed to overlap into each other, like living pieces having a voice that kept reappearing at different points. You start a business because you want to be successful and have a passion that wants to “tell its story.”
Yet the conflicting ideas in each of these stages kept us in a deep state of equilibrium. Growth, yes, but not at all costs. Profit, yes, but not at the cost of growth! Growth, yes, but not at the cost of destabilizing us. Reputation, yes, but not before we actually started making a mark!
The interaction of these different voices was not only in the form of conflict. There was also dialogue, as different voices learned from each other. As an entrepreneur, one learnt to hold contradictions.
Each phase has distinct challenges, and you have to be quite crazy to even imagine the journey, let alone actually do it. In fact, if I had any clue about what it would take to really build Cequity to this stage, I wouldn’t have done it.
At a personal level, it also forces you to keep learning to become the “expert” that you have to be to be successful. Cognitive psychologist Anders Ericsson has specialized in studying how experts acquire world-class skills. He has a crucial insight – Experts don't just practice their skills a lot; they do "deliberate practice".
Having a goal and keeping deliberate track of it is deliberate practice. As an entrepreneur, you learn this very fast. For 16 years before I started Cequity, I was always the client, so I had to learn to wear the other shoe (become a consultant) and at the same time learn to bring on new clients. This needed massive “deliberate practice”. The good news is that it can be done.
As entrepreneurs, you mustn't sacrifice speed even as you grow. Some consultants have called this “the growth paradox” – growth creates complexity and complexity kills growth. Speed is one of the few advantages a young company enjoys relative to bigger players. Using speed as a lens for making organizational decisions can help defeat the growth paradox.
For years as we built Cequity, I saw ourselves rapidly picking up opportunities and building a business out of them. How do we sustain this culture, how do we bring in “big company” processes and retain the “entrepreneurial heart”?
L.D. DeSimone, Chairman, and CEO of 3M has this interesting take – “Entrepreneurs, like dancers, need to be light on their feet. They need a sense of timing and room to move. However, they also must balance their freedom to explore opportunities against the discipline of the marketplace”.
Entrepreneurs can create a company fabric, with a soul, that is able to play with these contradictions – Freedom and discipline. And they can do it only if they are able to step into their own shoes comfortably and allow their entrepreneurial spirit to be a nucleus around which grow “enabling processes”.
Only then culture forms around you as an entrepreneur and others feel enabled to bring their strengths to the party. Only then can you chase EBITDA targets and be agile enough to not lose out on rapidly evolving opportunities. You have to be the “real McCoy” first, and only then does culture form around you.
People are actually very good at reading you. They can spot the fake "McCoy" from a mile! Like I said earlier, it's what you do that matters more than what you say.
One of the lessons I have learnt is that companies grow only when people do. Unless we grow as people, our company would not grow. And as Napolean Hill once said, "The starting point of all achievement is desire."
So how do you surround yourself with “hungry” people all looking for growth? And not all growth has to be long term — I would respect someone who comes in to create massive learning opportunities, contributes and then moves on, maybe to become an entrepreneur! Or the company keeps growing to show him the next step in the ladder.
Greeks often describe doing something with soul, creativity or love. When you put “something of yourself” into what you're doing, whatever it may be as “meraki”. How does one inspire others to put meraki in their work? Entrepreneurs carry this spirit, how do you infect others? I am still learning.
Escape velocity is the speed at which an object must travel to break free of a planet or moon's gravitational force and enter orbit. A spacecraft leaving the surface of Earth, for example, needs to be going about over 40,000 kilometers per hour, to enter orbit. How can companies enter their escape velocity phase?
How do you manage the short term with the long-term EBITDA every month and invest for the future? We still have some way to go. But I suspect the only way to change it for the next decade would be to again create some insurgency — "Insurgency, so you remain at war against your industry on behalf of underserved customers.”
But not at war, we entrepreneurs need to be kinder to ourselves — Don’t fight the hills!
In a recent trip to Israel, I had the privilege of meeting Mooly Eden, an iconic entrepreneur. Interestingly, he said, "If you have the same business model now as in the last 10 years, then you are dead."
The dancer Martha Graham said that it takes about 10 years to make a mature dancer. I guess the same applies to entrepreneurs, too, and I am looking forward to the next decade!
(Swami and I started Cequity in 2007, and this is the year we finish 10 years.)