During his recent summer internship at UpGrad in Mumbai, Simrat got the opportunity to interact with Ronnie Screwvala. He is a serial entrepreneur known best for being the founder and CEO of UTV. He talks about how startups are not just about the ideas behind them and how funding is an overrated concept in today’s environment.
SS : What do you see in an idea when you are approached by someone to validate or invest in it?
RS : An idea is not the be all and end all of what an investor sees. A fair amount of success is determined by the clarity of vision of the people behind the idea. A lot of it also depends on the size of the market or the appetite of the population to adopt a new product or service. Having said that, sometimes it is very exciting even if a market doesn’t exist. The most important thing is the clarity of thought of the people in charge and the execution plan. Execution is going to be ten times more difficult and more important to understand than the idea. If you get passionate about an idea and get involved, but there is no logic after that, the plan is destined to tank. Unless there is an in depth understanding of how it is going to unfold, ideas are a little overrated.
SS : What has changed since you started up to now. Has it become easier because of the awareness or is the competition a deterrent?
RS : I don’t think the competitive environment is an issue because with increased awareness, new sectors open up. The entrepreneurial ecosystem has definitely changed. I think it is much more out there and today, being an entrepreneur doesn’t put you in the category of second class citizens like it used to. During my time when one was starting up, people felt that nobody wanted to hire you so you had to become an entrepreneur. Most families still feel that security will only come with a job. So from the perspective of socio economic reasons, it sounds like a very high risk endeavour. Therefore the ability for you to get support from family, is challenging. In a western context, it is much easier because at 16, you move out of home and study somewhere else. The ecosystem in the Indian culture is such where you stay in a joint family till quite late. So the obligation for you to listen to elders is much higher. The things you learn when you have actually moved out of the house and are genuinely independent at 16 makes it easier to be an entrepreneur at 21. You have the conviction to convince your elders about being able to survive alone. But today, the big challenge still is the risk factor and how everyone perceives entrepreneurship. The security of steady income is still very attractive. You need to have a very high threshold for risk to become an entrepreneur. It is not an environment where people will encourage you and say, “Don’t you want to start something of your own?” It also reflects the fact that we don’t have too many great role models in this country. Role models invite you and make you passionate. We definitely have a few, but its too few for a country of 1.3 billion. Similarly in sports, we do have role models but its just 10 or 15 of them. These are not enough top inspire a country to take up sports as a career. I brought up sports because there too, you are becoming an entrepreneur of sorts. You are taking a risk to train at the cost of a job and hoping that you’ll be able to make a professional career out of it.
SS : You belong to the era when if you wanted to start up, it was your own savings or your family’s. Does external funding douse the fire of success since it is not your own money which is at stake?
RS : The problem with external funding is two fold. Firstly, people feel that until they get it, they cannot start. People want to become entrepreneurs and the only reason they are not is because they haven’t got funding. This is absurd because if you want to start something of your own, why should funding stop you. You should cut your coat according to your cloth and get on. Secondly, the earlier you get your funding the sooner you reach the crossroads to decide what business are you building. Most of the times when you are raising funds, you are concerned about how somebody else is going to view your business and what they’re looking for. But it is not relevant. Investors are coming to help and support you for your idea, it should not work the other way round. If you are starting to build a business based on what your investor wants, then your incentives are skewed and it is neither your vision nor the investors. That today is the biggest risk when you are raising funds at the early stage because you have already started to cater to what you think somebody else might want from your business. You are already compromising your vision for the company and that is a major disaster. That is why if you can get your business some distance on your own resources, it is a good idea.
SS : Many students get bit by the entrepreneurial bug while still in school or college. What is the right way to satiate that hunger? Work then startup or right out?
RS : You need to pick up a lot of experience because being bit is very different from going out there and starting up. The probability of you making mistakes on your first time are always very high. So, if you can do it in an environment where there are other people with more experience, it could save you from making half the mistakes you are going to make. The other half, you would at least make at somebody else’s expense which is always better. When you work with a large organisation you probably won’t experience the learning that you want to have to become an entrepreneur. But in early startups too, there is a risk because everybody is learning there. So it may not help your learning curve. You need to be in a company that is at least 4-5 years old and has a good team. Startups like these which have gotten somewhere take care of the risk of decreased learning because of an inexperienced team.
Written by Simrat Singh