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Is Entrepreneurship too hyped in India?

May 11, 2008

Firstly, let us decide on what exactly I mean by ‘hype’. I may not be able to define it in succinct terms, because, firstly hype is so much celebrated, that those who are busy in finding it, often end up promoting it. Secondly and more importantly, although its a precursor to a disaster, its difficult to sort say the proverbial hay from chaff.But yes, we can always have some filters in place. Something like:

  • If there is easy money to be made, it most certainly is hype
  • If everybody is talking about it, yet none of them actually has anything to show for it, thats a home run for ‘hype’
  • If a huge section of media is ‘romanticizing’ a particular stuff, then again, its most probably is a hype.

For point 1, think Web2 point Oh! That Oh! doesn’t stand for oh, as in zero. It stands for the moment of revelation, that its a bubble. Why did I say that? For every tom-dick and harry who makes the me-neth (and not me-too or me-three) replica of a worthless vroom-vroom maker, is getting acquired for a 100million dollar plus price tag. That is the most blaring signal of a hype. Think about it, people are talking and blogging about how to make money, out of third party advertisements of which the Big G takes out almost the entire juice. What is happening effectively? For every blogger who puts Big G ads, is turning himself onto another salesman for the company. And to think that, blogs are getting acquired and sold. [If only I could put up my image letting out a snicker]

Otherwise, lets not just talk about blogging. Think about the Web 2.0 model as such. Build, make it free and let money flow in from advertisements, which is not published by you. Thats too much of a inconsistent variable for me. Hard to predict, forecast and decide, and keep an eye too. And not necessarily, a better offering will lead to a better ad money. Think about social networking.

More recently, real estate is one more example.

The second point, fits to-to with airline industry a few years back in India, and almost a decade back in US. Airlines are perfect not-to-do businesses in this world. Sky high initial investment, generates little or no profit, demands cash at every quarter to keep the operation up and active, and what else, dependent on an ever dwindling natural resource.

The third point? Think IPL, Celebrity, Star power blah blah. In that order.All are seasonal fads.

I didn’t include a particular marker for hype,because it is not an indicator on whom you can have that high a confidence as that mentioned in the three points above, but yes it is a more of an orthodox indicator. It may at times give you certain false negatives, but almost always it returns a zero false positive.

This indicator is, that of change. If anything soars too high,too fast, then your alarm bells should start ringing. And in effect, points one, two and three come from this. Stocks in the last phase of a bull run show a very high rate of change, fashion statements before going out of circuit become a highly accepted style statement(for millions within a very short time). And stuffs like these.

This post is though not about ‘hype’ per se. But about a certain little phenomena which nobody talked about till a decade back, suddenly becoming the most ‘in’ thing.

If you subject the last indicator for the Indian mindshare for entrepreneurship, it most certainly is observing a trend like this. Ask your friends and if they are anywhere in their twenties then either they have started out [best case], thinking about starting out [normal case], or dream about starting out[ most frequently met case]. But nevertheless start out. It seems entrepreneurship has suddenly become the ‘in’ thing.

[Of course,its good]

Yes, I am of course not pooh-poohing this trend, but I think a basic reality check is in a strict order.

  • Businesses are not ways of making quick money. If you want to then dabble in stocks and burn your finger.
  • Sustainable businesses don’t become monetizable in two-three or even four months.
  • Its tough, so expect the unexpected.

And that is where, I cringe, when successes from Valley, drive people to starting out websites, with almost zero percent sweat equity. Just now, around half an hour back, I was sitting with one of my friends in Amethyst,Chennai and he was talking about why should we start out. I have atleast two more friends of mine who are looking to break out.

[Adventure all the way]

Incidentally, one is about to start out, and the other is dreaming of starting out. So all my best wishes to them. But along with those wishes, I sincerely wish them a good mix of gung-ho attitude and practicality. Entrepreneurship is all about adventure, and yes we definitely need a gung ho attitude. Nobody goes for a jungle trip or a mountaineering trip thinking if they will return safely or not. All they look for is a fantastic time and an enriching experience and an experience to talk about. Entrepreneurship is something very similar. And hence you definitely need an attitude to face the tides. But in the process you need certain amounts of practicality as well, which makes the entire adventure a fun thing. Something like, when you do bungee jumping off a bridge, if you don’t harness a rope properly, then you might hurt yourself. Or something like when you jump start your business, if you look out to flip asap, then you might run yourself to ground.

[Parting words]

Web 2.0 has made entrepreneurship look way too easy than what exactly it is. Or should I say it has made it more palatable to the traditionally risk averse Indian society? But I am just not wishing a rude awakening tomorrow for this society, which is now slowly waking up to the charms of ‘I’ll-do-it-my-way'[Remember Sinatra Doctrine?] kind of life, when it wakes up with the Web 2.0 hangover.

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