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Entrepreneur – A nice word to capture enthusiasm, zeal, motivation & drive to achieve something out of the box, on your own & be contended.
I too wanna be an entrepreneur . However, my notion of entrepreneurship changed drastically after watching this series – SharkTank.
SharkTank is a reality programme aired in english reality channel. Here is the plot. There will be 5 – 6 investors, sitting in centre of a meeting room, with their pockets loaded with cash. They are so much loaded such that, they can easily make a million dollar deal within seconds.
An entrepreneur / group of partners / founds / share-holders walk-in to the meeting and greet them as follows.
“Hello Sharks. My name is XXX coming from YYY and I’m the CEO of KKK company. Today, I’m seeking $$$$ dollors in exchange of 15% equity of my company”
This is how the scene actually starts. But the rate at which the scene transforms is truly mind blowing.
Most people in the “wanna be entrepreneur” category just focus on the novel idea / product / design in their thought process. Even I was under the same category until I accidentally get myself hooked up with this show. While everyone would acknowledge that, you have a unique value proposition to conduct a business, it does not necessarily mean that, your product / service is the one.
Your product / service may be an outstanding one. But that’s just the first step. It may be the last step, if you don’t have answers to other important factors when it comes to business.
These sharks are millionaires / billionaires who started out as a normal people just like you & me and they had risen to this level after going through lot of business hurdles. The kind of perception they bring-in to the table, simply amazing. When an entrepreneur starts outlining this idea, it might look mind-blowing , awesome, excellent. However when these sharks some fundamental questions, you will just see, right in front of your eyes that transformation that takes place in the table. You will understand what are the missing holes, how bad the business could turn around & lastly why they politely decline to invest.
What is the sales for the last 12 months ?
What is the cost of making one unit ( of the product ) and how much do you sell it for ? What is the % of margin you make per product ?
What is the projected sales numbers for current year?
If I give you the amount that you are asking, what are you going to do with it?
Do you have a patent? Why just utility patent, What about the design patent ?
Are you willing to license your product design ?
I want a royalty for every product that you sell, would you agree for it?
Do you want my money or my time ?
What is your customer acquisition cost?
How do you sell your product? Online or Retail or Wholesale ?
Answers to those questions, would make you to understand Business is not a sugar candy. Business is not engineering. Business is not just coding , developing, manufacturing, designing. It is lot more.
You don’t need to solve a problem. You don’t need to invent anything. You don’t need to redesign anything. All you need is to see an opportunity. And you just need to capitalize that opportunity.
Making money doesn’t have to do anything with intellect. I have seen lot of candidates walking-in with techy guy as a partner or friend and bag out deals worth of millions. Other category of people was either nerd or just the hard working legion of individuals, who just know to work.
One of the ground rule of SharkTank is
“Know thy numbers”.
That’s where I realized the ground reality. See almost 9 / 10 folks had / have an idea of starting their own company. It may be due to real passion or just want to get out of monotonous day to day routine job etc. But why there aren’t lot of start-ups coming out? Why only 20 – 30% start-ups really succeed in getting handful of investments. Especially when lot of support is getting together from Govt, support organizations likes MakeInIndia, Startup50, StartupSaturday etc.
The answer is simple. Business isn’t product / service. Business is Money. So when you start out to aspire for starting a company, just ask yourself,
Am I making money? Is there any opportunity for me to make money? Are there any potential buyers? How big is the market? Am I creating a new market division or your leveraging one.
How long does it take to get back my money that I invested? Am I imitable?
As Mark Cuban ( of my fav shark ) points out,
“First there are Inventors, next there are imitators, next are the idiots “.
To simply put, if you product / service can easily imitable, then you are in grave danger.
The bottom line is Business world is totally different. You can easily become an inventor if you have the right talent. However to become an entrepreneur , it takes lot of skills.
Watching SharkTanks gave me lot of insights. It has become my fav show and I’m following all the sharks and their post simply motivates me. Hopefully, I should learn the business acumen and turn in a shark one day.
Kasu… Panam… Dhuttu… Money… Money…. 🙂 🙂