Small but strong

The normal notion also says that bigger is stronger and certainly we will have many examples whre size determines strength. Nature has its ways to create exceptions and examples, The strongest material on the earth is diamond , no doubt about it. In fact phsycis will agree that the smaller is the size of particle , more energy it will require to break it. This year global recession has hit business school placements like never before , MBA graduates who considered themselves employable in any circumstances are having tough time to find a job so colleges started looking for small firms and start ups .

In last few days I have got a chance to interact with several such organizations from head count to 4 people to 100 , from revenue of 60 lacs to 100 crores. I am really amazed that even in such bad times many of these smaller firms who have been in existence for around 3-4 years are doing extremely well . There are many reasons to it and one of them is to target a focussed area and provide end to end executable solution in that area at very competitive price.
In discussions it also came out that where many of the larger firms could not predict about their future projects and cash flows , these smaller firms have project lined up for next couple of years so much so that they are turning down clients because they don't have enough resources to execute many such projects at the same time.

What is keeping small strong ?

Low Operational expense : Most of them are still running from small rented spaces and have not opted for purchasing and maintaining their own facilities. This is keeping the operational expense low. These organizations are running from premises with less than satsificing facilities where they may not even have a cafeteria for their staff. Where other larger ones have now a big task at hand to cut down highly on operational expense , for smaller ones its life as usual on this front.

Every one does everything : For start ups it is not acceptable at any time to handle an attrition rate of 25-20% , even if it happens than the key to remain strong is a flatter hierarchy where every one knows and does pretty much every thing, one is responsible from opening the office doors in the morning to making an international sales pitch, collecting receivables , recruiting projects and managing existing projects in hand.

Closeness to customer : Large organizations today have client list running in hundreds , one of the KPI of quarterly results is number of clients added and specially from fortune five hundred, post which it is about deal size but in case of start ups and new organizations in block , they have almost all of their projects are coming from very few clients which means complete attention and close association with these clients. There may not be deal sizes of millions of dollars but there are definitely continuos flow of projects and great trust on these small but flexible partners.

Its not money but passion and vision : I thought these it is very bookish and theoretical concept that small firms are driven by sheer passion which does not care much about cash flow , specially in short term. Recent interaction with some of the CEOs opened my eyes to a world which is full of energy , vision and un quantifiable passion. They are so intoxicated in it that every second sentence they speak gives a confirmation of their passion and commitment. Small size helps making such feelings contagious to the entire team. Offcourse money follows , many entrepreneur commented that earned much more in their small entrepreneurial stint of 3 year than their corporate career of 30 years.

Developing a perfect ecology : Larger organizations have too much pride and arrogance which hinders development of a cooperating ecology with their peers but this is just opposite in case of smaller ones, they are constantly looking out for friends who can help them in various phases , be it complementing them to provide end to end solution to customers or helping them in expansion to new locations. This kind of ecology gives them more strength.

I am certain that many such small organizations will not only sail through the current crisis but also will establish themselves as strong players in respective fields . Lets hope when they become bigger , they don't forget how they have drawn strength to do so.

Entrepreneurship : Do you have it in you

Few day back we were listening to Captain G.R. Gopinath of airdeccan ,his tell of building an empire was mesmerizeing and from that speech and our readings we have drawn some basic characteristics of an entrepreneur
1) Risk Taking abilities : So taking risk is the first step of entrepreneurship . An entrepreneur must have risk taking ability , one who can not take risk can not become entrepreneur. When one tries to enter into any venture he never knows whether it is going to be successful or a failure and that makes it very difficult for a normal person to come out of his comfort zone . The decision of taking a risk is very important , one who passes this examination of taking risk has surely one of the very basic characteristics of being entrepreneur. If we track back the starting point of some of the today’s successful entrepreneurs like G.R. Gopinath, Mr Narayan Murthy and many of their likes have left their jobs and took a risk of loosing the financial security of their life.

2) Entrepreneurs believe in humble start : Many of today successful entrepreneurship ventures have started in a garage , almost all of them have had very humble beginning be it HP , Amazon , Dell , Infosys , Linksys or Google. The reason was obviously not that they liked the idea of working from garage but because of obvious resource crunch in the beginning phase of entrepreneurship most of these people have to work with minimum available facilities and resources in early days. Just before starting google , larry page and Sergey bin have concerted their own hostel room into a research laboratory , In early days of Infosys it used to function from a small 2 BHK in Pune , there was no servant to clean the flat and founder members themselves used to clean it .

3) Entrepreneurship demands Vision : It is not a mandatory criteria that entrepreneurs must have some clear vision about what they are about to do but if this vision exist then the organization is bound to sustain for long term. When Gopinath Munde started a no frill cheap airline , he had a vision that his fellow countryman should be able to travel by air without paying a fortune for it , It was this vision that kept his motivation high and made air deccan an instant hit among people from middle society. Consider example of Harper-Arrington Publishing and Media which was started by Harper and Arrington with a vision to educate kids and adults.

4) Entrepreneurship demands persistence : There are very few entrepreneurs who get it all right in the very first shot. It need lots of persistence to carry on the quest for success and to not give up the hope. Entrepreneurs don’t let it go , they would exercise all available options and make sure that they get the outcome . One of the example of persistence is

5) Entrepreneurs learn from mistakes : Infosys was not the first venture started by Mr Narayan Murthy , First of all he started a company named softronix but within a span of 1.5 years he had to close it , after doing a job for few years he again started a new venture named Infosys but this time he had already learnt the lesson , Softronix was targeting indian software market which did not have much scope at that time so later on with Infosys Mr Murthy targeted US markets where software industry was booming at that time .

These are not the only characterstics for entrepreneurship but these are definitely few important onces and if you have them all then I guess you should start now