Entrepreneurial Motivation

One of the toughest questions Private Equiteers deal with is the art of fathoming the motivation behind entrepreneur - is it money, fame, self-fulfilment of driving to fruition an idea or the genuine drive to make a difference to the society ?

The piece I read recently, What motivates an entrepreneur ? is a pointer to some of this. It is a little dated but I presume nothing much else has changed. A majority of people seem to cherish the autonomy of being one's own boss (Is that a good thing for a private equity fund ? How much space will such a person be willing to secede for other's ideas).

One of the many things that we need to pore our heads over is the resilience and dedication of the entrepreneur to the cause at hand. If times go sour, will the person be willing to stick on and improvise on the business ? Or is he a fairweather merry maker who likes the sheer thrill of doing something new all the time and has no qualms shutting the door if the going is not good enough ? Is he going to be happy seeing his face on the cover story of a business magazine or pink daily or is the latest new sedan going to give him the highs ? Or is it the thrill of being acknowledged by his social coterie about his achievements ?

Often, a lot of entrepreneurs I have met are not so much motivated by money (especially in an Indian context where ostentatious display of wealth is still not taken very well by the society) but more by self-fulfilment (whether it be desire to make a difference to society or to prove onself that one can do it). If you cannot get this pulse right and touch the right nerve, no amount of external pressure or coaxing/cajoling is going to make the entrepreneur come out of his shell and look beyond the obvious.

Surely tougher than it sounds, is'nt it ?


~Varadha

(varadha.r1@gmail.com)

Love at first sight- the makings of a great date

After meeting a fairly promising company last week, my mind re-wound back in time to some of the first meetings we have had with entrepreneurs who since then have gone onto do bigger things (whether funded by us or otherwise). Could'nt help notice the fact that the first instinct after those meetings were overwhelmingly positive. And this had nothing to do with commercials - valuation, terms etc.

And in a large majority of the cases, the feeling was mutual - so it was not the buyer necessarily hankering after the seller or vice-versa. A good number of those have translated into professional, informal relationships far beyond that of the immediate call of duty then. (the transaction).

Curiosity for the other: In a large majority of the cases I analyzed, there was a thread beyond just the meeting that had aroused a curiosity in either. the first meeting of this type (for the promoter) or a strong reference on the counterparty ("Hey, I heard these guys are good", "They are pioneers in their thought process", "Strong team that have made delivered results consistently" or "These are one of the smarter PE guys around", They really build relationships").

Preparation from both sides: The best interactions are those in which the answers and the questions flow freely (none of the "I will get back to you. We have not thought about it " etc.). Even in the rare case of an action item that spills over, the progression happens automatically without any follow-up (no repeated phone calls/e-mails).

Sense of empowerment amongst the team : Rather than a peer to peer interaction, the best interactions are those where there is a lot of cross-firing and creative exchange of ideas. There is no one guy who leads the verbage from either of the teams -

Experience and domain knowledge: This often shines through anecdotal evidence of experiences the entrepreneur/investor have had in the past. The seasoned guys know what they are talking about, do a honest acknowledgement of market realities and have a sense of how to marry the market opportunity with their internal capability. For eg., going after a 1% marketshare in a $ 1 bn market in waste management equipment means nothing; however, saying "We will go after the top 20 government bodies that buy 70% of the total equipment in the country and we are already enlisted as the preferred vendor in 8." means a lot more.

As Neil Diamond's song goes " The first cut is the deepest". It seems like there is love at first sight, certainly in the business we are discussing.

~Varadha

(varadha.r1@gmail.com)

+91 9940670064