entrepreneurship

Tech Invention vs. On The Ground Implementation Startups

Another concise model I got through Sachin, who I first met two weeks ago, about entrepreneuship:

There are basically two approaches to do a startup.

Top-down: Invent something and build a business around it. (e.g. the "Google model", develop an exceptional search algorithm and start a search engine company)

Bottom-up: Research on the ground, understand a problem well and then build a solution for it.

There is surely need for both kinds of ventures, top-down leaps to technological advancement as well as solutions designed up from a specific problem. But be succesfull it probably helps to know what kind of personality you yourself are and which route you want to follow.


After that, its three steps to get going:

  1. Identify a/the problem
  2. Find a good team
  3. Get the money to fund it

How to become a social entrepreneur organizing the auto-rickshaw sector

IIIT-D again served me a really interesting seminar talk that exactly hits the intersection of social enterprise and information technology that I am excited about. Vishy Kuruganti, co-founder of mGaadi, told about his journey "organizing the unorganized auto-rickshaw sector" - thereby bringing better service to commuters and better livelihoods to auto drivers.

The business case of mGaadi is straight forward. Every day people here have a hard time with auto drivers asking extra or refusing to go to some destinations. As always, there is two sides to the story: Drivers usually do have good reasons for their behaviour. They need to make a living and getting stuck in rush hour or in an area without passengers for a return trip doesn't earn them anything.

With such a prominent problem, a good solution should make profitable business. The margin for arranging one trip may be small but the volume is potentially enormous with more than 5 million auto-rickshaws in India. Or, with a social entrepreneur's mindset: Why not do something to solve this huge pain point of auto transport? Building a self-sustainable business to broker a fair deal between passengers and auto drivers is probably the most scalable and least patronizing approach to improve the situation. Getting enough turnover to keep the business running and growing is essential. But that - solving a real, relevant problem - is what should be at the core of any enterprise in my opinion.


The "mGaadi story" got me somewhat excited. It sounds like exactly what I've been dreaming to do. So how to get there, to entrepreneurially solving a meaningful problem?

Vishy took a 12 months sabbatical, researching, meeting people, writing the TechSangam blog, thinking, getting his head free to dive into the right opportunity. It took an extension of 6 months and a pitch from one of the people he met at the very beginning to start mGaadi but here they are. Hard work in the end seemed to have led to serendipity. (And working on a startup idea on weekends seems rather hopeless)

Entrepreneurship is inherently risk-based (but some say living in India itself is already a risk). If risk tempts you and you want to make social impact however, India is a hotspot of social entrepreneurship. (Look for example at those Eight defining milestones in India’s social enterprise ecosystem). And there are lots of pain points in society. If you just pick the one that seems most relevant to you, you'll be fine. Even if it turns out to really be just number 3 or 4 in relevance (whatever that may mean), you will still have picked a meaningful problem to work on.

The unorganized sector in India is huge, over 90% of Indians do not get a regular salary. But making the step into formal employment with a regular income can be decisive to get out of poverty. Seems like there is a lot of room for more social enterprises here.


And (again) a few other thoughts and references to take away from this talk:

  • "Poor Economics" (subtitled "A Radical Rethinking of the Way to Fight Global Poverty" ), a book by Abhijit V. Banerjee and Esther Duflo, as an inspiration for social entrepreneurship.
  • Get the right allies, who also might have a stake in your target. For mGaadi tie up with Bangalore police to reach out to auto drivers through their prepaid auto booths was a game changer.
  • There are different models: Uber may demand its drivers to make any trip it assigns them but guarantees a minimum monthly income in return, while mGaadi leaves the choice to accept or reject each trip totally to the driver. Which model is better? Who knows. (But it does depend on circumstances and resources available to your company.)
  • Storytelling is an important skill for entrepreneurs.

"How"-People and "What"-People

During a talk at IIIT Delhi by Sachin Gaur, entrepreneur with an interest in social impact, he made a nice point when asked about the skills needed as an entrepreneur:

There are "how"-people and there are "what"-people. When people tell you about their project do you ever start wondering about how they are doing it even before they are done explaining what it is about?

The problem with that is that there are hundreds of ways how to solve a problem. But once you have figured out one "How" you are usually set on that only, quickly discounting other approaches and people who have a different perspective on the matter.

Focusing on the "What" is probably easier said than done, you have to stop yourself to immediately engineer solutions. But to make an impact in life the most important and challenging part usually is to get the problem right. And following the "What" instead of the "How" then makes you open-minded towards any kind of "Hows", where the most adequate solution may well be frugal and low-tech.

"If I had an hour to solve a problem I'd spend 55 minutes thinking about the problem and 5 minutes thinking about solutions."
     -- Albert Einstein

On a similar note: Do you know the exact meanings of Efficiency vs Effectiveness?

 

And a few other thoughts and references to take away from his talk. A lot of them I had heard somewhere before but that should probably just make them more credible.

  • "Zero to One", a book by Peter Thiel about building innovative startups
  • "How to Start a Startup", a much praised online course about entrepreneurship
  • If you catch yourself telling others "This should be done differently" for more than three times, either stop saying that or start working to actually do it differently.
  • While on the other hand your startup idea obviously needs to be appealing to you not just for the next ten days but for the next 10 years.
  • A personal network is invaluable. Meet different people, be nice (i.e. helpful) to them without expecting anything in return and it will come back to you surely.
  • And maybe try to also have a few friends outside of your technical college? After all diversity matters when you want to be innovative.

 

I don't want this to become yet another blog sharing advice and inspiration for (aspiring) entrepreneurs. (If you are interested in this, check out the daily two minutes food for thought from The Heretic, for example.) However I do love the concept of social entrepreneurship, approaching the world's problems in a way that is self-sustaining instead of merely handing out charity. So I will also collect whatever good I find around this topic here.