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Entrepreneurship and Innovation: “Any thoughts?”
I am an aspiring business student who wishes to major in Business Management as well as Electronics Engineering. From August 2011-July 2012, I decided to conduct a research project on the challenges of starting a business, and how to make a successful business grow. I analyzed three businesses in India and two businesses in the United States. I interviewed the founders of each business, and have analyzed how/why they formed, developed, and grew. I asked them about their inspiration, challenges, methods, and concluded each interview by asking for a few pointers for prospective entrepreneurs.
What makes the world go around? It is an age old adage with rhetorical connotations, but most people would agree, particularly in the current economic situation, that ‘money’ makes the world go ‘round. To the average person, business people are often perceived as Wall Street stock brokers, wearing expensive suits and crunching numbers. However, not everyone goes into business solely to make money, and certainly, not everyone becomes a Rockefeller or a Gates.
Financial literacy, knowledge of the law, and basic accounting abilities are absolutely crucial to running a business. However, enterprise is far broader than money moving and negotiating. A recurring theme from all the people I visited was ‘passion;’ a need to do something they truly desired to do, something that didn’t feel like a daily chore. Mrs. Sujata Khanna, Director of ‘Career Forum’, an educational company in India, started her business with a vision. She wanted to help people learn to communicate effectively and enter Indian MBA schools more easily. Seeing an opportunity in what she described as “a virgin market,” Mrs. Khanna developed a company that specialized in coaching graduate students to pass difficult exams such as the CAT, GRE, and GMAT (used for admission into business schools in India and around the world). In this new market, garnering interest and effectively teaching and maintaining a student body were challenging. The company was originally based solely in classrooms with little networking or feedback. As time went on, Career Forum seized the market through innovative additions and methods, relying heavily on technological advancements, such as virtual classes, and student/teacher feedback logged and sent for review to an electronic database. Over the course of nearly two decades, Career Forum grew from a school of seven students in Pune (Maharashtra), India, to more than 15,000 students in 56 branches (spanning 39 cities across India). When asked, Mrs. Khanna told me that a passion for utilizing her skills motivated her to become a business owner. Hard work, long hours, and finding start up capital were musts when starting out. In addition, exploiting a ‘virgin market’ proved valuable, as the company was able to provide a service with less external competition and hindrances. With a full management and marketing team, and her perseverance, she has raised the company to a value of over 94 Crore Rupees (approximately 17 million US dollars) today.
Continuing in the line of eager beginnings is another Indian company, Pioneer Enterprises, started by Mr. Ranjan Munshi, in 1997. Mr. Munshi illustrated a desire to help an industry while making money for his family. A packaging materials manufacturer, Pioneer Enterprises provides internationally recognized companies such as LG, Tata, Volkswagen, and Colgate (just a few of the many they cater to) with items such as bubble rap, packing foam, plastic bins, and stretch film. At its beginning, Pioneer Enterprises was a back-office company of less than fifteen people working to build cheap and effective packaging supplies. In the 1990s, packaging manufacturing was still in its infantile stages in India. Seeing an opportunity in this new field, Mr. Munshi rushed to fill the needs of the consumer goods manufacturing industries. Embodying a true start-up, Mr. Munshi faced infrastructure issues, government regulations and formalities, limited resources and funds, and of course, fifteen-plus hour days. For years, Mr. Munshi worked tirelessly with limited help and resources. When Pioneer received a major contract with a large scooter company, Mr. Munshi expanded his company in size and application, creating new buildings and a larger line of products. A large amount of Pioneer’s materials are reusable, with many products being returned, reprocessed, and resold. This innovative approach in a young field might be a testament to Pioneer Enterprises’ success. Approximately fifteen years after the company’s inception, it now has a yearly turnover in the millions of US dollars. The company operates with a full management staff, including a General Manager, Financial Manager, Production Management Team, and a marketing department. Mr. Munshi emphasized passion in a person’s field of choice and stressed the value of knowledge and a good education (while advocating to me the importance of financial and accounting skills). Intuitive thinking about the market’s needs, and a ‘follow your dreams’ theory, where with a clear roadmap and a willingness to work hard, anything is possible, no matter how difficult it may seem.
Businesses in India face great challenges. In a country where land is phenomenally expensive (most businesses cannot afford to own the land, and only sign short-term leases), infrastructure leaves much to be desired. Consumers are harshly critical, and competition is intense. Yet, from my interviews, I realized that a strong work ethic, professionalism, an ability to respond to criticism in a constructive manner, can lead a person to success in a challenging market. Mrs. Moutushi Sengupta knows this all too well. She runs a chain of child care centers in Pune, India. The Sparkles Nursery line was started as an activity center and playschool, eventually blossoming into a daycare for children ages five to thirteen. Mrs. Sengupta had previously worked in the IT sector and had no formal training in the daycare business. With strong communication and marketing skills, she started to enjoy the fun, creative side of the business, and eventually fell in love with it. As is in any service industry, Mrs. Sengupta described that a major challenge in running the company is a need for a ‘customer is always right’ mentality. Parent relations are a significant portion of daycare management, but financial management also plays a major role. To aid in the management of the company, Mrs. Sengupta delegates accountancy and marketing jobs to external firms, but checks on them regularly to ensure the health of her company. Mrs. Sengupta agrees that business sense is acquired over time and often as a result of negative events. She stressed the importance of keeping proper financial records and ensuring competency for all the roles below you (regional managers, teachers, custodians, and cooks in this case).
Motivation stemming from passion, a sense of responsibility, and a degree of fearlessness are common threads through business people. Dr. James Hainfeld is an academician interested in research in the medical field. Using the small business ‘incubator’ program at Stony Brook University, NY, Dr. Hainfeld took his talent in biology and chemistry and applied it to a commerciable, innovative use to launch Nanoprobes Inc., a company that specializes in researching and developing imaging complexes for the detection of cancer. By binding gold particles to proteins, cancerous regions are more easily detected in scans. The ‘incubator’ program provided state aid, office and lab space, and business development aid. As the company grew, Nanoprobes moved to a new, independent home on Long Island. However, as the company grew, so did the challenges. Nanoprobes became an incorporated company to achieve some financial security .Copyrights became increasingly important as sales increased. Though faced with difficult tasks (beyond scientific research alone) Dr. Hainfeld has performed the challenging balancing act of running a business, while still devoting a large amount of time to research. With a financial manager and vice president to help, Dr. Hainfeld has run a self sufficient company (achieving this with grants, sales of products, and federal aid) for over two decades. Dr. Hainfeld said that there are risks (loss of money, controversy over intellectual property, chances of failure), and extreme competition (particularly from large corporations such as GlaxoSmithKline) in business, but also great rewards. If one is strong in their field, and is willing to work diligently and patiently, success will come.
Mr. Syamal Raychaudhuri, founder of InBios Inc. in Seattle, WA, echoed similar sentiments. Mr. Raychaudhuri is a chemist, and initially wished to be a professor. He worked his way up through various chemical and biotech companies before finally deciding to start his own company with his wife. A strong desire to help people, particularly those in developing nations, prompted Mr. Raychaudhuri to work on ‘point of care’ (on site, near the patient) disease detection. At the time of the company’s inception, ‘point of care’ technology was in its formative years, not being heavily developed by major industry players such as GE or the Bill and Melinda Gates Foundation. Yet, with a goal of aiding those in need, Mr. Raychaudhuri developed his company into one that produces and sells tests for tuberculosis, encephalitis, and dengue fever to academic and research institutions in the United States, and for export to countries such as India. As is with other businesses, money was a requirement for startup. Using Federal grants from the DOD and NIH, InBios rose to be a prominent seller of ‘point of care’ tools. When I asked about the various challenges of his business, Mr. Raychaudhuri responded by saying that a necessary simplicity in ‘point of care’ technology can be limiting. Federal approval of medical products and sales is a challenging process, and a balance between research and business is also often limiting. The fact that ‘point of care’ technology was new proved to be both a challenge and a reason for success. Due to the research-heavy requirement of creating new medical products, InBios was limited in sales initially and spent years in between the expansion of sales products. Yet, as one of the first makers of its various products, InBios faced less initial competition than it perhaps would have in already developed fields. In a concluding lesson to me, Mr. Raychaudhuri told me to follow what I am passionate about. To not worry about profit, competition, or perceived feasibility.
My lessons learnt from all these high achieving entrepreneurs are, creative thinking, need based manufacturing ideas, courage, perseverance and hours of hard work.
So why would I want to go to business school?
Social Studies taught me that, America at one time was nothing more than undeveloped land. But it rose to prominence through hard work, and a keen sense of satisfying demand. From my interviews, I realized that innovation plays a major role in any successful business. Every business I visited, was filling a niche in the market that was previously untapped but needy. If we can find ‘virgin markets,’ or at least new paths in already developed areas (better, more efficient cars, more reliable electronics and medical equipment, development of renewable energy etc.), the American economy might get back on track. Obviously, there are no limitations to being innovative. For example, Australian doctors are working on the ‘bionic eye’ giving hope to thousands of visually challenged people. Perhaps we can even be more extreme, and seriously consider extraterrestrial colonization, or ‘flights of fancy’ like flying cars. I support the spirit of entrepreneurship and innovation. I believe in going forth against all odds and doing something new. This is my reason for going into business studies and one day hoping to start my own business.