A few days ago I read a book titled “Stay Hungry Stay Foolish” by Rashmi Bansal. This book discusses the story of 25 entrepreneurs from IIM-A who created a niche for themselves in the market and their journey from the fresh graduates to founders of India’s most successful entrepreneurs. I bought this book around 3 months earlier but I wasn’t able to give time to it. The title is chosen after the famous speech given by Steve Jobs at the Stanford Commencement Speech in 2008.
The first story I read was about naukri.com and its founder Mr Sanjeev Bhikchandani. The book clearly depicts his struggle to make the India’s largest internet based company having the official name InfoCom. Sanjeev passed out from IIM-A in 1989 after doing a post graduate course in management. From an early stage Sanjeev had chosen to start his own company. The obstacles in his ambitious path can be estimated by the fact that he wasn’t able to pay himself salary for six years as the company wasn’t successful. He had to have a part time job in order to feed his family. But, still the company was in red. The revenue was increasing but the company never became break even till 2001. Then, due to the dot com boom, ICCI approached them for funding.
First, Sanjeev refused as he was happy with the company’s break even revenue of 18 crores. But soon he noticed that many competitors were arising to make themselves firm in the market of jobs database. So he choose to accept the funding but net day the dot com bubble burst and markets crashed.
But the patience and hard work of Sanjeev paid work and the company survived the market crash and rebounded strongly. In 2006 InfoCom launched its IPO and till now it has the highest market capitalization of 1 billion$.
According to Sanjeev, one should never start business for money but for passion because in difficult times only passion would be there to support us in continuing the business. If it would be for money, we will soon leave hope. Further, he advises us to choose a good team and using ESOP for that as good team members would want more money and space.
He also suggest us that we should start early as we can commit mistakes while there is no competition and we should undercommit and overdeliver.
In the end, he advises to stick to the plan as a good idea will take time to be established in the market. If you are lucky then, it will happen in 5 years, if having average luck then 10 years, while if you are unlucky then in 15 years, but it will happen one day. Just Stick to it.
The next story is of Shantanu Prakash who created Educomp after passing out of IIM-A in 1988. Shantanu was interested in business from an early period after he realized that even after working his whole life in SAIL, his father wasn’t able to buy himself a house in Delhi. Educomp is the company which provides digital content to the schools so that they can provide better education to students. Educomp was started with a zero capital and is now well established in India, USA and Singapore. Moreover, the company has some very ambitious plans in pipeline and is working to scale itself to new heights. According to Shantanu, building this company was never too hard for him and he enjoyed every moment in it.
He tells us that one benefit of graduating from IIM-A is that you can happily start entrepreneurship and even if you fail , you can get a job easily.
In the end Shantanu advises young entrepreneurs to start their business as early as possible and he says that business is always better than job. You can earn manifold in business even if the company takes time in breaking even. According to him, two questions we should ask ourselves before, we delve deep into business:
- · Is the business inherently scalable?
- · Is the market opportunity large enough?
The third story was about Rashesh Shah who passed out from IIM-A in 1989 and created the investment banking firm Edelweiss Capital. Rashesh came from a pure business family and started Edelweiss in 1996. Rashesh saw potential in this field and yearned to create a bank which will compete with colossal global giants like JP Morgan, Merill Lynch etc.
He designed a plan for the company and worked hard day in and out with his friends. But soon he realised that unlike what they teach in business schools, nothing goes according to the plan in the real life situations of business. Before, starting business, Rashesh took guidance from Narayan Murthy who created the IT services giant Infosys and he suggested them that “Give capital to people who add value or to strategic partners. Don’t go for capital for sake of capital”.
Moreover, Rashesh diversified the company into many different areas to reduce the risk which worked and the company was able to survive the crash of 2001. After that the company touched the sky with glory by breaking its own records of growth. In 2007 it launched an IPO which was oversubscribed 119 times.
In the end, Rashes advises young entrepreneur that cash flow is very important for a company and they should work on that carefully. Moreover, he advises for not going for equal partners. One should have a slightly higher stake than other. This keeps things going smooth in future. But the one with higher stake is one who is working more. Further, the up and downs are a part of lifecycle of business and thus, you should have a patience and power to endure it.
In the end I will conclude that it is a fantastic book which guides us a lot about how to approach the business with very useful tips and suggestions. The language of book is easy to understand and attracts the interest of reader. I would suggest this book to any young entrepreneur and to students who are eying this path in future.
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