The Hindu Business Line : Societies must allow for failure, both socially and legally

Only when failure becomes socially acceptable, innovation blossoms as people are more willing to risk the unknown. — MS LAURA A. PARKIN, EXECUTIVE DIRECTOR, NEN

The National Entrepreneurship Network (NEN) is a network of academic institutions across India that develops and delivers skill-building programmes and networking activities, besides company-starting assistance, to new, high-growth entrepreneurs. A not-for-profit initiative of the Wadhwani Foundation, it was co-founded by premier academic institutions such as IIT-Bombay, IIM-Ahmedabad, BITS (Pilani), IBAB, Bangalore and SP Jain Institute, Mumbai.

Its focus has been on introducing a new paradigm in entrepreneurship education in India and its ultimate goal is to help launch thousands of new entrepreneurs, who in turn will create hundreds of thousands of much-needed valuable jobs for the country. Spearheading its mission to inspire and prepare new and future entrepreneurs is Ms Laura A. Parkin, Executive Director. A former entrepreneur herself, Ms Parkin is also a veteran in assisting entrepreneurs, having identified several promising start-ups, raised venture capital and worked with management teams.

In an exclusive interview to Business Line, Ms Parkin spoke on the activities of NEN and the need to foster the entrepreneurial spirit among students and what she brings to the table.

Excerpts from the interview:

Have you identified any sectors as high-growth? How have you gone about building an ecosystem of entrepreneurs? Do you have any programmes aimed at incubating entrepreneurial ventures?

With overall nine per cent growth, many sectors are showing tremendous growth — including retail, hospitality, construction, IT and healthcare. All provide excellent opportunities for new entrepreneurs. However, when NEN works with young and future entrepreneurs, we don't point them to specific sectors. Instead, we help them build the skills to evaluate any opportunity, because by the time they may be ready to launch a company, the dynamics may have changed and these same sectors may not be attractive for newcomers.

A supportive ecosystem is extremely important for entrepreneurial success. There are three dimensions to an ecosystem: the people, the regulatory and legal environments and the infrastructure. NEN works along all three dimensions. Through our programmes for academic institutes, we connect young people from all backgrounds with entrepreneurs, venture capitalists and other professionals. NEN and the Wadhwani Foundation also work to support policy change and improve infrastructure. We recently launched Entrepreneurship Week India to raise awareness and support for improving the ecosystem for entrepreneurship, in which over 200 partners, both academic and corporate, participated.

Several of our member-institutes offer incubation support - some to their own communities and others offer help to anyone. They include SP Jain, IIT-Bombay, IIM-Ahmedabad, IIM-Bangalore, MS Ramaiah Institute of Technology and IBAB.

How healthy is the entrepreneurial community in India? Does India need a unique model to foster entrepreneurship, or are there universal lessons applicable here too?

I find a particular dynamism and energy in the entrepreneurial community in India — a community that now includes young people from outside the traditional business communities. The level of venture capital pouring in from overseas is testimony to the fact that the world has recognised the opportunities in today's India.That said, India does throw up particular barriers for entrepreneurs, including poor infrastructure — a lack of power, roads, transport; an improving-but-still-difficult regulatory environment; and a bureaucracy that takes a particular toll on small, growing companies. These problems need to be addressed if broad-based entrepreneurship is to generate the millions of jobs that India needs every year.

NEN has discovered universal patterns that unleash entrepreneurship in young people. It is critical for young people to interact with entrepreneurs and investors. Academic institutes must offer comprehensive programmes, with innovative, exciting curricula and teaching methods. And on campus, faculty must support student leadership and entrepreneurship clubs running many activities. This combination shows powerful results and is an integral part of our strategy.

How important is the `fear of failure' factor in the growth of entrepreneurial spirit among youth? Is there a need for a culture that is tolerant of failure?

Societies must allow for failure, both socially and legally. Legally, one must enable business closures so that people can easily shift resources to more productive endeavours. And when failure becomes socially acceptable, innovation blossoms as people are willing to risk the unknown. Highly entrepreneurial cultures honour failure as a crucible for learning: in Silicon Valley, there's a belief that people are often more backable once they have failed.

However, that's not to say that even in Silicon Valley people feel comfortable failing. In fact, in one of the entrepreneurship courses taught at Stanford, the professor has her students put together "failure resumes" listing out the big failures in their professional and personal lives, and what they have learned from each. Through this exercise, the students can see that failure is an important stepping stone to success. In India, failure is not tolerated quite so well.

Worldwide, women continue to fight the forces of discrimination at the workplace and in business. Does NEN have any special programmes aimed at supporting women?

We are delighted that many all-women colleges and institutes are members of NEN, including MOP Vaishnav of Chennai and Mount Carmel College and Jyothi Nivas College of Bangalore. At these all-women colleges, students are exposed to all dimensions of entrepreneurship, with an additional focus on introducing women role models. Programmes also highlight different ways to manage the demands and restrictions placed on women by society. Entrepreneurship is powerful enabler for everyone, and particularly important for all women.

How has the response been from India's students? Any success stories from the campus?

We used to say that there is a revolution happening in the expectations of young people today. Now we say: the revolution has happened!

Students in India are primed and ready. At over 180 NEN member-academic institutes across the nation, we see that students just need a spark to become inspired, and structured support to gain confidence and knowledge. NEN has helped establish over 115 student entrepreneurship clubs, with more launching every week.

These students are charging ahead. During the recent Entrepreneurship Week India, over 1,00,000 students from 25 cities across India led and participated in entrepreneurship activities. These were innovative, fun, learning activities that ranged from games and competitions, to lectures, workshops and street plays.

We have seen the results in students' career choices as well. After joining NEN, an unprecedented 26 of IIIT-Bangalore's last graduating batch joined startups. At RV College, entrepreneurship club students are helping a young company get started. Of IBAB's graduating scientists in the past batch, about one quarter founded or joined startups. At ISB, 15 students elected startups over placements.

Should entrepreneurs be trend-oriented? More specifically, should newbies stay away from traditional industry, where establishing business is far more difficult that in new economy sectors?

Change creates opportunity - change in technology, in regulation, in consumer taste. For example, more consumers have money today and we see new shops, restaurants, hotels, travel portals in response. Technological changes have enabled global supply chains.

So, while I would not recommend an entrepreneur go head-to-head with established players in a traditional industry, if that same entrepreneur had developed a technology that could lower the costs of production in that industry, for example, by at least 10-fold, then yes. That's a change that could create an opening for a new player.

Don't you think that students would find it hard to resist lucrative offers and opt for entrepreneurship, which is tough work?

We generally encourage students to take jobs for a few years before starting a company. This allows them to see the markets, gain experience and continue to build their networks. Taking a job also allows them to build some capital that could be used for a startup.

If young people enter the workplace with an entrepreneurial mindset and skills, they are more likely to spot opportunities and be able to capitalise on them. This same mindset and skills also make them more valuable to any employer.

Despite the attractive offers, young people are opting to start companies. We are also seeing some other trends. For example, at IIIT-Bangalore, one student, who recently opted for joining a startup instead of an MNC, described with great excitement how interesting he finds his work, work he feels he would not be assigned in a large organisation. Clearly, some young people are starting to value benefits other than salary.

Would someone who has spent time in the corporate world be better equipped to launch a startup?

Absolutely. In fact, Prof Amar Bhide of Columbia has performed research on the list of fastest growing private companies in the US, in which he found that over two-thirds of the founders had got the idea for their companies from experience at former employers.

How focused are you on the rural opportunity? Do you have campaigns and programmes aimed at rural entrepreneurs?

NEN does not differentiate between high-growth rural or urban opportunities — skills to build these organisations are similar. At this time we do not have a focus on rural opportunities. However, over the next two years, our member-institutes will be increasingly located in the smaller cities and towns. We look forward to helping point young people to the opportunities that help benefit rural India specifically.

You have been there, done it as far as venture capital is concerned. What particular wisdom are you able to bring to your current position?

As a venture capitalist, one is in the position to work with and observe many companies: how they raise funds, adapt their strategies, build teams, manage growth. This has been of great value as I have faced similar situations in growing my organisations: patterns definitely exist!

http://Venturions.blogspot.com

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