Ask a mentor

Karthik Reddy, Managing Partner, Blume Ventures, an earlystage seed and pre-Series A venture fund.

He answers a question from Anirudh Prakhya, a student of IIM-Ranchi.

Why do entrepreneurs look for newer ideas and opportunities when there are already so many in existence?

I think the definition of entrepreneur is old-fashioned. Historically, it is attached to risk-taking alone, not shaping the world with new ideas and technologies.

So, I would classify one set of entrepreneurs for whom the opportunity comes first. These are entrepreneurs who prefer working for themselves and/or creating greater economic outcomes for themselves (in other words, making money or getting rich) and sometimes, providing jobs and opportunities for others — there is no necessity to innovate the product or solution here. This includes everyone from people who build ports and roads and power plants to those who franchise or create local brands (including your kirana shop owner and dry cleaner and restaurant owner). The businesses have risks but are also somewhat predictable due to precedence and are somewhat projectable even before inception.

The second set of entrepreneurs — the ones who have ideas that sometimes change the way the world operates (at least in geographic pockets) is what excites venture capitalists such as us. They are not seeking surety of economic outcomes, they are not interested in marginally better ideas and ways to improve products. They are interested in dramatically shifting the way the world works and almost inevitably, for the better. From college projects to spinoffs from larger innovation to R&D efforts, there are minds buzzing with advances in science and technology.

These advances and ubiquity of technologies then make it simple to disrupt traditional ways of working (e-commerce of all kinds — tickets, cabs, goods). Both these are good for society — they are always “improving” some efficiency or effectiveness - from better targeting of cancer cells to saving ₹10 or 10 minutes on something.

All of these can happen by inventors and creative managers in larger organisations as well but most large organisations stifle such innovation – that gives birth to some risk-takers who turn entrepreneurs and step out to shift the pace of innovation – they are the reason the venture capitalists exist. In both cases, a good entrepreneur is driven by a fundamental motivation to make things better — he/she could be innovating a retail store concept or inventing a new drug therapy or revolutionising how we take car rides or buy goods. The best of them sense macro trends and deliver efficiencies to improve various industries and human experiences (social networks, e-commerce, robotics, biotechnology are all great examples of this in the recent past).

(This column features a panel of experts – angel investors, seed fund partners and venture capitalists – that will answer questions from B school students on issues relating to starting ventures and taking forward an idea.

E-mail your queries to emergingentrepreneurs@thehindu.co.in, mentioning your name, educational institution, course of study and e-mail address.)

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