After you decide you want to set up an IT venture, this is how you ensure you and your business hit it off.
FOR some, setting up an IT venture is a dream that only gets bigger. For those bent on such a career path, here's a checklist that might serve as a handy guide to pick one's way with care.
Choosing your niche
"I think most entrepreneurs, especially in IT, begin their journey in an area that they are comfortable with and have some experience in. Either they must understand the vertical domain or technology very well or they must have had prior experience in marketing or selling in a specific domain or geography that gives them the confidence to become an entrepreneur," asserts Anand Adkoli, CEO and Cofounder, Bangalore-based Liqwid Krystal, whose product CodeSaw has been recognised as one of the best IT Innovations at the India Leadership Forum, Nasscom 2005.
Gowri Shankar Subramanian, CEO, Aspire Systems, believes, "Entrepreneurs come in two forms those with experience in the field they planto venture into and those that are green but burning with the desire to do something on their own. In the first case, the entrepreneur would have a clear idea about what he/she wants to do. The second type is likely to grab whatever comes along their way and make the best of that opportunity. By doing this, over time, they are likely to identify what aspect of business best suits them."
Bala J. Raman, Co-Founder and President, Congruent Solutions, advises, "The primary aspect is understanding the market well and being able to identify some clear customer needs. The entrepreneur should work from the market side and arrive at the product or service offering as opposed to developing a product and then trying to sell it to the market."
Can only people within the IT field set up such companies?
T. Chandramohan, CEO, BharatPlanet Consulting Ltd, believes so. He says, "One needs to constantly be in touch with the latest trends to adapt. I guess you have to be tech-savvy to understand the trends in technology."
Sarada Ramani, CEO, Computers International, contradicts saying, "Not necessarily, but a knowledge of the technology is helpful. A good marketing person with wide contacts can do much better than a technical person here. Capital, per se, is the not main criterion. In fact, this is one industry wherein you can start off with your own computer (used or brand new) and in your own house. The main ingredient is getting the work outsourced to you. Or if you have a sure idea of a product (preferably something that addresses a felt need in the market and if you have a ready buyer or have the capability to push the sales into the market) nothing like that to start off. Also, be sure to start thinking about the post-sales service of your product from the time of designing it."
Deciding the location
Among crucial factors that count is location. Subramanian advises, "If a venture plans to tap some IT opportunities in the domestic and rural areas, it will have to be situated accordingly in smaller towns and locations. An export-oriented venture will benefit from locating in a city that has good international air connectivity." Bala agrees, adding, "The position has to be close to the market the company serves." However, Adkoli says, "In today's world, I don't think it matters where you develop the software, it can be anywhere where there are skilled people available. Only customer-facing functions such as sales and customer support need to be in the same geography for advantages of time zone and culture." Chandramohan asserts, "Location makes a difference only when you hire people. In most IT companies, clients do not visit the office and hence having an office in a prime location is not considered very advantageous."
What do CEOs rate as `must haves' for companies to be successful? Ramani puts "quality orientation, adaptability to a quick turnaround; customer focus and strict process orientation" at the top of the list. Adkoli believes in keeping an eye on the basics. Bala's mantra too is the `ability to bring in revenues' as without that, the best idea is not worth much. Chandramohan relies on his people, "a team which you can trust, good marketing to ensure that there is a constant flow of business and sound technology."
"A typical trap is the entrepreneur thinks `I have a great idea and that is the job half done." Especially for product companies, the ability to dig deep into finances for marketing and sales dollars is a serious constraint. "It can be overcome by putting together a realistic business plan," advises Bala. Subramanium asserts, "Two essentials vital to any business are: a very clear differentiator in terms of what the business is doing; A core focus on one chosen area. Often it pays to have a partner. Partners should have `complementary skillsets'." On joint ventures with foreign investors, Adkoli says, "In the early round, I think they are advantageous for two reasons. They build your profile outside India and open up opportunities in that geography. In the later stages, once a company is established, it is best to hire a team that has local knowledge and a proven track record, and then have them make the plan and build the business."