Mr. Manish Sabharwal, founder and CEO, Team Lease on entrepreneurship

Date: July 28, 2008 Time: 19:00 - 21:00 Venue: Khemka Auditorium

The session held by Mr. Manish Sabharwal, founder and CEO, Team Lease on entrepreneurship was very insightful to me in how he defined entrepreneurship to be nurturing the right mindset and not just writing the business plan that one would like to write or the idea that one wanted to pursue.

He spoke on how there were no golden rules to a successful entrepreneurial venture; that there are no perfect ideas or opportunities; that there is no perfect entrepreneurial personality and that there is no perfect time to launch a venture. Entrepreneurship is a process in itself.

While addressing common myths on entrepreneurship, he spoke on ‘Hypothesis Testing’ where success of a venture can be achieved by discovering what is wrong rather than trying to find out what is right. He also said that nothing is really created from scratch and to make a point used an example where Einstein was invited to a dinner and the host told him that she had prepared the meal from scratch. He then replied to her saying that is impossible because to prepare the meal from scratch would mean having to create the universe. Entrepreneurship, he went to say is a synthesis of existing but fragmented ideas.

He then spoke on his ideation journey and the lessons he learnt while at it. He said that efficient markets are a myth and one shouldn’t worry if the obvious choices aren’t working. He also re-iterated the point that a perfect product or idea may not necessarily be the best and that it takes time for a person or an organization to become who they are. It is very important to ‘wander correctly’, he said, and that in the ideation phase it is important to stay divergent for some time and increase the ‘surface area of one’s mind’.

On resources, he went to say that trees don’t grow from seeds alone and that an entire ecosystem is required for its nurturing. He also said that money should be raised as little and as late as possible. By this he meant that one shouldn’t either under-capitalize or over-capitalize. Raising too little money can lead to making sub-optimal decisions and that many companies run out of cash when they start becoming profitable. On the other too much cash leads to behavior modification and an improper utilization of funds. On the people front, one should create a team that is as good as early as possible and that it is important to craft the people ecosystem. The team formation is also a process like a princess kissing the frog. You form good team with experience and bad team provides you experience.

Shifting from the ‘quantum’ of money to the ‘color’ of money, he spoke about how venture capitalists (VCs) and strategic investors (SIs) cannot co-exist. He went on to warn the audience that we need to be wary of promises made by VCs, that early stage investing is still nascent in India and that not every startup needs or deserves VC money. On the other hand, SIs have conflicting roles as customers and investors. VCs also hate sunk costs while SIs may be ck with it. VCs and SIs also have different paths to control the company. While the former looks at not having restrictions on exiting, the latter is actually the exit strategy for the company.

Entrepreneurship is about teamwork and he used an analogy of a great orchestra which is result not of a team of great musicians but of ordinary musicians at their peak. Entrepreneurship, similarly, he said is about the chemistry of a team and that a certain vague emotional intelligence has to be used to work and achieve one’s goals effectively. The value of different and complementary skills is inherent in that genetic variety is nature’s life insurance policy and also that one had work hard at maintaining relationships especially as they grow through time.

He egged on the ISB students and advised them that there is a larger purpose than grades and a 1 year job search at business school; that our aspirations must go beyond and that our dreams must be bigger than our current resources. If one knows exactly where one is going then that person becomes incapable of going too far. One has take a step, commit to it. This boldness requires power, magic and a certain touch of genius.

He mentioned that it is important to focus on relative performance and that one needs to be better than the other competitors and not perfect at it. Though one cannot outspend Multi National Corporations (MNCs), one can definitely outsmart and outrun them. MNCs were generally not good at handling small high growth opportunities very well where capital is not necessarily the key to success.

On Indian family run business, he mentioned that while they are overly personality oriented, they are also very flexible, fast and very entrepreneurial. However the biggest drawback he felt was that ownership here had become a ‘sexually transmitted CEOship' making this a self destructive exercise.

On a closing note he mentioned that entrepreneurship as a career will challenge you, pay you and also consume and assimilate you. It is a personal choice that one needs to make and that she/he will know when they are ready. There is a certain sense of destiny and destination that needs to come together.

He also stressed the importance of us as managers having a social conscience as there are many people at the lower strata of society who may have done things better than how we are doing them, but we are here instead of them as we are the fortunate winners of an ‘ovarian lottery’. It is up to us to at least partially address the problems of inequality through the business that we choose to do.

Team Lease outdid their competition by engaging with public policy and by having a bigger size of ambition than their competition. Though the ‘popcorn stand’ or the ‘dwarf’ had an opportunity, it was the growing baby that they invested in.