Innovation, Design and Entrepreneurship -Speech 29/04/2024

 

INNOVATION, DESIGN AND ENTREPRENEURSHIP -IDE-BOOT CAMP PHASE III 29/04/2024

SPEECH AS CHIEF GUEST AT THE MAHARAJA AGRASEN UNIVERSITY, BADDI, HP, MAHARAJA AGRASEN INSTITUTE OF TECHNOLOGY,

Dinesh K Kapila CGM (Retd) NABARD and Mentor. Author. Sr VP and Chairman Society for the Care of the Blind / Institute for the Blind, Chandigarh

Shri Suresh Gupta, Chancellor’s Nominee, Prof (Dr) RK Gupta, Vice Chancellor, Prof (Dr) AN Mahajan, Director and Central Nodal Head, Shri Ankush Sharma, Innovation Officer, AICTE MIC, Faculty Members, Dignitaries, Exhibitors and Students, Good Morning and thank you for the kind invitation to be a part of the Boot Camp and also for giving me an opportunity to share my thoughts. I will share in the time available o me certain loud thoughts.      

This is a topic and issue close to my heart. As a veteran former development banker and still engaged off and on in this, though within a limited extent, I firmly believe that the growth of our nation rests on the creation of wealth through encouraging broad based entrepreneurship. Entrepreneurship has served as a key factor in the development and growth of several regions around the world. Employment opportunities created by entrepreneurs have helped in dealing with problems related to poverty, regional imbalance, etc. Especially developing countries, are trying to provide a boost to entrepreneurial ventures.

I personally know a host of successful ventures and projects across the developmental spectrum as also in infrastructure and commercial ventures. These have imparted knowledge and insights on technology, product development, enhancing productivity, marketing in the rural context, the challenges in execution and overcoming them, the typical problems of urban or rural infrastructure,  it’s a huge range. More important, you love to see the pride and happiness in the eyes and manner of the fellow citizens, who turned entrepreneurs or social minded on developmental projects, and realise they are stable in operations, there are engineers who do showcase with pride the projects they have executed. These are the successes which need to be taken to the others on the margins or the ones still assessing the scenario.

I would like to state here that I have consistently supported the concept and field of entrepreneurship. This is one sector which is open to entry, on merit, to a large extent. Concerns of access to finance are certainly there, Plus the projects if many entrepreneurs are mostly basic and do not attract glamour or attention. Yet they are the foundations of development and as they add up in mass and scale, they are vital cogs of the economy. Benign Government Policies over the years have created a huge core of entrepreneurs across all communities and the access to information through the digital mode is breeding ambition and aspirations, even independent of governmental prescriptions. 

Now why coming to Baddi interested me. Scholars of innovation and economic geography have documented the importance of cities as geographical units of innovative activity for some time. Several academic articles and books have noted that urban agglomeration seems to lead to a clustering of innovation and startup activities. My simple point is we talk of Silicon Valley, well look at what we have here, PEC, your Univ, PU, ISB, Two IITs, IIMs, PAU, Incubation Centres and Chambers of Commerce, we need to talk and communicate with each other, much much more.    

My limited point, what we do today is very important, but the potential of fostering a vibrant ecosystem rests with you, the stakeholders, the North West lacks this culture largely. The alternative and answer is for an atmosphere of entrepreneurship and mentoring to be encouraged in the smaller cities by way of a fora to exchange views and seek guidance and insights. The Universities also have to have a commercial orientation for such initiatives alongside technology. All in all it takes time but its my conviction we are now settling in.

 

The Investors are mostly located in the metros with a sprinkling in the smaller cities. In any case it’s centred at Bangalore, Chennai, Delhi etc. The incubation centres located away from the metros and main business centres are often not networked or even able to establish credible relations with the investors. Mentors can only go so far. The highly urban centric focus leads to a neglect of start ups in smaller cities generally and funding assistance has normally flown to those who are already networked. A response I received from a major investor was this, “Hi Sir ! Nice to be in touch again. Mostly seed funds lay look at some of these if the tech is compelling”. Another response was “Sir, I think go to market for smaller institutions and pass outs especially in manufacturing is very tough, cash burn in a few ventures at Tier Two Cities has been very high and the revenue stream was not credible”. If we all network, we can put it together.

 

 Inspiring engineering students towards innovation and startups requires a multifaceted approach that integrates curriculum changes, extracurricular activities, industry collaborations, and support systems. By implementing this comprehensive strategy, educational institutions can play a pivotal role in shaping the future generation of engineers, instilling in them the mindset and skills necessary for success in the ever-evolving technological landscape. Students should know the context and reasoning.

Coming to culture, much has changed but just to underline, Gunnar Myrdal : India’s social attitudes and systems responsible for low industrialisation : low productivity / primitive production technology / low levels of living due to - poor work discipline / contempt for manual work / lack of punctuality / alertness and ambition / low aptitude for cooperation / superstition.   also debilitating land tenure system / low standards of efficiency and integrity in public admn / low peoples participation / rigid social structures.

Alberuni : About us - 1000 ad : marked preference for theoretical over practical learning.  have to become tinkerers : combine knowledge with manual hands on approach : this produces innovation.  entrepreneurs shied away from manual labour and technology - Gurcharan Das : is one reason to miss the industrial revolution. but new entrepreneurial miracles in India are a result of talent, hard work and professional skills.  We have to build on it – bankers to be facilitative.

Wealth creation is atleast as important or more important than wealth redistribution. a competitive economy produces high productivity / efficiency / innovation / higher investments in human resources.  The Japanese miracle – is based on brutal domestic competition. Product Development and innovation : This is an Indian manufacturing weakness, quite lacking. applies equally to the rural artisan also.  Japan had an immense curiosity for western science and technology - even in the 17 century. Japan moved up technologically tremendously due to a higher literacy levels.  BUT Economists state cultural traits are not that important – Example - South East Asia - success is by an efficient employment of resources, exports by labour intensive industries, vigorous literacy and govt. role in building competitiveness and correcting distortions.  India –industry’s share of GDP is only 22 % - for China it is 50 % and in Indonesia 45 %.  India’s industrial  sector sis the smallest in the region – it needs to grow at 11 %.  We cannot sustain or achieve 8 % growth in GDP with a stagnant industrial sector. Hence my sharing this.  

The last ten to fifteen years have given me immense hope and I am bullish on Indian founders. Indian founders have a unique combination of technical acumen coupled with a sixth sense of business as one expert has said. We don't need to do anything at all apart from changing the general mindset. Everyone has access to the same information, the need for proximity to investors has diminished. Whether you are at Baddi or Mumbai does not matter.

Now on Start Ups and Entrepreneurs, well, you must also know about the difference of a start up from a normal entrepreneurship. This could create a vibrant culture of a commercial orientation. innovative and creativity ; are the heart of entrepreneurship : ICEDIP Principles : identification / clarification / distillation / incubation / perspiration / evaluation.  Leads to a belief of win - win, improvise / compare / innovate.  .

There is no single definition of what an entrepreneur actually is, but the term usually refers to someone who, among other things, spearheads a venture, makes decisions on how to proceed, secures the capital needed to make the venture a reality, and shoulders most or all of the associated risk. In order to think like an entrepreneur, you need to have or develop the characteristics of an entrepreneur. 

Entrepreneurs are by nature motivated.

 Passion is another characteristic of entrepreneurs.

The best entrepreneurs have a vision as to what they want to achieve, how they can accomplish their objectives, and whom they need on their side to reach their goals.

Without confidence or self-belief,

Being able to make decisions quickly

Whether entrepreneurs are born or made is, as it turns out, not the key consideration. What really matters is that leaders acquire or develop the winning characteristics of an entrepreneur.

Do What You Love..

Refine Your Idea.

Mistakes are to learn from.

Sleep and unconsciously on It.

There are several startup ideas that an engineering student can pursue:

1.     App development: You can develop a mobile or web application that solves a particular problem or serves a specific purpose.

2.     Hardware startup: You can create a new hardware product or improve an existing one by adding new features.

3.     Robotics: You can create robots that automate tasks, improve safety, or increase efficiency.

4.     Sustainable energy: You can develop new technologies to harness renewable energy sources or improve energy efficiency.

5.     Artificial Intelligence: You can create AI-powered applications or develop algorithms that can be used in various industries.

6.     3D Printing: You can create 3D-printed products or offer 3D printing services to customers.

Of course, the possibilities are endless, and you can also combine different ideas to create a unique startup. Just remember to think outside the box, focus on solving a real problem, and don't forget to have fun along the way! Processes and systems, improving productivity. The technology transfer and engineering skills and knowledge cannot happen from the college or university, it has to go the field and get tested and recalibrated.

 

Of course, the possibilities are endless, and you can also combine different ideas to create a unique startup. Just remember to think outside the box, focus on solving a real problem, and don't forget to have fun along the way! This is that stage in your life, to observe, read,  learn, experiment, fail and again start. Read books on finance, consistently. And on Leadership and Management. 

Process and Business Innovations are now awaited, everything is not centred around the mobile as most believe or the drone. Plain simple interventions in processes and business models are equally important.

 

How would you go about it. Steps

1.     Scientific expertise, business acumen, passion for innovation,

2.     Earn a degree in a relevant scientific field, strong foundation in Engineering and Science,  Try a Masters and preferably a PhD.  Build domain expertise, name, credibility and expertise.

3.     Gain practical experience, intern, work for an entrepreneur, tools and techniques, connections, more competition / evolving competition and trends – be clear

4.     Build your network – very important, as such, very important for this sector, attend industry conferences, such events, join professional organisations, reach out to experts, these are invaluable resources.

5.     Develop a Business Plan – Once you have a solid foundation in science and practical knowledge, now start thinking about the business plan, What is the problem, the product to create, research etc. market, is there an opportunity or demand, target market, your competition, your financial projections, the marketing and sales strategies.

6.     Secure Funding – to start with are very expensive, Options – to bootstrap, grants, loans, venture capital, Angel Investors First or Venture Capital Firms.

7.     Assemble a Team – Engineers and Scientists with an entrepreneurial mindset, financé, strong team, to bring out the product, product or service the market, assemble a team of scientists, business professionals, advisors. Mentors.

8.     Launch a Business Plan – as the above fructifies – now proceed to launch the company, creating protypes, conduct pilots, trials, seek regulatory approvals, as appropriate and applicable. Know in your mind what type of company you want t build.  

9.     Develop your personality and skills. A must, read.

10.  Combination of engineering skills, scientific expertise, business acumen, financial knowledge, legal aspects, practical feel of the market.

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Just An important aspect of start-ups is the need to be aware about financing options, the mode and manner of reaching out to the financing institutions, the existing funds venture or Private Equity or Angel Funds supporting startups. More important, entrepreneurs have to be very focused on project finance and its intricacies, the potential balance sheets, margins and profitability. Understand the importance of knowing the terms and conditions of banks. Secondly, the marketing aspects, channels to trade partners are equally important. These must be absorbed by the entrepreneurs.

 

Structuring a Company or a start-ups knowing its various stages over a life cycle and thereafter the exit policy of the investing agency on fund, are all crucial inputs to be known to the entrepreneur. Read up on the GOI and State Government facilities and follow up on them, and sites like GeM, Start up India and Stand up India, these are result oriented sites. Do not ignore them. Maybe think small and scale up, if that is possible in the business you seek. Banks are certainly evolving on funding this sector and start ups as such but maybe alongside you need to enhance awareness about the Angel Investors, Seed Funds, Venture Capital also. Maybe just maybe Banks could be an option for funding after moving to  a certain degree of stabilisation from the mechanisms suggested above. Which partner gets what share, think while organising as a formal body itself.

 

Learn the financial jargon and aspects. This is important, technology will not be the only aspect to draw attention and eyeballs and investors. Learn the language of technology and finance and of the start ups operating eco system in particular. Learn to communicate, and smoothly. Polish up these skills too, if you have the ambition and the fire to drive your innovation. Know the operating cum financial strategic plan and projections from inside out, and the risks and risk mitigation or adaptation modes. Know the supply chain, the logistics, the trade margins, discounts in depth. Know the documentation and process / mode needed to convince a potential investor.

Next know the Chambers of Commerce, or Trusts etc working in your operating area and strike an alliance with them to broaden and deepen your reach. Building a network takes time and effort. Speak the language and concerns of the sector you are in, be equally comfortable with a customer, a retailer or wholesaler and an investor, speak the language of their field. And address their concerns. This is very important.

Banks / MFIs / NBFCS / SFBs

Build a relation, a long term proper relationship. And everywhere trawl their websites. Do Not neglect it.

Visit Govt Departments / DIC / KVIB / KVIC / Agriculture / Horticulture / AHD – is there a scheme you can piggy back on.

 

Are You Sure You Have a cogent start up idea.  Think. Can you scale up using Govt assistance and then fine tune your product.  And network in the meantime.

MSMEs

PMEGP (Prime Minister/s Employment Guarantee Programme)

Through the KVIB focused on micro entrepreneurs, Maximum for Manufacturing the project is for Rs 20 lakh / Rs 25 lakh. For Business Rs 10 lakh.  Also look up MUDRA, Stand Up India. Subsidy in OMEGP is 15 % to 25 %.

CGTSME

Credit Guarantee Fund Trust for Micro and Small Enterprises. 75 % of the loan amount is guaranteed. Maximum Rs 100 lakh.

CLCSSTU

Credit Linked Capital Subsidy Scheme for Technology Upgradation. 51 sub sectors, 15 %. To upgrade plant and machinery. Possess valid UAM Number.

Industry Incentives

Know the region wise, if any, incentives or subsidies ,

GEM

Government e-Marketplace. It’s a dynamic, self sustaining and user friendly portal for making procurement more transparent and enabling more sellers to join in. This is for all GOI Offices.

 

Private Grants

Approach Family Business Offices. Technology upgrades or learning or productivity through CSR Funds and the aggregator can reap the gains (say in farming the company or FPC can reap gains for members and the company alike and the technology can be through CSR Funds).

I can add here that NBFCs and MFIs (Micro Finance Companies) are also actively associated with the financial markets and can be scouted for financial assistance. The subsidy may however be tied to the loan from the bank only. Scout multiple financial service providers before finalising the loan.

Seek mentors. Depending upon the complexity, take advantage of for a such as the TiE. Gain insights and learn from their insight.

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Additional Points

1. Read the fine print carefully of each subsidy product and absorb it fully. Do not depend on intermediaries etc. The information is on all websites. Consult widely and meet officers in the Govt. Depts if appropriate / required.
2. You have to fulfil all norms of bank loan and adhere to the terms and condition of sanction as stipulated by the Organisation / Department or Bank. Security norms have to be complied with and understood.
3. All timelines for lodging claims for subsidy have to be adhered to by the Banks and the entrepreneurs. Banks and entrepreneurs may adhere to the check list.
4. Subsidy is not the basis to take a business decision. Study your idea and operating environment. Your business model must be generating cash and a surplus after a certain period.
5. Remember each business comes with a risk. Plan for an emergent happening.
6. Maintain a close professional relationship with the Bank and Government Department.
7. Do not interpret creatively the guidelines etc of subsidy, adhere to the guidelines.
8. Read and Read and meet financial institutions.    Value each incentive and be aware about it. Learn to handle follow up with patience.
9. Be suitably updated professionally – means technically.
10. Be open and may I say less control any tendency to be cynical. When on the rounds. Gain knowledge and update yourself professionally at each interaction. 
Know the exact financial implications of each transaction including the subsidy and more important seek financial assistance realistically. Means the amount, period for repayment, aspects of security, insurance etc.

 

Fascination for the Office Job, Our Success is primarily in the sub sectors of services. Manufacturing remains our weakness, even in Agriculture, it is mainly advisory. IIM A MDP training, youth would rather engage in selling rather than register as an apprentice. This must change. An Israeli Expert told me that our farmers don’t mind getting their hands dirty, here the farmer asks his labourer to see if the soil is moist. The mindset. 

I have observed two aspects with entrepreneurs here. The first one is — they think too small. It's not a mistake; it is difficult if you don't see the success and opportunity to copy it. And the second thing is they're very attached to subsidies or  grants. All their planning and all their ideas, and everything that comes up from an entrepreneurial mindset fit into the subsidies or grants they can get.

 

For me importantly the differentiating factor is respect for capital.

One: don’t blow up money. Don’t be extravagant Two: remember that capital is always in short supply and when you go on diluting you may get a high valuation but eventually, you become an employee. Three: Be frugal in the use of this capital. Four: be ready to raise capital. That means keeping all your documentation, the due diligence report ready, accounting ready, legal compliance ready and so on.

But the hustle, in attracting and retaining customers and more importantly on arriving at the margins and sales cost, Is often a major concern. This can often mean being satisfied with a minimal surplus while a sharp entrepreneur could spot the areas to hustle and enhance margins and even identify opportunities for a spike in pricing with a few tweaks of the product or service. THE HUSTLE OF BUSINESS. LIKE IT OR NOT.

This comes by experience and delving deep into the area by way of the knowledge of the trade / supply chain and it’s intricate working. But the actual value to be arrived at is always a concern for an entrepreneurship venture. To undercut, discount or match or go premium are always open to discussion plus in a start up more so. Revenue has to flow in and more so a steady surplus. And relationships have to be cultivated and maintained over the long term alongside and repeat orders and footfalls ensured. Mutual satisfaction and at the same time maintaining margins and planning for premiums within a category is the key.

 

Five Must Haves

Failure to Listen to Customers

A lot of businesses don't treat customers as if they're important. Ignoring the needs of customers can cause a startup to fail. Losing the connection with your customers is a sure path to failure.

The talent

Why do you have the best team to win? What complementary skills does each founding member have? Often, your founding team isn’t the right team to scale with. Individuals who serve you well in the early stages might not be right in the growth stage.

Technology

What gives you an edge? Can you provide unlimited scale? What about profitability? Are you a must-have technology that eliminates manual processes? Understanding these factors allows you to articulate your offering to investors and customers and develop your marketing strategy.

The timing and expect the unexpected

In 2011, an entrepreneur states I faced transcription challenges as a lawyer and wanted to solve them. But he didn’t pursue it then as the tech wasn’t mature enough and the timing wasn’t right for training a speech algorithm.

The total addressable market

To be attractive, you need to showcase that your business is meaningful. Its valuation is set by the market. How big is your market? Entrepreneurs make their careers about building something big and meaningful. What impact can you make?

With the right talent, technology, timing, team culture and an understanding of the market, you’re primed to be more successful. You’re nothing without a good foundation, a story to bring to the market and people who challenge you and complement your own skill set.

Finally, A relative, by marriage – single handed – 25 years – Highly Technical Automated Plant, Public Limited Company, Laminates, Products command a premium, From Faridkot to Business to Manufacturing to a major Exporter – Knowledge, Egypt Episode, Interpreter always,  self confidence, does not shy away from seeking advise, always the latest technology, Relationship Building and truly so, maintains it, networked, market trends, devoted to his passion and business, and taps all media channels. Risk taker. But with calculation. Knows his financial position and assessment inside out. Travels and meets in person.  My discussions with him lead me to observe that  Entrepreneurs must go and travel the world. They should visit all the places and markets where they want to do business. They must meet people over there and see how they think. In person, not online. People online don't say everything that they mean. Entrepreneurs need to expand their horizons and hear these stories up close themselves. They must feel them. They also have to see what others are doing in that capacity or to solve a particular challenge. It's very important for them to find their purpose, to think about all stakeholders, for the solution to really have a positive impact. Once they do that, they will feel much more comfortable knowing they are making the right decisions

 

As I end, the point I seek to stress is that the path is not easy but it is doable. I thank the University once again for the invitation and my best wishes to the would be entrepreneurs. As I  will move among the start ups, I will share my views with them and look forward to it. Let me emphasise again that the commercialisation aspect of the  technology or research is what I look forward to. Thank you. Jai Hind.  

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