Why experience is perfect recipe for entrepreneurship
Entrepreneur's New Year’s Guide
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This is not to take away anything from entrepreneurs who start their venture straight out of college. Some of them are really bright, hard-working, and have access to great mentors. At the same time, there is a strong case for those who turn entrepreneurs after they turn 40, too. Here are just four of them:
Better know-how: What turning entrepreneur after 40 allowed me to do was understand how the critical components of a business are built. It helped me understand better critical issues such as cash flows, profitability, team motivation, and how they are managed and sustained. When you are younger, you are still learning all this while trying to start the venture.
Making money, saving money: You will also notice that a number of younger entrepreneurs, when they raise their first round of investment, use the money in a not-so-optimal manner. When Carzonrent raised capital in 2005, no one had raised private equity in our business. Our investor had committed $2.5 million in two tranches – $1.5 million and $1 million. We invested in physical infrastructure and technology framework. We used the money judiciously and by the time we had used the first installment, we had another investor who wanted to invest double the money at last valuation!
Risks, safety nets: One often hears how the younger you are, the more risk-taking capabilities you have. I differ. Anyone who decides to be an entrepreneur is a risk taker. When you become an entrepreneur after 40, you put your entire career at stake. You have responsibilities too; you put your entire savings at stake. You have to succeed, for there’s no going back. That is because you aren’t someone just out of college, who will try his hand at a venture, probably another one, and has the option of taking up a job if things don’t work out. This gives your urge to succeed that much more.
No rude shocks: Nothing comes as a surprise to you. Even in stressful situations, with markets collapsing, you are in a better situation to deal with it since it isn’t a shock to you. When my first venture – net2travel, India’s first B2C travel website – had to be shut down as the dot-com bubble burst, we didn’t panic; the decisions we took were well thought out.
(As told to Prerna Raturi)