In conversation with India Today, Vasilios Theoharakis, Director, MBA Programmes at the Management School explores why experience is often invaluable in creating a successful start-up business.
The popularity of successful, young entrepreneurs has led to the widespread fallacy that most entrepreneurs are young and new to the business world. While the Internet and the technological discontinuity that came with it may have favoured young entrepreneurs this is not a reality that can be generalised. It is important to understand some of the key business plan elements that an investor examines and how these may relate to age.
1) Ideas into opportunity
Popular frameworks have presented opportunity, resources and the team as the three crucial elements of a business plan that an entrepreneur needs to support in order to receive financing. While a new venture starts with an idea, success depends on the ability of the team to transform the idea into an opportunity. An idea is valuable only if it is an opportunity for the specific team. However, the conception and screening of ideas depends on the experience of the entrepreneur; an experienced entrepreneur has gone through an apprenticeship in industry and may have personally experienced customer pain points and realised a market gap.
2) Valuable network
The experienced team also has the network that can prove very valuable in terms of having access to necessary resources. These resources often provide access to markets and distribution networks or strategic partners that can be crucial and beneficial in the set-up of a young company.
3) Past experience
Experience does not only build on practices that lead to success, but perhaps more importantly, includes failures and the understanding of practices that need to be avoided. Therefore, a more mature team that possesses the passion and know-how would often be more appropriate to execute a new venture.
4) Revitalise the old
It would be a mistake to think of entrepreneurship only through the narrow lens of start-ups. Entrepreneurship brings innovation and change within older companies as well. An opportunity obsessed way of thinking is what is needed to revitalise older businesses that already have the resources and teams in place. These older firms often reach a plateau because they forget how to be entrepreneurial.
5) Leadership skills
In fact, companies seek to hire entrepreneurs that will develop new products and drive expansion in new markets. It is the development of leadership skills of an individual that will enable the team to effectively execute a market expansion plan. While going back to study entrepreneurship can be a very valuable tool to set-up a new business or revitalise an existing one, business experience and passion are key ingredients in the value creation process.