Till a few decades ago ‘profiteering and big business’ were considered bad. In the Bollywood of the 70s and 80s, the villain was often a businessman, and hence the notion that ‘business and profiteering is for crooks’ got imprinted on a generation.
Entrepreneurship, especially venture capital driven entrepreneurship, democratized access to wealth creation.
The thought for this article was triggered when someone asked me “Is ‘entrepreneurship’ different than ‘doing business’? Every young kid wants to ‘startup’. Is that healthy?”
I reflected on this question, and realized that while both words – business and entrepreneurship – may mean the same thing, the underlying associations with both these words were rather different.
To many, and perhaps more so to people from an older generation, the word ‘business’ was traditionally associated with someone doing his/her own venture, usually something small or mid-sized. And ‘big business’ was something that was considered the domain of ‘industrialists’ – a small breed of individuals or families that had lots of money and ‘connections’ with the political class, and hence were capable of using some form of clout – usually monetary – to create a favourable environment for them to conduct business. That was the environment of license raj, and impediments for doing business that had to be removed usually with ‘speed money’.
Till about 20 years ago, it was difficult for those outside the clout-wielding circle to think scale, primarily because business had to be started and conducted using your own capital.
The word ‘entrepreneurship’ however started getting associated with the kind of businesses that could be started with OPM – Other People’s Money i.e. angel investors and VCs. As the venture capital sector in the country evolved, it became possible for those with entrepreneurial aspirations to consider doing business, and consider doing it at scale.
Also, till a few decades ago, because of the reasons mentioned above, and perhaps because of the socialistic mindset of the country, ‘profiteering and big business’ were seen as un-favorable terms. And I dare say, Bollywood had its own role to play here – if you notice, in the 70’s and 80’s, the villain was often a businessman, and hence the notion that ‘business and profiteering is for crooks’ got imprinted on a generation.
Perhaps, it became necessary to embrace a new word that would allow parents to not worry when their child declared that he/she wanted to start something of their own.
In many ways, entrepreneurship, especially venture capital driven entrepreneurship, democratized access to legitimate wealth creation. It allowed anyone with ambition, competence and commitment to give a shot at creating a strong and large business that created wealth. And in that sense, while business and entrepreneurship are the same things, they mean very different things to people. While business represents starting something small, entrepreneurship signals an ambition to create a large enterprise, and create wealth.
This brings me to the second part of the question. Is it healthy and sustainable for the country to have so many young people aspiring to ‘do a startup?’
In my view, while it is good that many young people are aspiring to become entrepreneurs, we still do not have enough options for the initial small capital required by aspiring entrepreneurs to test their ideas. Angel money and VC money is available largely to those who have put their own money or gathered some resources of their own (perhaps friends & family, etc.) and have tested and proven that their concept has a reasonable chance of becoming a real, valuable business.
However, if we were to provide capital in the INR 10 lakhs to INR 50 lakhs range for young entrepreneurs to test their idea, we would have a lot more entrepreneurs. And while we have incubation centres and accelerators in academic institutions, and also some grants from DST (Department of Science & Technology), we need a lot more private money to make this prevalent across the country. We need successful entrepreneurs and senior professionals to come forward to co-invest small sums in high-potential ideas. They could perhaps start from their own alma mater, and fund curated, high-potential teams and provide them the capital to take their concept to the market.
Of course, this needs checks & balances, but if we fail to provide small capital to fund ideas, we will have many aspiring entrepreneurs eventually take up a job that they are not most excited about.
On my part, I am evangelizing creation on alumni angel investor networks to make it possible for individuals to contribute small sums of money to fund ideas from young entrepreneurs from their alma mater. Hope this becomes a trend so that we have a lot more job creators in the country.