I am in my late 40s. I left the corporate set up early 30s and since then then have been an entrepreneur, prop investor and now an early stage fund manager.
My peer group, who passed their IITs late 80s – early 90s and are all at CXO levels in corporate set-up. Some have reinvented their careers to become film makers, writers, cooks and journalists giving vent to their creativity. But a constant question I hear from my peer group is it too late to become an entrepreneur. After all, we only hear of success story of folks who are in their 20s and some born after I and my peer group passed their IITs. Are the VCs only looking at funding 20 somethings? Where does this leave entrepreneurs with experience over two decades?
I think older entrepreneurs must play to their strengths rather than merely ape and compete what the high energy and daring younger entrepreneurs can do.
For a 20 something, the world is their oyster. They have no family pressure and while they lack experience it also means they have no baggage. They tend to do more consumer related businesses which they can relate to. In India, these folks while in college replicate international business models and build MVPs and are able to scale up much faster. Take one investee company of Unicorn Ventures. Three boys from 2012 batch IIT Kharapgpur after two years work experience left their jobs, started living together in a rental accommodation in NCR, put in all their savings to start a business in the transportation area. Realising the market had many players, they pivoted their business to an inter-city one way cab business, raised funding and are aggressively growing the business. They had no fear of failure and no preconceived notions on what would work. They put all their savings to risk and lived hand to mouth for a year. If a young entrepreneur fails society in general, and the corporate sector in particular will see this as a positive. It shows their risk taking capability. On the contrary, if an entrepreneur fails in his 40s people take it as personal failure not realizing that entrepreneurship is anyway fraught with risks. Corporates, on the other hand, may brand this failed entrepreneur as someone who likes “full freedom” in the work environment and not someone who can work in an organized set-up.
As a senior entrepreneur, one needs to leverage from one’s industry knowledge and network. Create a business in the industry where you have grown and solve a problem that you have faced. More senior entrepreneurs should look to digitize business processes in their industry of comfort and knowledge. Having spent time within the industry one is able leverage from one’s contacts to get things done at a minimal spend and in the most judicious manner. Let me give an example of UFO Moviez (a publicly listed company in BSE). This company was started by a close friend of mine Sanjay Gaikwad who had over two decades experience in media. He spotted a huge opportunity in the way the film distribution operated using old reels. He digitized the entire process and changed the nuances of film distribution in India. He didn’t re-create any new technology just to say he created an IP, he didn’t change any industry habit but just digitized and scaled up an existing process and rode his way to success. Given his knowledge in the industry, he pressed the right buttons. Not chasing PR too soon just to see his name in some daily or spending absurdly in marketing without the product being ready to deliver value at a scale.
Folks of my pedigree, come with the old school of thought, where business should deliver a profit within a reasonable timeframe. In standard B2C business this may give rise to conservatism and in a world where it is more of land-grab; this may be seen as unambitious. In the world the new mantra, appears to be to sweep the P&L statements under the carpet, burn VC money and go for a land-grab. So while fundamentally an older entrepreneur chooses the right mix to balance profitability vis.-a-vis. scale, he could be on the wrong side of an investor whose driver is scale-scale-scale.
So my advice to my peer group of 40 somethings looking to get into entrepreneurship: Go for businesses in sectors you are familiar with; take the risk and be out of the corporate set-up; invest the risk capital and build the product; take newer blood in your team; shred the ego of who you were and how many people reported to you; get used to travelling cattle class and don’t compete in businesses which the 20 somethings can also do.