Within six years, Laura Parkin and the National Entrepreneurship Network that she heads have become synonymous with grooming tomorrow’s entrepreneurs. Starting in 2003 with just 5 institute partners, the NEN today runs entrepreneurship courses and clubs at 456 educational institutes across 30 cities in India, with faculty of 1,000. It recently concluded the first competition of its kind to find the hottest start-up in India, which saw participation from 588 young companies. The serial entrepreneur and VC talks entrepreneurship, education and economy with DNA Money.
After being a successful entrepreneur and a VC, why did you join a non-profit organisation?
Being an entrepreneur is about solving a problem. In fact, successful entrepreneurs don’t say ‘I want to get rich’, they say, ‘There was this problem I wanted to solve’. But you also have to be passionate about the problems you solve. Somewhere along the line, I realised I was more passionate about social problems.
Has the economic climate made aspiring entrepreneurs in colleges more wary?
There is definitely an impact. Today, they are asking more questions. And the fact is that we have a tough year or two ahead of us. Though entrepreneurship activity hasn’t ceased, people are struggling to raise capital. We still see people trying, wrestling with financing. But we will look back 5 years from now and say, ‘Hey, this great company was born during recession’.
There are still lots of opportunities in India. In the US, consumer needs are very well met. Here, however, majority of the people still need basic things. There are lots of opportunities that just aren’t met and there are inefficiencies that are just too costly (that can be addressed by an entrepreneur). However, there is a difference between a cash-flow business and a share-price business. Companies that were planning to raise a lot of capital and then start, that won’t happen today. Weak business models won’t get funding. Money has becoming very demanding —you have to provide clear solutions to people. So, today is a tempering time, what I would call a healthy disciplining session.
Have you changed your teaching methods, now that economic growth is easing?
We never believed in measuring our success by pushing fresh graduates into starting companies. We don’t go and say ‘entrepreneurship is great’. It’s not right to put successful entrepreneurs before people and tell them how great being an entrepreneur is or to tell a bunch of winner stories to young people and expect them to emulate that. Instead, we must allow them to experience entrepreneurship before they go out, give them practical experience.
Can you give us an example?
Let me take you back to when we were just starting out. It was one of our initial batches at SP Jain (Institute of Management & Research, Mumbai). Suresh (Rao, chairperson of the institute’s Centre for Entrepreneurship) and I went out and marketed the course to the current MBA batch. We got about 30 of the 120 students to sign up. Our course was about putting things together, like events. So, they had to make marketing collateral, get speakers...It was also hard, in terms of the sheer effort and time they had to put into it, we were afraid nobody would join the course next year. They saw their seniors work so hard...Yet, next year, they had to put together a lottery because all the 120 students wanted to be in the course!
So, the idea is to make them experience the anxiety and the joy of doing this. Entrepreneurship is hard; there are easier ways to make money, people say no to you a lot. But trying it out gives you a realistic picture. At the end of it, no student has said, ‘I didn’t realise it was so easy!’ Instead, they always say, ‘We never knew we could do so much!’
Is lack of VC funding crimping the growth of entrepreneurship?
I believe it is more of a mindset. Because there are so many stories about getting venture capital and so on, most entrepreneurs cannot imagine it any other way. But if you look at the 588 start-ups who applied for Tata-NEN Hottest Start-Up Contest, 80% were started on personal savings. In fact, there was this great exercise by a faculty member at the Welingkar Institute (of Management, Mumbai.) First, he took all his students’ money, credit cards, everything. He sent them out on the street and gave them one day to make as much money as they could. All of them made money. One went to Colaba and offered to give tours. In another experiment, he gave them all Rs 1,000 each. Guess what, they lost the money. It was easier to make money when they had no money.
On how to teach entrepreneurship — you need to instil confidence. But you can’t ‘teach’ confidence. Entrepreneurship education is all about developing confidence and skills by experiencing entrepreneurship in a risk-free environment. So practical experience does not mean negotiating a term-sheet (for funding) with a VC.