Opportunities and Strategies
March 11, 2006
I heard a talk by Aditya Nath Jha (profile here and an older profile here), an alumnus of RK Hall, IIT Kharagpur, 1986-87. He talked about emerging opportunities for us in the next decade. The biggest opportunities are:
- High end research and development work – Every company worth its salt – Google, Microsoft, Intel, GE etc. is opening its centers in India and it is the place where all the action is going to be in the next decade.
- Entrepreneurship – With a growing economy, we are going to have a lot of holes in the economic fabric which will be filled by young entrepreneurs.
- China – It is definitely a huge opportunity at least in terms of market size.
- Media – Print and TV
- Entertainment – Movies, Music, Video Gaming – all the trappings of life with rising incomes.
He says that Capital availability has been a major concern for entrepreneurship in the past because banks would typically only give loans to companies which were underwritten by a large business house. However, all that is now changing with the entry of Venture Capitalists and the market is going to prefer innovative thinkers.
Apart from that, he said that we should count our risks and work to derisk them properly. Three most important things in entrepreneurship are:
- Insulate the family from business risks. To do that, we should do one of the following:
- Jump into business as a bachelor.
- Ensure that the spouse is working while we start our venture.
- Stockpile savings to ensure a steady cash flow before starting off.
- Make sure that we are do not do anything that is illegal or immoral even though we will face a lot of temptations. In his words, “a clear consicience is the softest pillow”.
- Be frugal. Emulate Shylock. The biggest companies now have been marked with a very strict control on the purse strings in their inchoate days. He also says that if we look at the P/E multiples at which a company operates, if it is X times, then for every rupee saved, it is X rupees for the company.