Learnings & Insights from Serial Entrepreneur & Investor Kanwal Rekhi’s Journey
It is not very often that you get to spend a whole lot of time with iconic entrepreneurs unless you are in a group at a conference or in a working meeting with them, as they are always hustling and gunning for the next point.Recently TiE Mumbai hosted an exclusive business builder breakfast session with Mr. Kanwal Rekhi - a serial entrepreneur, an iconic investor and the co-founder of the global TiE Network. Over 70 entrepreneurs turned up for the 2 hour session. Fortunately for me, Mr.Kanwal had a flight to catch a little after lunch, and I, along with three others, volunteered to 'hang out' with him and drop him at the airport.
This is what I call plain luck, when you get to spend a few hours over lunch with a 66 year old genius and learn some great insights and get some personal mentoring.
I believe in sharing knowledge and have put together some excerpts from our conversation with Mr. Rekhi. (With a belief that my perception and understanding has not skewed too far):
Entrepreneurship and Getting Started:
The entrepreneurial gene is randomly distributed. It doesn’t matter if your parents are entrepreneurs or not, or which background you come from.
Only 6% of start-ups in the USA get funded. Only 2 % of the USA population succeeds in entrepreneurship. For example, in India it is 1-2%, and in Nigeria the number is 10%. In Japan, the word entrepreneur is almost synonymous with a cheat.
You have to give yourself a chance because nobody else will. I became an entrepreneur because I met somebody I knew and I thought, "Why can’t I be the one?"
There were these lines form the song Mera Juta Hai Japani (that articulated this well) – it represents the entrepreneurial spirit very well:
Nikal Pade Hai Khulli Sadak Par Apna Seena Taane
Manzil Kahan, Kahan Rukna Hai,Uparwala Jaane
Badte Jaayen Hum Sailani, Jaise Ek Dariya Toofani
The biggest motivator for a human being is not the reward, it is fear. The fear of getting left behind and not getting in, is more motivating. The young kid who sells books on the road knows math much more than the kid who goes to school- he has the fear of losing out in life as against not scoring the best marks.
Keep yourself out of the comfort zone- that’s what entrepreneurship is about.
(From several transformations in his life): If you're good at what you do, you will go up quickly. It is like going up the hill. Once you are on top of the hill, the next step is always to come down. You can sit there and stagnate but, to climb up the next hill you have to come down first.
(FYI: Mr. Kanwal went from being an entrepreneur to an angel investor to starting a venture fund and now an active mentor. He transitioned from hardware to software)
Upar-Neeche Neeche-Upar Leher Chale Jeevan Ki
Nadaan Hai Jo Baith Kinare, Pooche Raah Watan Ki
Chalna Jeevan Ki Kahaani, Rukna Maut Ki Nishaani
On 'Me Too' Business Models:
Indian's do well because they are brought up in a competitive society.
You can choose to be like gorillas (heavyweights), chimpanzees (specialist in a particular geographies) or monkeys (who do survive, but on peanuts). For e.g. in the automobiles sector- General Motors are Gorillas, Porsche and Volvo are Chimpanzees- specialists in a particular type, and we know many monkeys around.
On Being a Mentor and a VC - yet so fit and active at his age:
When you work with an entrepreneur, you assume that you can add value to them. They are sharp and brutal- if you waste their time, they will move on. “I am motivated to stay fit because of the fear of being rejected as a guru.”
There is no formula in entrepreneurship. However, the formula that I use is learning 10 times more than I teach.
Venture capital is not about business models and other MBA analytics that help in fully formed and stable business model that works more at PE businesses. VCs need to understand the start-up dynamics and should be able to empathize with an entrepreneur. This comes either by running an enterprise or working closely with a large number of entrepreneurs.
B-Plans are dime a dozen. As a VC, I invest in people and not in ideas. Ideas and plans keep changing in the course of journey. Key traits that I look for in an entrepreneur are:
Intellectual honesty: Be true to yourself while designing the business ideas, concept and projections.
Ability to hold oneself accountable: Do not blame the VP engineering for the product bust or the VC for lack of funding. Instead, accept that you couldn’t hire the right person or anticipate the funding requirement and were unable to manage costs.
Don’t fall in love with your idea: Many times you have to let go of the idea to build a sustainable enterprise. Entrepreneurs who are hung up on ideas and averse to adapting are most likely to fail.
It’s easier to survive in India without VC money than in any other place in the world. You have family support system here that funds and mentors you.
Incubators assume that there is a proven model which is not the case. There hasn’t been any major winner emerging out of an incubator yet.
An entrepreneur has to evolve in the rough and tumble on the market place. An incubator cushions the entrepreneur. You need to learn decision making, running errands, signing leases - each of these prepares you for the next stage. If you are too dependent on an incubator you cannot become a tough entrepreneur. It’s the small decisions you take that help and teach you for the long run. Incubation is not totally bad, it’s a hop step. it is a good place to start once you have quit your job and need a place to start going to, before you find your own.
In the current incubator-investment circuit, ‘every deal seems to have the same valuation’. There is no differentiation among entrepreneurs, market and technology. It’s like ‘Andher nagri, chaupat raja, takke ser bhaji, takke ser khaaja’
About TiE, the global entrepreneurial network that he Co-founded:
TiE is like a temple where you meet likeminded people, draw inspiration and get mentored. It's not the end but one of the tools.
You acquire knowledge and wisdom over a long period. You develop your knowledge and belief by working with entrepreneurs. At TiE this knowledge gets transferred very efficiently. For an entrepreneur, even if his arts improve by 5% he gets a new perspective of looking at his challenges. That’s the magic of TiE.
Finally, his favourite entrepreneurial song from where the lyrics have been quoted.
“Mera Juta Hai Japani” from Shri 420