From Ideas to Wealth thru Entrepreneurship

1. From Ideas to Wealth thru Entrepreneurship U. B. Desai SPANN Lab Dept. of Electrical Engineering IIT-Bombay www.ee.iitb.ac.in/~ubdesai

2. Entrepreneurship and Wealth Generation • General belief that for economic growth • Need to generate wealth • You can think of this in terms of • increase GDP • increase in ease (comfort) in personal life • Whatever the measure: • Money plays an important role • Entrepreneurship is business of making money • To some, this may sound crass • But this is the bottom line Ideas to Wealth thru Entrepreneurship

3. What is involved in becoming an entrepreneur? OR What is involved in generating wealth? No formula Guidelines thru Case studies Experience Burning ones fingers In short: It is tough You have to be at the right place at the right time with the right idea a marathon runner (perseverance) Adaptable (may need to change things mid course) Never fall in love with your idea – be open to change Magic Wand? Ideas to Wealth thru Entrepreneurship

4. Modern Day Entrepreneurship • Complete faith in technology • Innovationas the key driver • You have to be on the lookout for a void, for example: • iPOD • 1 lakh rupee car by Tata • Always keep looking at your environ for a problem; euphemistically called opportunity • A good understanding of what different segments of the populace can afford is important • simply understanding wants is not enough Ideas to Wealth thru Entrepreneurship

5. Different approaches … You take on a giant • In the 70s researchers at Fairchild (a giant in semiconductor tech.) came up with CMOS (complementary metal oxide semiconductor) technology • Upper Management at Fairchildrefused to accept it as future prospect; were happy with PNP (bi-polar junction) technology • Researchers with CMOS technology separated and started Intel; as they say rest is history • Fairchild today is almost non-existent • Juniper took on Cisco and is giving tough competition in the core router segment Ideas to Wealth thru Entrepreneurship

6. Disruptive Technology • What is disruptive technology? • Working Definition: • Technology which creates a major (positive) disruption in the way society functions • Best explicated thru examples Ideas to Wealth thru Entrepreneurship

7. Examples of Disruptive Tech. • Sun Microsystems Workstations: disrupted the market for main frame computers. • PCsdisrupted the market for workstations • Wireless telephony (GSM, CDMA): disrupted the market for wire-line telephony. • Xerox plain paper copier: disrupted the market for offset printing. • Cannon’s desktop photocopiers: disrupted Xerox’s high speed photo copying market. Ideas to Wealth thru Entrepreneurship

8. Disruptive Technology … • Honda motorcycle of 60s • Japanese cars of 70s • Korean Cars of late 80s • Smart Phones will disrupt the market occupied by desktops / laptops … Ideas to Wealth thru Entrepreneurship

9. Impacting Technologies • Impacting technologies are disruptive • Disruptive innovations are products and services that initially aren't as good as those that historically have been used by customers in mainstream markets, and therefore can take root only in new or less-demanding applications, amongst non-traditional customers Stuart Hart and Clayton Christensen • Watch out for China Ideas to Wealth thru Entrepreneurship

10. DM Almost always .. • Major waves of growth • thru forays at the bottom • of the developed markets • (DM) • Very rarely you can • attack a “Mercedes” • directly Ideas to Wealth thru Entrepreneurship

11. Knowledge Economy • Economic growth and wealth generation are driven by the acquisition and use of knowledge • Knowledge: • research skills • information assessment skills • ability to innovate • ability to implement • capacity to continuously learn • Knowledge Economy is different than the Industrial Economy • This is the great edge that India has • We have small window of opportunity and a chance to become world leaders in this domain Ideas to Wealth thru Entrepreneurship

12. Service Industry • Service industry is a corner stone of knowledge economy • Do not scorn at service industry • In India service industry can be the driver for other industries • Service Industry Sectors: • Banking, insurance, education, finance, marketing, entertainment, leisure and so on. • Today ITES (IT enabled services) is a multibillion dollar industry Ideas to Wealth thru Entrepreneurship

13. Indian GDP • GDP: $650 billion • Rural GDP $160 billlion • GDP from IT industry is • $20 billion • Per Capita income: • $534 • India’s economy ranked • 120w.r.t. per capita GDP • But ranked 4 if one • considers PPP (purchasing • power parity); after US, • China and Japan 22% 56% 22% Ideas to Wealth thru Entrepreneurship

14. Product Industry • Very vital for the growth of Indian economy • Govt. policies are not favorable for product industries • Example of China: you can buy latest • FPGAs, DSPs, LCD display screens like chocolates • Oscilloscopes like TVs • … Ideas to Wealth thru Entrepreneurship

15. Entrepreneurship is Interdisciplinary • Take the case of iPOD • Audio encoders-decoders • User interface • File management • Search engine • Data base management • Display screen technology • Microphones and small footprint HiFi audio amplifier • Sever management, including security, for downloading songs (from millions of songs) • … • Could a startup have developed an iPOD? Ideas to Wealth thru Entrepreneurship

16. Semiconductor technology Wireless technology Innovative Applications of Wireless and Semiconductor technologies At the end, VCs want a chip Software is typically not considered a product by VCs Low cost PCs VIA chipset (Taiwan) Given a new meaning to embedded systems New handheld devices Smart homes: Wirelessly controlled homes In general: smart devices … En-ship in Electrical Engineering?? Ideas to Wealth thru Entrepreneurship

17. This is Catch 22 During the boom time (~1998-2001) Get funding based on ppts Today one needs a prototype (bare minimum) Endorsement from potential buyer Preferably a first sale Where do you get money for this Angles, friends, family, soft loan, ?? What today’s VCs wants Biz unit in US R and D unit in India American CEO American Marketing personnel You can be a CTO Indian market is too small for VCs They want a product which can take on giants in the US Need Money to Make Money Ideas to Wealth thru Entrepreneurship

18. Business models and all that • Innovations in Biz model is a must • iPOD is a case in point • Down load a song for 99 cents • This can add up to billions • Recall, ring tone market is a billion dollar industry • Innovative marketing approach • Innovative supply chain • Dell computers • Very little inventory • Technology contributes 15% to 20% in a business; rest all is the other stuff which engineers ignore Ideas to Wealth thru Entrepreneurship

19. How many agree? • Entrepreneurship can be a driver for social change • Ethical entrepreneurship is important • Environmentally caring entrepreneurship is important • ??? Ideas to Wealth thru Entrepreneurship

20. Finally … “It is not our abilities that tell us what we truly are.… it is our choices.” Dumbledore – Harry Potter and the Chamber of Secrets Would you refer to Bunty and Babli as entrepreneurs? Ideas to Wealth thru Entrepreneurship