EDC, My Love

This is my first post that gets personal and doesn't have to do anything with open innovation or business. It has to do with the stuff i love, so nothing else matters anyway. I have many reasons to love the Entrepreneurship Development Cell (EDC), IIT Roorkee which we started when i was in my 1st year, with people from all 4 years of B.Tech. whom i didn't know much at that time, but whom i'll remember all my life. It was started with a vision and is going great while I am in my 4th yr and serving as the Addl. Secy. right now. Some of my reasons for why we do the stuff we do, would be:

# I believe in entrepreneurship. It's not important to be in EDC for pursuing it, nor is it mandatory for everybody in EDC to have such an inclination, but while being here, i have been a part of the group which discusses the stuff i love and i can contribute to it. I gain a lot of knowledge from you guys, things which i wouldn't have known if some of you had not discussed in group meetings. Entrepreneurship societies like NEN, magazines like DARE i came to know from fellow edc members. I feel i am at the center of the world that i want to understand better.

# While we were a team of 8 when EDC just started off in Feb'06, it was an opportunity for me to face some difficult situations. I used to think that other sections have been there for many years and i would be just another member if i join and could pass my 4 yrs taking chaapos, but here in EDC i had the chance of doing stuff and proving myself. I wanted to have the pride of creating something, and i had the chance to give shape and decide for the group we started, which really gives a kick. Not to denounce but I don't think any other group has even a fraction of the potential which EDC holds, though a lot needs to be done. Look at the entrepreneurship culture at Stanford, MIT etc. The campus will be a totally different place if we had one company growing in every wing of our hostels. This idea never ceases to amaze me.

# Anything you do in future, some kind of management is required. Most of the stuff we do is basically event management. In 1st and 2nd yr, i wanted to organise events and learn, though the urge has subsided a bit, but i have had some exposure which is necessary for anyone to succeed in life. Go to Program Mgmt. and you'll appreciate that EDC gives 100 times better exposure. Actually, EDC provides a mix of anything you may like in other groups. Like in Cogni and Thomso, you can concentrate on sponsorships if you like big money, organise events etc. EDC has a newsletter and website as well which have lately defined a new level of their own.

# Most importantly, i can know more smart people than i wud know if i weren't here. I get to meet with people who work 16 hrs a day when i get a chance to receive them at stations, take them for lunch etc. (though it's double pleasure when we get to have dinner with Anjali or Amar). I respect these people who build products and companies, who are driven, passionate about their ideas and work untiringly to achieve their aim. I feel honored to meet such people who want to change the world (though not all our guests are so great, but some of them are!!)


But what do we do??

1. We introduce Deferred Placement Program which is a back-up for people taking the risk of not taking a job, to start their venture.
2. We organise Mentor Clinics where some people get a lead to what they should do next, get advice as to how they can improve their product offering.
3. We organise Bplan competition which by luring some people through prize money makes them interested in starting a venture.
4. We create awareness. Even if people don't come to our events regularly and don't want to start a venture now, some of them will start 4-5 years from now, after getting bored with their regular life.
5. We make a community, EnClub, of aspiring entrepreneurs, who don't want to discuss their ideas with other people who laugh them away. They get encouraged by discussing their ideas, getting approval and appreciation from others.

To know more about EDC, visit www.edciitr.com

How VCs work?

Technology Business Incubation

Most of the Start-ups fail. It's depressing to see some innovative technology based companies started by very high-energy youngsters either get sold or close down. Traditional incubation offers not much scope to improve the survival rate of start-ups. Actualy if the success rate of technologies is not more than 15%, how can we expect for the companies based on those technologes to be successful. Also, because of this fear, a lot of start-up start something with not-so-innovative idea, to get validation from the market in first place.

The idea is to increase the survival rate of start-ups by building incubation environment. A few incubators won't do, but the reach to every nook-and-corner of the country will required. Maybe collaborating with the infrastructure developers will help a lot of start-ups to give a small %age in exchange for the office space to start off.

Also, not only outside environment but helping in building the technology successfully will add a lot of value. This can be done by utilizing open innovation and collaborations with the corporate and govt. research labs. IBM, Sun Microsystems, Intel are doing it to some extent but the potential is not unleashed yet. They are doing mainly for brand-image and an experiment for future collaborations but not for profit-making. Waking up all the big companies to the idea through a proper channel to direct, and enabling start-ups to work with students, scientists, engineers and their potential customers over a web-based platform providing collaboration tools will definitely go far to create value.

Also, mentors today give out some time to start-ups but not in a manner required, because they need to handle their own companies and they don't benefit personally. And those who have started Venture-Catalyst businesses/consulting, first demand stake and then help in business development and mentor. But remember, if stake's gone, it's gone, even if they don't provide any services in the future. Start-ups (cash-starving) cannot afford to hire consultants either. So, no proper framework is there at present. Also, talking to a lot of start-up experts and some VCs and angel investors, even they don't have an answer to this.

Most of the incubation centers are govt. aided or corporate funded. Sustainable incubation is the only key to spread it like wildfire otherwise it's not going anywhere. A very different break-through business model will be required to make incubation sustainable.

Would like to have your comments and opinions, targeting the feasibility and sustainability of such a model incubator.


Whats's Open Innovation??

Crowdfunding

People are funding the struggling artists and bands, and movies are being made today with money generated from the donations of the audiences. But a lot many enthusiasts, who might be developing their prototypes at this point in time, are waiting to get funded to kick-start their venture. People can actually help by collectively funding the potential start-ups. This will give them the right to interfere in the important matters and get heard, and thus contributing managerial help as well. The entrepreneur will have to share all his experiences in the form of blogs, all the interviews and surveys he conducts, all the people he met last week, the changes in the plan, the developemnts, the technicalities, explaining his hard-times and all his actions. This will give the crowd the experiences of an entrepreneur, and a satisfaction of having been able to help someone. The start-up will also have to give-away the shares, as per the agreement. People can even help with as little as $10, or Rs.100 in an idea they think has potential. The company will collect the money and when a particular sum, as specified by the start-up, has been collected, it will be invested on behalf of the investors. The exit route being the investment of a VC or a buy-out, investors will get back a considerable amount in the time-frame of an year or so.

Please comment on the feasibility of the idea and your own considerations if you were to invest.

Sudhir

sid.man2@gmail.com

Suggestions:

-Too many people having an interference in one particular business would cause co-ordination trouble. Besides, if this guy has to spend so much time justifying his actions to people and giving explanations, when would he actually work on the startup?

Basically you're suggesting that we create a marketplace for ideas and let people invest in whatever capacity they can. How about issuing unsecured but convertible bonds, so let part of the risk be with the entrepreneur since he has to pay the interest, and part of it is on the investor since there is no collateral.

So what happens is, if I start a company today and need 100,000 rupees as capital, some people invest, I pay them an annual interest of 12 percent. After a stage, they can convert this into equity in my company. Of course, this would need a lot of credibility issues to be handled.

Ankur Gattani

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#I think that people like us who are students wont have any problem in investing upto , say , Rs. 1000 but they would need some kind of assurance.For an amount larger than this ,People would obviously demand for some kind of written proof and constant update of company's progress.

Soham Mazumdar

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Open blogging and discussions would interfere with the independence of the entrepreneur.getting funds is surely one of the most important aspects in starting a business but it should not be at the cost of your independence because after all its your own venture.

Simrita

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I agree with your point that the guy needs to have independence in decision making, but involvement of the investing crowd needs to be looked upon (though they won't have a mojor role to play), so i think this can be done by conducting polls on various issues concerning the company, taking the public perspective on it, mainly if i say, help in the market study. And it can be advantageous in one context that all the investors, like if we say there are 500 of them, they will be in an active role when it comes to studying the market. This can also bring-in the advantages of user-innovation, because the investors probably will have some relation or understanding of the business area.

And as per the first comment, credibility is very much required here and initially people will invest and help only if they trust the person, or can approach him, or share something common like school, college, workplace, colony. It will be a high risk situation and whatever return they get from the small contribution will be divided between the crowd and hence its not a good investment.

People, if-at-all do it, they will do it for reasons other than monetary gains. So now, what can be the other reasons? The question's important because this will not only apply here, but also to all other existing crowdfunding models, and others which are there to come.

Sudhir

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Crowdfunding will work if the person is doing something useful for the world with least self-help. wikipedia gets crowdfunding because its useful to the entire world.


Phani