I recently attended a startup event (ARISE) organised by the IIT Kharagpur Alumni Association. During the event, I managed to sit down for a quick chat with Professor Parameshwar P Iyer, Principal Research Scientist and Head, Placement and Industrial Liaison, Department of Management Studies, Indian Institute of Science, Bangalore.
As a digital marketing agency, we create buyer personas to understand the needs and pain points of our clients’ buyers. The idea is that if you know the needs of your buyers, you can attract them to your website by creating relevant content that provides solutions to those needs. It’s the most effective content creation and marketing method that you can deploy, so we do it for ourselves as well as all our clients.
In this case, one of our buyer personas is startups who need help for everything from website design to content creation, marketing, sales and funding. So we’re trying to outline some of the challenges that startup founders face, and potential answers to these questions provided by an expert in this subject – Prof. Parameshwar P Iyer.
One of Prof. Parameshwar’s interests happens to be entrepreneurial studies, and he has been working with and advising startups for decades. In the videos and transcripts below, you will find his answers for everything from how to start a startup, test your idea, when to start, what kind of funding you should be looking at in each stage, and a particularly interesting section about women entrepreneurs.
Oh, and one more thing. At age 63, after 40 years of being a salaried professional and academic, he is now launching his first startup.
Q&A With Professor Parameshwar Iyer
Question: Can you just tell me something about how to start a business…a new business.
Prof. Parameshwar: I am going to do something in these 18 months. So I think the basic driver has to be some kind of a pain point. Something that you feel is wrong out there, okay. Some kind of a problem, problem which is also a opportunity. So one of the things I found lots of organisations suffer is in not getting the right conversations. Not talking to people enough. Not knowing how to arrive at a consensus. Not knowing how to manage change.
These are the difficulties organisations have.. All these years of my professional life I have seen many many organisations suffering from problems of reaching consensus and managing change. So I thought let me see if I can try to do something. Be a change agent. But also be a person who can help people manage change and… so what do you what do you try to do, so you want to create something, at one level it can be a service.
Every time they bring us a problem, you go consult. You go help them to change. But that’s neither repeatable nor scalable. So then you say, can I try to productise it. Can I create a product to enable this change management? Or change management told to them. So that’s that’s where business ideas sort of come from.
How to Start a Startup
Question: How should you go about implementing it, actually? Next step.
Prof. Parameshwar: That I haven’t done. So I am just in the ideation stage. So one thing to do is, I teach it as part of my course. What I call, Fail Fast. Lean Startup kind of thing. So, if at all I realise it is going to to be a failure, I would rather realise it now within two three months…Rather than put three years of my.Time Money…Effort to build a product. Protect the IP, and then take it to the market and find nobody wants it.
So how do I do that, and that’s where, so there has been a transition stage I think, somebody like me, I have been working, I have been in academics for forty years. So now I have to transit from being a professor to being a businessman. Or somebody who is… who is going to put the money where the mouth is.
So I would do it in a in a sense that I’ll gradually start floating this… testing this… putting the beta out there. And see how many people like it. How many people…Ask me for help.
So I have had about 10 to 12 such sessions I have conducted on these concepts with various types of organisations. Our own institute, Indian Institute of Science, to an IIT, IIT Kharagpur to a public sector company like NTPC to a R & D lab like CSIR, CFTRI Mysore and to even social organisations. I have floated it and now I am finding yes there could be some traction. No commitment, but an indication – yes, if it’s done right we could get
So that’s the only way I can think of testing, you know, take it to the real world. See if people react positively to it. See if there is some indication of validation of the need. And…and the real proof will come when people have to pay money, fine. I don’t know that yet.
Question: What are some of the challenges that startups face? New entrepreneurs doing startup. What are some of the biggest challenges they face?
Prof. Parameshwar: Correct. I think for me personally the biggest challenge has been the mind-set. I have been salaried for forty years. I get a cheque every month, I’ve got stability. My wife is also an academic. She also gets a cheque. So we know our income is guaranteed. So we have a quality of life we can maintain here. Our daughters have grown up, they are all working. So you know we never have to… the risk element was not there in our life. Now when I think of starting up something, so first thing I have to ask is – Do I want to leave this lifestyle and do I want to get onto a lifestyle where I don’t know where my next revenue is going to come from. Whether I will get any revenue at all. Whether I will be able to pay myself a salary. So those are the questions of… first thing is to have a mind-set or a paradigm change saying I am no longer going to be looking for salaries or steady income. I am now jumping into an ocean where there are sharks, there are all kinds of stuff out there. I don’t even know swimming. So will I be able to succeed?
When to Start a Startup
So that… that answer to that question. So perhaps when I was talking in the morning – When do you start, right? So people say you start-up when you are young. Because cost of failure is very little, right? I don’t succeed, I go get a job and…But the others will say you need some experience, then people say you start-up in your thirties and forties. But at that time is when you are typically raising a family or your various commitments, so..
Do you want to push everything aside and say I am going to jump – start a company. Your wife will be sleepless, you will be sleepless. Kids won’t know what is happening.
Then the third stage will be perhaps when you are in your fifties or something, when you’ve done most of the things you want to do. Then can I think of starting up? But then the children are marriageable age, so you say should I get them married? So for me, it is now working out when I am past sixty, I am sixty three, this the time I feel I fulfilled all my worldly responsibilities, the children are taken care of, wife is earning, we have good savings. I don’t need a salary now. So in a sense, I am risk seeking now…years ago, I was risk averse. Free to take risk. So that… to me this seems to be the time to start-up.
But I don’t think there’s a universal answer to this. Age is no bar. Gender is no bar.
Question: You talked about women entrepreneurs. Can you just give some inspiring…
Prof. Parameshwar: No, no, the real problem is, it is a… it is a male dominated world in one sense. So I will give you one set of example. See, if you look at schools. In my experience take Kendriya Vidyalaya, where I studied, where my daughters studied, and National Public School where my elder daughter was studying, you will find that in most classes the girls are toppers. Especially in the primary, middle, even up to high school, up to tenth, school toppers inevitably, if it’s a co-ed, girls are toppers. What happens after tenth is very, I don’t know, some some hormonal change or some adolescent factor, I don’t know. We see that from eleventh and twelfth, the boys start getting much more competitive okay. So when it really matters let’s say for JEE or CET or COMEDK or any of the… or GMAT, any of the competitive exams, you will find the boys out performing our girls.
So that the first glass ceiling they face is, when entering into the competitive world, they are second best. They are never out there. Fine. So in IIT when I studied, 8% of our B.Tech. class was girls. Today it’s increased to maybe 18 or 20 whatever. But still boys out number girls.
So the entry level itself you have only one fifth of the population coming from the female… And okay, fine they complete the education. Then you look at the career planning kind of thing. Most girls will opt for soft jobs. IT, coding, biotech, math… very few will get into heavy engineering, mechanical, energy, materials, where you know, you have to put…hard work. You have to put lot of money, lot of risk.
So as I mentioned in my interview in the morning. So when my my daughter said I want to start-up after immediately after college, my wife would say, why now beta, you get married. Right. It is important for a girl to get married, I don’t know, so it is equally important for a boy to get married but…the boy’s never told to wait for marriage. They just go and do their start-up. So they get married. You get married and then ask your husband should I start a business. No no let’s have some kids now. Babies right. So one baby, five years later another baby. Ten years has gone. Now you are thirty five, forty years old. You have forgotten all that you learned in college, you’re out of touch professionally. What can you do now with start-ups? Very difficult.
You wait, go back to school, so there are people who I know who have done that. Gone back to college, gone back to professional education, done an MBA, done something. By the time you are ready at fifty, the children are now adolescents, they are looking into their high school their career, their thing. You say okay, let me wait till my son finishes twelfth, get him in into an IIT. Then I can do something. You do that. So eventually what happens is you probably wait till your children get married. So I know many many women who have started up in their sixties.
This AWAKE I was mentioning – Association of Women Entrepreneurs in Karnataka. There are many women who are, including the founder… Mrs. Srinivasan.. I forget her first name… they’re all starting up in their sixties. Now they have no commitments, family is taken care of, husband has earned enough money. There are savings, children are married, settled… And free to do whatever they want to.
So either I do it when I am twenty one, twenty two, or I do it when I am sixty three, sixty four. So in between is a very difficult period where lots of… and in our… again, male dominated society, the onus of running a family is always on the women.
Question: Can we talk about funding. What kind of funding should a startup be looking to raise, and when?
Prof. Parameshwar: Last stage, when you are growing up, you have…what you said…say revenue, profits starting, then you want to scale up, that’s when you go to venture capitealist. Then they will look for a very mature business model, very mature market. You have proven that you can do it at some X level. How do I take it to ten x, 100 x? So, I think the needs are different at different stages. Not like family, friends, fools. Go to seed fund if you want. I would say the best friend for an entrepreneur is an Angel.
I would give lot of importance trying to get a good Angel…who can also be your mentor, and also be a financial partner, also be a technical partner. Grow up to a level with the Angel, then if you want to… the question again arises that you want to partake of equity? Most Angels don’t want equity. They are willing to… goodwill they invest. I have been an Angel for a person on the technology side. And he succeeded so much, he is now giving me some shares of his company, okay. But I never…asked for it, and I never put that as a condition.
But once you reach a certain level where you are ready to partake equity, and then you want lot of funds to grow quickly. I think that’s when to go to VC. People make the mistake of approaching a VC right away. Never works. Because VC is not looking to fund such small thing, number one. Number two, the VC doesn’t know so much of the technology part of the business to help you at that stage. You won’t be able to convert your idea into a proof of concept or a minimum viable product. No. That you have to do the hard way.
When I have a POC or an MVP, that’s what I call the first part of the start-up. That’s the lean startup. You start…very few people get customers as partners, co-develop with customers, pay in fast, pay in quickly. Pay back. Go on to something. Once you have a proven marketable precise module, then you talk to an Angel…or an Angel to grow to some level. Get some customers, get some revenues, then go to a VC.
So there are…I think different stages at which you could……… But my advice still to people is…stay away from banks, stay away from government schemes. Those are the soft options. They never let you test the deep waters at all.
Question: Right, right. Thank you very much. Do you have anything else that you want to add, Sir?
Prof. Parameshwar: Nothing. I have just mentioned that I am going to start-up in eighteen months and I know the real proof of the pudding…you have come. I learned a lot mentoring people, sitting on committees, advising, mentoring, and screening all this stuff. But now when I am going to start my own…I know there will be problems I have not solved earlier…There will be questions that I may not have answers to.
So the real proof will come when I am able to practise what I am preaching. So I have been a preacher all this time. I have never put any money into anything…In form of a business. I have done some investments in the market. Primary market, but some secondary. But all that was very different. Now I’m just.going to put my own money.nice business as a change management tool…How do I now productise it? How to make a proof of concept…How do I make a minimum viable product? How do I find my first customer? So I have located an entrepreneur…she is now going to. Sorry, I have located a mentor. She is going to mentor me till…first paying customer comes.
So that, once that happens, then I probably go seek an Angel, putting more money, grow it. So God willing, everything happens well, maybe two, three years I will look for a VC to…to give me money.
Question: So you are actually going to do what you have been advising.
Prof. Parameshwar: Exactly. Last twenty years I have been teaching entrepreneurship studies. I have been advising many people. You know, informally, I also have mentored over a dozen start-ups, in different ways. Some of our own students…Former students, some others coming from Engineering colleges of Bangalore. Because I…one of the things I do is that I talk a lot about my ideas to lot of people. And we have a continuing education program in the Institute where we give extension lectures to various colleges, over twenty, thirty colleges…
Every year, in and around Bangalore. I talk to them. So some of those people come to me asking for help and I help them. So it’s more a hobby or a past time, and I haven’t charged anybody any money for it. But now when I am getting into it seriously, you know…so I am getting a mentor, actually I am going to be paying this mentor money for what she is going to do.