Secrets of successful entrepreneurs: Prasad Kaipa at TEDxBayArea

the key question it comes down to is why do some entrepreneurs succeed while majority of them fail the ratio of success to failure is like one is to nine so for every nine entrepreneurs that fail one of them probably succeeds when I quit Apple Computer in 1990 I began to really look at how do people learn lead collaborate and innovate after interviewing about 200 extraordinarily capable people including CEOs sports Persona musicians spiritual leaders Nobel laureates I began to think I had some answers with that answers I began to identify why would some people succeed while meth many people fail I came up with a list in 1990s I put together like 10 things that people could use to become successful they seemed to be pretty good especially because I recently tried to ask a large number of people what made them successful many of these criteria are still show up as important criteria for people to be successful except in the 1990s towards the later part when many of my clients both large companies and entrepreneurs became successful I really began to feel confident and I went ahead and started my own startup so I raised about a million dollars from angel investors and I put in half a million of my own and I worked with them but within a year and a half mine just went flat-out gone that gave me kind of a pass and then I found out during the same time many of the entrepreneurs also lost their what you might call the stake that they put into their company that gave me not just a pass I began to look at it and say do I really know what makes people successful whatever I learned from other people are they applicable can I actually apply some of these ten principles in my startup if I couldn't make my startup successful with them do they have any meaning for any other entrepreneurs so right after the dot-com bust I began to spend a lot more time with the practicing entrepreneurs researching again interviewing working with them and helping them to understand what's going on and in the meantime I began to look at the success criteria in the 2000 afterwards so I researched started at I Institute and several thousand entrepreneurs had gone through and then I also started teaching in business schools I realized that every answer that I have is necessary but none of them are sufficient so I decided I will do the crowdsourcing that is the in thing right now right so I wrote to various people in variety of groups that I am both individually and in collectively I started asking them if they are entrepreneurs what did make them successful if everything else is gone is there one secret sauce that made them to be successful is there one secret sauce that made them fail so I ended up getting large number of answers from not only entrepreneurs but also from professors but from VCS investment bankers researchers and I spent large amount of time looking at even Kaufman foundation reports various other serial entrepreneur research that has been done I looked at it to my disappointment I found out there is no secret sauce there is none whatsoever interestingly if there were to be one algorithm one formula that applies objectively in every situation to everybody chances are every one of the entrepreneurs can become successful right it doesn't happen what it means is objectively some of the principles may be the same objectively how you apply them subjectively how you integrate multiple principle that's what makes you successful in some respects I was beginning to recognize there is no opportunity to really understand any one person who can help me to understand about serial entrepreneurship and certain number of recipes that could help people to be successful at the time I came across a gentleman called this Deshpande he is the co-chair of the National Council on innovation and entrepreneurship for the President Obama at this moment he is also a trustee of the board of MIT and he had started cascade communication Sycamore network pages network a123 several of them and many of them he got like four hundred million two billion dollars he took some of them public he sold some of them he was extraordinarily successful in multiple ventures not only that what I was amazed to hear was that he was able to create innovation sandboxes in Merrimack Valley in Massachusetts he is able to create something in Hubli Karnataka not Bangalore Karnataka but hubli Karnataka which is a very well I mean what you my hidden place from the entrepreneurial world he was able to work with the local people and he was able to resuscitate entrepreneurial spirit on entrepreneurial capabilities so Canada United States India if he is able to do it I thought he might be able to help me to think about so then I began to spend time with him several of the principles which I talked about before began to fall together in a completely different way I found out many of these kinds of recipes are oxymoronic in perspective so in some respects to some extent they are helpful if you become obsessed with them if you try to overuse them as if those are the only principles they will backfire on you so there is a smart way in which you can apply principles from outside there is a wise way in which you can apply them so the it's a combination of some of those out of all this I came up with top 10 list of what I have found that might be most useful compared to many other things which I talked about I try to put them as oxymoronic principles so let me start with my top 10 list begin with it 10 first stop obsessing about entrepreneurial success of course you might ask why would I actually listen to this advice if I want to be successful should I forget about succeeding and keep focusing on failure no that's not what I am saying I am saying you should pay attention to success more as a measure not as a principle by which you do what you do for example if you take one of the greatest entrepreneurs and who created the largest company are currently on the market interestingly he talked about what is his larger purpose his noble purpose he said I would like to make a large dent in the universe for that purpose towards that goal I am willing to fail and I am willing to experiment so in 2007 when Apple did not have any background in telecommunications did not have any products did not have anything to do with technology in the telecommunications area he came up with iPhone people laughed at it Steve Ballmer gave an interview saying would anybody buy a $600 telephone so blackberry Nokia all of them said something like we seriously invite Apple let's see where they go of course now we know where they are Nokia is struggling blackberry is renamed itself from research in motion to blackberry so 40 to 50 percent of the Apple revenues continue to come from this particulars I phone and then the next versions of it and then the iPad that came out so can we say Steve Jobs didn't obsess about success of course not but at the same time he was a guy who was willing to take risks not focus on what other people think not focus on whether his products are successful or not he is going to do them because that is where his passion is that is where his heart is and that is what he thinks that the customers needed because he is willing to be a customer for his own products so from that perspective you need to not worry about success do what needs to get done connected with a larger purpose that's the first principle second and most important it becomes is where is your foot nailed to the floor of course as I was preparing my colleague was asking me shouldn't you say yes your foot nail to the floor there is a guarantee that your foot is nailed to the floor it is just the question of knowing where is it nailed because whatever is your success recipe your winning formula that got you to this point is not going to get you to where you want to go that is for certain why is that the context has changed the market is rapidly changing the world is becoming smaller and interconnected so whatever recipe you got before to become successful will not work like I was talking to a gentleman who sold his hotmail company for 400 million dollars a few years ago he was telling me the recipe would be probably eyeballs you need to pay attention to eyeballs but when I talked to somebody else he was telling me that he has five Hotmail accounts that means ten eyeballs but he uses only one so if you keep measuring the success based on the number of eyeballs actual success will be seriously affected because that's not how people act so in some respects you need to look at not just what is my core competence my core incompetence as I mentioned before the BlackBerry was the best smartphone that you could have people said how can you have a smartphone without the keyboard you cannot have a touchscreen but now of course this BlackBerry 10 has a touchscreen just as anybody else of course to make sure that they are not abandoning the people who use the keyboard they also have a version with the keyboard but will it help back bury or not we don't know yet to see but Nokia for sure is struggling quite a bit they were number one but they're pretty much simple phones are no longer as useful 40 percent of the consumers around the world are using smartphones and they are continued to grow in it only one model Lumia 920 recently has shown some promise hopefully Nokia will find its bearings and become successful but till they begin to recognize their foot is nailed to the floor based on the past practices and what worked unless they change it and we look at the context in which they operate they will not become successful number eight on my list is practice wise persistence we all know when we start as entrepreneurs whatever idea we come up with we have to persist through the various stages whether it is the funding stage whether it is the stage of after you get the funding whether it is getting the proof of concept whether it is the prototype to be successful whether it is through execution it's all about persistence and you need to stay in the market till you become successful everybody knows that right but if that is not going where you want to go if it is no longer aligned with your larger purpose if you believe that the it has moved on should myspace still be hanging around even though the Facebook has pretty much done and taken over the entire world so the key part you need to look at is when do you cut the cards when do you hold on when do you let go that wisdom will only come if you have a larger purpose why am I doing this startup what is the underlying mission that I have and what is the underlying problem that I am solving for the customer if you really look at the Pinterest recent one Ben Silbermann he says at one time he was ready to give up and he wanted to go back and ask for a job in Google but he was not sure he will get a job back because nine months after they released the Pinterest he found out it was not growing at all as a matter of fact one of the co-founders went and took a job somewhere else and he called he says first 5,000 people and he met with several several of his 5,000 customers but still there was no traction but because he believed in that and the timing was right and he was able to get appropriate attention now it is the number three social network site and also the company is worth more than 1.5 billion dollars at this moment next on the list is integrity interestingly as I looked at are there entrepreneurs with integrity that I could identify and highlight I couldn't find any I couldn't find anybody whom I can say they are known for their integrity alone that I could put in yes this Deshpande seems to have had a lot of integrity he continues to have integrity but beyond that if you really use my yardstick you need to have credibility that means you need to walk the talk second you need to be committed to your employees as much as they are committed to you you need to be committed to other people in the ecosystem like your customers your suppliers your partner's if that is the way in which you define the integrity plus if you add the courage that means you are authentic and you are doing something that you have passion for and you have a commitment for and if I define it as credibility plus commitment plus courage what defines integrity there are very few people so in some respects you need to begin to build the network and the only way you can do next is passion and compassion you need lot more than obsession in some respects if you look at Steve Jobs is the representation of obsession but Bill Gates for that matter went into some other area with a gate foundation he is able to make something work much more effectively in practice you need to take more reflective actions and practice jugaad jugaad is a creative improvisation create it with your customers create it with your people and that just don't have a Action bias you need to take reflection at different stages of organization and different stages of your startup you may need to think about what needs to get done and how do we move forward for example if you take Instagram they had much bigger product beforehand and instead of just the photo sharing they had a node sharing they went ahead cut down the features sharply focused they stayed with one platform and made it successful just before they've got bought out by Facebook they went ahead and released an Android and increased their customer base from 10 million to 30 million so continuous improvement and jugaad helps you quite a bit in that respect it is not the risk-taking that differentiates you but it is the risk mitigation because risk-taking is part of the definition of an entrepreneur but at the same time risk mitigation happens when everybody in your company can share your decision do not blame each other and are willing to go on the path the same way we everybody is actually bringing their collective intelligence to solve the problems the chances of your company becoming successful becomes much higher finally you need to look at execution is not the only thing and it is not everything because if you take palm if you take Kodak who invented the digital camera those are already gone the palm is absorbed and disappeared so the other execution was excellent they didn't have a big picture so what you need is a foresight which requires both the context sensitivity knowing what's going on around you plus instinct instinct is what we need for example black bust blockbuster was for billion-dollar company which went bankrupt despite the fact they had the all the resources Netflix had God Netflix almost also lost the context because they came up with the DVD as a separate one but it looks like they are able to convince the customers the digital downloading is the right way if I go back to the last and the most important purpose especially a noble purpose even though it looks like an oxymoron is much more important than the vision everybody talks about a vision but vision needs to keep changing as the context changes as the product changes we know that when we go to pub two founders go to some kind of venture capitalists are angel investors as soon as you get the money the vision changes there are companies whether you take Whole Foods by John Mackey or Infosys Narayana Murthy these are the people who believed in a larger purpose so they were willing to share their secret formulas when they became the level 5 certified in the software they brought all their competitors and shared their recipe so that everybody could be at the same level as they are in full foots the same way my friend tells me if you are an employee and if you can actually go ahead and reduce your BMI and have health practices Whole Foods gives you better employee discount for it own products so the end I would say as an entrepreneur your time is short you need to focus on what is most important to you you need to focus on where you have the commitment and where you have the passion with that instead of trying to outsmart somebody else if you can be a wise leader chances of success seems to significantly increase thank you very much

Channel: TEDx Talks

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Id: HD-yFYQ5UPM

Length: 20min 30sec (1230 seconds)

Published: Tue Mar 05 2013