Christian Chabot has a timely – and sobering reminder on IPO Dashboards re. how long it takes for a start-up to achieve meaningful revenues at scale (Hat Tip: Guy Kawasaki).
As he says:
…growth conversations between VCs and management teams often cause angst. One of the reasons is that people from both groups tend to have unsubstantiated beliefs about how long it takes to build an important company.
Maybe these conversations would be easier if we simply knew how long it takes to build a successful company?
He has the answer…in this amazigng chart that I have reproduced below:
Dear All: For those of you who may not already know, I am leaving Amadeus at the end of eight long years – of what has been an amazingly rich and educative experience.
I am leaving to spend more time in (and on) India and a few personal passions.
I will continue to scout for interesting seed and very early-stage investment opportunities in India but expect to spend less time on Venture Capital in general.
I have been very fortunate to experience, first-hand, the boom and the bust in this industry…
It has been a true learning experience – and a humbling one too.
I expect to spend progressively less time on this blog…so do not be surprised if you don’t hear from me over long stretches of time. If you are really curious to know what I am up to (or just want to email a “Hello”), pl. leave a comment here and I shall try and get back to you.
Here is wishing all of you the very best in your endeavours – now and in the future.
Swaroop’s dosa-seller is someone whom I would call a micro-entrepreneur. A micro-entrepreneur is usually involved in an activity that manages to support his/her family’s basic needs.
A good micro-enterprise will generate profits that would be larger than most average jobs.
Needless to say, these profits are more “riskier” than a regular monthly income (salary) – especially if your regular monthly income comes from the government.
So who exactly is a micro-entrepreneur and what qualifies as a micro-enterprise?
Before I attempt an answer to this question, an important caveat: I am talking about India, not USA.
Another caveat…Not everyone who we think is a “micro-entrepreneur” may be so out of choice…Some of them may be forced entrepreneurs – forced to eke out a living doing what they are doing, either because they could not find a job they liked OR because what they are doing seemed to be the most natural thing to do (e.g. managing your parents’ micro-enterprise).
Note that micro-enterprises typically lack scalability (that elusive trait which VCs seek) and may not be particularly “innovative”. Having said that, their contribution cannot be dismissed. At the very least they provide an alternative to unemployment (and the consequent frustration and disillusionment that accompanies it); At best, they have the capacity to transform a family’s fortunes (think of all the famous “halwais” who started small…)
Back to the main point: who exactly is a micro-entrepreneur and what qualifies as a micro-enterprise?
Here is my (proposed) definition:
A micro-entrepreneur is anyone who manages a micro-enterprise.
A micro-enterprise is any business that:
has start-up costs of less than Rs 50,000/-
employs less than 5 people (typically in a single location)
has annual revenues of less than Rs 12 Lakhs (or monthly revenues of less than Rs 1 Lakh)
…and has uneven cash-flow, problems in employee retention and suffers from bureaucratic burdens (but these are hardly unique to micro-enterprises!)
What do you think? Comments/ thoughts very welcome.
Next post in the series: Why this sudden interest in micro-entrepreneurs?