Lessons for Entrepreneurs: Integrity, Ability to Handle Adversity
The Quint’s Editor-In-Chief Raghav Bahl imparted some important lessons on entrepreneurship at IIM Bangalore.
Video Editor: Mohd Ibrahim
Video Producer: Shohini Bose
The Quint’s Editor-In-Chief Raghav Bahl imparted some important lessons on entrepreneurship while addressing the gathering at Vista 2018, the business summit organised by the students of Post Graduate Programme in Management at the Indian Institute of Management (IIM) in Bengaluru.
Lesson 1: Integrity
Starting with his own different phases as an entrepreneur – first with Network18 and then with The Quint – Raghav Bahl said integrity is the first lesson that anyone who wants to start a successful business must keep in mind.
The first lesson is integrity. If you guys are going to be founding your own business and be in the wealth-creating business, creating wealth for stakeholders, shareholders, employees, you need to have extraordinary integrity for the simple reason that people need to believe you. If you can’t carry your word through with people, you are not going to be successful. You will always hear of the outlier who will do some tweak, some jugaad, some borderline crime to create wealth. You will hear a lot of these stories. But those are exceptions. People who genuinely create a lot of wealth are people of very high integrity.Raghav Bahl, Editor-In-Chief, The Quint
Lesson 2: Ability to Handle Adversity
Raghav Bahl stressed on the ability to handle adverse situations to deal with ups and downs of a business. He explained to the audience that it is important to recover from the mistakes.
The next quality that you will necessarily need to have is the ability to handle adversity. I will tell you one thing that will happen to you in the world of entrepreneurship. It is going to be a real up-and-down ride. You will never have one single graph throughout your life. Your life will yo-yo along with business cycles. Your life will always be in the two extremes of fear and greed. You will make a lot of mistakes and you will have to recover from them.Raghav Bahl, Editor-In-Chief, The Quint
Lesson 3: Nothing Lasts Forever
Bahl told the future entrepreneurs that nothing lasts forever – neither a favourable situation nor an adverse one.
When you are on a roll and there is more business coming in than you can handle, you believe it is going to last forever. Therefore, you start creating fixed-cost structures to handle variable revenue products. That’s a cardinal mistake. Because it doesn’t continue forever. Nothing ever continues forever. We had this fixed-cost structure, then business plateaued and we had no other option but to lay people off. And that’s a gut-wrenching experience I hope nobody has to go through. But sometimes business cycles are such that you have to.Raghav Bahl, Editor-In-Chief, The Quint
Lesson 4: Be Opportunistic
Raghav Bahl stated that a very important lesson for all entrepreneurs is to be opportunistic and not wait for things to get better.
Be opportunistic. Do not wait to say, “It’s going to get better”. If things are going seemingly well for you, markets are good, business is going good, go and pick up equity at a hefty premium.Raghav Bahl, Editor-In-Chief, The Quint
Lesson 5: Equity Is the Most Expensive Form of Capital
He explained that the wisest decision for first-time entrepreneurs is to try and build their business in the initial stages with capital from any other source but external equity to the extent that they can.
When you are a first-generation person, you don’t understand the value of equity. You feel equity is the cheapest form of financing because they are giving you their capital and not asking for it back. So it is free. Actually, equity is the most expensive form of capital because equity never comes back. Once you have sold it, it’s gone, you’ve sold a part of your company away. I’m not saying don’t do it. Do it because to grow, you need external capital. But remember, equity is the most expensive form of capital. If you can build your business in the initial stages with capital from any other source but external equity, do it to the extent you can.Raghav Bahl, Editor-In-Chief, The Quint
Lesson 6: Joint Ventures Are No Charity
As a final lesson for would-be entrepreneurs, Bahl said it is important to assign a good lawyer to interpret joint venture contracts, as no joint venture is a charity, and each party looks for its own interests.
We were doing really well in the world of business news programming. Our BBC show was doing really well. I was anchoring it. It went out on Sundays, globally. We were then approached by a Wall Street Journal company along with the Hindujas to become a three-way joint venture to launch India’s first live business news channel. We were 4-5 years old in the world of business and Rs 3-4 crore in topline. We were completely overawed by the stature of the 2 people sitting across. We signed anything that came our way. We just signed the joint venture agreement. We did not have the stature or the financial position to invest in good lawyers. Joint venture negotiations are no charity. In joint venture negotiations, each party looks for its interests. That’s the way it should be. You must maximise your interests. Plus you need a good lawyer who can interpret the dense language in those contracts.Raghav Bahl, Editor-In-Chief, The Quint
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