FAQ's for the IT Entrepreneur
Is IT industry reviving?
The answer is YES & NO. The euphoria of the years 1998 – 2000 or popularly known as Y2K or dotcom boom is definitely missing. In that period everything was booming (crazily) . But IT outsourcing & IT enabled services are areas of definite potential. Change is the only constant thing in IT . Current hot trends are Cloud computing, Mobile, Enterprise Applications, IT based governance and Security.
The Indian software exports industry for the year 201011 was Rs 2,50,000 crore.
What is the scope of entrepreneurship in IT?
The IT industry is basically driven by an enterprising spirit & the ability to take risks. In this industry, skill & ability to execute are of paramount of importance. These traits are needed even to seek an employment opportunity in an IT unit. There is nothing like a ‘Safe Job’ in the IT industry. This industry works on the Silicon Valley’s mentality of ‘Hire & Fire’ and Darwin’s principle of ‘Survival of the Fittest’. ‘Perform’ or ‘Perish’ is the rule of the game here.
Against this backdrop, experience & prior business background are not of importance for starting an enterprise. Model of the ‘startup business’ is very common. Most successful companies such as Microsoft, Oracle, Novel, Citrix and Indian companies such as Wipro, Infosys, Mastek, HCL and others are also examples of entrepreneurial successes.
What is the typical characteristic of IT Entrepreneurs?
IT entrepreneurship is driven by innovation. It is not a Zero capital game, but the capital requirements are far smaller than other businesses. One need not have a plush office, high capital infrastructure. You can operate out from your bedroom. Matek, Infosys all started from one Bedroom flats.
But your vision as portrayed by your website has to be innovative & world class. Your mobile phone & email ID is what is required for business.
How Much capital is needed to start an IT venture?
Freshers must put in survival capital for 24 months. This mainly includes salaries of essential staff (not sales people, they must earn their salaries), initial setup costs, marketing expenses & cost of building ideas.
You can use bank loans to buy physical assets such as computers, furniture & software. But no bank will finance the working capital for a startup IT venture. Most banks will also ask for Surety & Guarantors for the loans.
If your operation is of agency or stock & sale then more capital will be needed. These businesses have to also worry about technology obsolescence. Software product development needs great ideas, design ability & smooth and sleek development. I have seen great products built in areas such as textile, cotton yarn stock management etc. There is always scope for new ideas in IT industry. There is nothing like all products built & no more scope for computerization in IT. Dil Mange eMore is the Mantra in IT!
IT applications are like music or a piece of art. There is always room for something different, better & world class. No one should feel everything best is done & nothing more is remaining. This is where IT entrepreneurs can pitch in.
What are the Sources of Finance for IT Entrepreneurs?
Personal or own hard earned money is one important resource. There is no replacement to that. Bank finance can be used for buying assets. But all working capital needs such as salaries, marketing, development costs etc need to be raised from equity.
Morale of the story is very clear. People with great ideas but 0 capital can not become entrepreneurs unless they partner with trustworthy rich people who are willing to invest in their risks.
There are thousands of examples in India & overseas wherein middle class professionals have become successful entrepreneurs. This is difficult in capital intensive old economy style businesses. Prior experience as an employee is desired for contacts, marketing innovation etc. A small % can hope to straightaway become business people.
What are the Areas for IT entrepreneurship?
Hardware & Network maintenance (hot demand from corporate's)
Sale & Service of IT products
Development jobs / projects
Localization of products as per Indian conditions / requirements
IT enabled service
Training in rural & semi urban areas in local language
Implementation of projects & free lancing.
Can IT business be done Part Time?
An IT entrepreneur cannot do part-time entrepreneurship. Either you DO IT or DON’T. In teaching as a consultant or technical copy writing such possibility may exist. But you can’t build an enterprise on a part time model.