In News

January 2005


Cover Story: Making the leap

Making the transition to the league of a large company.

"You must be either insane or widely passionate about your idea to start your own company”. Reapan Tikoo was quite sure that start-ups fared well, if and only if run with a missionary zeal of a monk or with a chaotic frenzy of insanity."

He too set out on his own with Powai Labs, a company that focuses on electronics design automation and is set to touch million dollars in its turnover … “It took me a long time to decide, but once I had decided, I was at peace and I refused to give up even when the chips were down”, he says.

Focus small

‘People don't work day to day in the ‘big picture'. They work in the nitty gritty details of their company and it businesses'. Built To Last by James C Collins and Jerry I Porras.

In their book, Collins and Porras studied the habits of 18 visionary companies and went on to describe what helps build an enduring company. Through their workshops and seminars, the writers traveled across the globe to research the characteristics of visionary companies. And one critical finding that the authors report is common to all companies worldwide is that the transition from small to big is made by companies that persevere.

This fact say, both entrepreneurs and academics, is borne out by experience. A small company has to chalk out a strategy that is not only different from a large one for its growth, but also one that is unique to itself. Often, the big picture is an elusive image and it takes years to get there.

But small companies have an advantage here as,” being small allows you to be more agile. The advantage, as he sees it, is the ability to switch tracks at any point. His company, he says, had to start from scratch three to four times in the five years of its existence. As a small company, Herald Logic could afford to do that. Small and medium enterprises (SMEs) need to accept and use their agility to survive and succeed at the marketplace.

Reapan Tikoo agrees. According to him, a small company works with guerilla energy that it needs to carry through as it scampers up the ladder.

Focus sharp

Small companies have to sharpen their focus to be able to make best use of their energy. “A small company that is like a light powered by a 10,000 watt generator”, he says. For his company, this has meant staying focused on the core competency of making software products without getting into services, which he say,” is the greatest temptation because the return come faster”.

Tikoo say, a small company needs to learn first. There are no set rules to follow except that you must focus on your strength and persevere on the chosen path.

According to Tikoo, every company has its own DNA and its survival or success depends on understanding this. What he means is that firm must be steadfast in its core ideology, or what is known in business jargon as enduring character. Character could be the way in which a company treats its employees, or the manner in which it plans for the future. It is for company to define its character and then stick with it.

For Powai Labs, for example, Tikoo explains, the spotlight is always on becoming a company that uses technology to impact the lives of people all over the globe. That will not change and neither, according to him, will the company's decision to treat employees with the same respect that it does its client .His company, he says, will now ensure that its businesses are wrapped around these principles.

At this point, his bet is that Powai Labs will not lose sight of its character as defined by the above qualities. This could help the company find its way into the management history books. That would be his biggest reward, says Tikoo.

Find your market

Every small company must find its own market. It could focus on the domestic market, as done by many successful Indian companies and recommended by management gurus that say ‘go local before you go global'. Anand Patwardhan, former director of the Shailesh Mehta School of Management, says that small or medium enterprise”can consider technological inventions and innovation where global solution are available but not suited for the Indian market”.

The other option is, as shown by Tikoo, go global before going local. Says Tikoo, “Though there are management gurus that told us otherwise, for us it was not possible. You just have to see what works for your product.”

The challenge will be to heed the above and define the road ahead, on their terms.

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