Entrepreneur Journeys: A Review

Many of you may already be familiar with Sramana Mitra through her Seeking Alpha contributions or perhaps her columns in Forbes. I have enjoyed her perspectives in those venues, so I am not surprised that I found her first book, Entrepreneur Journeys, to be so captivating. I liked it so much that I sent it to all of my clients as a year-end gift.

The book is a collection of interviews with entrepreneurs organized into five sections: Bootstrapping, Taking on Giants, Disrupting Business Models, Addressing Unmet Market Needs and Tackling Planet Scale Problems. In all, she interviews 12 dynamic entrepreneurs. I think that one of the things I liked best about the book is that it is so optimistic - several of these leaders overcame what seemed to be insurmountable odds. With the financial markets in disarray, several of these vignettes inspired me to see past the current gloom.

I recall reading Michael Lewis' "Liar's Poker" when he published it almost 20 years ago. At the time, I actually worked in the world that he depicted and knew several of the "characters". I felt that Sramana serves as a similar type of insider in the world of venture capital who is able to really hone in on the essence of the culture. When I read these interviews, I felt like I was overhearing an intimate conversation. As an equity analyst, I certainly appreciated that Sramana asked the right questions, which got right to the crux of the issues at hand.

I was familiar with some of the ventures featured in the book, certainly the public ones, but the breadth and global nature of her subject fascinated me. Crunching numbers and trying to spot trends is what many of us do as analysts or investors, but trying to capitalize on the somewhat abstract concept of "management quality" is something that I believe sets apart the pedestrian analyst from the valuable one. This book really helps the reader to appreciate the qualities of a leader who plans for the long-term but navigates through the challenges of the short-term.

Sramana covers the bases with respect to pre-bubble and post-bubble entities. She leads off with one of the most interesting interviews of all, Jerry Rawls of Finisar (FNSR). After a meteoric rise during the bubble, the business almost evaporated, but Rawls took the steps necessary to keep the company alive. The other "bootstrapper", Sridhar Vembu of AdventNet, is taking on Salesforce.com (CRM) with 600 engineers in India, 6X the number of engineers at his rival.

The "taking on giants" section leads with Steve Hafner of Kayak. Hafner started Orbitz (OWW) and started Kayak to fulfill the original mission he felt Orbitz failed to ultimately address. The next entrepreneur, Gautam Godhwani of SimplyHired, tells how he has used technology to differentiate and to become the number 5 player rapidly in a highly competitive job search market. Finally, Russ Fradin shares how Adify is taking on Google (GOOG) in the online advertising space. Any investor should appreciate the threat of competition after reading these dialogues.

The next section ("disrupting business models") features a company out to be the "next VMware" (VMW), Qualys, as well as one of my favorite interviews, with Steve Singh of Concur (CNQR). The CEO of Qualys, Phillipe Cuortot, has so much experience with big blundering companies that he can't help but succeed outside of them. Singh discusses the challenges of distributing product to customers across the entire spectrum with respect to size.

The next section ("addressing unmet market needs") features a fascinating interview with the young Stanford MBA, Marcos Galperin, who created a Latin American "Ebay", MercadoLibre (MELI). My wife is a teacher, so I was very excited about the interview with HotChalk founder Edward Fields. Anyone interested in learning about how technology can be applied to make education work better should read this interview.

Finally, Sramana concludes with three entrepreneurs trying to solve major global problems. Energy Recovery Inc. (ERII), which just went public this year but has been around for decades, uses reverse osmosis to create energy. Obopay has created the infrastructure for micro-finance in developing countries (using mobile phones). SELCO provides solar panels to poor workers in rural India. It is this last section that really leaves the reader optimistic that we humans will ultimately overcome any obstacle.

I really enjoyed learning about the people behind these enterprises and what makes them tick. Sramana does a great job of placing everything in context. She links their past efforts and weighs their successes and their challenges in both their present endeavors as well as past ventures, all seemingly with the goal of understanding the factors that can lead to success.

This book was an easy read, as it isn't technical at all and could appeal even to someone without a background in business or finance, especially the final part highlighting entrepreneurs tackling major social issues. Given that it is essentially a collection of short stories, it is a great book for the busy reader who has to cram in time for reading. Good luck putting it down!

Entrepreneur Journeys, Volume 1, by Sramana Mitra. BookSurge Publishing, 2008. Softcover, 262 pp., $16.95.

Disclosure: I have no positions in any stock mentioned in this book review.

Comments

[Clavis:]

Interesting article, obviously a 'must' read.

2008 Dec 06 02:33 PM

[DollarTalkNet:]

This is a well written review. So much so that I am going to buy this book. I have written about this before on this site and on my site, but our nation is in desperate need of more entrepreneurs, not more government handouts. I'm looking forward to reading this book and hope it will inspire the creation of more capital in our country.

2008 Dec 06 07:26 PM

[DollarTalkNet:]

Well, I just went ahead and bought two copies. One for me and one as a Christmas present for a fellow entrepreneur. I was happy to see that this is actually labeled as volume one.

2008 Dec 06 07:34 PM

[Jason Rines...:]

I will share my main lessons about being a successful entrepenuar for those people looking to start and fund a business:

1) Attend Venture Capital meetings and network groups. The investment to join these groups is very small in comparison to the learning acquired. Your objective as an entrepenuar is to conduct research to shorten the learning curve to become successful rather then learn the hard way through a business failing. 70% of all start-ups fail because of lack of research. Not surprisingly, 70% of investors that invest in a business fail. Is it coincidence? NO! Lack of research kills. These groups will have people you can hire for consulting. Ask around the group whom is the best of the best consultants. Find individuals that will waive large portions of the fees and mentor you. If you apply there teaching in the real-world they will either personally invest or contact there circle of investor colleagues to invest in your business.

2) Learn business by numbers. Ask your mentor or research how to build a financial plan, especially using a spreadsheet. This takes awhile and is critically important to raising money. Most entrepenuars attempt to sell an investor how an airplane flies. An investor cares secondarily how your airplane will fly (that can be explained in 2 minutes) but will demand to know how they will make money (10 minute explanations). I have a questionairre I once received by an investment group on what focused info to present to an investor. I still refer to it when it's time to raise money! If any of you reading this want it, I will email it to you. Contact me at jrines@ prime health solutions . com . Please don't ask me to invest in your business, nor will I attempt to sell you consulting! I am in the Health sector and am mentoring others already, so my time is zero to assist you beyond this necessary document.

3) DO WHAT YOU SAY YOU WILL DO - If your pitching to raise money and promise follow up docs, phone calls etc do what you say you will to the letter and to the point! If you get money (3% of entrepenuars get money, hence why point 1 & 2 are important) then you continue doing what you say. Your reputation will grow, you will return the investors money with profit and raising money the next time is VERY easy.

4) Banks can lend money too as a line of credit (LOC). You can go to the Small Business Administration (SBA) which can help you get bank financing and older, successful retirees volunteer which can help you build a financial plan and longer explanations of how your airplane flies as a business plan format. Plus, the SBA gurantees half the loan with the bank. The US government's next fiscal stimilus plans will focus on Senator Kerry's ideas of increasing funding in 2009 for entrepenuar's. Your timing to raise money will never be better, but earning the money by doing the hard work of research and the points I am making will MUST be accomplished. You must be prepared to make a ten minute pitch to convince investors (banks, angels or VC's) why they will make money by investing.

2008 Dec 09 12:58 PM