There are many skills you can only learn by doing. Reading books on skiing won’t help you all that much when you hit the slopes, and no one ever learned to swim while staying dry. Is the same true of entrepreneurship ? Is there any way to prepare for entrepreneurship besides jumping in and starting up?
Monika Kochhar, CEO of Smartgift, thinks so. While there may be no substitute for actual entrepreneurial experience, Kochhar claims to come to Smartgift, her first startup, more well prepared than many. How did she manage it? Though currently a Brooklyn, New York resident, Kochhar grew up in India and later spent a decade on Wall Street structuring and marketing investment opportunities in countries like Brazil, China, India, Mexico and Russia. This depth of experience in emerging markets has given her an edge in entrepreneurship, she feels (a stint advising her co-founder’s previous company, music promotion platform Guguchu, didn’t hurt either).
With a recent study concluding that a third of companies that went public since 2006 had at least one foreign-born founder and a host of stats showing immigrants (many from scrappy, developing economies) make an outsize contribution to U.S. entrepreneurship, maybe she’s on to something. Forbes asked her to explain how she thought her background has helped her.
How did your work in emerging markets prepare you for startup life?
Emerging markets and the startup world have interesting parallels – both are volatile by nature. Emerging markets provide a landscape for tremendous and rapid growth but also have high uncertainty. Startups have the same characteristics. When it comes to building a technology business, identifying the need for a product in a market, is similar to seeing a potential market in natural and demographical resources in a country.
In both fields, after you identify a market need, then comes the long task of addressing that need intelligently and building a sustainable product that changes the way systems or customers have traditionally interacted. It’s important to run controlled experiments that lead to hard data before implementing big infrastructural changes. That's very similar to the lean startup philosophy in which frugal engineering takes precedence. You need to independently and rigorously test features while keeping an eye on key metrics before you make them a part of the whole product roadmap.
What are one or two concrete examples of how you put the insights you learned working in emerging markets to use at your startups?
Before having worked in emerging markets, I grew up in one and learned three things that I’ve used as an entrepreneur: do more with less, stay flexible, and know that competition is everywhere. Adopting a frugal mindset and bootstrapping are at the crux of building a business. When I was growing up in India, we began to learn coding at the age of 15. There were 20 computers available for 100 students. We learned BASIC, COBOL and FORTRAN by writing assignments on paper with a pen and had to understand which syntax errors would result when we omitted a command or input something incorrectly.
Once a week, each of us would get 45 minutes to use a computer and actually input our assignments into one and witness the digital output. It was glorious! Staying flexible and using what’s on hand is so key. When it comes to competition, growing up in an overcrowded country with extreme talent everywhere, you compete for a handful of seats to get onto a proper career track or to get into a bus. The only thing you can do to make sure you get that seat is to work smarter and run faster.
What was the biggest challenge of making the transition from Wall Street to entrepreneurship?
Wall Street is full of really bright people. It’s a great training ground and boot camp to learn finance and professionalism. I’m happy to have gone through it. When I was operating under an umbrella institution, it was very easy to secure meetings, as big names go a long way. As an entrepreneur, you get through the right doors because of the magic of the technology your team has built – not because of the backing of an esteemed institution. And, of course the certainty of a monthly paycheck vanishes!
Would you recommend being an advisor first and then an actual founder? What were the pros and cons of approaching things that way?
Before I founded Smartgift, I was advising my co-founder Bernd Strenitz on Guguchu, his previous business, which was acquired in 2012. It gave me a front row seat into entrepreneurship. I got to witness all the nuances of building a business firsthand while maintaining a healthy distance from it. That gave me a real solid understanding and the best opportunity to truly consider whether that route was one that I wanted to pursue before I quit my day job. That collaboration also resulted in Bernd and I teaming up for Smartgift having already established a strong relationship.
What about aspiring founders who haven’t had the opportunity to work in emerging markets. Any advice for them?
A book that I highly recommend is Jugaad Innovation. It goes beyond just charting consumer growth in Brazil, Russia, India and China, but really goes into how the emerging world is pioneering new practices that embrace rapid growth and intelligent improvisation. For example, CEOs tend to manage innovation like orchestra conductors with a hierarchical, and prescriptive approach. What the BRIC model teaches is to innovate like a jazz band—with improvisation, creativity, and agility—a perfect prescription for a CEO operating in the startup world.
Do Kochhar’s claims mesh with your own experience?
Photo credit: Michael Garrigues via Flickr.
