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My last Blog Post, AQ Blog Post #67 – Failed Business…For Usual Reasons, generated several comments, emphasizing about the need to look at the topic in more detail. Here is my take on it.
Several people whom I knew personally, started their own businesses after many years of management. Many of these were small scale ventures. Most did not do well.
Most salespeople went into marketing their own products acquired from here and there. Although these guys were ‘sales managers’ but they could not ‘manage sales’. The scale of business did not matter. Some people from Pharma tried to go into some other line, such as printing or making promotional items etc. The outcome was not much different.
Those who made it big are few but note-worthy.
Iqbal Ahmed, who started HiQ was my second field manager. Later, we were not in reporting relation for many years because both of us were relocated. But he remained my senior till he left in 1996 and went into business. HiQ started with three imported products and is now a multi-billion business, sitting in the top few. HiQ was always customer-centric. Iqbal sahib and I had one-on-one discussion about his business for about three hours when he had just started. I was working in Hoechst then. His model was so different that I could not comprehend it at that time, and I told him so. Over time, IA proved my views wrong on several counts.
Qaiser Waheed of Medisure was also my colleague. He worked for Roussel which was a sister company of Hoechst. Later the two merged. He went into business in 1995-96. His business grew rapidly, but unlike HiQ, Medisure went into manufacturing much earlier. Medisure in the beginning was focused on Neurology/ Neurosurgery, but lost hugely to new, more agile, competitors.
Ishtiaq-ur-Rehman was product manager in Abbott when I worked there. After few years, he went into business as Icon Pharma. Icon also acquired manufacturing facility and brands of Spencer Pharma which had earlier acquired Fisons, a UK company.
Horizon has made big news in the industry in present time. I don’t know Nazim Sayani personally, but I do know that every budding pharma entrepreneur would give an eye to become Horizon. Many small manufacturers also would do the same to get a marketer like Nazim. The rise of Horizon is meteoric and worth studying.
Genetics worked relatively low profile but was able to build sizeable business in about a decade. Aamir Qayum is known to me since he started in Pharma sales. Genetics focused on Neuro-Psychiatry, stuck to it and built it up.
Novamed was started by Idrees, who was my colleague, and Shafiq Abbasi. Later, they were joined by Tahir Iqbal, a very senior Pharma executive. It is a very successful venture and has grown rapidly. They have made contract manufacturing as their specialty.
Another successful project to mention would be Galaxy Pharmaceuticals. Khalil-ur-Rehman started as medical rep and left the industry as MD. Galaxy worked specifically in the high-end products and services in Gynae and Obs.
Based on my personal observations and analyses over the years, I see the following factors as Key Success Factors in successful ventures. Nothing works alone, various combinations certainly do.
- Planning. There was a reasonable period of planning before starting the business. It spanned at least a year or more, depending upon the plan. This time was spent on product selection, source selection, area selection, customer selection, team selection etc. They went into business with adequate homework. They must still have faced problems, but fewer and less stunning. Another critical aspect of planning is to do it in good time, when you are secure in your job and you are not hard-pressed to do something urgently. Virtually everyone I know, who started planning after losing a job, lost in business also. It is so written on the wall. Pressure to generate income quickly clouds the thinking process and fatally hurts the venture.
- Resource Allocation. No one had huge or unlimited resources. But they allocated resources properly. If they could not go into manufacturing, they did not kill themselves to do so. They worked on building and consolidating business through other sources. They went into manufacturing when they could. Some of these tried to fast forward putting up a plant, but it damaged the business. Same is true for other things like buying a Land Cruiser when the business could not afford. Personal and business finances must never be mixed. This is a golden rule anyway. Businesses can make and lose money on any given day. Personal life must not rise and fall with this every day. From the outset, business finances must be separate, and business must get priority over everything else.
- Commitment. Whether you call it burning the boats or closing all other windows, I have seen unwavering commitment in these guys. They gave it all they had; time, energy, mind, body, and heart. They were extremely serious about their business and never shirked the responsibility.
- Focus. They kept a sharp but stable focus. While in business, many new opportunities come along the way. These may be examined carefully but picked up rarely. A business should know what its focus is and must stick to it. The focus may be therapeutic specialty, class of drugs, type of business, nature of business, competitive advantage, or else.
- Competitive Advantage. What will you do differently? This is the starting point for identifying/ creating competitive advantage. All successful businesses identified or created a tangible competitive advantage. They did not just copy what they did before in their job, or what their previous company did. Identifying competitive advantage starts from a solid SWOT analysis, which in itself is rather poorly understood and done mostly for the heck of it. Large organizations such as Werrick and Pharmevo also gained early and big success by creating competitive advantage. However, as I quoted in a previous blog, a competitive advantage should not be taken as etched in stone. Today’s advantage will be lost tomorrow.