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My last two blog posts were about managers-turned-entrepreneurs. The topic generated a lot of interest because a very large number of managers, first line to senior most, have tried to do it. I discussed some patterns predicting failure and success of ventures. Here I give the important points again, together.

Failure Patterns

This is the typical story of a lot of managers, senior and junior, who go into their own business and lose. In my observation, for one successful manager-turned-entrepreneur business, there are one hundred failed ventures. Why is it so? Why does it happen, so repeatedly and predictably?

Following patterns may be seen as reasons.

  1. Managerial mindset is different from entrepreneurial mindset. While an entrepreneur is looking for opportunity, a manager is busy in setting up things. Starting a business from scratch and building it up is not part of managerial training and orientation. Managers build and grow running businesses. Entrepreneurs build from bottom up, from nothing to something. This is such a huge difference that it etches the failure in the foundation. I have talked to many seasoned managers while they were planning to go into business. Their confidence arises from the fact that they were running billion-rupee business or running a thousand strong team. True, but they did not start it. They were assigned to it and they ran it.
  2. Resources-on-demand. Managers get resources on demand. They would grumble and cry if they did not get enough resources. They do not generate their own resources, on their own responsibility. That is a key difference. Entrepreneur knows he has what he has, and no one is bringing resources from elsewhere. When managers start business, they quickly consume their capital on necessary (business) and unnecessary things (office, décor) and then complain about lack of resources.
  3. Shared Responsibility. No manager has the ultimate responsibility of sustaining the business. He has a part of responsibility. Therefore, managers are not used to the position, the-buck-stops-here. Even the senior most managers are supported by senior managers. Entrepreneurs have to take up the responsibility all upon themselves. Managers go home on time, go on vacations and go out if things get rough. Entrepreneurs do not have any such relief. Finally, the managers do know that the business will not fall apart if they are not there, because the overall burden is shared by many. Entrepreneurs know they are a one-man army, the first line of defense and the last line of defense, and there is no one to share responsibility with.
  4. Partial View. Even the senior middle managers have a partial view of business. They may know enough about business, but they don’t know anything about finance or regulatory issues or taxation and so on. The more senior a manager, the more difficult it is to learn new things. Entrepreneurs are not trained on everything either, but they know from the outset that they have to know it and they learn fast.
  5. Option of going back to job. Finally, the mother-of-all-reasons. Managers always carry the notion that they can go back to job. They keep this option open in this mind. With this window open, they never try to run the business like their life was hanging on it. If they know this is the end of life and they have no option but to succeed, they will behave differently. Entrepreneurs never think like this. They do not have an open window behind them. They understand their life depends on it and they give their everything to it.

The managers aspiring to become entrepreneurs should consider both; the factors likely to cause failure and those likely to bring success.

Success Patterns

Based on observations and analyses over the years, the following factors can be seen as Key Success Factors in successful ventures. Nothing works alone, various combinations certainly do.

  1. 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 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.
  2. 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 money 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.
  3. Whether you call it burning the boats or closing all other windows, there was an 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.
  4. 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.
  5. 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.

Entrepreneurship is about vision, commitment and labor of love. Whosoever gives it what it takes, succeeds……


  1. Excellent sir..I am also facing this kind of problems currently…I m doing own my Pharmaceutical business with a unique & innovative way for last 2 years but still facing huge loses and challenges..but himmat nahin Hari na haronga.. inshAllah..Sir I need more suggestions and directions..what is the procedure to contact with you sir.. my email id is

  2. Sir, Excellent Observation and experience which you have share. Its really a contribution from your side to your all colleagues how are still in conflict and just looking for actual advice.

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