When the industry grows...

They are the toughest times, in a summary. Below are the two examples: Outsourcing example from India, Year-1999/2000 example in the US

Outsourcing example:

I was telling Himanshu - when an industry grows like outsourcing industry in India, the enterprenuers there dont need a business plan or even (complicated) business sense. The money flows in, business grows for any small enterprenuer

[I am not trying to say that its easy, but its not difficult if you want to cross over that initial "comfort feeling of known"]

Thinking later over the discussion, I realized probably this type of thinking might be the biggest pitfall for most enterprenuers

When the market is growing, the enterprenuers should balance between:

* making money today and growing with the market (make the most advantage of this growing market)

* building the "competitive advantage" that would help them sustain themselves when the market slows down, whenever it does

It is not easy to realize the second part of this balance.. and makes these times the most tricky ones

It is ironical, though, that companies which build these competitive advantages dont have a clear advantage during the growth period

Year-1999/2000 example:

This was a golden time, tons of money was pouring into the market. New companies were showing up like the grass in the lawn - any company with some slides as business plan had a funding, trial and error was at its peak. The established companies were showing crazy growths

In there, were some established companies that could not keep up the same growth level as the rest of their industry. Some of them finally had to cook the books to keep the investors happy. For them, its a huge peer pressure, pressure built from the WallStreet and the Board, implicit pressure from customers

If we were to analyze these companies, the problem was not developed during the growth period, rather the symptoms were more visible now. No remedy to band-aid the symptoms would solve the issue as the problem would resurface as a different symptom

During this time, the call is a balance between:

* removing the problems from the roots

* flowing as much as possible with the market growth currents