Incubating entrepreneurs
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MATS has conceived the idea of a business incubation centre which helps young entrepreneurs pursue their careet and a dream.
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Budding entrepreneurs of the Mahaveer Academy of Technology and Sciences with Chenraj Jain, Chairman, Jain Group of Institutions (fourth from right). — Photo: K. Murali Kumar
A STUDENT of any of the Indian Institutes of Management, even before completion of his or her course, is sure of a "fat pay packet." Unimaginable salaries for freshers come on a platter. No wonder, there is a scramble for seats in these institutes. Is that all to it? It seems so.
Not so with one institution — Mahaveer Academy of Technology and Sciences (MATS). Driven by its Chairman, R. Chenraj Jain, MATS is creating "job providers, not job seekers". "I am not interested in my students getting Rs. 6 lakhs salary. I want them to create jobs for others, I want them to be part of the nation building exercise, I want them to create wealth for themselves and for others."
This is the genesis for the business incubation programme of MATS. Fourteen students of MATS and two other individuals have conceived and set up small business ventures, mostly in the services sector, in Bangalore. There are many who dream of starting up and heading big companies, often in vain because they lack the required finance or they are not dogged enough or they are strong in their own domain but not confident about other aspects of business. This is where an incubation centre comes in.
A business incubation centre happens to be an ideal launch pad for an young entrepreneur. Such a centre would ideally first check the personal qualities of the entrepreneur and his or her skill sets. "Does he/she have the fire in his/her belly" is the question often asked. Relevant skill sets and some basic domain knowledge pertaining to the business that he/she wishes to take up are desirable pre-requisites. Finally, the centre establishes that it can support the venture by providing physical infrastructure, finance and strategic guidance. The entrepreneur then goes off the starting block, ready to register as a firm or a form a company. And MATS has been the starting block for some of them.
Arun Prabhu, who got the push from Mr. Jain, is running a successful market research company called Intouch Analytics; Vineet Agarwal, an MBA from MATS, is the man behind Damask, a company into distribution of school uniforms, shoes etc; Jyothi Jain has set up Sheetal Interiors, supplying plywood and veneer material to the construction industry; Saket Jalan is running 10 hostels for the Jain Group of Institutions; Punit Solanki has a retail network of artificial flowers and there are many more. All of them owe their success to Mr. Chenraj Jain who not only has approved their projects, but got them funds, either from individual investors or from his own pocket. The combined turnover of these companies is about Rs. 80 crores.
These students have become entrepreneurs, egged on by Mr. Jain. Of the nearly 350 students, 40 per cent are interested in becoming entrepreneurs. States Mr. Jain: "We do not push them into business. They should have the fire in them and if there is a spark, we take them and nurture them. But after seeing the success of some incubated companies, students themselves are lining up with projects. I want to incubate 100 companies in two years and my desire is to make 9,000 entrepreneurs in a decade's time and they should be able to generate an employment of five million."
MATS B-School was started in 2001 and Mr. Jain got the idea from Harvard Business School where 40 per cent of the students end up becoming entrepreneurs. "At the Jain Group, we are looking at the larger perspective of channelising the human resources. The knowledge economy is growing and we need to put the students in the right direction. They have ideas and they only need financial and moral support."
In India, no institution had such initiatives, though the IIMs and Nirma Institute of Management had business plans for students, but were not funding them the way MATS is doing.
Mr. Jain feels his venture to mentor the programme participants would vindicate the need for a close relationship between industry and academics. Ideas can be converted into technology business products only through rigorous applied research. "On our part, we shall be mentoring the programme participants and extending our facilities and ideas to them. We will provide opportunities for developing business prototypes as a prelude to commercial operations."
As to who would bear the risk of the incubates, Mr. Jain states "all the risk is mine." The mission is to prepare a talent pool for entrepreneurship. Bangalore has a huge potential needing several one-stop services and upgradation of family-owned businesses to offer a ready platform for students to come up with good business ideas for incubation.
The incubates will provide a platform for the MATS students to experience the pressures of running businesses in a competitive landscape, the pains involved in surviving, interfacing with customers and developing competitive advantage and finally growing. In five years, the business ventures of the students would have grown and they can break free from MATS. "Normally, they would love to be with us for various reasons. We imbibe in them values, motivate them to create jobs and have been with them through thick and thin."
Mr. Jain mentions a student from Gujarat who was studying at MATS and was depressed for various reasons and how he goaded him into starting a "fast food joint." "Now, he is doing a business of Rs. 20,000 daily. I gave him the money to start the place and he has brought in management skills into the business and is a runaway hit. I am interested in such students. I will be starting such projects in Chattisgarh where MATS is an University and also in Maharasthra. I am incubating professional companies, so that they would be able to raise fund from the market, if need be. They don't have to go banks. Once we make a prototype of a project, it becomes easy to repeat. At MATS, we are concentrating on the services, consultancy and trading sectors, maybe later we will think about the manufacturing sector."
MATS has a team of chartered accountants, business managers and marketing chiefs, who help the students go through the business plan of the school. It is a 12-step business plan which the student has to address and after that the student has to undergo training in the venture for a brief period, before coming up with a feasibility report. Subsequently, a business plan for the project is prepared and zeroed in on. The final approval is by Mr. Jain who does not take longer than 15 minutes to give the green signal.
Though the Jain Group of Institutions has 21 institutions under its umbrella, the incubated projects do not get any support from them in the marketing realm. "If I give them business from my institutions, then they will become complacent. They have to fight for their share. Take Vineet Agarawal who runs Damask and is into providing school shoes, uniforms etc. I could have given him business, but then he will not know what competition is all about. When he started he had eight schools as his clients, including one from the JGI."
Even while the students are working on their projects from the college campus, they have to complete their courses for which MATS has contact classes on Saturdays and Sundays. "After the first year of their schooling at MATS, we bring in the concept of incubation. But there is no compromise on studies."
Mr. Jain has a vision of starting 100 free schools and this vision is shared by most of the MATS students. The ones who have started business ventures have started contributing towards this project. "We have Jain Vidyaniketan, a free school for about 2,000 students and the annual budget is about Rs. 3.5 crores. We get funds to run the school from philanthropists, investors and the students who have started ventures. It is not mandatory on the part of the students to contribute, but they have been doing it, all for a national cause." Mr. Jain plans to set up 100 day boarding schools in Bangalore, Kanpur, Raipur and other places and for each boarding school, there will be one free school.
Mr. Jain confides: "I don't make any money. Whatever they earn, it is for them. It is a movement, not for money." The movement, he believes, will have a multiplier effect and help in nation building.
R. CHANDRAKANTH
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