EE October 2011

O C T O BE R

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The Entrepreneurs’

Express MONTHLY MAGAZINE OF THE E-CELL, VNIT

ALL THAT GLITTERS...

Rediscover the obsession called Gold

9/11 & Co. America: A Decade Later

THE ABSTRACT NOUN A new take on Business 1

The Entrepreneurs’ Express Design Coordinator: Pratik Das Content Editor: Ankur Mathur Content Coordinator: Sanchit Agrawal Stock Market Analyst: Vedant Bang

The Entrepreneurship Cell VNIT, Nagpur is an initiative of some visionary students of India. It was established with a noble aim of reducing the industry-institution divide by making the rift, seem that lesser. Thus would be done by making the interaction between the two parties for viable through increased frequency and taking effective measures to continue to foster a healthy relationship between them.

We are on the internet only! Green environment, save money, live life!

Post you queries, comments, articles, and suggestions at : ee@consortiumvnit.com Cover: The Gold Souk, Dubai City, the UAE Facts contributed by: Sanchit Agrawal, Content Coordinator, EE

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9/11 & Co……………………

The Editorial

All That Glitters………..

Contents

MonthlyFeature

Juggling Jargons………..

Benefit-Cost Analysis

Breeding a New Life….

Kiran Mazumdar Shaw

The Abstract Noun…….

Lord of the Senses

Starting a Start-Up……

Nurture Talent Feature

The Stock Souq………….

The Market Analysis

Express Times……………

E-Cell News 3

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-Ankur Mathur

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Although the month is October, September holds a special connection when it comes to starting a new chapter in world history. Ten years ago, as the world stood aghast staring at seemingly diabolical turn of events; little did it know that one sadist psychotic mind could unleash a fear psychosis that even Satan would be ashamed of himself. And what started with the US continued in several nations namely England, Scotland, Spain, France, Morocco, Turkey, India etc.

phrenia, it‘s no wonder that Moody‘s and Standard & Poor‘s outlook verdict for the USA is ‗poor‘. Ever since the Bush administration went on an all-out war against Iraq and Afghanistan, the economy has gone through a chequered phase from economic downfall, bankruptcy, credit rating reductions (from AAA to AA+), rising interest rates and the like.

But the one thing that the Recession has taught pseudo a war-hit American is to rely on Social Support no more and save money in his accounts. Thus, public spending reduced drastically and Indirect taxes – Service Tax, VAT, Goods Customs Tax – all took a hit. Lesser receipts meant lesser investments and the cycle is eerily in motion.

The US then tried to retaliate; Pakistan, Afghanistan and Iraq have had to face their annus horribilis year on year. For ten whole years the ‗America‘s War on Terror‖ as former President George W. Bush put it was waged. His successor and current President Barack Obama finally laid the ghosts of 9/11 attacks to rest in the National September 11 Memorial and Museum opened this year much to the relief of soaked eyes and heavy hearts. And as if legitimating Shakespeare when he wrote (Act I, Sc. 7)

So 9/11 & Co. has given and is giving the world a run for its money. Because, every time another of its type occurs – anywhere in the world, it revokes those horrible scenes of helplessness, dastardly crimes that are not only unjustifiable on grounds of humanity and ethics, but those “…that we but teach with a rigid bend of mind would agree that they Bloody instructions, which, being taught, re- simply don‘t make mathematical and economic turn sense. Why reduce trust in an already speculaTo plague the inventor: this even-handed jus- tive environment and fuel another session of tice profit bookings…leading ultimately to governCommends the ingredients of our poisoned ments resorting to monetarial measures to chalice maintain liquidity in flurry?

To our own lips.”

For all that we can do, make moolah while secu-

That poisoned chalice did indeed return to its rity shines because losing it won‘t take a jiffy inventor – Osama bin Laden was killed in an and recovery is a long never trodden path mired almost sci – fi inspired, overnight operation and bumpy. complete with soundless helicopters, armed men crashing in and the assailed dumped in his sea – grave on May 2nd, 2011. The American revenge - which eventually became ‗Global war on terror‘ – was over.

Its impact on the US economy and Global Health has been pressing and difficult for most companies to bear. With public debt at a staggering $14.77tn (100% of GDP), rising unemployment, practically defunct public health policy till May 2011, plunging productivity and a paranoia enough to be synonymous with schizo-

The National September 11 Memorial and Museum.

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All That Glitters‌ -Amit Pillai Cometh the festival time again and this Diwali sessed with traditions, gold and silver have actoo, the commodity market is all set to reach tually reached the status of currency. It won't be new heights. With the sales of gold and silver a matter of surprise if in some years, India already on a high, in shifts back to the traspite of the soaring ditional barter sysprices, investors of tem with the trading the market are plancommodity as gold ning to grab every or silver. opportunity to make What kind of impact money. has this market had Dussehra followed on the Indian socieby Diwali forms a ty? The gold and silsalient- part of Inver market boom was dia's largest festive not a sudden pheseason. No wonder nomenon. Over the the season would alyears, it gradually Golden futures: Stacks of gold ingots ready to be cast into so mark a definite increased to exorbiexquisite jewelry. growth in the comtant levels and today modity market. If as we see, the market not for the season, the particular day of Dhan- boasts of having a lion's share in financial India. teras will definitely find huge investors trying Besides having had an impact on the buying and out their luck at the commodity market. selling trends of the two commodities; it has alIn India, where traditionally only some classes so had a socio-economic impact on the Indian of the people were inclined to business and the society. With a larger proportion of the common market, gold and silver could otherwise never man actually investing into gold and silver tryhave had such a vast impact on the general pub- ing to grab their share of the profit, Indians are lic-trade relationship. However, a gradual becoming much more economically sound and change in the trend of 'biased business' has re- financially productive. The result of the same sulted in the masses actively getting involved remains evident from the increase in the per into the bullion market. In a country so ob- capita income of the Indian economy. Clever 6

businessmen are a joint result of this commodity market and the real estate. As people are investing more and more into the market, the competition also stays healthy. With gold and silver getting dearer, everyone wants to ensure that s/he purchases an appropriate buy for his or her money.

It isn't surprising to see people checking for the BIS hallmark and the 916 quality mark before purchasing gold; ditto with silver.

ed the markets. Marriages have now become an investment more than a ritual. Not just has this helped in making the Indian masses financially sharp but it has also made the Indian marriages more posh than before. The Indian economy has actually changed from an agricultureoriented to a tradeoriented one and the commodity market to a large extent could be held responsible for this immense change.

However in view of Not just has the the recent technologiPeople buying gold on Akshaya Tritiya from the Lakshmi boom in the market cal advances, the Gold Palace, Mangalore. changed the mindset commodity market of Indians, it has also resulted in a marked like every other trade has been affected by adulchange in the social patterns of the Indian mun- teration. And so, as investors still keep on indane life. While people nowadays prefer to keep vesting into gold and silver, market analysts list gold and silver safe in their bank vaults or in down only one important fact: "ALL THAT gold loans, artificial jewelry material has flood- GLITTERS IS DEFINETELY NOT GOLD!"

For every 50 miles (80 km) driven in an automobile, a person has a 1 in a million (.0001%) chance of being killed due to a road traffic injury.

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-Sanchit Agrawal Now that you can convert everything into one year scale, lets move ahead. What if you are worried about the profitability of your business?

Confused as to which business model to apply?

costs and the estimated benefits of a project to see if the benefits outweigh the costs (i.e. if it is worth investing in the project at all) and by how much (i.e. which one to choose). In this approach, benefits and costs are expressed in money terms, and are adjusted for the time value of money, so that all flows are expressed on a common basis in terms of their ―Present Value‖.

The benefit terms are then divided by the costs and if the outcome if more than 1, the proposal is said to be profitable. The following is a list of steps that comprise a cost-benefit analysis:

These are the common situations that every entrepreneur has to face while setting up a new business. The solution to these problems involves usage of a few techniques which calculate the estimated returns for a particular proposal. Some of the techniques used in this regard are Cost-benefit analysis, costeffectiveness analysis, cost-utility analysis, economic-utility analysis, fiscal impact analysis and * Establish alternate projects. social return on investment analysis. In this is* Collect all cost and benefit elements. sue, we shall discuss the most trivial technique, * Predict all outcomes of costs and benefits over Cost-Benefit analysis. the duration of the project.

* Put all effects of costs and benefits in monetary terms. * Calculate the net present worth of project options. * Analysis. * Recommendation.

Cost benefit analysis is a systematic process for calculating and comparing benefits and costs of a project for two reasons, if you want to find out if your business plan is profitable or not or if you have to choose between different proposals. It involves comparing the estimated

Though simple to execute, this analysis has some controversies including valuation of benefits when they are in terms of human lives.

Such controversies are taken care of in costutility analysis and other techniques which shall be discussed in the coming editions.

Approximately 5% of people who gamble will become problem gamblers (addicts). An addicted Gambler is a person who spends money irresponsibly which impacts on themselves and the people around them.

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-Shehazad Dhuliawala and supplied them to brewing, textiles, biofuels, animal feed and other such industries across the world. In the mid-1980s with a loan of US $250,000, Biocon was able to build a solid-state If you want to succeed, first learn to fail. fermentation plant which helped in the advancement of its R&D. - Kiran Mazumdar Shaw.

The next 20 years saw growth; "The enzymes "I was an Accidental Entrepreneur" claims era of the company" she calls it. That is when Kiran Mazumdar Shaw, the chairperson and Mazumdar realized that the business model of managing director of Biocon, India's largest biothe company needed change and if anything technological multinational. could speed up the growth, this was it. This is Kiran Mazumdar's story with Biocon is quite an when Biocon invested heavily into biopharmainteresting one. Trained to be a brewer, with a ceuticals and within a small span of six years, degree from Australia, like her father she the world watched Biocon rise from a 25 million wished to join the brewing industry. Her gender to a 100 million USD enterprise. This is the time seemed to impede her aims, though. The brew- when Biocon decided to go public. ing industry in India during those times was So what‘s the mantra? The mantra that transparticularly male dominated; Mazumdar strugformed an Rs.10000 setup to the multi-billion gled hard to find a job. "A male Bastion" is what dollar enterprise Biocon is today. What was the she described the industry as then. charm that transformed the 25 year old, inexpeHer journey to being an entrepreneur started rienced ‗accidental‘ entrepreneur – towards with an accidental encounter – with Les Auch- whom many remained skeptical to lend money incloss, an Irish entrepreneur. Les Auchincloss – into The Kiran Mazumdar Shaw? was the initiator of Biocon in Ireland and wantAccident she claims, Accident we say not. Fored to extend its reach to India. tune, as said, has always favored those who try; With nothing but the support from Les Auchin- for success is never hit in a single shot. Dilicloss, Rs.10, 000 and the rebellious streak in gence links entrepreneurship to success, diliher, Mazumdar started Biocon in India, begin- gence is fueled by zeal; an undying zeal to not ning in a small garage. The beginning, as always give up. Many innovators never rose to success, was the toughest; India was never a country ori- many were cast-off into oblivion. But for many, ented much towards R&D, the future for a bio- once they start, ‗alea jacta est‘, fate has no role chemical company, whose sole produce re- to play and there is no turning back from their quired R&D, seemed bleak. 25 year old Ma- goal; for failure has been just a new way to zumdar never gave thought. For in the end what learn. We end with one of her famous quotes: "I were such setbacks against myriad hours of really believe that entrepreneurship is about being able to face failure, manage failure and sucstruggle? ceed after failing."

Until 1983, the company blended only enzymes 9

The Abstract Noun -Abhirup Lahiri

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Starting this month, we present to you The Abstract Noun, a new and fresh column with takes on Business that reflect on the casual and lighter side of Entrepreneurship. The articles will be penned by Abhirup Lahiri and shall suit the usual reader in want of seeing business in a different light. So read on, and enjoy...And yes, do write in to us about your reactions on this initiative of The Entrepreneurs’ Express.

LORD OF THE SENSES ―Beep-beep‖ the organizer reminds him of the appointment, one that he has been eager for, ever since the hope of a rocket-launch to success began governing his ambitions. On either side of parity lie disparity and the safest way out for a fatigued mind as this, potentially derelict of reason would be to yearn for a miracle that the coin stands erect on its edge and time seizes to be a variable. But as fate would have it, his paranoia of a failed business proposal continues to haunt him and to add to his distress is the apprehensions of a possible déjà vu of an unpleasant dream that may lead him astray. Yes, before the Sun drops below the horizon again, he has to make a decision, one that can redefine his career as an entrepreneur and reframe the lives of a thousand people who are indebted to him for the very distinction of his, which to him lies on slippery grounds.

What else is entrepreneurship but innovation in creation and dexterity in innovation? A successful entrepreneur is one who minces doubt with practicality and stagnancy with dynamism, and it is his acumen and predication which breeds the confidence to merge the forks of decision making into a single file tightrope walk to a Utopian view of the real side of sanity. Any jitter on this path and it‘s a headlong dive into the „oblivion of everyone‖, and it is a fear of this that monopolizes the conscience of our protagonist today. ―Beep-beep‖ it is his organizer again, re-minding

him of the same appointment, the turning point in his life, the game-changer that will either out limit copiousness and affluence or… well… do pretty much the same. Brimming with impudence and self-belief, he is yearning, craving to live the moment, toss the coin for he knows the outcome. The coin is biased, prejudiced to spell success for the illuminato and no sooner does he allow the laws of gravity choose the better side of parity will the world glow up and bow down to his indispensability. Yes, before the Sun drops below the horizon again, he has to make a decision, one that will transform lives, lionize personalities and eventually bring him the contentment of an immensely successful business deal…

A wink of an eye and the dormant gaze in-to nothingness erupts to life. The protagonist is distraught but delighted, shattered but overwhelmed and the better part of reason that his conscience gives testimony to, is that indeed, today, he has to make a decision, one that will make or break him. He has lived an illusion and foreseen an event whose odds of actuation are a slave to the objective reality of the world of his presence. We, in real life, are nothing else but a projection of this protagonist, one that hears only one of the two instances of the ―beep‖; and the very instance that stirs our auditory senses defines our competence as an individual and acumen as the Lord of our own senses…

Bill „Hewlett‟ and „Dave Packard‟ tossed a coin to decide whether the company they founded would be called HewlettPackard or Packard-Hewlett.

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Up Starting a Start -Amit Grover, Founder, Nurture Talent

After having interacted with 5,000 start-ups, professionals and students of all ages and if there is one thing that makes a difference between a successful and an average company, it‘s the never-say-die attitude of the entrepreneur.

So what are the blanks people usually need to fill while beginning a start-up?

what he told me, ―If only I could clone myself — I need someone as energetic and passionate as myself.‖ Go out, network, meet people, take part in exhibitions, attend business plan competitions, share your vision with friends and ask for acquaintances, post your requirements on LinkedIn, or tie up with someone who can do a 1. Money: If I had money, I would have grown part of your job, but keep moving. For them, I advise them to start working on these areas and much faster, but investors do not support my idea — this has been the most frequent com- learn the art of selling. plaint I have come across. Money does not 3. Office, infrastructure and miscellaneous make a business successful, but it definitely items: I call these the ‗hygiene factors‘— they plays a very important part. So if you feel the just add to the comfort level of an entrepreneur need for money, then reach out to investors, in their ventures but do not add any real value make a good business plan and polish your to customers. Neither does their absence lead to pitch. any real issues. Remember, some of the best Reach out to people who believe your idea and companies were started in a garage — Apple, are willing to back you even with a small HP and Microsoft. amount. Do not forget that the most important So keep an eye on the big picture without undue source of cash is your customer —make them complaints about what you do not have. happy It is the pride of creating a solution that the 2. Team: I recently met an excited young man, world will use happily that makes a successful who was a little disturbed as his venture was entrepreneur so get down and start-up. going nowhere. I asked him why and this is

'Coca-Cola' is the most recognized trademark, recognized by 94% of the world's population and is the most widely recognized word after „OK‟.

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The Stock Souq: October October--November -Vedant Bang Past Summary RBI, in October, raised Repo and Reverse Repo by 25 basis points (0.25%) and has finally decided to put a brake to its interest rate increment cycle. Market cheered this decision of RBI and SENSEX rose by 520 points in the intraday trading.

Going Forward It clearly seemed that despite all its attempts of rate tightening the Government couldn‘t control inflation. This happened mainly because of the decision to deregulate Petrol and Diesel prices by the government. Due to this there is a double - digit inflation in fuel prices and it is also reflected in other products‘ inflation which are transport dependent.

Indian markets. Because of this Dollar is currently very strong and trading in the range of 48 plus. So the export driven sectors like IT are enjoying good margins and are benefited out of it.

Some private sector banks like Yes bank, Axis bank have increased interest rates on saving account to 6%. This encourages people to keep their money in savings account. So this is an intelligent move by these banks to raise funds cheaply when Repo rate is close to 9% level.

The only stocks spared from interest rate impact are 2-wheeler auto segment, private banks, FMCG. IT space is also recovering fast from some setbacks mainly due to the stronger Dollar. 2-wheeler auto segment has not seen dip in the demand in spite of the rate tightening and buyers are ready to for the delivery for a long period of upto 3 months. Private banks are conNow though the government has stopped the tinuously coming up with different ideas to rate tightening cycle, there is not much to cheer raise the funds at cheaper rates. for industries. Because when interest rates are Overall market sentiment is positive for now as high, the spending tendency of the customers is there is no new bad news even from Europe reduced and affects sectors like real estate, 4- side. So market may go higher from here onwheeler vehicle segment etc. directly. This in- wards for short term. But due interest rate hike tern affects other sectors like mining, metal, ce- the growth rate will be slow and NIFTY will rement since their demand is reduced. So the IIP main range-bound for medium term with 5150 data and quarterly results of the companies as its basic support level. On the higher side have been disappointing.

NIFTY may taste 5550.

Last month FIIs pulled their money out of the

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October 2011: BSE Sensex.

The energy saved by recycling a single aluminum can would run a TV for three hours. Every three months, Americans toss out enough aluminum to completely rebuild the nationâ€&#x;s commercial airline fleet.

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Express Times of the website have been handled remarkably by VNIT, Nagpur: The E-Cell VNIT has been or- the students of various Departments who have ganizing, in association with VNIT, a Manage- expertise in this field of engineering—this appliment and Business Festival in the campus by cation of knowledge is praiseworthy. the name of CONSORTIUM. This unique festi- Speaking on the occasion was the Chief Guest val provides a platform for students from all Ms. Sarita Kaushik, Vidarbha Bureau Chief, Star across Vidarbha and India to be a part of the job News and Star Majha, she congratulated the Inproviders fraternity as they come face to face stitute for coming up with such innovative ideas with them and discuss the pros and cons of ven- to further the development process of students turing into the corporate jungle even as they holistically. She also mentioned that with this EE Bureau | 20th October

A screen shot of the new CONSORTIUM 2012 website.

day and age, student organized events often compete in competitions that test their mettle turn out to be the best because they have come to understand things and tricks of the trade in doing so. faster.

As part of the run up to the event, slated to be held in January next year, the Organizing Team With an audience of over hundred people, the unveiled a fully refurbished website for the event was a great teaser for the things to come. event which can be accessed at This one‘s surely going to be a success. www.consortiumvnit.com. All the technicalities

According to the American Solar Energy Society, the amount of sunlight that falls on the Earth‟s surface in one minute is sufficient to meet world energy demand for an entire year.

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