Why IIM grads delay entrepreneurial leap

MUMBAI: The placement process is just over and management student Ankur Gattani is experiencing a gamut of emotions. Anxiety, joy and curiosity are dominating his mind.

This strategy and marketing student from the Indian Institute of Management - Calcutta (IIMC) has just opted out of the much-awaited placement process to become an entrepreneur.

All that is ruling Gattani’s mind is the blueprint for his own venture. He has started a web portal called lifeinlines.com, the first product of his enterprise Onelife Knowledge Services Pvt.

His family stands behind him. The website is being financed by Gattani’s mother. “Later, I may rope in private equity players,” says the IIT-Bombay alumnus, adding that Apex Division, a Kolkata-based web development company, would also help him out later on.

Gattani’s effort is, no doubt, laudable. But, what hits the eye is that he is the only student out of a 291-strong postgraduate programme batch at IIMC to have opted out of the placement process to start his own venture.

Other business schools also throw up similar numbers. Six out of 256-strong batch at IIM Lucknow, 4 out of 180 at Xavier Labour Relation Institute (XLRI), 4 out of 250 at IIM Bangalore, 1 out of 180 at IIM Kozhikode and none out of 173 at IIM Indore have decided to tread the entrepreneurial path. 

Though B-schools are primarily expected to produce managers, inculcating the spirit of entrepreneurship is sacrosanct to the institutes, says Madhukar Shukla, professor of strategic management and organisational business at Jamshedpur’s XLRI.

“Aversion to risk is uppermost on the minds of most business school students,” says Anindya Sen, dean-programme initiatives at IIMC, adding that the fear of failure is one of the chief reasons, which works behind students taking the safe way out.

Very few students would want to tread the path less travelled when lucrative offers are eyeing for their attention.

Firstly, to start a new venture, finance is the key, and this often dissuades students from taking a leap into the dark. “We, at best, can give guidance, contacts of private equity players, but not any direct funding,” says Sen. “Also, several students complete an MBA on a bank loan and hence, utmost on their minds is to repay the loan on completion of the course,” adds Shukla.

Also, many students are fresh graduates with minimal or zero work experience and therefore prefer working for a couple of years before setting up their own establishments, says Kalyani Gandhi, chairperson of IIM-Bangalore’s Nadathur S Raghavan Centre for Entrepreneurial Learning (NSRCEL).

After working for a couple of years, individuals often end up getting business ideas, which can be executed and prove commercially viable.

Sen says that at alumni meets he has met IIMC graduates who have started their own firms after 5-6 years of work experience. “I don’t have numbers but there are quite a few people who make savings, contacts, gain experience, and then design the drafts for their firms.”

HeadHunters India Pvt Ltd’s Kris Lakshmikanth is surely one of the people Sen is referring to. The founder CEO and managing director of the Bangalore-based HR firm is an IIMC alumnus, who after working with Asian Paints and Shalimar Paints for around a decade started his own venture in 1987.

“The IT tide had just begun and Bangalore then had no staffing company. I felt that IT people would need a firm which would assist in roping talented people,” he says. Shukla says that the business school syllabi are also partly to be blamed for the poor numbers of self-made business people. 

“The courses teach about marketing, finance, etc in an existing company, but not on how to get a company registered, the licences required to start a firm etc.”

Under the deferment policy in several B-school campuses including XLRI, IIMB and IIMA, the students who have opted out of the placement process to execute their own businesses can come back to the process after two years, in case their ventures don’t prove to be successful.

The institutes also have entrepreneurship development cells to propagate this trend.

g_priyanka@dnaindia.net