Sucheta Dalal and Debashish Basu, two Indian journalists, wrote a book titled The Scam: Who Won, who Lost, who Got Away. The book was written in 1992. The writers tried to investigate the events of the scandal in the Indian stock market in that year. Inspired by this book, last year a series came out named Scam 1992 - The Harshad Mehta Story.
For many, Harshad Santilal Mehta was a scammer; and for some, he was a genius who used the loopholes in the banking system. Let us not get into that debate, this article is all about what you can learn as an aspiring entrepreneur from the book and series.
Unquestionably you have listened to the phrase before. Any person that has gained massive success, had deeply envisioned their dreams before they became a reality. The dream leads the reality, always. Harshad thought of becoming a stockbroker when he was working as a clerk for 600 rupees per month living in a tiny apartment with his family. No matter how much struggle you have in life, you should dream big.
Taking risks does not mean you will be successful every time, you can face failures and that is fine. The thought of taking risks may lead you to failure. But even that can advance you into a better person by developing the ability to recover fast from failures.
When Harshad thought of leaving the job and starting his own trading business, he took a risk. As the market crashed, he lost his capital and he could not trade anymore.
He recovered his losses by starting a consultancy firm, selling the experience he made from the market and eventually recovered from the loss and got back to trading stocks again! As mentioned earlier, risks can lead you to failure and it teaches you how to recover from losses.
Meet new people
Don't just stay at your home office or behind your desk. If you want your start-up to grow, you should become a networking specialist. You can get ideas, funds, insights from people you do not know personally. The ability of networking is one of the most fundamental skills any startup founder can have. In the earlier period of Harshad's career, he met so many people from experienced stockbrokers to senior officials of Banks and government organisations. Every successful meeting helped him reach a new milestone in his business. You will be able to do it if you understand the importance of meeting new people.
Build a competent team
One of the biggest duties of an entrepreneur is to drive the team towards high performance. The understandings and connections inside the team are vital. An efficient team will definitely outperform a disconnected organisation, where people operate alone. If you carefully watch, you will see Harshad got to meet many new people and pulled some of them into his team who played a role in his success.
Get a job
Sometimes getting a job in your field of business can teach you a lot about the trade and push you several years ahead in the competition. When Harshad decided to become a stockbroker, he got a job in a brokerage firm to learn the business. It was not easy for him to convince his employer to hire him, but he was able to persuade his boss. So, if you want to become an entrepreneur and you need to learn the trade, do not hesitate to get a job.
Collect data and stay informed
Numbers are everything in any sort of business in terms of growth. If you ever go to a serious investor, you'll notice that investors always ask for numbers like market size, return on investment, cost per customer acquisition and many others.
Knowing the numbers is not everything, you have to stay informed about your niche. There will always be new information related to your niche such as new technologies, or government policy or a new trend. Staying updated will always benefit you.
Reputation is everything
Businesses spent a lot to build a brand. The reason is to become trustworthy. If someone is not a dependable character, he will hardly succeed. It is applicable to any sort of business or profession. It is necessary to deliver what was agreed. Harshad's personal brand was built because he provided consistent profits to his clients even when he was bearing losses.
Chase new opportunities
If you are doing one thing at a time, don't forget to chase new opportunities for the sake of focusing on one particular business. Sometimes you will find other possibilities which can be operated in parallel with your current project.
Harshad was trading in the stock market and met someone who deals in the money market. It was a new opportunity, and Harshad tried it overlooking rejections and risk factors. It turned out to be a profitable move for his business.
Stay out of legal troubles
Last but not least, legal troubles can damage and to some extent destroy your business. Understanding the basics of contracts, tax, intellectual property, are essential for your business. Check your contracts & tax files in the first place. Get your trademark and do not violate other businesses' intellectual property rights to avoid lawsuits.
In Harshad's last years, he got into legal troubles with tax authorities and many other government agencies which got him arrested. In the end, Harshad was charged with 76 criminal cases and 600 civil suits along with his family members. He was not able to deal with the stresses of legal difficulty and died in jail.
If you are passionate about an idea don't hesitate to start a business. Starting off is not everything, there are steps and strategies to make an idea work successfully. Your own ideas and tacts with a combination of established strategies can lead you to a thriving entrepreneurial journey.
Saiful Bari is a student at the Department of Law and Human Rights, The University of Asia Pacific.
Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the opinions and views of The Business Standard.