VENTURE 2001, a business plan competition to encourage                                                                                                
Malaysians to seriously consider going into business for                                                                                              
themselves, was launched on Nov 7, 2000. It brings together                                                                                           
people with ideas into contact with people with business sense                                                                                        
and people with investable funds. The opportunity has been                                                                                            
created in www.venture.com.my.                                                                                                                        
                                                                                                                                                      
There is a saying: A venture capitalist is prepared to invest                                                                                         
in 10 projects so long as he is assured of having one                                                                                                 
successful project. The rationale is that the success of one                                                                                          
project may be sufficiently good enough to compensate for the                                                                                         
loss of the other nine projects.                                                                                                                      
                                                                                                                                                      
This may be so some 18 months ago in the excitement of the                                                                                            
dotcom frenzy. With the shakedown of dot- com companies,                                                                                              
venture capitalists are no longer willing to fund an idea                                                                                             
without strong commercial viability.                                                                                                                  
                                                                                                                                                      
Therefore, if you are considering participation in Venture                                                                                            
2001, the following factors may be helpful to note.                                                                                                   
                                                                                                                                                      
The business opportunity                                                                                                                              
                                                                                                                                                      
How attractive is the business opportunity? Will it meet                                                                                              
market needs currently not or inadequately met? Is the                                                                                                
expected market for the venture's product or service large,                                                                                           
rapidly growing, or both?                                                                                                                             
                                                                                                                                                      
Obviously, the best ventures will be in high growth potential                                                                                         
markets early in their evolution, with the promise of                                                                                                 
significant scale in short time. This rules out the me- too                                                                                           
type of business.                                                                                                                                     
                                                                                                                                                      
The acid test of the attractiveness of the business                                                                                                   
opportunity is its economics. What is the price of the product                                                                                        
or service and how much will it cost to sell it, including the                                                                                        
cost of acquiring the customer, to produce and deliver the                                                                                            
product or service, and to support and retain the customer?                                                                                           
                                                                                                                                                      
A word on competition.  Malaysians are great imitators and                                                                                            
price discounting is the favourite route to compete.                                                                                                  
Therefore, it will be prudent to know the current or potential                                                                                        
competition.                                                                                                                                          
                                                                                                                                                      
Think through about what is your unique strength and resource                                                                                         
that make it difficult for competitors to imitate or under                                                                                            
price. For example, is there proprietary content that is not                                                                                          
accessible, to the competition?                                                                                                                       
                                                                                                                                                      
The business context                                                                                                                                  
                                                                                                                                                      
There is a time and place for a given business. It will be                                                                                            
financially quite difficult now to start a new private                                                                                                
college. In the 80s, it was the real opportunity when the                                                                                             
country was beginning to turn to private education as an                                                                                              
alternative to public universities.                                                                                                                   
                                                                                                                                                      
The greatest determinant of the right business is its                                                                                                 
economic, technological and regulatory environment. Any change                                                                                        
in the environment creates business opportunities. With the                                                                                           
move to the knowledge economy, the attractions are for                                                                                                
ventures which relate to ICT technology, particularly e-                                                                                              
commerce. Hence, the interest with dot-com companies like                                                                                             
Skali and Catcha.                                                                                                                                     
                                                                                                                                                      
The people factor                                                                                                                                     
                                                                                                                                                      
No business can be created without people. Any business can be                                                                                        
created by many people. But it will take energy and talent,                                                                                           
consuming passion, untold sacrifice, and unwavering commitment                                                                                        
and focus to create a successful business. Business creation                                                                                          
is less to do with the idea as with its execution. And it                                                                                             
takes stamina to convert an idea into a business opportunity.                                                                                         
                                                                                                                                                      
First, the entrepreneurs. Who are they and what is their                                                                                              
motivation?  Do they believe in the business, and are they                                                                                            
prepared to commit everything into it? What have they                                                                                                 
accomplished so far, and is past performance relevant to the                                                                                          
new business? What skills, knowledge and connections do they                                                                                          
really possess? If any additional talent is needed, are the                                                                                           
founders prepared to recruit?                                                                                                                         
                                                                                                                                                      
Second, the support people. Can the business assemble good and                                                                                        
competent staff prepared to work in a fluid environment and                                                                                           
with a missionary zeal of creating something new? Including                                                                                           
working long hours and previously involved in a wide variety                                                                                          
of work?                                                                                                                                              
                                                                                                                                                      
Third, the outside people. Are there connections to good                                                                                              
suppliers on favourable terms? Bankers and financiers?                                                                                                
Relationships with the authorities? Is the network of the                                                                                             
entrepreneurs and staff strong and helpful to develop, sustain                                                                                        
and enhance the business?                                                                                                                             
                                                                                                                                                      
The risk/reward assessment                                                                                                                            
                                                                                                                                                      
Entrepreneurs are human. They create business for profit.                                                                                             
Contrary to popular belief, they are not risk seekers and will                                                                                        
avoid risk if they can help it. Unfortunately, we cannot have                                                                                         
our cake and eat it, and hence the risk taken should be                                                                                               
commensurate with the prospects for profits.                                                                                                          
                                                                                                                                                      
But we can always confront the risk upfront. What happens if a                                                                                        
valuable member of the team decides to leave? What if revenue                                                                                         
falls short of debt commitments? Or a new governmental                                                                                                
regulation is introduced that hinders the operation of the                                                                                            
business?                                                                                                                                             
                                                                                                                                                      
The dream of entrepreneurs and investors is to drive the                                                                                              
business to IPO stage and to harvest it. For the benefit of                                                                                           
partners, staff and investors, an exit strategy upfront is                                                                                            
important. All it takes is for a dominant partner to form                                                                                             
alliances with big corporations and eventually be bought over,                                                                                        
oftentimes disappointing minority interests.                                                                                                          
                                                                                                                                                      
The old economy is characterised by one major cultural                                                                                                
drawback.  The brightest people end up as professionals or                                                                                            
working for others.  Often, it is the dropout who is the                                                                                              
entrepreneur.                                                                                                                                         
                                                                                                                                                      
We sense a cultural shift in the new economy. Young people                                                                                            
have new dreams. And many of the dreams draw inspiration from                                                                                         
Bill Gates.                                                                                                                                           
                                                                                                                                                      
Venture 2001 is to remind our young dreamers that help is                                                                                             
around.  If the foregoing factors have been carefully                                                                                                 
considered and you feel that you have what it takes to be a                                                                                           
successful entrepreneur, just log in to www.venture.com.my and                                                                                        
take the first step to fulfilling your dreams.