Miami, US: US-based Endeavor Global
, a non-profit group formed in 1997 and whose mission is to promote the growth of entrepreneurs in emerging markets, selects what it calls “high impact” entrepreneurs from developing nations and offers them intensive strategic and management support. By high impact, Endeavor means these firms have the potential to inspire large scale change in the lives of people and improve the economy.
Making high impact: Endeavor Global’s chairman Edgar Bronfman (left) and the group’s co-founder and chief executive Linda Rottenberg.
Entrepreneurship in India, it says, has a bigger risk than the economic slowdown sweeping the world: geopolitical risks from its next door neighbours. In an interview, Edgar Bronfman Jr., chairman and chief executive, Warner Music Group Corp. and chairman at Endeavor, and Linda Rottenberg, co-founder and chief executive, Endeavor, say, though India continues to be an attractive investment destination and a favourable region for entrepreneurship, security issues in the subcontinent may hurt entrepreneurship more in the country. Edited excerpts:
What is Endeavor all about and how does it help entrepreneurs?
Bronfman Jr: Endeavor is a very exciting model for economic development. I have always looked for ways to make sure that others also had opportunities to make a difference. At Endeavor, we give support and not money. The support is provided through financial planning, strategic planning, networking and mentorship.
High impact entrepreneurs make a difference to their economy. Promoting and encouraging entrepreneurs in emerging markets is a way to develop those economies and create a better world to live in.
Rottenberg: The soul of Endeavor is its selection process. We have analysed 20,000 entrepreneurs from 11 nations. In addition to support, we do customized need assessment of each firm, as they vary depending on their geography. There is great talent around the world, with huge investment opportunities, and it’s not just confined to the US.
Do you think the current slowdown will impact entrepreneurship, particularly in the developing nations?
Bronfman Jr:I believe economic crisis accelerates entrepreneurship. Entrepreneurship comes from necessity than vision. It’s in bad times that people try to break through. Also, a lot of people lose jobs and they get into doing what they would not have done otherwise. Also, companies coming up during this time need relatively less capital. Our hopes are high around energy and healthcare.
Do you feel investors are trying to hold back investments?
Bronfman Jr: I don’t think investors are sitting on their wallets. Investors, particularly VCs (venture capitalists) and angels, are searching for firms worth investing. Their model is not dependent on equity markets. I, however, feel that raising big amount of capital will be a constraint.
Rottenberg: A lot of our entrepreneurs are now telling us that it is a good time for them to attract talent.
What are Endeavor’s expansion plans?
Bronfman Jr: We will expand and we will be in 25 nations by 2015. There are certain conditions we need in a country before we start there. For example, in Chile, we started and stopped and restarted as our model was not right in the beginning. The economic environment of a country has to be reasonable. It should not be so underdeveloped that we cannot do anything there. Also, it should not be so developed (such as Singapore) that we are not needed there. Also, we need committed locals. We do not want to fail.
Rottenberg: We are careful about not expanding quickly. It is important for us to get the model right.
How do you see entrepreneurship in India and what are the challenges it may face in future?
Bronfman Jr: Frankly, opportunities in India are in the areas outside tech and services, which have been in prominence so far. We see opportunities in agri businesses…they have low capital needs. In India, the issue of security is high to the extent that things happening in Afghanistan and Pakistan have resonance on India’s stability. If it gets volatile, it will retard entrepreneurship much more than the current financial crisis.
Rottenberg: We are looking beyond Bangalore, Hyderabad, Mumbai and New Delhi. We are looking closely at tier II cities and at firms working at the bottom of pyramid level.
What are the biggest challenges for entrepreneurship in emerging markets?
Bronfman Jr: Entrepreneurs are neither celebrated nor admired…anywhere across the world! In Latin American languages, there is no word for “entrepreneurs”. No parent wants their child to start their own business. Also, the socio-economic divide is very high, making it difficult for people to start on anything new.