Serial Entrepreneur Shares Start-Up Tips with Students

Published on October 03, 2009

Converting an idea into a business is extremely simple, said Chandra Pendyala, founder of Profitics. “You need to convince somebody that something you have to offer is worth money for them and that they’re going to pay you that money to provide the service,” Pendyala said during the October 3 Entrepreneurship Series, hosted by the student-led Booth India Club.

Determine the cost of the service and sell it for more, he said. “That’s basically it,” said Pendyala, a student in the Evening MBA Program. “First, figure out what it costs to make and deliver the idea. Second, figure out who would be willing to pay you for it. Third, figure out why you are the target choice for your customer to buy that service from you.”

Nonetheless, even if you can do those things, the tribulations of starting a business will have only just begun, he said. Pendyala, advised students during his talk not to ignore the career path of trying to lead major companies. “There is no shortcut,” he said. “Entrepreneurship is probably the single most exhausting way there is of making a living. It’s 100-hour weeks, not counting your sleep, for a year or 18 months.”

Pendyala’s tribulations were the same for Profitics and at Edgenet, a technology service serving Lowe’s and Home Depot that was acquired by Liberty Partners in 2005. “I am an engineer by training, so whenever I start up, the first thing I do is build the product,” he said. “I’m programming all night and selling all day. During the day, I’m also putting together the infrastructure and recruiting people.”

Finding and training the right employees is an integral part of the process, Pendyala said. “When you want to scale, especially at the beginning, you have to figure out how to move what’s in your head into someone else’s head so they can keep one of the wheels going while you go focus on something else,” he said. “I have not figured out how to spread the responsibility and find a healthy pace at which I can do this in the early stages. If a sales opportunity shows up, you’ve got to close. If there is a full-time sales person, it’s an 18-hour-a-day job.”

In his career, Pendyala has always chased value, seeking out the department or coworkers with the most value, Pendyala said. “Efficiency chasing, without my noticing it, kept me moving toward smaller and smaller companies,” he said. “Eventually that led me to entrepreneurship. I thought, ‘I can do that, too. I can do that better.’”

In determining value, Pendyala uses a simple proposition, he said. “The cost has been beaten out of anything you make,” Pendyala said. “Branding is expensive. In the modern world, creating a product that relates to demand and selling the product at a premium price is where all the cost is. Dollar-wise, that is a field that’s being ignored. I thought I could bring science to it. I don’t know if it’s revolutionizable, but definitely much more science can be brought to bear on it.”

Pendyala’s comments on sales, cost-efficiency, and value determination were the key takeaways for Vignesh Subramanian, a student in the Executive MBA Program. “When I’m trying to pick through an idea, I know there are some viable pieces,” Subramanian said. “The question is, how do I put them into practice? How do I sell them to a client?”

                                                                                                                        — Phil Rockrohr