Get connected, get a head start

Philip Anderson, a professor of entrepreneurship at the Singapore campus of business school Insead, has a few words of wisdom for those who want to start their own business.

Anderson has been teaching since 1987. The American educator joined Insead in 2001. Besides the Singapore campus, Insead, a leading global business school, also has campuses in France, where it was founded more than five decades ago, and in Abu Dhabi.

Prior to joining Insead, Anderson was director of the Amos Tuck School of Business, Dartmouth College. Besides entrepreneurship, his research areas include venture capital and private equity, strategic management and technology change.

Unlike 20 years ago, no one believes in lifetime employment anymore. Therefore, starting your own business is always an alternative, says the professor.

However, the hardest part is to get your first group of customers. In this context, today's business environment is more favourable than decades before.

For example, outsourcing has become a powerful trend for businesses to stay competitive while the use of social media is now widespread.

Both factors are in favour of new business start-ups so it is now easier to make your first million selling software packages or computer circuits on the Internet.

In other words, barriers to enter the global supply chain are lower, especially if your products or services are innovative and the prices are right.

"If it's better, cheaper and newer, it has a good chance of success. Facebook, Linkedin and the likes are helpful, as are e-commerce sites such as Alibaba. Buyers around the world can now find you on the Internet. Small businesses such as family-owned tailor shops can also benefit from social media.

"In my opinion, Bangkok is probably one of the best places in the world to get high-quality clothing tailor-made, but there are hundreds of tailor shops on Nana or Ploenchit roads, for example, so you have no idea which ones are honest and reliable if you are a first-time visitor or tourist.

"One solution is to go to social networks. Your friends or friends of friends can be helpful. Those who are familiar with Bangkok tailors, could probably tell you which are honest."

In his opinion, personal connections and the "old boy's" network figure prominently in entrepreneurship in Asian economies such as China and India.

"In China, it's who you know that matters. Same ethnicity is also important and you must get along well with government officials. In India, the school badge is important. If you went to the same schools and classes, that's very helpful," he says.

Generally speaking, starting your own business is obviously a big challenge as the ratio of failures can be as high as 80 per cent, according to some previous studies.

But Anderson says the success ratio should be higher today. In his opinion, about 50 per cent of small and medium-sized enterprises may fail over the first five years.

That means you have a 50:50 chance of success in the long run if you can get your first group of customers and build the business from the ground up over the next several years.