Recession is the Perfect Time to Innovate

“Recessions signal end of an era; out goes the old way of doing things and room is made for the entrepreneurs to come with new innovative ideas.”

This is according to Kanwal Rekhi, a legendary Silicon Valley entrepreneur and graduate of Michigan Technological University’s electrical engineering program. Dr. Rekhi made this intriguing statement in an article recently published by SiliconIndia Magazine. In this article, he also compares India with the U.S. in the 70’s and 80’s, when many great start-ups were created.

Entrepreneurship in Hard Times

Dr. Kanwal Rekhi’s innovations provided the foundations for the Internet. His start-up company, Excelan, developed and sold the computer hardware that allowed distributed computing to flourish, helping to usher in the age of the network. Dr Rekhi eventually sold Excelan to Novell and then eventually became a venture capitalist, helping to fund more than 50 companies in Silicon Valley. Six of them went public.

Michigan Technological University had the honor of hosting this very distinguished alum. Dr. Rekhi received his masters in electrical engineering in 1969 from Michigan Technological University.

I had the unique pleasure of hosting Dr. Rekhi in my Entrepreneurship class. I also attended his lecture on “Entrepreneurship in Hard Times” on March 4, 2009. Dr. Rekhi gave an amazing an inspiring speech. During this speech he spoke about the virtues of bucking the trend, and starting your own business during tubulent times.

These are Dr. Rekhi’s top 10 traits for an entrepreneur. They readily apply to anyone who aspires to innovate:

Top Traits of an Entrepreneur

1.    Intellectual honesty. Brutal honesty. You can never fall in love with your business. If you do, you will fail to make the hard but necessary decisions.

2.    Humility.

3.    Accountability to yourself and your team. You ultimately have to be able to say that you accomplished something or that you did not. If not, why not? You cannot ever blame others. If you fail, it is on your shoulders — no excuses. If there is no accountability at the top, others below also will not feel accountable.

4.    Fairness. You have to be able to make sure the rewards are proportional.

5.    Economics. You have to be able to determine values and prioritize these values. The highest value-added issues get prioritized. You also have to understand the fundamentals related to costs and margins.

6.    Expertise. You have to be an expert when it comes to your customer and competition.  Although you also have to quickly become a generalist. You don’t have enough money when you start out to hire specialists.

7.    Execution intelligence. Investors pay a premium for this rare skill. For every great idea that you have, there are 10 very smart people with the same idea. What will make the difference is the ability to execute. Ideas are a dime a dozen.

8.    Leadership. When times are tough, pull everybody up. Inspire others to look beyond today. When times are good, keep everybody grounded; don’t get too exuberant.

9.    Self-reliance. Entrepreneurs do not need any approval. This comes from within. Also, there is little daily satisfaction; success comes in the long run.

10.    Confidence. Success loops are long, so you need to be confident and patient to reap your rewards.