Guest Post – Why less than 1% of incubated start-ups get VC funding

Over the last 5 years or so, India has seen the emergence of a number of private and government-supported accelerators and incubators. Many of them have run a few cycles and have now fine-tuned their models and programs. Quite a few of them have very good and solid programs.


Yet, if we were to measure the success of start-ups from all these programs in terms of them raising growth-capital, the report card is not very encouraging. If some industry numbers are to be believed, less than 1 per cent of start-ups that go through various incubation and accelerator programs in the country receive institutional funding. This number probably includes incubators in academic institutions, most of which have not been able to run meaningful programs to help entrepreneurs build fundable ventures.

Why is this number so low? Why the start-ups who join accelerator or incubator program with the hope of getting mentored for accelerating their journey towards growth are not able to get growth-capital? Continue reading “Guest Post – Why less than 1% of incubated start-ups get VC funding”

Why Startups should assess opportunities in the renewables energy sector

Apart from the global macro factors and a drive towards renewables, the Indian government is making some solid statements that indicate their thrust and seriousness about the renewable energy space. In fact, the Renewable Energy Minister Piyush Goyal has declared in a statement in The Economic Times India’s intent to be a world leader in this space in 4 years. That’s huge.

Given these statements, it appears that the government will create policies that create a more conducive environment for entrepreneurs to create ventures in this sector.

Green nature landscape with planet Earth

While several opportunities exist, one has not seen too many entrepreneurs considering it. Especially at early-stage, there are very few entrepreneurs creating startups addressing this segment. Continue reading “Why Startups should assess opportunities in the renewables energy sector”

The ‘Make in India’ program will create a range of entrepreneurial opportunities

Prime Minister Narendra Modi will kick off the ‘Make in India’ campaign on the 25th of September 2014. About a 1000 global and Indian business leaders are expected to attend the function.

The government is making a huge statement, and leaders of the business world are taking serious note. This is because the government appears to not just declare intent, but give the confidence that it will support the intent with enabling policies and create an environment for a supportive eco-system to evolve.

For an industry or sector to flourish and become sustainable in any geography, an enabling eco-system is necessary. Things cannot work in isolation. In the technology hotbeds like Silicon Valley and Bengaluru, there is an eco-system of technology companies, service providers, successful entrepreneurs, mentors, accelerators & incubators, co-working spaces, legal firms, investors and potential customers.


Likewise, for India to become a global manufacturing hub, which is the declared intent of the Narendra Modi government, it will need many supporting pieces to come together to create a conducive environment for manufacturers and customers to do business in. Continue reading “The ‘Make in India’ program will create a range of entrepreneurial opportunities”

Learning Time Management is Critical for an Entrepreneur

The founders and teams of any startup are most likely to have more things to do than they can manage in a day. There is always likely to be more activity, primarily because in a startup, things are constantly evolving and changing, than there are people to execute those activities.


In such a scenario, time management becomes a critical skill that entrepreneurs have to learn and implement in their day-to-day life.

But fret not! All it needs is a little organising and prioritising and some serious time management. I came across this article written by to Alex Cavoulacos, “One founder’s best productivity trick: Save time and do less”.

I agree with Alex’s opinion. She hits the nail on the head when she says that – knowing what not to do, and what to stop doing, can make a huge difference in your happiness and productivity. Here’s what I would like to add… Continue reading “Learning Time Management is Critical for an Entrepreneur”

ESOPs – a powerful tool and valuable currency for startups

Employee Stock Options (ESOPs) is a powerful tool available to startups to attract as well as retain talent. However, often I have seen it being undervalued or under-utilised by startups.

ESOPs are shares that are given to employees so that they can enjoy significant monetary benefits if the startup is successful. Since the monetary value of selling equity of a successful startup can be several times higher than the salary, ESOPs alter the risk-reward equation and makes it attractive for potential employees to consider joining a startups, which otherwise at just salary levels may not be such a lucrative option.


ESOPs are especially useful when startups or early-growth stage companies have to hire senior talent with experience, and they don’t have monies to pay full market salaries.

In fact, investors too encourage founders to carve out an ESOPs pool – often between 5 – 20% of the equity depending on how well balanced the existing founding team is. If the team has gaps that need to be filled in, it is important to carve out a higher percentage of equity, as that will allow you to hire the right resources to complete the team.

As an entrepreneur, it is important for you to communicate the ‘value’ that your enterprise is likely to create and thus explain to potential employees the potential value of the stock they are getting under the ESOP. If the company is successful, the stock can provide a significant upside to employees.

Not just in hiring, but ESOPs can also be a very useful retention tool. That is because a well-structured ESOPs plan ensures that the equity is vested over a period of time (i.e. it is given to the individual in instalments spread over a period of time), and if the startup is successful, the individual is incentivized to stay on even if there is a matching salary offer from another company.

Image Source

M&A: Why small exits matter? The big value of small exits (#iSPIRT-OEQ)

iSPIRT Open Ecosystem Questions(OEQ) Series. The conversation around this exciting session was lead by Sanat Rao (iSPIRT) and the speakers were Jay Pullur (Pramati Technologies), Sanjay Shah (Invensys Skelta), Pari Natarajan (Zinnov), Karthik Reddy (Blume Ventures) & Vijay Anand (The Startup Centre).

Sanat initiated the conversation with an observation that it was only the bigger exits that are picked up by the media. Smaller exits do not get any media attention at all. , We all hear about the big bang “home runs”: WhatsApp sold for 19 billion USD to Facebook, Google acquires Nest for 3.2 billion USD, etc. However, studies show that 65% of VC funded companies in the US return 0-1x to their investors. Even among the remaining 35%, the exit valuations are relatively small: since 2010, the average M&A deal size in the US/Israel is 100 million USD. Only a small 0.1% of VC-funded companies are home runs (50X returns). And not just in India. In Israel too, from 2010-14, out of the 88 exits, two deals on Viber and Waze accounted for a whopping 25% of the total M & A value.


Given these statistics, why do we promote the myth of a multi-billon $$ exit? Why don’t we recognize the value of these smaller exits? Should we not be promoting and helping product startups to find an exit at an earlier point in their lifecycle, rather than treating these exits as a worst case scenario? Continue reading “M&A: Why small exits matter? The big value of small exits (#iSPIRT-OEQ)”

What can we learn from the ice bucket challenge?

That the Ice Bucket Challenge was a huge marketing success is a given. How it actually benefited the non-profits working for ALS, is a subject of debate with quite a few dissenting voices.

However, as an entrepreneur, here’s what I learnt from the campaign.

  • Specificity of action AND cause, help. One without the other perhaps might not have been as successful. Take the case of the imitator ‘rice bucket challenge’ where people were asked to donate a bucket of rice to the needs. Worthy cause, but was not specific.


  • Making a task ‘fun and enjoyable’ is NOT trivializing the cause. To me the ice bucket challenge illustrates that doing something fun, even when you are promoting a serious cause does not undermine the seriousness of the cause or the intent. (As an entrepreneur and marketer, this could apply to any company as well. When could we see a stock exchange do a ‘walk the ramp’ challenge for companies where managements walk the ramp in office with their colleagues cheering & joining, and they challenge someone forward to do it.).
  • The task has to be relatively simple AND ‘doable’ to get wider participation. I mean, just think of why the rubble bucket challenge / mud bucket challenge did not get the same response. Imagine how challenging it would be for most people to (a) find a bucket of rubble and (b) remove all that rubble from your hair. I simply seemed impractical, though the cause was worth supporting. (To me, the message is: don’t ask others to do that you would not do yourself.)
  • People want to be SEEN doing something good. The ‘pass it forward’ aspect AND the videos were critical to the success. I don’t think 99.9% of the people had any particular soft corner for supporting ALS. But being SEEN as participating in something good was cool. (I know a few friends who will say this is a case of sour grapes as no one invited me to do the challenge).

 But, hats off to the team. Great job done. Keep pouring.

(PS: there have been loads of twitter jokes on this as well.. here’s my favourite on ‘I have been doing the ice bucket challenge for years. But the ice gets over after a few drinks’. Keep walking.)

References –  Image Source

Bootstrapping – Boon or Bane for Product Startups?

On August 14th, 2014 iSPIRT, the industry enabler that is creating a vibrant eco-system for promoting, encouraging, supporting and enabling product companies out of India, organised a very useful online discussion on the concept of bootstrapping. Titled  ‘Bootstrapping – Boon or Bane’, the discussion explored various facets of bootstrapping, including its relevance, benefits, limitations, and challenges.


Sharad Sharma, founder of iSPIRT kicked off the conversation with a very incisive observation that the startup community, largely driven by the media, tends to celebrate and showcase startups only when they receive angel or institutional funding. How true is that!!! There are a number of very successful and modestly successful startups, many of who are deserving of the praise and showcase, but they get reported about only when they close an investment round. (I am not sure if the media is to blame entirely. I suspect companies too reach out to media only after they have received an investment round, perhaps because they believe that funding makes the ‘story saleable’ for the media.).

Continue reading “Bootstrapping – Boon or Bane for Product Startups?”

All successful startups are great examples of learning from failures.


Ask any investor who has engaged with 100s of companies, and they will tell you that the plans they begin with, are almost always never the exact plans that they eventually build their successful businesses on.

Failure is not a negative in the ‘Startup scenario.’ It merely means that some of the assumptions did not hold true in the marketplace, and hence we dumped it and we did something else. In that sense, the earlier conceived model failed, and we pivoted to a different concept;  product;  value proposition; customer segment; price-point; marketing plan;  business model; sales plan; team or whatever it is that failed.

I therefore advice entrepreneurs to not fall in love with ideas but to fall in love with a problem. When you look at ‘owning the problem’ to solve, you can think of many different ways of solving it and try what seems to be the most suitable way, given your circumstances and the market. Then it doesn’t matter if a few ideas don’t work and you eventually have to try a different approach to solve the problem. Since the goal was defined as ‘solving the problem’, it is still a victory even if a few initial ideas fail.


Converting an idea into a business

I often get asked this question: “I have an idea. But I just don’t know what to do next. How do I start implementing it?”

It is not unusual to get stuck with the idea without knowing how to take it forward. Often the fear of having to manage operations, finances and staff is what stops people from getting started on their idea.

Having an idea is a good starting point. The first thing to do is to let that idea rest for a few days. Think about it every day. But don’t act on it. Think through all the positives AND all the negatives. Think of how great it can be. And also think about what could go wrong and how worse can it get. You will start seeing different aspects about the idea. Not all will be good. And that’s OK.

Continue reading “Converting an idea into a business”

First Steps to Funding Your e-Commerce Business

Panel discussion on funding for startups at the e-tailing India summit in Jaipur. While the summit was for e-commerce companies, the conversation on the panel was applicable to all startups.

At the eTailing India Conclave in Jaipur, April 2014.

Why do investors & experienced entrepreneurs advice startups to focus on ONE THING?

Because 99 out of 100 folks who try to do more than one thing fail. 

images(For those who do not know the relevance of this picture in this post, click here to read the story of Arjun and the fish eye). 

Focus helps startups concentrate their efforts and resources on doing one thing well. Even if that does not work, because of the focus and attention, they are able to smell the failure earlier, and can then plan the pivot and refocus.

If you do more than one thing, your resources and bandwidth is shared. Your efforts do not carry the same weight that a focused effort can. And, in the midst of the chaos you tend to ignore (or miss) the signals that things are not going as you intended them to.

Bootstrap whenever you can

It is possible to boot strap quite a few concepts into venture. 

However, the perception these days is that if you have to be an entrepreneur, the first option should be to raise funds. (This perception has a lot to do with Business Plan Competitions in B-schools and engineering colleges where VCs are invited as judges).

My view is that raising external funding should be the last option. If possible, and it is possible in many cases, try to bootstrap a venture.

Bootstrapping necessarily means that you would be frugal. When you are low on cash, you innovate and become more creative in all things – in hiring, in developing the product, in marketing, everything… And you try hard to get to revenues faster. All these are fundamentally good for a business

Should I worry about my product/service being copied by a bigger company?

That a concept/product/service can get copied is a real risk. You cannot wish it away by assuming that your passion and enthusiasm will help you win the war. You have to manage that risk well.
There are two ways of dealing with the risk of getting copied or someone else doing something similar.

1) Patenting 
If your idea patentable, go ahead and protect it. As you will know, many large companies create a forest of patents around their core product patent. Hence, when you do a patent search you will also know if your concept is infringing on someone else’s patent. And if it is not, go ahead and protect yourself by patenting your product.

2) Build a value proposition that helps you win
As a startup, you have several advantages over a larger company. The ability to be nimble and respond quicker. The ability to devote much more attention to that client than a larger company possible can (the larger company can thrown more professionals at the client… but that cannot match the passion & commitment of a founder).

Other way to differentiate, and thereby create a preference even if there is competition, are pricing, brand personality, service levels, business models, etc.

Remember, in most markets, especially if the opportunity is large, there are likely to be many others who will take a shot at that market.

Go ahead. Be confident. But not over confident. Plan well. Plan thoroughly. Implement well. Be patient. Be creative (in everything expect in legal and accounting). Go win.

How is “proof of concept” different from “minimum viable product”?

test-concept‘Proof of concept’ and ‘Minimum Viable Product’ are two very different things.

When testing the proof of concept, you could be testing not just the product itself but also a few other assumptions about the business around that product. I.e. Product testing is just one of the aspects that could be tested during a proof of concept test phase. Within this, a MVP is an early version of the product, finished enough to get a few early customers to try the product and give you some useful feedback which can be incorporated into the final product.

Below are a few things that are tested in a concept test stage/pilot phase:

  1. The concept – the power of the idea itself: Do the consumers/customers see the value proposition in what you offer?
  2. The business model: A business model is about ‘who will pay how much and to whom’. Each element of this should be tested in the pilot phase. i.e. are the consumers/customers seeing the value proposition as you meant it to be, how much are they willing to pay – is there price sensitivity, and if so, how much.
  3. The assumptions for your business case: As mentioned above, list all the possible assumptions you have made in your business plan and see if there is a way to validate those in your pilot. In a pilot, some of the operational outcomes may NOT be as per your plan. However, it is expected that in the initial phase your operations will be inefficient and that cost and operational efficiencies will improve as your business matures.
  4. Understanding operational challenges: Entrepreneurs often tend to underestimate the operational complexities and challenges of managing a business. While startups often manage operations with a limited number of people who are stretching themselves beyond practical limits, it is often not sustainable in the long run. A long-term business case cannot be made on the basis of the enthusiasm and give-it-all commitment of the founding team. A business case has to be based on what is practical and sustainable with an average set of people managing your larger teams.
  5. Testing processes and operational capabilities: Processes help organizations scale up. Processes are nothing but just a set of guidelines on managing activity and handling situations. Processes are usually centrally planned and locally implemented. Processes. They reduce the dependence of individual brilliance, and instill a discipline that results in operational efficiencies and consistency of experience. It also allows individuals to be clear on how a certain activity/situation is to be handled. The quality of processes can make or break an organization. Not only should processes be implemented, but they should also be measured and evaluated periodically to ensure that inefficiencies and redundancies are eliminated. In a startup, it is critical to define some processes, but yet be flexible to adjust processes quickly as soon as you see some processes becoming bottlenecks or inefficient. It is therefore important for startups to test these in the pilot phase.

Communicating your story in a minute

At the pitch session for Microsoft Accelerator’s next batch, more than 35 startups presented at today’s event at 91Springboard in New Delhi ( May 30th 2014).


I was really impressed to see that the number of high-potential startups – great teams driving meaningful concepts addressing large market opportunities – was much higher than the number of average or not-so-good startups. The startup eco-system in India is certainly moving in the right direction.

Continue reading “Communicating your story in a minute”

Flipkart acquires Myntra – what’s the deal?

This is a guest article by Ashish Jhalani, Founder at eTailing India & Indian School of eBusiness (ISeB), Angel Investor, Mentor, Advisor.

aj A deal brewing between Flipkart and Myntra was in the air for quite a while now. The valuation too was not a big secret, and given the size and stature of both, there were no major gasps about that either.

Over the past few years both brands have worked hard to create dominant positions for themselves in the marketplace. Given that both started around the time the online industry was beginning to accelerate also meant that both had to invest heavily in customer acquisition, including getting first-time users to try online shopping. And of course they had to invest in creating an eco-system – supply chain, logistics, etc.

While that has given them a leadership position in the industry, the fact remains that for iconic brands like Amazon, the cost of market entry has become much lower because of the investments done by these players. (And that indeed is one of the benefits of being an iconic or recognized brand). With the imminent entry of the likes of Wal-Mart, Flipkart & Myntra had to take proactive steps to strengthen their position, and build a formidable war chest. Amazon and Wal-Mart are formidable competitors, with globally proven processes, efficiencies and technologies. In just a year, Amazon has been able to get nearly half the number of customers that Flipkart has.

Now, that both brands had reached a reasonable scale (compared to market potential), they now had to start focusing on strengthening their business case. Naturally, seeking efficiencies of operations, customer acquisition and cost-efficiencies through synergies is what both brands would have been looking for in potential mergers or acquisitions.

The Flipkart and Myntra merger is a positive step for both companies as it further strengthens their position in the e-commerce space, and also gives them additional resources to fight mightier, global competitors like Amazon.

Myntra has positioned itself well in the fashion category and letting it operate as an independent brand would benefit Flipkart, even if the backend operations and common functions are merged. And of course, both can leverage each other’s existing user-base, even though there will be some overlap in their users.

While there will be synergies in operations, and there will be some cost savings by merging functions and leveraging common infrastructure, given that Myntra was largely in apparels, means that the cost savings on operations will be limited. The savings on customer acquisition costs however could be significant. (And not to forget the buzz and top-of-mind recall that PR news of this size and scale creates. E.g. A number of people who may not have tried Myntra till date may be reminded of its existence as a dominant brand in the fashion space, and may be intrigued enough to visit, and some of them may end up becoming customers.).

It is worth noting that both Flipkart and Myntra had done smaller acquisitions earlier, and that has helped both organizations get familiar with the process of M&A. I am sure all founders realize the value of aligning their vision towards a common goal. Given their entrepreneurial spirit, they may have agreed as their goal as not just retaining their leadership position, but to take the likes of Amazon in global markets too. Are we seeing the emergence of a global e-commerce leader from India?

Well, I certainly hope so.

Ashish Jhalani

So, I have an idea. Now where do I start?

Often a lot of ideas do not get implemented because the person with the idea just does not know what to do to get transform the idea from a concept to a product or service. Often the number of things that need to get done seem daunting, or complicated or just too time consuming.


My suggestion to aspiring entrepreneurs is to first relax and break down the things to do into easy to understand and easy to manage steps, and prioritize them. Often just listing down things to do will help you plan the activities in a manner that seems practical and doable.

When you have an idea, here are some steps that I would recommend:

Validate the idea i.e. check with others whether the idea is as exciting to them as it is to you. If others do not think it is as great as you imagined it to be, either do a real hard think of whether you are a visionary that sees the potential in things that others are not able to see, or is the idea really not as good as you thought it to be. Often many ideas fail to pass this test, and even if it fails the test, it saves you a lot of time in planning around something that may not have worked in the marketplace.

Quantify the idea: If the idea does seem to be exciting, do some basic research to understand the potential. E.g. if you are thinking of doing ‘healthy packed breakfast for office goers’, you could call up 20 friends and ask them if they would buy it, and if they would how often and how much they would pay for it.  One you get a feel of this being interesting to a fair number of people, you could ask a few students (or your kids or nephews/nieces) to do a quick research for you – contact about 200 – 500 people and give them a simple questionnaire – something that can be done in about 2-3 minutes per person.

This can give you quantitative data e.g. 25% of all respondents said they will buy, but 48% of people in the higher income category said they would buy. Within them, 65% of families where both husband and wife were working said they would buy.

Now, this gives you data that you can apply to your locality and make some assumptions. E.g. In the colony that I live in, which is where I will want to pilot test this project, there are approximately 5000 apartments. If I assume that 20% of them are families where the husband and wife both working, we get 1000 households to target. Of these, if I am able to reach 50% through leaflets, etc., I can have an audience of 500 families. And as per research if 65% of them buy, then I have a potential of 300+ families just in my locality.

Think of the larger potential: Once you quantify for a smaller scale, think of what the larger potential could be. E.g. in our example of the ‘healthy packed breakfast’ business, do some research on how many double income families in the higher income category are there in the city. Then how many are there in the top 4 cities. Then how many are there in the top 10 cities. This give you a view of how large the business can be. YOU DO NOT HAVE TO DO IT AT LARGE SCALE IF YOU DO NOT WANT TO. But understanding how big it can be often pushes you to give it a good try at a smaller scale.

Think of the ‘HOW’ part: I.e. think of the implementation. ‘See the film in your mind’ of how this can be done. What resources will you require, what kind of and how many staff you will require, etc. Spend a lot of time detailing out the operational aspects. The better and more detailed you do this, the sharper your plans and more in-control you will feel.

Work out the business case: Planning the operations will give you a view of the costs for doing the business. First work out the costs per unit and add the margin or profits you could have. See if the pricing with the profits works out to be a reasonable figure. If it does, then work out the total costs and total revenues for a pilot project, then for a larger area and gradually scale it to a larger size. You could take the help of someone who understands numbers better to get this financial model done. It need not be a complex sheet. It has to give you broad indicators on whether there is money to be made.

Think creatively about marketing and outreach: Think of ideas of how to reach people. And what your brand’s personality could be. Hire a small ad firm or design agency to develop your communication. Be creative. Innovate.

Plan the launch: Work out the details on when and how you will launch. Work backwards from the launch date. Plan everything well. Assume more time than you initially budget. Keep buffers for everything.

Do small tests: Test all systems – do a free trial run. See what worked and what needs change. And change it.

Launch: Just do it.

Reassess and review: Take feedback. See what is working. Constantly keep changing.

See. It’s not that difficult

Plan well. Implement diligently.

Go win.

This article was originally published in the Sheroes Community on May 12th 2014. Read the article here.

What questions should entrepreneurs ask an angel investor to determine if there is a potential fit?

Well, what you want to know about the angel investor are the following:

  • Are you as excited about this as we are – what is your view of the opportunity?
  • What do you think will be the challenges in the journey in achieving the potential?
  • What is your expectation on return on your investment… and in what time period? What kind of an exit are you hoping for?
  • What can you help us with, apart from the money?
  • Why did you decide to invest in us?

In a lot of cases, because they typically invest in several startups, angel investors may have a causal interest in your venture. (Some call it the ‘spray & pray’ model where they invest small amounts in a number of companies that ‘seem’ nice and hope that some of them deliver on the potential promised). Your goal should be to get the angel investor super excited about the opportunity and the potential, and engage him/her as much as you can in helping you in the venture. Often warm introductions and perspectives from past experiences are priceless.

Should all founders present in a pitch presentation?

In a 10-minute pitch, it is best for one person to lead the presentation. Others can chip in in the Q&A, when of course the person presenting has to direct the question to them.

Even in a longer presentation, I suggest startups to let one person lead the pitch with adequate time for each team member to introduce themselves and establish to the audience why they are important to the venture.

Why do I say that? Because for investors a pitch is not about checking if the founders can present well. It is about checking if the story is compelling. Once they are excited about the story, then it becomes important to establish each person’s role in strengthening that story.

Is there merit in starting e-commerce ventures now?

That online commerce has a strong value proposition is proven. For urban consumers, the biggest value proposition is convenience followed by choice. For consumers in tier 3 cities and below, access to choice is the biggest value proposition.

Given the size and scale of the country, and given that internet penetration still has significant headroom for growth, that online commerce will only grow is a given.

Therefore, on the face of it, it appears that there is indeed merit in starting e-commerce ventures, especially in categories that have not been dominated by someone and where newer brands could have an opportunity to establish leadership positions.


However, e-commerce is not a game of just making products available on a nice looking website. The business case of e-commerce depends on being able to maximize the lifetime value of a customer. Let me explain further… Continue reading “Is there merit in starting e-commerce ventures now?”

What should an undergraduate aim to get out of a VC internship?

(This post was my answer to a question on Quora)

Think of a VC firm as an observatory. A role in a VC firm gives you a vantage position to observe what works and what does not, and what real-world dynamics impact success and failures of businesses. Interacting with successful as well as struggling entrepreneurs provides you an opportunity to learn from other people’s experiences. Of course, being in a VC firm gives you an opportunity to understand what kind of businesses investors invest in, and more importantly, why. 

All these opportunities give you a well-rounded view that is made up of different experiences and different perspectives.

Of course, one could argue that you could get this well-rounded view also by working in a consulting company. The difference however is that in a consulting company the discussions are largely about strategy and plans. In a VC firm, apart from strategy, it is also a lot about gut feel, individual insights & beliefs, AND MOST IMPORTANTLY, also about the most crucial factor for the success of a business – the on-ground implementation. 

Most businesses fail not because the idea was not good. They fail because the founders made incorrect assumptions and/or were not able implement well in the marketplace. 

Being at a VC firm can be a huge learning experience. 

I must however also add that i have seen very, very, very few young professionals working in VC firms make appropriate use of this awesome opportunity. Most often they do not recognize the power of learning from other people’s experiences and tend to be clinical in their approach to challenges and opportunities. In the real world, entrepreneurs tend to celebrate successes and introspect on failures. Unfortunately I have rarely seen employees at VC firms spend time to introspect on failures. They just move on. They tend to spend a lot of time on analyzing why a particular model/concept/team was successful… and that is useful too. But is is much more useful and helpful for the future to understand why something did not work.

The Importance of Market Research

“Research is formalized curiosity. It is poking and prying with a purpose. ”

Zora Neale Hurston, American author


Scene 1 : A couple of years ago

You or your visionary team have a great idea for a new product!! It ‘feels’ like the answer to everyone’s problems! It will definitely be a big hit! So you get your creative heads, product designers, technical staff and experts all into a tizzy! The product must be ready in next 6 months! After hours and hours of hard work, there it is – to take the consumers by storm. You launch it with big fanfare!!

Scene 2 : Cut to the present

The ‘great’ and promising product was ‘great’ only on the drawing board! Your negative inventory is piling up; there are just not enough takers!

What went wrong?

The consumers just didn’t connect with the product or the price point was wrong or the brand personality did not appeal or the communication was not clear or the distribution was poor or the value-proposition was not meaningful!! There are a number of things that can have a very different response in the market, than you had imagined it. Continue reading “The Importance of Market Research”

Find a Co-traveller – Find a Co-founder

In my view, it is extremely helpful if you find a co-founder when starting an entrepreneurial venture. Apart from sharing the work and responsibilities, a co-founder can be the motivating companion and the emotional support that you will need when your business is going through a tough phase. And all businesses do go through a tough phase.

Also, a business needs different types of skills and competencies. The ideal composition of a founding team is when the founders bring complementary skills to the venture. E.g. someone from the marketing/brand management category, the fashion industry and an operations management/procurement person – will make an ideal founding team for an e-commerce startup.


Ideally, apart from people with varied skills and competencies, it is also useful to have a founding team, with different personality types – someone who depends on gut feel for decision making will find it extremely beneficial to have a co-founder who takes measured, well-thought out decisions, and vice versa.

Who exactly is a co-founder?

Continue reading “Find a Co-traveller – Find a Co-founder”

Wrong assumptions kill more startups than bad products.

This is a summary of my talk at the Startup Weekend Next pre-accelerator program on the topic: Why customer discovery is critical to a venture

(For the purpose of this article I am using the word customer very broadly – for this article by customers I mean all entities that will either use, or pay for or influence the purchase of your product or service).

Wrong assumptions kill more companies than bad products.

Continue reading “Wrong assumptions kill more startups than bad products.”

My Notes from TC/1

I spent this weekend (15th and 16th of March 2014) at the first conference organized for creative entrepreneurs by The Coalition. Great initiative, awesome experience.  Check out

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Here’s a para from their website about what this initiative is about. The Coalition is a new platform to support creative entrepreneurs in India. Whether it’s music, film, design, fashion, arts, creative technology or something completely radical, The Coalition gets young creative thinkers together with the people, skills and money that can turn their passion into successful businesses – and connects them to the resources that can help their business grow.

Continue reading “My Notes from TC/1”

Summary of my workshop at TC/1

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This was a workshop at conducted for Startup Weekend at The Coalition on 15th March 2014. Here’s a summary of what we covered:

  1. Different stages of the venture are fundamentally different – the entrepreneur has to change roles from the DOER to a MANAGER to a LEADER
  2. A good product is not the same as a good business – you have to design a business around a good product or service
  3. Personal readiness and organizational readiness are important – Check the presentation for my 10×10 scorecard on personal and organizational readiness
  4. Delegation is difficult – but critical – If you do not delegate, you will become the bottleneck
  5. Hire Rockstars – An entrepreneur’s role is to attract and retain good people – Spend 30% of your time on HR – hire people smarter than yourself
  6. Have a business plan that outlines what you want to do and how you will do it
  7. Clearly identify and align with your motivations – ensure that all founders are aligned on the goals and vision and direction
  8. Redefining your business opens new possibilities – don’t describe your business by the product or service that you currently offer – define it as the problem you solve – check notes in my presentation 
  9. Visualize your goals, milestones and activities – first define them clearly
  10. Identify key stakeholders and have a plan to engage them

Leap of Faith

Many people have ideas for a business. Almost everyone thinks of some idea at some point in his or her lives. But only a few individuals actually take the first steps to convert those ideas into a business.


To be an entrepreneur, one has to have the conviction and belief in the idea that one is pursuing. Unless you have that conviction, you are unlikely to take the first step required to convert that idea from a ‘thought in your head’ to a ‘venture in the real world’.

Once you have a thought or an idea about something that can become a good business venture, you have to think hard about the potential of that concept, assess the merits and challenges, and once you feel convinced enough, you have to be able to take that leap of faith to go and implement that idea in the marketplace.

Many aspiring entrepreneurs tend to test and research, and retest and re-research their idea or concept and depend only on the research findings to pursue or drop that idea. Often, research cannot give you the answer to whether an idea will work or not. Sometimes, entrepreneurs have to take that leap of faith and that gut-feel to make a concept work. Entrepreneurs however, should NOT be blind risk takers. Successful entrepreneurs understand the risks and take necessary steps to overcome those risks and challenges. Planning well is what helps them deal with the risks and challenges better. Others who give up often do not think hard enough about addressing those challenges. They get scared of the challenges because they do not think of solutions.

Entrepreneurship requires entrepreneurs to pursue their vision often in the face skepticism and negative feedback on their ideas and plans from many individuals. Often these individuals who are skeptical of the plans are well meaning and may give an honest feedback based on their own assessment of the risk-reward dynamics of that idea. But mostly, entrepreneurs are able to spot opportunities where others see problems.

Entrepreneurs see opportunities before others see them. Entrepreneurs catch the wave on the up…. That’s why successful companies often have the ‘first-mover advantage’. Others, who follow or are me-too copycats to successful first-mover concepts, often have a much harder road to success, if they do succeed. Entrepreneurial thinking and aptitude is about seeing the ‘signals’ where others see ‘noise’.

The ability to take that leap of faith AFTER assessing the potential and understanding the risks allows entrepreneurs to be confident and optimistic about the opportunity and potential of an idea. Optimism and confidence create positivity and enthusiasm, which infects others around them. It helps entrepreneurs build teams, get early adopters, and often, helps them get investments from investors. (It is not without reason that entrepreneurs who are successful are good presenters and can tell their story with conviction and passion.)

Go ahead. Think hard about the opportunity around that idea and what you need to do to make it work. Seek mentoring. Get guidance from those who have more experience in operationalizing a business venture. Plan well. Execute efficiently. Be confident.

You will never fail. Either you will win or you will learn. And this learning will help you prepare even better for the next journey of your life. Go ahead. Take that leap of faith in your idea.

This article was first published in the SheroesCommunity on the 6th of March 2014.

What parameters do investors use to decide on an investment?

Different investors will have different criteria for selection, and could vary by not just the amount of capital they invest but also the stage at which they invest and the kind of companies that they invest in.

Most investor’s decisions are based on the following:

  • Quality of the team: This is our most important criterion. We are not looking for experienced entrepreneurs. But we certainly look for understanding of the domain, business concepts & operations management, and most certainly commitment to the venture.
  • Clarity of the concept/idea: How well has the team been able to articulate what they want to do. You cannot plan it well, if you cannot communicate it well.
  • Size of the potential: Concepts addressing large markets with large potential are obviously better.

If the above two are positive, then the following few areas would be discussed:

  • Scale of aspiration of the team: Does the team have the aspiration and hunger to be a market leader?
  • Business case: Is the business case strong enough? Remember, when pitching to an investor you are competing not just with direct competition from your domain but also with startups with interesting business plans
  • Exit potential: How are we going to get a good return on our investment. I.e. what is the exit option for us.

How do you choose a name for your startup?

Decide on the name for your startup very, very thoughtfully. Give it as much importance as a parent would give to naming a child. YOU will have to live with that name for life… even if the startup fails and shuts down.

Ideally, a name should give your intended users/customers a clear idea of what you do. e.g. ‘Page on‘. It should be easy to pronounce for all people across geographies and it should, as best as you can research, mean the right thing in all languages.
Ideally, it should be short, and should sound nice.
More importantly, the domain should be available. If not, trying to create a ‘compromise url’ (e.g. is not very useful.
The sound should be relevant to your audience. E.g. if it is an enterprise solution, it should sound very professional and solid. If it is a fun thing for teenagers, it should sound fun.
Likewise, the logo design for that name should also reflect the personality that is relevant for the intended audience.

How do you do keep an employee motivated and happy while delegating tasks to him/her that don’t fit his/her line of goals?

This was my response to a question on Quora.


In a startup, when you hire, hire people who are willing to go beyond their call of duty. You need people who are likely to do a bit of heavy lifting, and lend a hand in areas that are outside of their scope of defined responsibilities.

It is up to the management to also encourage people, motivate them and make them feel part of the larger goal. This means that the more transparency there is, the more opinion seeking there is, the more sharing of good and tough news, is the more likely that an employee will be willing to take on tasks that are not in the line of goals. Continue reading “How do you do keep an employee motivated and happy while delegating tasks to him/her that don’t fit his/her line of goals?”

How do you validate a new business idea?

There is only one way to validate a concept. Talk to potential users and customers (customers could be different than users). Speak to as many as you can. Ask them if they find the value proposition meaningful. But first define your value proposition well and articulate it in a nice, crisp sentence.

If the intended users like the concept, do some research to see if there are enough number of such users/buyers for you to make this venture commercially viable. (In all concepts, users need not be the ones who pay. E.g. ad supported models… but in those make sure you speak to someone from the media buying industry to assess what the revenue potential could be).

What’s the appropriate way to terminate an advisor relationship that isn’t adding value?

This was my response to a question on Quora.

The person had provided this additional information: We do 24 month vests and are about a year in with someone who just isn’t adding much value. We don’t want to burn the bridge but feel it necessary to unwind the relationship. Other than simply picking up the phone to let this person know, what other steps do we need to take to do this properly?

My response

Different people will have different styles, and different personality types will deal with these situations very differently.

My style is to have an honest conversation. State your expectations, highlight where the delivery has not been as expected, assess if the reasons were within the individual’s control, and provide an opportunity for the person to respond. And ask the person what you think is a fair way forward.

In most cases, if you present a fair assessment of how things are going, the person may himself/herself offer to step aside. Of course, if the person is not agreeable to stepping side, then you need to do what is in the best interest of the company.

Of course, it is also possible (and often that is also the case) that the company itself was not able to leverage the advise and inputs of the mentor/advisor. And that is also a reality that needs to be dealt with. If that situation is unlike to change, even then having an honest conversation and saying “I don’t think we are geared to make full use of all the good advise you give us. We are just too bogged down with other priorities, which I understand you may or may not agree with. But for now, we have decided to focus on those. How do you suggest we move forward. Can we disengage for a bit and see if there is merit in reengaging when we are in a better position to benefit from your wise advice?”.

(And of course, the shares vested till then should be given to the advisor).

What are the most common reasons for startups to fail?

In my observation startups fail because of any one, or a combination of some of the factors below:

  • Poor implementation (usually due to poor planning of operational aspects of converting the idea into a business on the ground)
  • Assumptions on costs, adoption rates, revenues, operational efficienc, etc. prove to be wrong
  • Value proposition not as meaningful to users as hoped by the founders
  • Founder disagreements
  • Company running out of money… or founders unable to sustain low take home for much longer than they had estimated
  • Failure to get funding or follow-on funding
  • Poor product-market fit
  • Poor product / service (though I have rarely seen companies die because the product or service was bad)
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More often than not, it is either because of poor quality implementation or because the team’s assumptions on costs and revenues and other factors were inaccurate, which meant that they either run of out money a lot quicker, or the business case becomes weaker and as a result they run out of energy, enthusiasm… and eventually capital to sustain the operations.
I therefore always recommend to teams to overestimate on costs and underestimate on revenues in their excel sheets. When working on your excel sheets, try to work out the worst case scenarios (as those may turn out to be true as well) and build your foundation to deal with the worst case scenarios too. Think of what your response and plan is going to be in different scenarios – the very optimistic, optimal as well as the very worst case. Either of these scenarios could play out, and if you are not adequately prepared for any one of them, the end result will be a disaster. (Even if you have planned for sub-optimal scenario, and the in-market response is phenomenal, unless you are able to quickly adjust your plans and create resources, infrastructure, processes and people to deal with the growth, the business will flounder).
Entrepreneurs tend to be unrealistically optimistic on their own and their team’s implementation capabilities and often tend to understaff and underestimate the time and costs required to make the business work. (At least that’s my observation from the Indian startup eco-system). And that’s why I recommend to startups to talk to a lot of people. Advisors, mentors, investors, customers, other entrepreneurs… anyone with a more experienced perspective on that subject. Get a realistic view of how things work and what challenges you are likely to face as you start implementing your concept in the market.

Startup Showcase – Instamojo

Here’s the story of Instamojo– helps you to sell online & collect payments by sharing a link via sms, email and social networks.

Catch them on –

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In conversation with Sampad Swain, CoFounder of Instamojo – 

Tell us about the story of your startup – Why did you start this, how did you start, when did you startup?

It all started in late 2010 (Instamojo was founded in early 2012) when Sampad (one of the founders) started a newsletter comprising of video interviews as a side project. Later he wanted to monetize the newsletter but couldn’t as there wasn’t an easy, hassle-free solution which just works. Soon he realized that the problem was much deeper. The prevalent solutions for selling stuff online were really painful & had too much friction. Instamojo Founders This led to present day Instamojo. We are striving to simplify online commerce with focus on design, delivery and distribution. While Instamojo was started as a side project but now it has taken a life of its own.

How did the co founders come together?

We know each other for more than 5 years now – met over social networks, side projects and previous ventures.

What challenges did you face and how did you deal with them?

Primary challenges being inception of a radically new idea. We were super early adopters of social media for Instamojo and being almost 24×7 available on customer support to help the early adopters understand our product & use them for their benefit.

What is your aspiration for the venture?

It’s too early for us — right now, most importantly we are trying to create an amazing product experience for our customers.

What did you learn from the journey so far?

Think long term and have enough money to experiment.

If you had to start all over again, what would you do differently?

Nothing much. So far we have been extremely lucky and fortunate to have amazing customers who give us valuable feedback to improve our product, a great bunch of investors & advisors who have been helping us all along.

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Why Weak Decision-Making Is Dangerous For Business, But Is Difficult To Spot

Leadership is not the same as good management.

Corporate leadership is usually seen in the context of ‘managing’ the journey of a company in a defined direction.


Efficient management of people, resources and environment may help the company progress smoothly on course in an agreed direction. However, the success or failure of the company, or whether the company is able to fully leverage the market opportunity is often dependent on the leader’s ability to make tough decisions, sometimes involving making a choice between progressing in the agreed direction, or changing the direction.

Leadership is about leading i.e. setting the direction and ensuring that the troops are aligned to move in that direction, and encouraging them to move in that direction.

Use the analogy of an army in the past, marching on to conquer new geographies and it is easier to visualize what a leader’s role is. Leadership involves the ability to see far in the horizon; imagine what the land beyond the mountains looks like based on assessing the current environment; and then chart the most optimal route; stock up on the necessary supplies; communicate the plan to your troops; create smaller manageable groups and identify people among them to lead those contingents. Then before the onset of the journey, the leader’s role is to give a rousing speech to motivate the troops, and as you move along in the defined direction create the mechanism to review if the progress is happening at the right pace and in the right direction.

Sometimes, the journey may be more difficult than imagined and the leader may have to reassess the plan. Often, when you reach the top of the mountain you may realize, that the vision of what lay ahead was different than what it actually is.

It is during such times that good leaders make tough decisions, while weak leaders keep ambling along on the same plan hoping that somehow things will change for the better. This is the crucial difference between definite leadership and the mere ability to manage the march in the agreed direction. This is the difference between good managers and great leaders.

If managing change is tough, deciding to change is tougher

Changing direction is a tough call as it may require the company to realign its direction and resources. It requires conviction, confidence, the ability to convince others that the changed strategy or direction is a good decision and then the ability to reorganize the resources and people in the new direction. Of course, it calls for a vision that can assess what the outcome of a new direction could be. And it certainly calls for courage to give up what was debated and decided previously as a good direction, and embark on a new journey or a new direction. It also calls for emotional maturity, as suggesting a new direction may often mean debating against the very decisions/directions that you earlier fought your way for. Even if it is in the best interest of the organization, it is a difficult decision as it involves a whole lot more effort, not the least to convince the rest of the team to realign their views and plans.

To be able to pull off such a tough change in plan requires a leader with great competence and one who enjoys respect from the rest of the army.

The impact of indecisiveness or lack of foresight and vision is not measurable under normal measurement trackers, and hence managements need to debate at board meetings, on whether the direction needs adjustment.

When a leader guides the company and manages people & resources well in an agreed direction, it is visible as a ‘success’ because there were milestones identified and measurement criteria defined, and it is easy to ‘see’ that the company is progressing well. Or if the leader is not driving the progress well, that is easy to spot for the same reasons.

However, since the outcomes of an alternate direction are in the ‘unknown’ zone, absence of push in that direction is not visible.

Great leaders introspect. They assess the environment, and the factors that led them to take the original decision. They are not afraid of thinking of alternatives.

Apple may not have been relevant if Steve Jobs had not decided that Apple is NOT a computer manufacturer and bet on music players and mobile devices as the new direction. It took great leadership to change the Indian Tobacco Company into ITC, a multi-category brand, including hospitality – something that was not at all related to the business they were originally in. It took great leadership to reimagine Titan from a watch brand to a fashion accessory brand.

Great leaders take bold, difficult decisions. All decisions are not necessarily right. Because, a decision is nothing but choosing from amongst the various options available, all of which would have different outcomes in the future. All scenarios of possible outcomes are based on assumptions. And hence, it is dependent on the leader’s conviction on these assumptions and outcomes that will set the direction and pace for the company. And success will depend ultimately not on whether the decision was right, as any of these decisions could have been right, but on whether the leader was able to align the team, resources, products and processes to the decision.

This article was originally published in NextBigWhat on February 3, 2014 (Read here).

Entrepreneurship : the option of leading a life you love.

I have often heard senior professionals tell entrepreneurs, that they wish they had the guts to leave their jobs and start up on their own. But I have yet to hear an entrepreneur, irrespective of whether their venture is doing well or struggling, tell any professional “I wish I had your job”.


The reason is easy to understand. Entrepreneurs choose their ventures largely on the basis of their areas of interest or passion or competence. It’s always great when work is also what you love to do. A job may or may not provide that option.

But just doing what you are passionate about is not the only reason why entrepreneurs are generally more excited about their work. In some cases, rare though, you may get to do what you really are passionate about in a job too. The big difference however is that while in a job you are living either someone else’s dream or a company’s objectives, in your own startup, you are driving your own vision, goals, dreams and aspirations. Every small step in an entrepreneurial journey feels like an accomplishment and gives you the satisfaction of having reached a new milestone.

And while the entrepreneurial journey is not always smooth and often fraught with risks, challenges and failures, the entrepreneur’s passion for the concept and the domain provides the person the patience and courage and the will to push ahead and sometimes, even if the venture fails, gives the person a personal high of having tried something.

Most importantly, irrespective of what the outcome of an entrepreneur’s venture – whether it fails or succeeds – the entrepreneur always wins, because even the failures teach you so much about business and life. They prepare your foundation for another leap. Another shot at glory.

Most entrepreneurs continue on the entrepreneurship journey, if one venture fails, they try another. If the entrepreneurial experience had not been a satisfying one, they would have given up and taken up a job.

But passion about what you do is not just a nice by-product of entrepreneurship. It is a necessary ingredient. Because, without passion and commitment; you are unlikely to find the will to push through challenging times. And challenging times there will be at many different times of the venture’s life. That’s why I tell entrepreneurs, especially women entrepreneurs –don’t start a venture because it was the first opportunity that came across, or because you saw someone else do something well. Don’t just think of the obvious business ideas like baking, cooking, children related events, and other similar business that seem easy to do, manageable within flexible times etc.

My suggestion to aspiring entrepreneurs is to think hard about what you are personally interested in – what you are passionate about. Think hard about what would give you maximum pleasure. Then when you have a list of many, many options, narrow the list to a few that pass a certain set of filters that you may want to apply – e.g. time, capital, profitability, travel/non-travel etc.  Once you have a list of 2-3 venture ideas that you think you are keen on, start evaluating them deeply. Think about all the aspects about this venture – see whether this will give you the joy as well as the financial returns you seek, as well as some of the other aspects that may be important to you (e.g. the recognition and respect, intellectual stimulation, etc.). Once you have thought about all this, let these simmer in your mind. Let some time pass post your initial evaluation. Then revisit that evaluation and see if you still feel strongly about them. If not, go back to the drawing board, including adding some new ideas into the pool. If you have a couple of ideas that seem to be good contenders for the finals, run it past a few people, get their views and perspectives and then take your final decision based on your gut and instinct. The rest will be detailing that can be left for later when you start planning your entrepreneurial journey.

Go ahead. Give entrepreneurship a shot. You owe it to yourself. After all, it’s your life. As the ad of a popular whiskey brand says, ‘Make it large’.

This post was originally published in The Sheroes Newsletter on February 11th, 2014  ( Read here )

How do I write a powerful elevator pitch?

An elevator pitch is  – what you describe about your venture in a 1 – 2 minute window. The pitch could  be to a potential investor, or even a potential client/ partner/ employee.

The purpose of an elevator pitch to an investor, is to excite him or her about THE BUSINESS CASE OF YOUR CONCEPT. The business case is about ‘Who will pay how much for what and to whom’.

An elevator pitch is usually a short conversation, which starts with a one-line introduction to your venture. This one-line description is something that should excite the investor to know more.

Once the investor is excited with a one-line descriptor, the follow-up answer should cover a brief overview of the concept, your aspirations, and most importantly, what you expect from the person e.g. possibly a meeting to present your concept.

Here’s an example of an ‘elevator pitch conversation – 

Entrepreneur: “Hi, I am the co-founder of Tune Patrol, an online platform for independent musicians to upload, share and sell their music. We are in beta stage. The results look very good. We are now seeking a USD 100,000 in funding to go to a million users mark. We are currently funded through friends and family, including my ex-boss who invested USD 5,000 in my venture”

Investor: Looks good. Tell me more.

Entrepreneur: Thanks. My name is Saurabh. We launched the platform a month ago. I have two co-founders, one of whom is a techie, the other a music promotion professional. I have 3 years of experience as a marketing professional. The ex-CEO of one of the largest music channels in India is an advisor to us. We have what we think is a good business plan, and a strong business case. Apart from funding we need mentoring and insights to help us convert our dream into a very large company.

Investor: Good. How can I help?

Entrepreneur: Could we come over and meet you someday? We have a presentation and would really appreciate your advice, and of course seek your investment.

Investor: Sure we could meet. Here’s my card. Drop me a mail with a presentation and the link to your platform. I will put you on to someone from our office to set up a meeting. All the best.

Does traction trump revenue (in the short-term)?

Naval Ravikant‘s definition of traction is: ‘Quantitative evidence of market demand.’

Traction,  in my view, is not just about users. It is about users using your product at the price-point that you eventually want them to buy at. Everything else is about users taking advantage of an ‘offer’ with no guarantees that ‘usage during offer’ will translate into ‘traction’.


But the answer to the question above is that it depends on a variety of factors.

If you are in a business where there is precedence of the revenue model, business model, price-points, etc. working well for others, then there will be less tolerance to, you not having adequate revenues with whatever traction you have.

However, if you are in a category where getting to a reasonable scale to use that as a competitive advantage, then focusing on tactics to get traction, even if that means at the cost of revenues, could be acceptable to some.

Facebook’s LittleEyeLabs Deal: What Founders Should Know About M&A

Sanjay Bansal

This is a guest article by Sanjay Bansal, Founder – Aurum Equity Partners (

Facebook recently announced that they have acquired LittleEye, an Indian startup that helps developers identify and fix performance issues in their mobile apps. According to Sateesh Andra, Managing Partner of VentureEast Tenet Fund, which invested in LittleEye less than a year ago –  “This is a transformative event for the Indian Product Startup Ecosystem. Also validates our Fund’s belief in Product Startups, with Global Focus and Local (India) Execution”.

And a transformative event it is, indeed. Facebook has made several acquisitions so far. But this is its first acquisition in India. Early-stage mergers or acquisitions have been rare in India. Continue reading “Facebook’s LittleEyeLabs Deal: What Founders Should Know About M&A”

What do investors want to know when a startup retires a product?

(This post was my response to a question on Quora: “Dear Investor, …” How should the rest of the email go? Required elements? Bonus points for…? Tone? How different is it from the communications to the press and to customers?)

Hopefully, you will not break the news via e-mail. If that’s the case, the relationship is most likely broken and therefore the e-mail would have in it all that you need to communicate, to keep your side of the story simple and straight.


Continue reading “What do investors want to know when a startup retires a product?”

What does being an already successful one-time entrepreneur do to your chances of being successful again?

Any entrepreneurial journey, even the most successful one, is not a straight line up. There are always ups and downs in that journey.

The experience of having built a successful venture exposes you to many of the challenges that one can face in an entrepreneurial journey. It teaches you to keep your assumptions practical. It helps you understand what it takes to make a sale. It give you the wisdom to keep costs low. It teaches you that there will be ups and downs, and it teaches you to be resilient and teaches one that perseverance can pay.

Continue reading “What does being an already successful one-time entrepreneur do to your chances of being successful again?”

Is it okay to be a leader in a niche segment?

Targeting a niche segment almost always seems like a winning strategy. There is always a temptation to carve out a niche when a category matures or seems to be growing well.

However, just because you have identified a good niche does NOT mean that it makes a good business case, no matter how sharply defined that niche is.

Often entrepreneurs make the mistake of getting excited about playing in a niche, and assuming that they can be leaders in that niche simply because they are super-focused ONLY on that segment. The truth however is that just because you focus on a niche does not mean that others who service broader segments are not at least as good as you, at servicing that niche as well.

Focusing on a niche makes sense only if that niche represents a fairly large market. Also, if servicing the niche helps you build competencies which can be leveraged across a broader segment, there is really no merit in building a ‘business case’ around that niche. Although, you could have multiple brands targeting different niche segments, with the common competencies deployed across all the segments.

Testing processes during the pilot phase

Processes help organizations scale up. Processes are nothing but just a set of guidelines for managing activity and handling situations.

Processes are usually centrally planned and locally implemented. They reduce dependence on individual brilliance, and instill a discipline that results in operational efficiencies and consistency of experience. They also allow individuals to be clear on how a certain activity/situation is to be handled.

The quality of processes can make or break an organization. Not only should processes be implemented, but they should also be measured and evaluated periodically to ensure that inefficiencies and redundancies are eliminated.

In a startup, it is critical to define some processes, yet be flexible enough to adjust them,as soon as you see some processes becoming bottlenecks or inefficient.

During a pilot phase, the startup could test multiple processes and then decide which ones seem to be working better and adopt them for the organization. However, what is important is the focus on establishing processes BEFORE the company needs the processes to scale up. The pilot phase allows processes to be tested, as some of them are bound to fail. The smaller scale of a pilot allows the outcome of failed processes to be handled or damage to be contained quickly. But it does require closer monitoring and planning.

Nett: Be process-oriented during the pilot-phase too. But be nimble and flexible, and be ready to make quick adjustments.

Is there a ‘matchmaking’ service between Start-ups and Angel Investors?

In India, there are numerous angel platforms like IAN, Mumbai Angels, Hyderabad Angels, etc, that help start-ups connect with angel investors.

downloadThere are some online platforms as well, like – Let’sVenture | Startup Funding Made Easy.
A number of events organized by TiE, etc.also help entrepreneurs connect with investors.
A number of accelerators & incubators also facilitate interactions with investors, for their start-ups.
Here is a list of some acclaimed international ones-

What is the best way to create a ‘Fear of Missing Out’ in investors?

(This was my answer to a question on Quora)

Do all the things that make your startup a good investment case:

  1. Address a large problem or opportunity
  2. Have a great product/solution/service that addresses that opportunity
  3. Be knowledgeable about the domain … and business in general
  4. Be practical about the assumptions

Continue reading “What is the best way to create a ‘Fear of Missing Out’ in investors?”

What is the average valuation on an Indian startup with beta product, pre-launch stage, pre-revenue stage?

(This was my response to a question on Quora)

Depends on several factors… could be anywhere between INR 2-5 cr.  – 5cr. (i.e. USD 350,000 –USD 800,000). 

Valuation range will largely depend on the following factors:

  • Who is doing it : Team – if it is a bunch of college students with no prior business or work experience, it will be in the lower end of the range… if it is a team of experienced professionals or entrepreneurs, it is likely to be at the higher end of the range. Of course, if it is a team os super-star, proven entrepreneurs/professionals with significant domain expertise and experience, the valuation could be much higher…. and actually may not be an angel round.
  • Size of the opportunity: Larger the opportunity, higher the valuation.
  • Does the product/service have a reasonable chance of dominating that market: If the answer is a resounding yes, the valuation will be higher.
I must add here that, if the opportunity is large and the team is competent and committed, the chances of getting funded are higher even if the product is not great. On the other hand, even with a great product and a large market, if the team is weak, they are unlikely to get funded.

For a Startup, how important is traction for raising funds?

Traction is not a necessary condition, and certainly not a sufficient condition for investors to get excited about your venture.


The factors that investors will consider, are as follows:

  1. Is the market large enough?
  2. Does your product/concept have a reasonable chance of being a dominant player in that market?
  3. Is the team committed and competent to execute this?

In all the above, if there is a negative on point No.3, then point 1 and  2 become irrelevant.

If you already have traction, all it does is improve the chances of getting funded because traction means that some of the assumptions for that business are proven in the marketplace.

But traction by itself does not mean anything unless supported by the 3 points mentioned above.

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