December 29, 2009

"To Indipreneurship" - Article by Sanjay Anandaram

1991 was when India achieved its second independence – that of economic liberalization. But, in retrospect, one has to say that it has been far more than just economic liberalization. It also liberated the mind of the baggage of self-doubt, low confidence and ignorance. It has therefore been my belief that those born around or after 1991 would be the change agents of India. Entrepreneurship and entrepreneurial thinking would be the vehicles of change.

In the first column of Indipreneur published August 25th, 2006, I wrote: “For the first time, an entire generation of young people cutting across class lines is acutely aware of the opportunity ahead of them. They also recognize the inscription on the other side of the coin: RISK. And it’s not a four letter word anymore. While earlier generations were defensive and inward looking, this generation is aggressive, outward looking and not given to the self-doubts of the past. This is the “why not?” generation. This generation has the potential to lead India to heights that are greater than anything we have achieved till date.”

Here’s an example. I met an impressive young woman Jayashree Hegde, an engineering graduate of 2008, yesterday. Energetic, vivacious, quietly aggressive, understands the value of relationships and networking, entrepreneurial. Being interested in marketing, she interned with well-known advertising agency McCann-Erickson in Mumbai for 2 months after her engineering from Bangalore. In these 2 months, she also attended a week long programme on marketing in Malaysia during this period. Returning to Bangalore, she joined redBus a startup to help with on-line marketing while volunteering with a theatre company and learning French. After about a year at redBus, she recently quit to start her own company. She toyed with the idea of doing a MBA but rejected it in favour of becoming an entrepreneur. To raise money for her venture, she brokered some high value real-estate deals, sold art-works of some friends online (selling 35 pieces in 1 month!), co-founded an events management company focused on arts and cultural events, secured sponsorships and helped conduct various events in India and abroad. Jayashree’s dealt with bureaucracy and the political administration and has emerged unscathed! Today, her company provides online and digital marketing services to 5 clients and she employs 15 people. She is currently developing an innovative digital marketing programme for educational institutions that is set to launch in January. Her first year revenues will cross Rs 1 crore. According to her, “I have nothing to lose. If I don’t take risks now, when will I? If I fail, I can pick myself up and move on. At least I will have failed doing what I wanted to do”.

As the end of the first decade of the 21st century dawns, it is important for all to understand how far we’ve come in just 19 years. The decision this year to stop production of the Bajaj scooter is symbolic of the shedding of the pre-1991 past; The globally watched and celebrated arrival of the Nano was a metaphor for the possibilities of 21st century India. There are huge problems still to be solved, enormous inequities to be addressed and immense entrenched regressive mindsets to be battled. Entrepreneurial thinking (across society) will be required if these are to be dealt with.

As we contemplate India in 2010 and beyond, it is worth reiterating that we must first learn to celebrate entrepreneurship and entrepreneurs. Role models and successes need to be highlighted. But, while doing this, we must also learn to celebrate failures. Setbacks are inevitable in the course of creating successful enterprises and navigating these successfully is the hall mark of great entrepreneurs. Creating such a celebratory mindset and a culture is imperative to fostering entrepreneurship.

This column has been devoted to entrepreneurs, entrepreneurship, and in general to an entrepreneurial approach to problem solving for over 3 years now. It now re-dedicates itself in 2010 to the Indian entrepreneur – The Indipreneur.

What do you think?

Sanjay Anandaram is a passionate advocate of entrepreneurship in India; He brings close to two decades of experience as an entrepreneur, corporate executive, venture investor, faculty member, advisor and mentor. He’s involved with Nasscom, TiE, IIM-Bangalore, and INSEAD business school in driving entrepreneurship. He can be reached at The views expressed here are his own.

December 22, 2009

"Self Awareness" - Article by Sanjay Anandaram

A CEO’s job, like any leader’s, is a lonely one. The CEO of a startup is especially lonely. He’s expected to manage finances and investors, the board, motivate employees while dealing with recalcitrant ones, engage with, influence and grow relationships with key customers, partners, suppliers and industry players. The CEO needs to be emotionally strong to deal with all the pulls and pushes. And has to always present a sunny disposition even when times are difficult.

It is a job that requires enormous confidence and humility. Confidence to keep executing towards the goals of the company and humility to keep learning and unlearning. Not surprisingly, these are uncommon traits that only the more successful CEOs have. Rarer too is the desire to know one’s weaknesses and the willingness to work on improving oneself.

I was therefore delighted when I recently received an email from a CEO saying he wanted an honest appraisal from me of his leadership. He had commissioned a 360degree appraisal of himself to understand his limitations and how his leadership style is perceived by others around him. He had set ambitious (audacious?) goals for his company and believed that the market presented the opportunity to realise those goals. He was also humble and more importantly, displayed amazing self-awareness, in realizing that he did not possess the capabilities and qualities necessary to lead the company towards those goals. And he wanted to understand what those limitations were. How many of us do or would do the same? Our egos would come in the way, our insecurities and fears would prevent us from an honest self-assessment. CEOs who aren’t self aware tend to be insecure and in extreme cases become delusional surrounding themselves with sycophants and yes-men. Constructive feedback on capabilities, need for improvement and development of inter-personal skills especially in groups need maturity and self-awareness to appreciate and internalize

Obviously, there are different types of leaders. Some self-aware and others not quite. To become an objective evaluator of oneself including one’s behaviour and values is not a trivial task. It requires one to be conscious, serious and committed to transformation. One has to first manage oneself effectively before one can manage others and/or a business, let alone transform them. Self-awareness, self-esteem and confidence are required to do this; they’re connected and entrepreneurs tend to implicitly know and react to these concepts in practice. It leads to people being honest with one another, acknowledging that they don’t have all the answers and that they’re keen to learn from outside. It is OK for the CEO to say, “I don’t know” but it is not OK to be defensive or otherwise to be a “know it all”. This results in the CEO’s credibility getting enhanced and his points being respected. Such credible honest behaviour also creates an organization with low levels of politicking. It ensures that one doesn’t become judgemental about events, situations and others. Learning to listen and marshalling the facts and data before arriving at a decision therefore become far easier to achieve.

The first step in problem solving is to recognize there’s a problem and then to identify the source(s) of the problem. Only then can any problem be resolved.
Daniel Goleman, whose studies and practice of meditation in India decades ago played a crucial role in his developing the celebrated theory of Emotional Intelligence, describes self-awareness as a critical competency of high achievers. Being self-aware, they realise their strengths and weakness and are comfortable with the realization. They surround themselves with the appropriate talented and competent people who then fill in the gaps, so to speak.

The result? A well-rounded, competent, complementary team consisting of team members who’re comfortable with each other and with the company’s goals. There’s no dissonance with regard to values, objectives and action.

As the saying goes, all bottlenecks are at the top of the bottle! And self-awareness has to start from the top of the organization.

What do you think?

Sanjay Anandaram is a passionate advocate of entrepreneurship in India; He brings close to two decades of experience as an entrepreneur, corporate executive, venture investor, faculty member, advisor and mentor. He’s involved with Nasscom, TiE, IIM-Bangalore, and INSEAD business school in driving entrepreneurship. He can be reached at The views expressed here are his own.

December 13, 2009

The Entrepreneur who brought McDonalds to India

Forbes India has an interesting profile of Vikram Bakshi, the JV partner of McDonald’s in India.

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the Private Equity and Venture Capital ecosystem in India. Click here to learn about Venture Intelligence's products and services for entrepreneurs.

December 07, 2009

Sources of Govt Funding

DARE magazine has an article on the various government-related agencies that provide funding for technology start-ups.

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the Private Equity and Venture Capital ecosystem in India. Click here to learn about Venture Intelligence's products and services for entrepreneurs.

"Is "Business Ethics" Old Fashioned?" - By Sanjay Anandaram

The TV channel had headlined the story “Education or Business?” The story was about how students had been taken for a ride by the administrators of a couple of educational institutes that had taken large sums of money as fees and then not provided admission to the students. The police, the students’ families and even the local MLA were all interviewed. The administrators of the institute were not available for comment. The headline “Education or Business?” was troubling. Was it implying that education and business were mutually exclusive? Or, was it, even more so, implying that cheating students with false promises was unacceptable behaviour in education but, and here’s the rub, understandable and even acceptable if it were yet another business?

Is business assumed to be corrupt and unethical? And therefore is it perfectly legitimate to indulge in practices that might not be considered ethical as long as it benefits the company? What then does it mean for entrepreneurs starting out to create something of value?

The CEO of a venture funded startup told me he wanted to create a company that was admired by all. The attributes he used to describe “admired” were illuminating: well-known brand, financially successful, large number of well-known customers, a thought leader, attracted top class talent. I asked him about the kind of culture he wanted to create. He responded by saying “open and professional”. And what about integrity and ethics? He looked at me and said that one needed to be practical and “real” in business in India!


Over 20 years ago, as a fresh sales person at a then young and small computer company I was asked to sell computers in a state where my company did not have any real presence. The state was perceived to be among the more backward and corrupt states in India. There was hardly any private sector worth mentioning and almost all the purchases were made by various department of the state government. Upon returning from my first visit, I told my boss that it would be impossible to sell without financially taking care of various people typically involved in government purchases. My company was and is known for a zero-tolerance policy on issues of integrity. The integrity at all costs mantra had been drummed into all of us right from the Chairman downwards and we all swore by the mantra. We were proud of that mantra. No one was penalized for losing business because of unethical practices indulged in by competition and customers. All very well but how on earth was I expected to sell in this state where apparently everything had a price? I was told unequivocally: “We’re aware of the situation. We also don’t believe that there’s 100% corruption there. Get us business from the 10% who’re not corrupt!” I returned and over the course of the next 12 months managed to bring in business from one of the more corrupt departments (the Public Works Department!) without diluting my company’s mantra or impacting my conscience. We lost a lot of business to competition in the course of these 12 months. But we had a small installed base of customers. The reason I was able to do it was because I had the full backing of my company, right from the very top, and was challenged to prove my worth vis-à-vis the company’s mantra.

It is true that we don’t have enough role models in business as far as integrity and ethical practices are concerned. It is true that more businesses choose the easy way out and succumb than those that don’t. Whether it is paying taxes or indulging in questionable business practices, what is the acid test? If there’s a doubt in our minds about a practice, what’s the company mantra? To err on the side of what we know is right or push the envelope, or even tear it perhaps? Should we do something as long as it is “not illegal” or should we refrain from grey areas and choose just the white?

How then does one answer the CEO who felt that one had to be practical and “real” to do business in India? Should one just say, as I was told over 20 years ago, to go and get business from the 10% that are straight?

Yet for all of us involved in today’s India, involved in building a new set of entrepreneurial companies and involved in creating jobs and wealth, the challenge remains. And one that we must all rise up to.

What do you think?

Sanjay Anandaram is a passionate advocate of entrepreneurship in India; He brings close to two decades of experience as an entrepreneur, corporate executive, venture investor, faculty member, advisor and mentor. He’s involved with Nasscom, TiE, IIM-Bangalore, and INSEAD business school in driving entrepreneurship. He can be reached at The views expressed here are his own.

"Look Outwards" - By Sanjay Anandaram

It was the first presentation the CEO was making to the recently constituted board of directors on the company’s performance till date and the business outlook for the next 12 months. It was well laid out with a series of numbers detailing revenues, margins, headcount, growth rates and so on. The CEO was well acquainted with the numbers and was aware of the operational details. But there was one troubling issue.

There was no data on customers, competition and market dynamics. None of the analysis focused on the revenues, margins and opportunities in different market segments or with different customers. Information was lacking on how the headcount of the company was distributed across customers and geographies. Were customers satisfied or not? Which customers were showing the most promise from a growth standpoint, which ones were giving the company higher margins and which ones were a drag on the company? How many new customers were being added every month and how many customers were not renewing their contracts? What were the reasons for not renewing their contracts? Was the business going to competition? Was there the possibility of new players entering the market with a different business model and a different range of products and services? What if any were the threats and opportunities to the company – regulatory, financial, competitive, supply side etc?

Were customers demanding newer services and products that could not be serviced? If so, what were the trends in customer requirements of product features and services? Was the business heavily dependent on a few large customers and therefore risky or was the business spread out over a large base of customers? Were existing customers being mined for more business from different departments or was just one customer department giving business? How was the company perceived by customers – commodity player, high quality vendor or a partner? Was the company being beaten down on prices or were customers comfortable with the prices? How was the company placed vis-à-vis competition in terms of pricing, range of services, perception by customer? How often did the CEO meet top customers? How many customer outreach programmes did the company run? What was the nature of the relationship enjoyed by the sales team with customers? Just order takers or partners with whom the customer shared their medium and long term plans and requirements? Given changing market and customer requirements, what are the implications for the company in terms of its people and business model?

All too often, companies spend their time not just looking inside themselves but in a manner of speaking, actually living inside themselves as hermits. They don’t engage with the market and customers. They are unaware of the goings-on in the world around them – new technology, new competitors, changing customer needs. Focused maniacally on operations and delivery, these companies lose out on the opportunities and the threats from outside the company. They become reactive, focused on servicing only the stated needs from a manager or two at the customer end. The company grows by riding an existing wave of industry demand along with everyone else. It drives margins by being operationally efficient. However, there’s little or no strategic value the customer sees in working with the company. No name recognition, no top management visibility and no long term business. The customer too then views these companies as commodity providers of little or now value and develops a purely transactional relationship with them. In the event of a slowdown, the first to lose business is the “commodity value, transactional relationship” company. This kind of a company is also the first to be hit by changing customer situations, new technology, new regulation, new competition, new business models.

Meet customers, competitors, industry experts, advisors regularly to learn about and understand what’s happening in the industry. Read about the industry and learn what others around the world in similar businesses are doing from the standpoint of people, business models, technology, pricing, suppliers. Build relationships based on long term value and value-systems, not on short term transactions. There are a vast many examples of companies from every business segment that made the mistake of not looking outside themselves often enough and deeply enough. Most of those companies don’t exist today.

What do you think?

Sanjay Anandaram is a passionate advocate of entrepreneurship in India; He brings close to two decades of experience as an entrepreneur, corporate executive, venture investor, faculty member, advisor and mentor. He’s involved with Nasscom, TiE, IIM-Bangalore, and INSEAD business school in driving entrepreneurship. He can be reached at The views expressed here are his own.

November 25, 2009

Risk Culture - By Sanjay Anandaram

The board meeting at the startup was underway and the CEO proudly highlighted what he considered to be the most successful initiative of the company. The initiative had been embraced by customers and partners whole-heartedly and the signs of continued growth were very visible. The head of business development, present in the meeting and responsible for that initiative was understandably delighted at the acknowledgement by the board. He subsequently made an unusually peppy presentation on his department to the pleasant surprise of all. Later on, the CEO explained about business development and its head: “He’s full of ideas all the time. We tried several of his ideas earlier and they all bombed. When he came up with this latest one, I told him that this would be the last one we’d try. I also asked him to think through the idea and take full responsibility for its implementation. The results are visible. In addition, the business development head was so thrilled with the success that he took extra care to make a detailed presentation on his department, something that was sloppy, at best, earlier.”

The above highlights two important things: one, the role of the CEO in encouraging and nurturing ideas, in spite of past failures and two, the delegating of execution of the idea to its originator. All too often, the company culture is hierarchical resulting in a top down style of management. Where the CEO generally decides what to do and the rest of the organization simply executes. This implicitly assumes that the CEO has the monopoly on thinking. Of course, there are socio-cultural issues at work as well, typically visible in a class and hierarchy conscious society. In addition, the person who generates the idea and the person executing it are two different people. This quite naturally leads to problems – of egos, of understanding, of expertise and so on. On the other hand, if the person responsible for the idea is made part of its execution, the practical aspects of idea implementation come to the fore. It is one thing to suggest an idea, quite another to execute it. Participation of people from different areas of the company in problem solving is a great way to build a strong culture of team work as well.

A startup is founded on risk-taking and its management. So how come in many startups as they evolve, there’s this hesitation to experiment, to try out new initiatives? After all, no one really knows what specifically is going to work. If they knew it, all startups would be successful. There’s this endless cycle of trying and experimenting, seeing the results, modifying activities and then dropping some initiatives, re-launching some and starting off others afresh. One of the advantages of the startup is its ability to move fast. It makes mistakes faster, learns faster, launches faster, makes newer mistakes, learns,…..It is therefore critical that this culture of risk taking is encouraged and calibrated by the CEO. Else, it will be impossible to harness the intellectual capital of the people. There are market and customer insights that only those in daily touch with customers and partners have. It would be fool hardy not to listen to this group for their ideas and thoughts. Being afraid of trying new things is a sure recipe for failure for all companies, especially for a startup.

Creating and sustaining this culture of ideation, risk taking and managing it are therefore crucial for a startup. The entire company needs to be motivated to participate. Obviously, the effort needs to be calibrated in such a manner that, both, the cost of failure and the cost of trial need to be low not just for the startup but also for the customer or partner if they’re involved in the initiative. Quick and inexpensive course corrections need to be made based on results.

After all, jumping off a cliff without a parachute isn’t risk-taking, it is foolish.

What do you think?

Sanjay Anandaram is a passionate advocate of entrepreneurship in India; He brings close to two decades of experience as an entrepreneur, corporate executive, venture investor, faculty member, advisor and mentor. He’s involved with Nasscom, TiE, IIM-Bangalore, and INSEAD business school in driving entrepreneurship. He can be reached at The views expressed here are his own.

Strategic Hiring - By Sanjay Anandaram

“I hired him as President thinking he would transform my company. He was experienced, had worked for Indian and MNCs and we got along well. He was the highest paid executive in my company at Rs 45L plus incentives. Unfortunately, I didn’t see any impact on sales or margins and I had to ask him to leave”, said the founder-CEO of the startup. “How long did he stay in your company?” I asked the founder-CEO. The COO was asked to go after 4 months.

On further probing, the founder CEO explained, “I think 3-4 months is sufficient time to see results in sales. I want to see execution and quickly, not ideas and plans. He just spent time meeting customers, spent money hiring a company to train employees, wanted clearance to hire some more people and wanted to build a plan that he would then execute. Arrey bhai, what’s there to plan about when we know our customers and market and know exactly how much we can do.Instead of “doing”, he was wasting time and money in planning! Apparently, he couldn’t work without a plan in place. I couldn’t understand what his problem was – after all, we’ve been in business for a few years and are profitable and we never worried about planning-shanning. I think I made a mistake in bringing him on board. I think getting these high-fliers into a young and small company is not appropriate since they want all kinds of resources and time to execute. We cannot afford such luxuries.”

“I was excited to join the company to help it grow to 10X its current size. I really liked what they had done so far and I enjoyed good chemistry with the CEO. I was impressed by his knowledge and vision for his company. To grow at the desired pace would’ve required us to expand practice areas, enter newer geographies, build relationships with very senior executives, develop a brand, leverage technology and become a process driven organization. We would’ve needed to have strong operations and performance metrics. We would’ve needed to make investments in people, marketing, sales, and technology. But, the quality of the people around me left much to be desired. Many of them had poor communication and interpersonal skills. Learning to listen to customers problems didn’t seem important. While there was this intention to grow ten times, the details of how that was to be achieved were more than hazy. For example, What kinds of customers and markets and practices should we focus on? How much money would be required to be spent? In what areas and over what time frame? What kinds of people would be required to grow and manage the business? What kind of marketing needed to be done? What kinds of internal systems of measurement would need to be in place? And so on. To do this, required me to understand customer needs, capabilities and competencies of the current team, market trends etc.

There was no planning process in the company and that made it difficult to estimate resources, activities, headcount, time and outputs. There was seat-of-the-pants management with an enormous amount of focus on tactical aspects of the business, the here and now. There was no thinking about planning of any kind. If there’d been planning, then we would have understood what was an investment and what was an expense. Because some things take time to develop and one needs to budget that into the planning process. Else, treating it as an expense would result in dropping initiatives that would pay off over a 6 to 9 month period. The company would therefore not be able to grow multiple engines of growth to achieve its goals of growing ten times.” This was the former President speaking.

He continued, “The founder-CEO had achieved success over the past few years but I think he had become a victim of that success. It was difficult for me to make him see that what had brought them to this current point wasn’t going to be sufficient to take them to the next levels. They need to look around and see how larger better companies were doing and more importantly learn from them.”

What do you think?

Sanjay Anandaram is a passionate advocate of entrepreneurship in India; He brings close to two decades of experience as an entrepreneur, corporate executive, venture investor, faculty member, advisor and mentor. He’s involved with Nasscom, TiE, IIM-Bangalore, and INSEAD business school in driving entrepreneurship. He can be reached at The views expressed here are his own.

November 15, 2009

IIM-A announces Business Plan Showcase

IIMA is organizing a Business Plan Showcase as part of its Finance Conclave 2010.

Entrepreneurs from following sectors are invited to submit their entries:
  • Clean Tech & Renewable Energy
  • Telecommunications and Mobile Services
  • E-commerce & Web Portals
  • Electronics
  • IT/ITES Services
  • IT Software
  • Power
Registrations for the Showcase

Registrations start on the 10th November 2009. To register your team, please send a mail to with the following details:
  • Name of Team Members
  • Contact Details
  • Category of the Business Plan
Please use the following as the subject line: "Showcase 2010: Registration for ". On registration, you would receive a mail confirming your registration within 24 hours.

Important Timelines
  • Registration Begins: 10th November, 2009
  • Submission of Round 1 Executive Summary: 25th November, 2009
  • Result of Round 1: 30th November, 2009
  • Submission of Round 2 Business Plans: 7th December, 2009
  • Final Shortlist for Presentation on Campus: 14th December
  • Business Plan Showcase at IIM Ahmedabad: 8th January 2010
For more information, visit

September 29, 2009

Are Entrepreneurs "their own bosses"?

From an Knowledge@Wharton interview with Atul Jain, the founder and CEO of TEOCO:
..people sometimes “tell me, ‘I want to be my own boss.’ I tell them that when you become an entrepreneur, nothing could be further from the truth. Every single employee is your boss because if they leave, you have nobody to do your work. Every single client is your boss because they tell you what to do. When you work for a company, you typically have one, maybe two bosses. When you're an entrepreneur, everybody wants to tell you what to do. Your employees will tell you what to do, your clients will tell you what to do, even your vendors will tell you what to do.”

...Part of business success is cost management. We never let expenses get out of line with revenue. The way I explains this is: think of your revenue as an 18-wheeler truck on a highway. It's like a large truck. Then there is another truck right behind it, another 18-wheeler called expenses. Sandwiched between the two 18-wheelers -- revenue and expenses -- is a little Volkswagen called profit. If the revenue truck slows down and the expenses truck doesn't, the Volkswagen gets crushed. If the expenses truck speeds up and the revenue truck doesn't, the Volkswagen gets crushed. I love my Volkswagen. I don't ever want it to get crushed.

...Finally, he says, “Have courage.... It takes a tremendous amount of courage to go into business and it takes a tremendous amount of courage to stay in business. It takes a tremendous amount of courage to stay true to your values because people will challenge them and ask you to compromise them to create a successful business.”

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the Private Equity and Venture Capital ecosystem in India. Click here to learn about Venture Intelligence's products and services for entrepreneurs.

September 18, 2009

Wanted Fools and Angels! - Article by Sanjay Anandaram

Alexander Pope’s 1709 “Essay on Criticism” had these immortal lines “…for fools rush in where angels fear to tread”. He was of course referring to the literary critics of his time and, in his time, implied some one who behaved foolishly rather than referring to a simpleton or someone lacking in intelligence as it does now.

Every entrepreneur, observer, VC, analyst and even bureaucrat will tell you that there’s a severe shortage of true boot-strapping capital. The money required to really start off on the entrepreneurial journey. Friends, family and fools (collectively FFF, rather unfairly but with tongue firmly in cheek) provide the initial emotional and perhaps some monetary support for the budding entrepreneur. It invariably takes more than that to demonstrate the venture is capable of taking off.

Ours is a capital starved country. There’s a huge shortage of investment funds in the country. The shortage is on account of regulation and partly in fact as well. Almost all the money invested by VC funds today is sourced from investors outside the country. This directly and indirectly impacts the size of the fund, profile of fund managers, risk appetites, kinds of deals, time-frame for investments and exits, return expectations and the like.

The venture capitalists would rather fund revenue generating companies with at least $1m to $2m for it to be worth their while and that’s just for the very few. A majority want a company that preferably has a full team, revenues, a working business model, generating cash and is close to profitability, if not already profitable. Of late, a few focused seed stage VC funds have emerged that aim to be the bridge between the FFF and the other VCs. But these are the oddballs. While more seed stage funds will undoubtedly emerge, the truth is that securing early stage funding of between Rs 50L and Rs 2 crore is a serious challenge. Which is what most entrepreneurs are looking for.

That’s where angels tread in. Angels are usually experienced entrepreneurs and successful senior executives who invest their own money (unlike VCs who invest out of an investment pool) in very young companies for reasons other than pure monetary returns. They are excited by the company building process and by the opportunity to learn, wish to mentor, believe in the opportunity, and love the team. They provide valuable business advice, referral networks and, of course with the right angels, credibility. As nature abhors a vacuum, angels have emerged in the last few years. Not surprisingly, this coincided with the success of a few entrepreneurs and companies in the last decade or so. They’ve also formed angel groups like the Indian Angel Network and Mumbai Angels. Organizations like TiE too provide a forum for entrepreneurs and angels to connect with each other. But as with the entire Indian entrepreneurial ecosystem, these are early days and the impact of angels and angel networks is yet to be realized.

According to the UNH Centre for Venture Research and PwC MoneyTree surveys, in the US in 2007 alone, angel capital of $27 billion was invested in 57,000 companies! Contrast this with about $30.6 billion of VC capital invested in 3918 companies in the same year. But even in the US, angel capital while being more readily available is still hard to raise. The Indian Angel Network has 80 odd members, has invested about $3m or so in 18 companies.

Data from Angelsoft suggested that in 2008, there were over 300 angel groups accounting for over 12,000 individuals. These groups syndicate deals amongst themselves and entrepreneurial companies get access to more than one group for raising additional capital.

Clearly, there’s enormous room for more angels to participate and the good news is that with the growth and successful expansion of the Indian economy and companies, more and more educated, experienced and aware potential angels are being created. Forums for these angels need to be created (as they invariably will be) where they can learn, understand, network and partner among each other. The government can pass legislation that makes it attractive for companies and individuals to invest in young companies targeting risky high growth opportunities, that are creating interesting intellectual capital or creating jobs.

It is only with the active participation of a very large number of angels who are passionate about creating successful companies in India will this issue of early stage financing be meaningfully dealt with.

What do you think?

September 03, 2009

Satya Prabhakar on startup hiring and retention

I attended a presentation on entrepreneurship by Satya Prabhakar, Founder & CEO of, on August 31 at an event organized by TiE-Chennai and the Loyola Institute of Business Administration (LIBA).

I found the points he made on hiring and retention quite interesting.

He suggested entrepreneurs look out for "5Is" for hiring and 'three 4-letter words" for retention.

The "5 Is"

1. Intellect
2. Initiative
3. Industry (ie, Hard work)
4. Integrity
5. Interpersonal Skills

The 3 4-letter words:

1. Work (i.e., its content)
2. Love ("Am I valued and appreciated here?")
3. Hope ("Is this place enroute to something great?")

Entrepreneurs should not allow an employee to settle into a comfort zone and keep setting the bar higher.

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the Private Equity and Venture Capital ecosystem in India. Click here to learn about Venture Intelligence's products and services for entrepreneurs.

September 01, 2009

Disclosures and Non-Disclosures - By Sanjay Anandaram

“Here’s a NDA (Non-Disclosure Agreement) – please sign it”, said the entrepreneur. His face fell and he looked almost hurt when I told him that I don’t sign NDAs. It is simply impossible to keep track of the business ideas and plans that get discussed with various entrepreneurs. There are also many ideas and plans that sound and indeed are similar in concept if not in all details. One would open oneself to needless and avoidable complaints about plagiarism and favouritism if NDAs are signed.

So, how does an entrepreneur “protect” his business plan or “idea”?

Every entrepreneur actually believes that his/her business plan is singularly unique and that it will change the world if only capital were made available. While it is important for every entrepreneur to believe in his/her plan, it would be arrogant to assume that no body else has thought about it either.

Most businesses are the types that could be classified as “better, faster, cheaper.” In other words, they take an existing mode of delivering a solution, value-add around this solution by better orchestration of the eco-system, usage of technology and greater operational excellence and deliver “better, faster, cheaper” solutions to existing problems. The real key to their success lies therefore in their ability to relentlessly execute to their plan day after day, acquire customers and be financially viable. There’s little or no real intellectual property in these companies.

On the other hand, there’re a miniscule number of companies that are actually developing fundamentally new business models and technologies that can radically alter existing value propositions to customers. These types of companies tend be staffed by top class technologists and experts from the relevant business domain. Intellectual capital and intellectual property are the bedrock of their existence. Patents are used, among other ways, to fiercely protect their intellectual assets. Even in such scenarios, unless important formulae, critical and unique business processes and crucial algorithms are discussed, NDAs are rarely signed by professional investors.

When one goes to a doctor or a lawyer or a chartered accountant, one doesn’t sign a NDA in spite of discussing deep personal matters. Why? Because there’s a sense of trust and faith and sometimes even helplessness. Their sense of professional ethics prevents them from discussing specifics of a case with anyone else. Similarly, entrepreneurs need to understand that professional investors too have a code of conduct and business ethics that prevents them from discussing specifics of a plan. It is also important for entrepreneurs to have done their home work about the investor and learn how to discuss the details over multiple meetings. In any case, if an entrepreneur believes that the mere disclosure of his/her business plan jeopardizes its prospects, then it is probably too fragile to fund in the first place!

In the case of a public company, the following details are well, public. The capital structure and financials, the valuation, the management team details, the business model, the solutions offered, the kinds and names of key customers, the new strategic initiatives being planned. These companies have to brutally compete in the market where there are rarely any real secrets or at least (short-lived ones).

So why then are private companies so wary about their details? Given that they are private, they are under no obligation to share details; but then even if these details become known, why should it impact the company? After all, investors, key senior employees, key customers and partners will all want to know details of the company to make sure the company is worth partnering with. Details are to be shared with these constituencies and needless and excessive secrecy around the company can only harm it, in today’s day and age. While it is important to keep a healthy buzz around your company, it is important that this buzz be created by happy customers, employees and partners rather than through contrived means.

What do you think?

Sanjay Anandaram is a passionate advocate of entrepreneurship in India; He brings two decades of experience as an entrepreneur, corporate executive, venture investor, faculty member, advisor and mentor. He’s involved with Nasscom, TiE, IIM-Bangalore, and INSEAD business school in driving entrepreneurship. He can be reached at The views expressed here are his own.

Intellectual Capital - By Sanjay Anandaram

I came across this interesting trivia about the late King of Pop from the “IP Marketing Advisor”: “In the 1988 video of the song Smooth Criminal, the pop star and his dancers leaned forward dramatically, seemingly defying gravity. It turns out Jackson didn’t just invent the move — he eventually patented it. To do what became a signature move in live performances without the help of harnesses and wires, Jackson created a shoe “system” called “Method and Means for Creating Anti-Gravity Illusion.” Granted in 1993 to Jackson and two partners by the U.S. Patent and Trade Office, patent No. 5,255,452 covers a “system for allowing a shoe wearer to lean forwardly beyond his center of gravity by virtue of wearing a specially designed pair of shoes.” A heel slot in the shoes gets hitched to retractable pegs in a stage floor. Wearing the shoes, Jackson (or anyone) could seem to lean past his center of gravity without toppling.

“I’ve used (Jackson’s) patent for years in classes to teach students what they can patent,” says lawyer Gene Quinn of IPWatchdog. Rather than licensing the shoes, Jackson probably sought the patent to keep the effect exclusive, Quinn says. “Just getting a patent may be enough to create marketing buzz in some cases, and he may have achieved that as well.”

There are some interesting points here. One that Michael Jackson a performer and entertainer invented a dance move and that it was patented, that the objective of the patent was to create marketing buzz by promoting exclusivity and that it is important for all to understand the value of an invention. Only then can that invention be monetized successfully.

As we rapidly move into the so-called Knowledge Economy, it is important to understand that information arbitrage can at best provide momentary gains but insights gained from knowledge of a market, process, customers, technology and so on provide long term value. Information arbitrage ceases to lose value when information becomes freely available to all as is happening in today’s world.

So what do startups and entrepreneurs need to do to develop insights?

There are no short-cuts. Insights come from deep and sustained engagement with a market and customers. It means being in conversation with customers, partners, prospects, and sometimes even competitors to understand the problems, opportunities and dynamics of the industry and the business. It means wide reading and talking to experts from industry, research labs and academia about the forces shaping the industry – regulatory, technological, economic and so on. Every entrepreneur in every industry and business needs this kind of awareness to be able to create profitable and sustainable businesses in this economy. Unfortunately, a lot of the entrepreneurs I meet are still hesitant to go out and engage with the outside world. They seem content being in their own company’s silo and view the world from that standpoint. This results in their being unable to see the lay of the land. Many a time, they aren’t even aware of their competitors and what they’re doing, what the sales challenges are, what the hiring and retention issues are, what the customer support expectations are etc. These kinds of entrepreneurs tend to reduce the issue to one of just having adequate money. Money would not solve the problem of ignorance but rather money would be available to those entrepreneurs who can demonstrate their knowledge of the business.

Intellectual capital is not just about filing patents. It is the aggregate intellectual material – knowledge, information, intellectual property, experience – that can be put to use to create wealth in a company.

Here’s an old apocryphal tale that explains the situation. A computer expert billed a company $1,000 for solving an urgent computer problem at a company. The company was livid! How could he charge so much for just 10 minutes of work and for just typing a few lines on the console screen. The computer expert replied “$100 for the 10 minutes of my time and $900 for knowing what to type on the screen to solve the problem”.

What do you think?

Sanjay Anandaram is a passionate advocate of entrepreneurship in India; He brings close to two decades of experience as an entrepreneur, corporate executive, venture investor, faculty member, advisor and mentor. He’s involved with Nasscom, TiE, IIM-Bangalore, and INSEAD business school in driving entrepreneurship. He can be reached at The views expressed here are his own.

August 10, 2009

Bharti's "Professional Managed, Entrepreneur Supported" model

Extract from Sunil Mittal's interview to Forbes India:
When we started out, we were an entrepreneur-led, entrepreneur-promoted company. We did a great job. In some companies, this phase lasts forever. Nothing wrong. But in my view, if you do that, you remain small. You can’t manage a large company using this model. So we moved to the next stage — entrepreneur-led and professional-supported. Over the last four years, we’ve moved to professional-managed and entrepreneur-supported. And that’s where we want to keep it.

There is one more stage — professional-led and professional-supported. Vodafone is in this mould...No single shareholder is dominant...Parts of our organisation were moving to the professional-led and professional-supported model. I had to pull it back because I figured they were becoming too bureaucratic. Things didn’t move; too many approvals were needed; too many emails. That is something we want to avoid...You must feel like the deer in a forest, which is always afraid of being attacked. Else you’re dead.

...Entrepreneurs do it intuitively. For professionals, it is part process and part intuition. When we wanted to outsource our network, it was considered blasphemy. Akhil [Gupta] and I spoke about it many times. I know how many obstacles he had to face to take it through. Everybody was dismissive of the idea. Sometimes, seniors will not only say this isn’t good, they will work hard to ensure it isn’t good. I had to protect him. That’s where the professional-managed entrepreneur-supported model comes into play. I said let’s go...If I were a professional CEO and even if I had the guts to take on the board, I don’t think I would have got the approval. The board would have batted on the safe side.

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of data and analysis on private equity, venture capital and M&A deals in India. View free samples of Venture Intelligence newsletters and reports. Email the author at

July 20, 2009

"The Valuation Conundrum" - By Sanjay Anandaram

“How much will my stocks be worth in 5 years?” was the question the senior corporate executive asked the CEO of a startup. “I don’t think my stocks are worth anything now, so I want a big salary raise considering the fact that I’ll be spending the next few very productive years of my working life with you” was the refrain from a senior manager of a young startup. “What will your exit valuation be” asked the junior VC partner to the entrepreneur as if anyone had the answer!

All too often such scenarios play out in young companies. These questions are not easy to answer with any certainty given the state of the company. Yet, these questions need to be addressed. The trouble occurs when these perfectly legitimate questions consume the startup team such that enormous energy is expended in explanations and negotiations with employees and investors leaving the startup shaky before take-off.

It is important to keep some basics in mind.

First, in young early stage startups, valuation is almost entirely subjective. Qualitative issues such as quality of the team, the market size and growth, market opportunity, uniqueness of the offering, the business model, the amount of capital being raised and likely to be raised, the kind of exit, what valuation have comparable companies in similar circumstances received, the competitive pressures on the investor, investor’s investment model etc are factors that determine the valuation. Being subjective, the beauty lies in the eyes of the beholder. However, professional, quality, and smart investors while negotiating hard generally do not squeeze the entrepreneur beyond a point knowing that the key to their success is a motivated and charged up entrepreneurial team. One cannot make money at the cost of the entrepreneur so while starting valuations might seem tough, investors are open to parting with equity if the team executes to the plan. Assuming one has researched the investor(s), there must be some faith in their judgement. At the same time, naivete should not be the cause of being handed a lemon of a deal. You too should be professional, smart and demonstrate understanding.

Second, the qualitative valuation starts becoming more objective over time. So while entrepreneurs fight tooth and nail to secure a “high” or “good” valuation in the early days of their company, what many don’t realise is that having secured this “high/good” valuation, the company needs to execute to justify this valuation. What this means is that the company must demonstrate growth in revenues, cash break even, profits and profitability, productivity and so on. The company therefore has to be aware of expectations and demonstrate its value in financial terms. Of course, there are businesses like Facebook that are valued very high in spite of not having any profits because they demonstrate enormous growth month-on-month and have a visible credible path to making serious money in the future. But these are the rare exceptions. In short, the more mature the company, the more objective will be the valuation methodology.

Third, if the company fails to execute and therefore justify its earlier “high/good” valuation, the value of the company will be re-set to a new lower number in the next financing round. This, while not being a happy moment for the team, is certainly an important reality check. If the company, however, executes to its plan or exceeds it, the valuation will be more than justified and will increase for the next round of capital infusion.

Fourth, at the end of the day, valuation is a number that’s a function of how the company is actually performing and how it is perceived by the outside world. It is the job of the CEO to deliver on both these aspects. Investors invest in the company based on this promise.

Fifth, money is only made when an exit occurs (typically, an IPO or an acquisition) so returns, while looking good on paper thanks to “good/high” valuations, mean something only when cash hits your bank account. Till then, valuations are like money in the mirror – look good, feel good but worthless.

Remember, a “good/high” valuation will only be obtained and realized in cash if a good or great company is built. That should be the focus rather than worrying about intermediate valuation points.

What do you think?

Sanjay Anandaram is a passionate advocate of entrepreneurship in India; He brings two decades of experience as an entrepreneur, corporate executive, venture investor, faculty member, advisor and mentor. He’s involved with Nasscom, TiE, IIM-Bangalore, and INSEAD business school in driving entrepreneurship. He can be reached at The views expressed here are his own.

June 26, 2009

Qualcomm's QPrize competition for funding business plans in India

Qualcomm Ventures, a division of Qualcomm, has announced a global business plan competition called QPrize, with the aim of help the winners with funding to translate their business plans into reality. The competition invites entries from India, China, Europe and North America for business plans that accelerate wireless technology development in any of the following business sectors:

* Consumer/enterprise applications and services
* Communication devices
* Semiconductor and component technologies
* Mobile platforms
* Digital media and content
* Healthcare technologies and services
* CleanTech

The deadline for submissions is July 31, 2009. A winner will be selected from each region. These 4 winners will each receive US $100,000 of convertible note funding and will be invited to the Qualcomm Ventures CEO Summit in San Diego, California to compete for the Grand Prize in November. The Grand Prize winner will receive an additional US$150,000 of convertible note funding.

For kore information, visit

Blind Spots - By Sanjay Anandaram

The CEO was a highly qualified and experienced person. He had returned to India over 3 years ago to start a company with his own funds. For family reasons, he had set up his company in a town about 100 miles from Bangalore. He was now struggling to grow beyond the initial customer or two. Customers weren’t comfortable with doing business with a company located in that town; Payments from customers took more time than usual; it was hard to recruit talented people in the smaller town; Communication infrastructure wasn’t the best resulting in loss of efficiency and productivity. It was hard to find people in his town who were aware and knowledgeable about how things worked in national and international business. And that there was no PR firm in his city to help generate visibility for his company. In short, according to him, the reason he was struggling had everything to do with the location of his company.

In the course of the conversation, he also mentioned that his company had built a fairly unique solution for its only real customer; that his customer, a large multi-billion dollar company, was very happy with him and his company; that the customer was in a specific industry vertical that required certifications and regulatory clearances to enter; that there were several other large companies in that industry vertical; that his communication network had improved drastically in the last few months; that two of his family members were involved in senior positions in the company; that his employee attrition was almost zero; that his banker was a well-known private bank with a very large network.

So was it really true that the location of the company adversely affected its prospects or was it something else? Had he leveraged his relationship with his customer adequately – in getting more business, seeking and getting endorsements to secure other customers in the same industry? Were his family members the right people for the jobs they were performing? Had he talked with his bank to understand how money transfers were to be effected so that his account could get credited could be realized almost immediately upon receipt of the monies in India? Had he networked with industry associations and groups in his town? Had he used the internet and the web to reach out to potential prospects who could all be well targeted given the industry vertical?

Turned out that the CEO had done none of the above.

Clearly, the CEO did not really understand what it took to build a business from a sales and marketing and operations standpoint. Yet, he was quick to jump to the conclusion that the problem lay outside his company, in its location! He was uninformed, unaware and prejudiced. There’s a term for this in psychology – blind spot. And all of us have our own blind spots and that’s perfectly OK. The real issue is whether we’re doing anything to discover and address them. For this one needs to analyse the situation on multiple dimensions dispassionately; one needs to also introspect one’s own behaviours, attitudes, and actions. One needs to be open enough to seek, get and deal with feedback from others around. One must watch how others who are doing better are going about the task. Go through the process again. Doing this requires self-awareness and a genuine commitment to improvement.

As in most things in life, the answers to many questions actually lie deep within us. We either don’t ask the right questions or are afraid to ask the questions. Perhaps because our ignorance or more likely, because we’re afraid of the answer?! Which founder-CEO wants to be confronted by answers like “You’re perhaps the bottleneck and not the right person for the job” or “You have no clue about sales and marketing so stop pretending like you know” or “Your attitude is upsetting the morale in the company and no one wants to work here”.

Ready to discover your blind spots? What do you think?

Sanjay Anandaram is a passionate advocate of entrepreneurship in India; He brings two decades of experience as an entrepreneur, corporate executive, venture investor, faculty member, advisor and mentor. He’s involved with Nasscom, TiE, IIM-Bangalore, and INSEAD business school in driving entrepreneurship. He can be reached at The views expressed here are his own.

June 20, 2009

Dealing With Status Quo

Last week, I wrote about the entrepreneurial mindset challenging status quo. Challenging status quo and embracing change can take many forms and operate at many levels; but the presence or lack of an entrepreneurial mindset is apparent in the smallest of things or in everyday operating situations.

Here’re two real life examples regarding status quo.

Some years ago, a well known and very experienced Silicon Valley VC was visiting a small and young business in Bangalore that was raising capital for funding its growth in India and overseas. The company was building a high-tech component for the telecom equipment sector. He met the US educated CEO and his team, visited customers and the manufacturing facilities. Everything seemed to be fine with the visit. However, the VC declined to invest. He had noticed that the CEO’s office had typewriters and not computers! He had also noticed and learnt that the CEO’s business card didn’t have an email id, that the secretary took printouts of emails for the CEO to read overnight, respond to by scribbling on the margins and handing over the scribbled upon printouts to the secretary the following morning. In his view, an office that relied on a 100 year old technology like typewriters and which were hardly seen anymore – outside of government offices which aren’t the best examples of innovative or entrepreneurial mindsets – and the way the CEO dealt with email betrayed an unwillingness to change, a comfort with status quo and really reflected the CEO’s own mindset relating to modernization, investments, efficiency, productivity and so on. The company was not able to raise money and is still around, hopefully without typewriters, leading a hand to mouth existence.

A company had ambitious growth plans and so a strong executive team was hired. The company wanted to be run professionally, raise capital and grow aggressively. The executive team shared good chemistry with the CEO and all seemed fine. Then one by one, the newly hired team started leaving. The CEO was simply unwilling to let go of any and all decision making. Every decision had to be taken by him, the minutest details had to be shared with him and he wanted to know everything that was going on. Back seat driving and micro-management were the reasons for the hired team to depart. They felt they weren’t empowered and trusted enough to execute. The CEO was unable to let go, uncomfortable with the new scenario wherein the executives took operating decisions to execute the business plan and he felt left out of the daily action. The CEO, in spite of having an experienced team, felt comfortable only when the company operated in its earlier manner with him in control. The need to balance the CEO’s operating style with the company’s growth plans demonstrated the true extent of his entrepreneurial mindset. Today, the company is still exactly where it was financially several years ago and is unable to hire and retain talented and experienced executives.

Challenging status quo therefore doesn’t necessarily imply doing something radical. It means not only changing the way things have been done but being comfortable with the new ways. Without being comfortable with the new, there’s every danger of the situation regressing to its earlier ways. And that isn’t good for anyone.

In the 19th century, horse drawn carriages were the norm and with burgeoning city populations, city planners used to wonder about ways to deal with the horse dung on city streets. The internal combustion engine put an end to that problem! One cannot operate in the 21st century with a 20th century view of the world. It is necessary to shed or modify old ideas in the light of new signals. These signals come from policies, economies, markets, technologies, regulations, user behaviours and the like and one must, therefore, be receptive to these signals. Interpreting these signals to modify and change for the impending new sets of circumstances is therefore critical.

What do you think?

Sanjay Anandaram is a passionate advocate of entrepreneurship in India; He brings two decades of experience as an entrepreneur, corporate executive, venture investor, faculty member, advisor and mentor. He’s involved with Nasscom, TiE, IIM-Bangalore, and INSEAD business school in driving entrepreneurship. He can be reached at The views expressed here are his own.

June 02, 2009

Fear of Status Quo? - By Sanjay Anandaram

I came across this interesting question in an in-flight magazine: What would your life be like if you lived it without any fear?

It started me thinking about fear and how the primal emotion impacted us humans.
To be sure, fear has helped us survive as a species. Early man feared wild animals, for example, and that helped him stay away from them. Fear also played a role in early man’s migration as fear of a place or surroundings forced him to seek out more comfortable environs.

Fear of death or harm also forces radical and unnatural behaviours (fight versus flight) that help ensure survival. Fear also forces our imagination to work overtime in fanciful ways. All of us, at one point or the other, have been afraid to enter dark, silent and secluded areas because of the fear of the unknown. It is the anticipation of a terrible act that causes us to react. Charles Darwin concluded that fear is an ancient instinct that helped propagate the human species.

Fear of the unknown, of rejection and failure also makes us remain with the known, the familiar and within our zones of comfort. The comfort of the known makes us feel secure in our status quos. A known devil being ostensibly better than an unknown one. However, nature has taught us that a species that doesn’t evolve perishes over time. Status quo situations therefore are only temporary zones of comfort.

Mankind’s progress has occurred because the desire for adventure, exploration, knowledge and learning, challenging, inventing, discovering and conquering has trumped fear of the unknown and the contentment with status quo. Continents, oceans and space have been, are and will continue to be the domains for man’s indomitable quests to know what’s on the other side. While these quests were initiated by the most intrepid of dreamers, they were followed by many others to chart new worlds.

The European exploration and conquest of the Americas started off in the 15th century thanks to the efforts of a man who went against the traditional wisdom of his day. In the late 15th century, Ferdinand and Isabella, monarchs of Spain, funded Christopher Columbus’ wild idea of an expedition westwards across the seas to India. Columbus was to keep about 10% of the profits made on the trip. Perhaps the first known example of a venture capitalist and entrepreneur!

Most of the fears of our ancestors have been today conquered by knowledge, reason, courage, conviction, wisdom and experience. Fear is slowly conquered by knowing more and more about any matter. The only way to know more and more is to jump into inquiry or the activity whole-heartedly. After all, while theory has its value, the only way one learns swimming is by being in the water, choking, trying and then finally mastering the art.

Intrepid men have challenged dogma, battled socio-cultural mores, traveled where others didn’t and even taken on and defeated extremely powerful empires. Think Mahatma Gandhi, for example. He walked a path that was uniquely his, challenged the mighty British empire by mobilizing millions, talked of and walked his talk on social emancipation of the downtrodden, displayed exemplary personal conviction, courage and shrewdness in dealing with nay-sayers and dissuaders of whom there was no shortage. He believed that fear was not a disease of the body but of the soul. That while fear had its uses, cowardice had none.

In the darkest days of The Great Depression in America in 1933, Franklin Roosevelt in his inaugural address as President said “…first of all, let me assert my firm belief that the only thing we have to fear is fear itself—nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance.”

Yet, why is it that most of us tend to be afraid? To take decisions, to go against an established orthodoxy, to challenge status quos in our daily lives? Government bureaucracies (especially ours!) have for long been known to not just favour but to positively revel in maintaining a status quo. Executives in companies are happy pushing paper confusing activity for progressive movement leading to new outcomes.

Are we then simply afraid of the socio-cultural-economic consequences of trying something new? Is the system designed to protect status quo and punish those who challenge it? Or are we just too content, lack motivation and curiosity? Do we lack courage, conviction and confidence, the desire to learn and explore? If we are, then we should be really afraid for our future is bleak!

An entrepreneurial mindset is one that challenges the status quo.

What do you think?

Sanjay Anandaram is a passionate advocate of entrepreneurship in India; He brings two decades of experience as an entrepreneur, corporate executive, venture investor, faculty member, advisor and mentor. He’s involved with Nasscom, TiE, IIM-Bangalore, and INSEAD business school in driving entrepreneurship. He can be reached at The views expressed here are his own.

May 28, 2009

The Importance of Growing Up - By Sanjay Anandaram

Startups thrive in an environment of chaos where multiple tasks are done, undone and re-done often times guided by just a leap of faith. Decisions are taken in quick time without long (boring?!) meetings typically by a small team of extremely committed and passionate people. Systems, processes and procedures are considered inhibitors to their competitive advantages of speed and innovation.

But as the startup grows, the lack of systems and processes start inhibiting growth; indeed, the company can implode before long without adequate attention and focus on having and implementing systems and processes. These processes and procedures relate to every functional area of the startup and these functional areas cannot scale, operate efficiently and effectively without the right systems. And the management team cannot manage the growth of the company if they cannot measure and track activities, people, money, time, contracts and documents among other things.

As the startup matures, expectations from various stakeholders only increase. For example::
- Does the CEO know the sales, receipts and payables position of the company on a daily basis? Does he have visibility into the cash-flows of the company for the foreseeable future? Are receivables being tracked age-wise and managed? And payables? Does he know what are all the deposits that the company has paid, to whom and when they’re due? What’s the policy for transferring money and issuing cheques?
- How are departmental and company performances tracked and discussed? How often?
- Does every employee have a job description with a clear position on the organization chart? Are employment contracts in place? Is there a hiring, firing, performance appraisal and management, promotion, training, compensation and benefits system in place? What is the system for dealing with employee travel and entertainment expenses? Is there a new employee induction programme – so important for ensuring the comfort of every new hire?
- How is customer service organized, tracked and measured? What’s the system for dealing with refunds and returns?
- What’s the effectiveness of marketing? ROI on campaigns?
- How’s sales organized and measured? What’s the incentive structure for direct and indirect sales?
- Are all the assets of the company documented (including intellectual property) and physically verified? Are maintenance contracts in place for say, the computers? What’s the inventory situation?
- Is there a system for authorizing travel, approving expenses, investments, payments and the like?
- Are there contracts governing partnerships and vendors or are just handshakes and phone calls substituting? Are these contracts still active or do they need reviving? Do the contracts need to be renegotiated keeping in mind the changed circumstances of the company?
- Are statutory requirements being complied with – board meetings and minutes, registrations and licenses, taxes, filings with various regulatory and statutory authorities?

All too often, startups do not pay attention to the need for creating the soft infrastructure within the company for growth. It is not surprising therefore to see most startups flounder after achieving initial success. The capabilities within the company need to be continuously enhanced if the company is to reach subsequent levels of growth with each level being built on a strong foundation. Stronger the foundation, higher the levels. The foundation in turn is determined by the company culture and the quality of the people. The culture must value discipline, diligence and data. Discipline to ensure that systems and procedures are implemented and followed; Diligence to ensure that the systems are continuously working as they should across the company; Data to ensure that the quality of decision making goes beyond pure leap of faith.

Making the transition is not easy. Juggling growth, investments, customers, partners and investors takes up time and energy – systems and processes therefore take a back seat. And then one day, there’s panic! The management has lost its grip on the business with no idea of the finances, customer, employee and partner issues. The company is ripe for an implosion.

However, as with all things, timing is critical. In addition, different systems are required for dealing with different stages of growth. But what is always required from day one is the realization that systems and processes are critical elements of soft infrastructure for the startup.

To realize and to act requires the startup CEO to start thinking like a grown up CEO.

What do you think?

May 20, 2009

Private Equity and Venture Capital investors, who have invested over $2 billion into Healthcare & Life Sciences (HLS) companies in India over the last five years, are keen to step up the pace of investments in this industry. Over 42% of PE & VC investors surveyed by Venture Intelligence, a leading research firm focused on Private Equity and M&A deal activity, felt there was a strong opportunity to tap the market for healthcare services in semi-urban and rural areas.

The investors also identified Diagnostic Services, Medical Devices / Equipment, Hospital Chains and Wellness Products and Services as their favorite sectors for investments within the HLS industry. The detailed results of the poll will feature in the Venture Intelligence “Private Equity Pulse on Healthcare & Life Sciences” report to be published next month.

Click Here for more information.

May 05, 2009

CEOs contesting polls: Conflict of Interest?

Julius Caesar the great Roman emperor divorced his wife Pompeia as he considered his honour and position compromised because Pompeia was indirectly associated with a trial for sacrilege. He explained that his wife should not only be free from sin but from suspicion. Given the state of our political system, this kind of requirement seems laughably quaint. But if the system is to improve, keeping this principle in mind is crucial because it is a pre-requisite for good governance in the political as well as the business spheres.

In the last Indipreneur column, I had talked about the need for more entrepreneurs to enter the political sphere. But, and there always are buts, this comes with a significant caveat. The caveat of suspicion of “conflict of interest” becomes therefore especially applicable to those entrepreneurs who’ve decided to be in public service. Our courts which enjoy enormous credibility amongst other institutions in India have a well established system in this regard. Recently, in the case of Ajmal Kasab the Mumbai terror accused, judge Mr M L Tahiliani debarred lawyer Anjali Waghmare from defending Ajmal Kasab on grounds of conflict of interest since she had accepted the legal brief of a surviving witness in the Mumbai attacks.

It would be rather unprecedented for a CEO of a startup that’s in the process of finalising its initial funding to suddenly declare that he would be involved in another venture in an altogether different area and that he or she would be able to do justice to both adequately. Both the existing startup and the new venture call for passion, active and intense hands-on involvement if they are to truly deliver on their promise. The new venture will require the CEO to spend over a 100 days a year in another city and spend an enormous amount of time catering to a totally different set of stakeholders than in his startup. On what basis can the respective stakeholders believe that the CEO will deliver on the promises in spite of the enormous pressures and constraints? Now, what if the new venture was politics and that the CEO was standing for elections with the hope of becoming a Member of Parliament?

Stakeholders want to see focus and be confident that the person in charge is concentrating on delivering the best possible results for them. In addition, people around the world frown upon the CEO having multiple interests especially when there’s enormous potential for serious conflicts of interest issues to arise.

Good governance requires interested parties to recuse themselves from being involved in any situation or decision that can cause a conflict of interest. For example, can a CEO be part of the committee that decides on his own compensation? Can a CEO be involved in writing his own appraisal or that of a subordinate who’s a relative? Should a CEO do business with a company run by family member or a very close friend? If so, what should be the safeguards? Is the relationship at an “arms length?” to address concerns of conflict of interest and prevent suspicion? Increasingly, companies are realizing the virtues of being transparent and above board. Entrepreneurs in politics will hopefully bring about the much needed impetus to the issue of good governance. An issue that cannot be overstated. Therefore, they need to set the standards for the rest of the political system to follow.

Mr Rajeev Chandrashekhar is well known as the founder Chairman of BPL Mobile. He’s a Rajya Sabha MP from Karnataka and currently Chairman of Jupiter Capital which has interests in infrastructure (transportation, logistics, utilities, aviation, electricity), defence technology and media. His company is developing the first non-metro greenfield airport in Karnataka at Hassan. Mr Chandrashekhar is backed by the BJP the current government in Karnataka.

Mr Vijay Mallya Chairman of Kingfisher Airlines is a Rajya Sabha MP and on the Parliament Consultative Committee on Civil Aviation.

Captain Gopinath founder of Air Deccan (merged with Kingfisher Airlines) is now the founder CEO of Deccan Express Logistics which is in the process of raising Rs 300 crore in initial funding out of a total estimated Rs 1000 crore over 3 years. The business of logistics and air-freight involves central and state government regulations. Captain Gopinath is a Lok Sabha aspirant.

There are potential conflicts of interest in the above cases. Shouldn’t the principle of Caesar’s wife be applicable? Can the CEO do justice to two sets of diverse stakeholders (employees and investors in one and the general public in the other) without compromising one or the other?

What do you think?

Sanjay Anandaram is a passionate advocate of entrepreneurship in India; He brings two decades of experience as an entrepreneur, corporate executive, venture investor, faculty member, advisor and mentor. He’s involved with Nasscom, TiE, IIM-Bangalore, and INSEAD business school in driving entrepreneurship. He can be reached at The views expressed here are his own.

April 27, 2009

Entrepreneur pitching to VC: Reality TV-style

CNBC-TV18's Enterprise Inc. show has an interesting Reality TV-type video of an first-time entrepreneur pitching to an angel investor.

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the Private Equity and Venture Capital ecosystem in India. Click here to learn about Venture Intelligence's products and services for entrepreneurs.

Nominate Indian Startups for The World Economic Forum's Tech Pioneers Program

Startup Journey is happy to invite you to nominate companies you are associated with in India to The World Economic Forum's 'Technology Pioneers' Program 2010. The Program, started in 2000, with the goal of identifying new technologies that will have a dramatic and sustainable impact on business and society, has achieved the distinction of being the most prestigious recognition in the world of technology.

Last year, Bangalore-based mobile payments company JiGrahak Mobility Solutions was selected as one of the 34 "Technology Pioneers" for 2009. Another tech firm that does a lot of its development out of India - Nivio - was also named.

To be selected as a Technology Pioneer, a company must be involved in the development of "life-changing technology". In addition, it must demonstrate visionary leadership, show signs of being a long-standing market leader and its technology must be proven. WEF solicits nominations for the Technology Pioneers program from Technology Pioneer alumni, WEF members, partners, entrepreneurs, innovators and other technology experts.

To nominate a candidate please fill out the form available at

Please note that once a nomination is accepted, a detailed application form will be sent to the contact person in the company.

Successful candidates will be notified in October 2009 and the class of Technology Pioneers 2010 will be officially announced to the public via a press release on 3 December 2009.

Links to more information on the Process & Criteria:

Work-Life Balance. What's That?

Jason Nazar, founder CEO of, has a great post on the "The Unintended Consequences of Startups" that a lot of entrepreneurs can definitely empathize with (and hopefully learn from). Hat tip: StartupDunia

It took me a while to admit that I was stressed out, and even longer to realize I would turn to food to compensate for that stress. Over the past year, I’ve become a more solitary person with my thoughts and emotions than I’ve ever been, while increasingly becoming a public figure who’s known as an outgoing social networker and showman. It’s a strange dichotomy.

My family has been both incredibly supportive but also upset that I’ve seemingly disappeared. I have three (quite) older siblings, and we’re undeniably close. But while they’re all proud of me, they disapprove of my unbalanced lifestyle. My brother and I share opposing sides of duplex, he’s literally a wall away from me. But I can often go 2 weeks without seeing or talking to him. My sisters are busy raising their kids, so they can relate a bit more. But like so many others, our conversation often come back to them asking me “why don’t you ever want to talk about what’s going on in your life”.

...I think I’ve reached my breaking point, at least for now, and mostly in regards to my health. Somehow I know my relationships will work out, but I often find myself feeling like I’m working at 40% of my capacity and energy, and I think its due in large part to poor physical habits.

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the Private Equity and Venture Capital ecosystem in India. Click here to learn about Venture Intelligence's products and services for entrepreneurs.

April 21, 2009

"Wanted: Entrepreneur Politicians" - by Sanjay Anandaram

As the cliché goes, the world’s largest exercise in democracy kicks off yet again this week in our country. Hope, hopelessness and cynicism are the constant emotions accompanying this exercise. The political class appears determined to demonstrate new lows in venality, criminalization, corruption and crassness. Competitive one-upmanship in making empty, patronizing, platitudinous, parochial, narrow and sanctimonious statements of intent is the order of the day. Civil society is battling away slowly and doggedly. But change is very frustratingly slow to come by thanks to the twin deadweights of our fossilized justice (viz. police, courts, laws and legal procedures) and administrative (eg. defence procurements to social project implementations to securing a driving license) systems.

Social and political change has always been brought about by visionary and charismatic leaders (Gandhi, for example) who could articulate that vision such that it mobilized vast numbers of people towards achieving seemingly impossible goals. Less daunting but nevertheless very impactful changes have been brought about by public minded and powerful people – think Jamshedji Tata (eg. IISc in Bangalore, the counry’s first labour association at Tata Steel in 1920 with collective bargaining, creation of the city of Jamshedpur). While it appears impossible that a Gandhi will emerge again anytime soon, it is possible that many first generation entrepreneurs like Jamshedji Tatas will emerge in the near future given the changing circumstances of India and the world around it.

First generation entrepreneurs are not businessmen in the traditional sense. As entrepreneurs, they’re driven by the desire to change a status quo, to upset the applecart as it were. The financial rewards are a derivative of the successful conversion of that desire into action. Businessmen are less concerned about changing the status quo (in many cases, preferring a status quo and the cosy crony capitalism that comes with it) than with making money. First generation entrepreneurs are not constrained by lack of resources but creatively leverage resources through their imagination, will power and obsessive passion to succeed. Subsequent generations do not have to grapple with this mismatch between aspirations and resources and then tend to focus more on managing the bottom lines than in participating in “risky” endeavours like engaging with the political class to effect social change.

If one looks at the political landscape today, one sees film-stars, criminals (both convicted and yet to be convicted), businessmen, people with sectarian, religious and regional interests, and some with genuine public minded agenda for change. There are no entrepreneurs yet in our system unlike in the US, the most powerful democracy. The reason for this is that there aren’t quite as many successful first generation entrepreneurs yet in our country and the few that fit the label have been wary of engaging with the system given their initial experience. India however has many political entrepreneurs but not enough entrepreneurs in politics!

The attributes one would look for in the political leadership today would encompass the following:
- an agenda for the country that will help it achieve its “tryst with destiny”
- an articulated time-bound set of actions towards fulfilling that agenda
- a qualified, passionate, hard-working, honest and experienced team
- confident yet humble
- decision making in the larger interests of the country, not hostage to narrow cynical agendas
- willing to engage with the world around them to actively promote the agenda
- develop partnerships and alliances in furtherance of this agenda
- a belief in meritocracy while providing opportunities for all
- fighting injustice through the creation of effective and efficient systems
- being transparent in all dealings
- in touch with ground realities and with the citizens

In short, an entrepreneurial mindset is required where personal ambition is subservient to the larger goal of building a successful company. Where competence is valued more than loyalty. This is an important point to keep in mind because “I want to be the Prime Minister” is like saying “I want to be the CEO” but both are rather different from saying “I want to be part of building a great country or company”.

What do you think?

Sanjay Anandaram is a passionate advocate of entrepreneurship in India; He brings two decades of experience as an entrepreneur, corporate executive, venture investor, faculty member, advisor and mentor. He’s involved with Nasscom, TiE, IIM-Bangalore, and INSEAD business school in driving entrepreneurship. He can be reached at The views expressed here are his own.

April 14, 2009

Private Equity appetite for slowdown-resilient Education Cos. soars

Press Release

Over 80% of Private Equity and Venture Capital investors surveyed by Venture Intelligence in its newly released “Private Equity Pulse – Education” report, plan to make an investment in Education companies during the next 6-8 months. With an estimated $40 billion market for private institutions and a CAGR of 8.6%, it is no surprise that PE & VC investors are looking to ramp up the 30 investments (worth over $300 million) they have already made in Education-related companies, the Venture Intelligence report indicates.

“In the current uncertain economic environment, the attractive and predictable rates of return of the Education industry, is serving as a magnet for PE investors,” points out Arun Natarajan, CEO of Venture Intelligence. “In fact, in another poll which we had done in end 2008 among PE investors, Education had received thrice as many votes as the next favorite sector in terms of attractiveness for investments in 2009,” Mr. Natarajan added.

Despite the overall optimism, investors have their own set of concerns, the topmost being the regulatory uncertainty surrounding “for profit” ventures in the K-12 and higher education segments and the lack of scalability of ventures in “non formal” segments. Over half the fund managers surveyed by Venture Intelligence felt that regulatory hurdles are a significant deterrent to the free flow of investments into the Education industry. The lack of quality teachers and political interference also figure in the list of concerns.

Entrepreneurs, by their very nature, are optimistic and resourceful. And those interviewed in the PE Pulse report seem confident that the constraints facing their industry can be overcome. For instance, Vinay Pasricha of Wigan & Leigh College (India), a vocational education firm that has raised Private Equity funding, feels there is enough scope to create scale in the unregulated segments of the industry – both within and outside India. "Tell me a sector where you do not face regulatory uncertainty," he asks adding that "Education, apart from healthcare, is the only mass growth opportunity that will continue to flourish during any economic downturn”.

Incisive Articles
The report features an article by a team from The Parthenon Group highlighting how investment opportunities in India’s education industry can generate high returns even in an unfavorable economy. Leading Private Equity firms like India Value Fund and Sequoia Capital India weigh in with their thoughts on the Higher Education and the Tutoring segments respectively. Dushyant Singh, Director (Strategic and Commercial Intelligence) of KPMG's Transaction Services practice, elaborates on one of the most exciting segments: the Kindergarten-to-Class 12 segment (K-12).

Will the boom in for-profit education ventures benefit only the economically better off sections? In her article, Reema Shetty of Kaizen Education Fund, assures us that there is no conflict between delivering high quality inclusive education and providing high returns to investors. Vignettes from PE-backed education ventures in other countries, highlighted in another article, also support this.

Given the significant regulatory challenges facing the industry, this report also features the expert views of top corporate law firms - ARA Law and Dhir & Dhir Associates.

For the convenience of entrepreneurs, the report provides a listing of Private Equity and Venture Capital funds keen to invest in this industry. A directory of investment advisory firms, who provide value-added intermediation services with a special focus on Education, has also been included.

The Private Equity Pulse on Education can be downloaded from the Venture Intelligence web site on

April 04, 2009

"Entrepreneurial MBA - An Oxymoron?" - By Sanjay Anandaram

An increasing number of universities and colleges are offering courses in “Entrepreneurship” as part of their business education. Around the world, business plan competitions are held by academic institutions at regular intervals. The wide publicity given to “entrepreneurship” in recent times has resulted in entrepreneurs gaining respect and being acknowledged as critical participants in a country’s economy, wealth and job creation.

But does taking a course or two in entrepreneurship while pursuing a business degree make one a better entrepreneur? My own view conditioned by many years of experience is that a business degree, with or without courses in entrepreneurship, is not material at all. Then are all these courses useless? Well, no they’re not! They’re useful for learning and understanding multiple aspects of entrepreneurs and entrepreneurship but don’t, in any way, make one a better and successful entrepreneur. A small percentage of any population become entrepreneurs while the vast majority become employees. There’s nothing good or bad or right or wrong about this – it is just the way it is and indeed should be as both entrepreneurs and managers-employees perform complementary activities in the growth of an economy.

It is said that entrepreneurship cannot be taught but it can be learned. And what better learning environment than the real world, through interacting with other more or differently experienced entrepreneurs, customers, investors, partners and suppliers?

Entrepreneurship is not a traditional discipline with theoretical constructs unlike say, engineering where one needs to spend many years in a classroom learning the sciences and mathematics. Entrepreneurship is more an art therefore than a science. The study of entrepreneurship offers opportunities for researchers and academics though! One doesn’t, for example, learn swimming from reading books in a classroom but by being in a swimming pool with the help of a coach. But even the best coach in the world will not and indeed cannot prevent the novice swimmer from unintentional and painful swallowing of water the first few times! Without that experience of “drowning”, learning from others and then through rigorous practice, it is impossible to be a quality swimmer.

In countries like India, most students doing their MBA have no or little work experience. Their ability therefore to spot opportunities, appreciate scenarios, develop and leverage relationships is limited compared to those with experience. It also doesn’t help that academic institutions in India are insulated from industry, entrepreneurs and the entrepreneur eco-system.

Yet, why are investors almost always are biased in favour of entrepreneurs with degrees from well known business schools? The reason is that, all other things being equal, the degree is a filter – demonstrates that the holder has passed other stringent selection criteria. It is obviously not perfect. On the other hand, many professional investors and many senior executives in the corporate sector are usually business school alumni so having a degree leads to membership into alumni networks that can be leveraged by the entrepreneur. Business schools teach students to analyse situations and excessive analysis leads to paralysis. Business schools teach students to manage risks. Business schools, however, don’t teach students to take risks while solving problems and addressing opportunities because risk-taking cannot be taught. In real life, decisions are taken with incomplete information with imperfect people being involved. Decisions are taken on a “leap of faith” basis and persevering when all analysis suggests otherwise requires self-belief and conviction. These cannot be taught in a class-room situation. They can only be learnt through experience, introspection and with the help of a mentor.

Now here’s an exercise worth doing. Business school education in the US is about 100 years old and about 45 years old in India. During this time, how many “successful” companies, across all sectors of the economy, were founded by MBA entrepreneurs in either country? “Successful” meaning wealth creators and not lifestyle income-substitution businesses like consultancies. I believe that this number would be a very small fraction.

Keep in mind therefore that while there are many attributes of a successful entrepreneur, having a MBA isn’t one! What do you think?

Sanjay Anandaram is a passionate advocate of entrepreneurship in India; He brings two decades of experience as an entrepreneur, corporate executive, venture investor, faculty member, advisor and mentor. He’s involved with Nasscom, TiE, IIM-Bangalore, and INSEAD business school in driving entrepreneurship. He can be reached at The views expressed here are his own.