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Showing posts from February, 2010

"Partnering - Big or Small?" - Article by Sanjay Anandaram

The startup was in a tizzy. One of its largest partners who sourced the startup’s products, bundled them with other offerings and sold them to customers had decided to make the products itself. The partner was much larger than the startup, had more money and reach. About 10% of the startup’s revenues came from this large partner, albeit at a lower margin than if the startup sold products directly. On the other hand, it did not have to incur additional sales and marketing costs. For the partner, the revenues from the startup were a tiny fraction of its current revenues but the market opportunity was large and fast growing. It was quite possible that the startup would be in direct competition with its partner before long. The startup was therefore understandably nervous – should it continue to supply the partner or should it stop supplying products? Should it aggressively cultivate other comparably large partners while continuing to do business with this partner?

All too often in bus…

Profile of iMetrex Co-founder Rajeev Mecheri

Subroto Bagchi has published an interview with Rajeev Mecheri, Co-founder of building security technology firm iMetrex, in Forbes India magazine.

In time, they became the go-to organisation for every high-rise in town that required compliance with safety, security and energy management norms. In 2007, Siemens noticed their work. And Siemens also noticed that their building solution software was comparable and in some ways, actually ahead of what Siemens offered. It wanted to buy them out but with a condition: The brothers came with the business. Rajeev came on board as the managing director of Siemens’ Building Technology business for an agreed period of five years. This year, the business having fully integrated, Rajeev has decided to move on and brother Anand has stayed on as the chief marketing officer of the Building Technology business, located out of Switzerland. The acquisition is valued at a whopping $100 million. If you have not heard about it, it is because in Chennai, folks …

"People Growth in Startups" - Article by Sanjay Anandaram

The following was narrated to me over the weekend by a Professor of Finance and a former finance industry executive with experience in well known multinationals.

Upon asking his supervisor about his not being promoted even after performing well at his job and being recognized for it as well, he was told that he was asking the wrong question! His supervisor told him “You’re asking the wrong question! You should ask – what should I do to get promoted?” Quite naturally, this confused the finance executive and now Professor all the more. Upon enquiring, he was told by his supervisor that he was undoubtedly very good at his job but hadn’t demonstrated leadership by developing a competent second rung of leadership. “You should make yourself redundant by growing out of your job to be promoted” was the message from the supervisor; else, upon promotion, who would do the executive’s job at least as well as it was being done?!

The executive took the message to heart. In the next 2 years, he was …

"M&A: People Issues are Paramount" - Article by Sanjay Anandaram

At some point in their existence, many startups have to confront certain existential questions – about themselves and their future. Some of these typical questions: “Are we on the right track? Are we likely to reach where we wanted to? We need to grow fast but how? Should we acquire and grow? Should we be acquired”?

Three real life situations from my experience:

There was a term sheet on the table from the large well known public company to acquire the young VC funded startup. The price seemed right, the company was respectful of the startup, the products were complementary and the cultures seemed to match. The deal didn’t go through because the CEO of the startup couldn’t be accommodated in any worthwhile role in the large well known public company though all the other startup employees would’ve been absorbed. So the startup CEO rejected the offer.

The CEO of a startup that had raised venture capital financing was under severe pressure. He had aggressively promoted his company’s offeri…