January 23, 2011

"An Entrepreneur's Tale" - Article by Sanjay Andaram

I recently met a senior executive with a MNC who was contemplating leaving to either start his own company or join a startup. He has over 25years experience, is a respected and recognized technologist with several published articles and books to his credit; he has built several solid technical teams in his various avatars through the years.

He had also started his own technology company about 10years ago. The company had to shut down after 2.5 yrs. “I took the decision to shut down the company after a meeting with an official of the Provident Fund authority. The company had not remitted PF on account of its employees though it was making some revenues. I was using cash-inflows to part pay salaries to employees that took care of the immediate situation than to worry about a future pay-out like PF. These employees had been with me at little or no salary for close to 18 months and I just couldn’t let that situation continue. However, the official made me aware of the serious consequences of this lapse (which included my going to jail!) and was advised to somehow find the money, square off the PF account and then proceed to shut down the company. I was in a state of shock”.

“The company owed money to lot of people and I was personally in debt. It was a very hard decision for me but I managed to find the Rs 2 lakhs required for the PF payments and then proceeded to shut down the company. It was a terrible experience”.

“I should have taken the $500K that a VC, who knew and respected me, had offered in the early days of my company. My business partner advised me against taking the money as he hadn’t had a happy experience with this VC. I depended a lot on my partner who I’d brought in to help me with the business end of the company – sales, finance, marketing, partnerships. I was a technical guy and didn’t want to deal or feel comfortable with business issues. Over time, I realized that my partner wasn’t able to contribute in real operating terms and was more of an advisor”.

“I had raised money from some angels. During the shutting down process, I went to them and asked them for their feedback. They told me that I had to learn business and as the founder-CEO couldn’t outsource it to someone else. While at an MNC, I had been exposed to finance and business, it had never been my direct responsibility as there were always others who would do it for me. Here I had to roll up my sleeves, understand, execute, monitor and measure performance and the plan myself. After all, it was my company! My business partner then started pressurizing me for making good on the loans that he had helped arrange. The angel investors told me that he had to stand in line like everybody else and, in fact, as a director on the board of the company he should be at the end of the line! One of the angels wrote me an additional cheque to help me tide over the closing expenses on the condition that I not disclose the matter to his wife!”

“Anyway, I learnt who my friends were during this process. My wife stood solidly by me during this entire saga. I didn’t go back to the VC as I felt bad for having rejected his offer. In hindsight, the VC would’ve made a difference. There would’ve been a lot more discipline, more focus on business and on the model.”

“I then joined another MNC and used my entire first month’s salary to pay off the angel who’d written me the cheque. I attended finance classes, invested in the stock market and made some money. This also helped me pay off some of my personal loans”.

“I’m free of all debt now. I advise a few startups on technology and on helping them shape their product from a market standpoint. I’ve learnt that technology without a market context and an efficient delivery and support mechanism is worthless; I believe that the experience has made me emerge as a much stronger and better person”.

“I’m now ready for a startup!”

I’m sure there are many of us with similar experiences. The learnings of this entrepreneur should resonate within all of us. 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 sanjay@jumpstartup.net. The views expressed here are his own.

January 20, 2011

Speaker Lineup for APEX '11 PE/VC Summit & Awards

We are delighted to announce a stellar list of speakers for APEX '11, the annual conclave of the Indian Private Equity / Venture Capital industry, scheduled for February 9-10 at Mumbai.

Apex'11 Awards (evening of Feb.9)

Special Guest: Gurcharan Das, Noted Author and Former-CEO of P&G India

P.R. Srinivasan, CEO, Exponentia Capital
A.K.Purwar, Chairman, IndiaVenture
Vinod Dham, Managing Director, IndoUS Ventures
Paresh Vaish, Managing Director, Alvarez & Marsal India

Apex'11 Summit (Day long on Feb.10)

Private Equity: The Road Ahead

Raja Kumar, Founder & CEO, Ascent Capital
Alok Gupta, Managing Director - India, Headland Capital
K Srinivas, Managing Partner, BTS India*
Al Lakhani, Managing Director, Alvarez & Marsal India
Vishal Gandhi, Partner, Gandhi & Associates
Anu Parthasarathy, CEO, Global Executive Talent

Cleantech Panel

Dr. Vivek Tandon, Co-Founder, Aloe Private Equity
Inderpreet Wadhwa, CEO, Azure Power
Vinod Kala, Managing Director, Emergent Ventures
Siddhartha Das, General Partner, Ventureast

Logistics & Transportation Panel

Ashis Nain, MD, Expressit Logistics Worldwide
KK Iyer, MD, India Equity Partners
Sankalp Shukla, CEO, Inlogistics
Manish Saigal, Partner, KPMG
Mohit Bhatnagar, MD, Sequoia Capital India

Real Estate Panel

Jay Jegannathan, Abner Capital
Sunil Rohokale, ED, ASK Investment Holdings
Sanjeev Dasgupta, President, ICICI Venture*
Prem Rajani, Managing Partner, Rajani Associates
P. S. Jayakumar, MD, VBHC

To view the more detailed event agenda Click Here

To request participation details, Click Here

January 16, 2011

Baggage of Experience - Article by Sanjay Anandaram

The meeting ended with a list of “to-dos” for each of the startup team members. Everyone appeared charged and excited. Yet one of the members appeared less enthusiastic. Upon having a discussion with him, he said that he had the longest list of to-dos, with almost 15 specific items! More importantly, he felt that most of them would be a waste of his time as he was sure that executing them wouldn’t really benefit the company.

A few weeks later at a follow-up meeting where the status of these to-dos were being reviewed, it transpired that only 2 of the 15 items on this individual’s list had been done and that too only in part. He explained that he hadn’t followed through on the execution of the 13 items as “given my earlier experience (in another company), I was sure they wouldn’t work”; But what of the part execution of the 2? Ah, the completion of those items required inputs from others and since those inputs weren’t forthcoming, the work couldn’t be completed in full.

When the individual was asked if he was sure that the 2 items that were to be implemented would benefit the company, he said there was a “high probability”. In other words, there was still uncertainty. All of us carry baggage from our past experiences. Those experiences colour our decision making abilities in the present and future. The real issues to consider while arriving at decisions relate to the context, environmental situation and applicability of the past experiences to the present. And to give in to and stay with the temptation of applying the learnings from the past without appreciating the nuances. For example, certain marketing campaigns that didn’t work in say, the earlier context of a fast-food chain cannot be used as templates for decision making in another context of say, on-line travel.

In a startup and in the Indian context, it is very hard and indeed impractical to use the past as a predictor of the future in a vast majority of the cases. In most cases, the business opportunities and customer segments are brand new, are growing fast, and there are a slew of new companies with new approaches attempting to cater to these opportunities. For example, Airtel wouldn’t have been a successful brand if it had attempted to learn from the marketing efforts of BSNL. Or, if a Make My Trip had attempted to learn from the efforts of a P & G. Obviously, there are some high level learnings – at the level of universal abstractions – that are uniformly applicable but these are about as useful to a startup as saying that one is addressing the issue of world hunger or peace! The context, the details, the nuances, the model etc are where the devil lies.

If no one knows what will work, what should the startup do? Short answer: try out all possibilities! As fast and as smartly as possible. Learn from the experiments in the market, adapt and re-launch the campaigns or programmes. Some will work, most won’t. Those that work start becoming the fulcrum of the company’s “strategy”, the kind that provides material for 20:20 hindsight laden speeches that the CEO will make in the future, if the startup is reasonably successful. Given that speed is one of the great advantages the startup has, ensuring that all functions of the company operate at top gear and beyond is crucial. Mistakes will happen but then there will be enough time to rectify them if one moves fast enough. Technology is ensuring that cycle times are getting dramatically shortened, hence decision making and consequent action needs to be operate in tandem.

Waiting for feedback or inputs from some others in order to complete one’s task isn’t going to be helpful to the startup that’s focused on growing. In the example quoted above, the executive team member was harming the company far more by inaction and by mindless application of a past experience. It is crucial to learn to identify these behaviours and take suitable action – counseling, training, mentoring – to ensure that the culture of action and the consequent learnings are what guide the startup in today’s India.

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 sanjay@jumpstartup.net. The views expressed here are his own.

The Story Behind CCAvenue

Vishwas Patel of Avenues India, the company best known for its online payment gateway service CcAvenue, has related his entrepreneurial journey in The Rodinhoods.
Learnings from IT: 1) An average Indian businessman doesn't understand technology; he wants technology to understand his business and do wonders. The businessman just wants a simple, idiot proof solution that saves him time, effort and money.

2) Business is like an inverted triangle. You start from a small dot at the bottom and as you grow your business upwards, the opportunities keep on increasing. This is because you get experience, knowledge, access to funds etc., thats why you find the Ambanis, Tatas, Birlas, Mahindras. etc dabbling in all kinds of diverse businesses (Oil, telecoms, Insurance etc.) and are mostly successful in all their ventures. They build huge capital intensive scalable businesses that it becomes difficult to beat them on price and the way they scale their businesses in double quick time. Now if you don't become an entrepreneur and are under employment, then your graph is like a straight triangle where you start off at the bottom, there are lots of options but as you specialize in one as you grow upwards in the triangle then your opportunities become lesser and lesser. You start living your lives within your salary earnings and always become ultra sensitive in taking new responsibilities which has any recurring financial bearings.

3) You have to be blessed with a good team, who understand you and share your aspirations and believe in your vision. You have to have the knack of spotting good people (often more smarter than you) and work hard to gain their respect not by throwing attitudes but doing sheer hard work and showing respect to them. A company is as good as the team behind it.

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. Click Here to learn about Venture Intelligence products that help entrepreneurs reach out effectively to the investing community.