Entrepreneur magazine april 2016 by Cuong Ta

RNI No. HARENG/2011/39608-FBD/286/15-17

FDI in E-Commerce

SMALL MEDIUM

EXCLUSIVE

www.entrepreneur.com April 2016 l ` 100

THE FACE-OFF WHO WILL PROFIT FROM THIS CONFLICT?

KUNAL BAHL

SACHIN BANSAL

CO-FOUNDER & CEO, SNAPDEAL

EXECUTIVE CHAIRMAN, FLIPKART

The Turn of the Tortoise THE STORY OF THE ONLY INDIAN E-COMMERCE COMPANY TO BRAVE AN IPO.

Makerspaces: the ‘Lego’ of Start-ups

Learning from the Unconventionals

MAKERSPACES CAN CHANGE THE FACE OF HARDWARE START-UP ECOSYSTEM RELATIVELY MUCH QUICKER THAN THE ONLINE ONE.

HERE IS WHAT ENTREPRENEURS CAN LEARN FROM NONENTREPRENEURS.

EDITOR’S NOTE Raising Capital for Start-ups & MSMEs

Empowering Women Entrepreneurs

@PHD Chamber Startup Summit 2016

You can rebel and you can be a rebel!

e can argue about Donald Trump and Hillary Clinton turning the US politics into a bad reality show, but are our e-commerce unicorns any better? Both scenarios are melodramatic, crude and shameless, and they are all riding high for the improbable bid to be #1. Today, startup entrepreneurship in India is seeing rebellion that is beyond business, it can be defined as a mass of resentments, anxieties and frustrations about each other’s business style and growth. The start-up euphoria is however, giving a way to realism both at the top and grass roots, and therefore it promises to be more impactful. The larger prediction is that valuations will become tight and funding will become real. Innovation combined with scalability and sustainability with in-built profitability will become the mainstay of investment in start-ups. This will call for pushing boundaries and making people uncomfortable, challenging the rules and feeling damn good about it. The rule of the jungle, “let the fittest survive,” will be the new normal as our cover story spells it out amid the unicorn spats. Amid re-valuations and tightening of investor purse strings, an Indian entrepreneur changed the course. The Infibeam Founder Vishal Mehta has walked the true path of Indian entrepreneurship by guiding his growth in a more traditional milieu, pursuing a more conventional, and perhaps a less risky path. The IPO may have not broken world records but surely has achieved what he set out for and while doing so has set precedence for e-commerce and tech start-ups to take a hard look at the public money to build growth. Many new start-ups will now be looking at IPOs

@JITO Ahmedabad Conference on Women’s day

more closely. Even unicorn e-commerce companies can do well to heed this path. It has been a busy financial year for entrepreneurs in India, thanks to the economy that grew by 7.4 percent much ahead of the world’s developed economies. It is the period when Indian entrepreneurs should make time to take financial overview of the business, take stock of their assets and debts, and evaluating monthly cash flows to set new financial resolutions. It is especially important for start-ups to look at financial management during this period as the major part of the year otherwise goes into business model restructuring. Even a less than 100 percent realization of financial resolutions can leave a very healthy impact on the balance sheet rather than having no game plan at all. “I can sleep when I die.” That’s the mentality of an entrepreneur, artist and sportsperson. While they have much in common, they can always look at each other to draw energy and inspiration. They are obsessed with their craft and their passion, and they also know that in this uncertain world, they can only depend on themselves, so they invest in themselves. We feature some nonentrepreneurs who have the mindset of an entrepreneur.

Ritu Marya Editor in chief E-mail me at: rmarya@entrepreneurindia.com

APRIL 2016 ENTREPRENEUR

CONTENTS

APRIL 2016

IS FLIPKART BEING CORNERED?

Start-up 20

EARLY-STAGE INVESTMENT Presenting India’s leading power-packed angel investors and their side of the story so far.

WACKY IDEA Raj Desai, Co-founder, ThinkScream, talks about how free WiFi can be used in making a social impact.

STARTUP KICKOFF Investors share ways to start a venture in a right manner.

QUITTER Housing.com’s Co-founder Advitiya Sharma shares why he quit Housing.com and what lies ahead.

KUNAL BAHL CO-FOUNDER & CEO, SNAPDEAL

SACHIN BANSAL EXECUTIVE CHAIRMAN, FLIPKART

NEW INNINGS Ace shooter Abhinav Bindra has floated a venture fund that will invest in start-ups.

THE ‘TREP TRAINING ROUTINE Running a business is like running a race; You’ll flop without proper preparation.

Expert Speaks

HOW TO BUILD A SUCCESSFUL BRAND IN THE DIGITAL SPACE Sandeep Goyal, Chairman, Mogae Media, on how to efficiently use digital space to build a brand.

WHY ADVERTISERS NEED TO TAKE WEARABLES MARKET MORE SERIOUSLY Mohit Saxena, Cofounder and CTO, InMobi, talks about how wearables are storming the market.

SYNCING ENTREPRENEURSHIP WITH GOVERNANCE Gaurav Dwivedi, CEO, MyGov.in, shares government’s start-up initiatives and the response they have received.

WHAT SILICON VALLEY CAN LEARN FROM INDIAN ENTREPRENEURS Pankaj Jain, Partner, 500 Startups, talks about what Indian entrepreneurs can learn from Silicon Valley and vice versa.

ENTREPRENEUR APRIL 2016

CONTENTS

APRIL 2016

Eco-system 40

FACE-OFF Who will profit from Snapdeal-Flipkart conflict? Let’s find out.

SYNTHESIS Digital manufacturing, aka the third industrial revolution, has literally brought manufacturing to our computer screens.

VALUE CHAIN Rex Chen, Founder, TikTeck, shares how IoT is changing the way we look at the global product value chain.

ASK THE AD GUY Ad guru Prahlad Kakar talks about his school of branding and entrepreneurship.

KNOW YOUR CAPITALIST Subrata Mitra of Accel Partners shares insights while stressing on the need to build real startups.

POLICY FSSAI’s Pawan Kumar Agarwal talks about food safety initiatives.

Growth 54

FAMILY BUSINESS Showcasing how the next generation is taking forward the legacy of Piramal Group.

Money

PATH-BREAKER The story of the only Indian e-commerce company, Infibeam, to brave an IPO.

IPO Presenting the buildup to the mega listing of Infibeam.

ECON A graphical representation of deal scenario from 15 Feb. 2016 to 15 Mar. 2016

Tech

Culture ESQUIRE GUY Hold your tongue: When saying nothing speaks volumes.

FIVE WAYS TO TELL YOUR BRAND’S STORY Your company is a vision, a cause, and a solution so communicate that.

CHAT ON CHAAT In a chat with Ritu Marya, Editor-in-Chief, Entrepreneur Media, Vani Kola, MD of Kalaari Capital, shares her style of investment.

GROWTH JOURNEY Freshdesk’s Girish Mathrubootham shares the idea behind forming the firm.

LEARNINGS What entrepreneurs can learn from the Vijay Mallya case.

VISION STATEMENT Sri Sri Ravi Shankar talks about his venture and lots more.

ENTREPRENEUR APRIL 2016

INNOVATOR Shiv Khera shares his views on building sustainable enterprises.

START-UP FINANCE Using video to ask for cash.

THE FIX Zubin Mowlavi, an entrepreneur, musician and innovator, shares the simplest way to improve your call to action using A/B testing.

APPS Just bring your phone’s camera over text – and get instant translations into virtually any language – without the Internet or processing time.

ASK A GEEK Meraj Faheem, the Founder of The Hacking School, highlights the path to finding the right bootcamp.

ONLINE TREP Ambarish Mitra started with being a runaway teen, a slum dweller, a magazine subscriptions seller on Delhi streets to a tech entrepreneur at 17 in 1997.

SHINY OBJECT Presenting bikes that can be controlled by a smartphone.

Franchise Focus 90

FRANCHISE FOCUS Peyush Bansal, Founder & CEO, Lenskart, on how franchising has supported the growth of his firm.

Lifestyle 92

SUCCESS MANTRAS Here is what entrepreneurs can learn from nonentrepreneurs.

BOOKS Ankur Warikoo, Co-founder & CEO, Nearbuy, shares books that always inspire him.

THE OTHER SIDE Showing the lighter side of Vishesh Goel, Founder, FitMeIn.

SMALL MEDIUM

EDITOR IN CHIEF Ritu Marya EDITORIAL ASSISTANT EDITOR Punita Sabharwal Kapoor SR. COPY-EDITOR Naresh Bhardwaj SR. SUB-EDITOR Sandeep Soni JOURNALIST Sunil Pol ART SR. ART DIRECTOR Manish Raghav ASSISTANT ART DIRECTOR Rajeev Kumar ENTREPRENEUR.COM MANAGING EDITOR Tripti Narain SR. CORRESPONDENT Sneha Banerjee FEATURE WRITER Samiksha Jain FEATURE WRITER Ritu Kochar SUB-EDITOR Rustam Singh

BRAND ADVERTISING CHIEF MANAGER-SALES Madhusudan Sinha #8595350534 msinha@entrepreneurindia.com GENERAL MANAGER-SALES Ashish Arora #9555714242 aarora@entrepreneurindia.com DGM-SALES Anshu Kumar #9555988335 akumar@entrepreneurindia.com FRANCHISE & BUSINESS OPPORTUNITY ADVERTISING ASSOCIATE VICE PRESIDENT Daman Deep Singh #8860084174 daman@franchiseindia.com SUBSCRIPTION/CIRCULATION ENQUIRIES

Tel: 0129-4228800 #9311148342, magazine@entrepreneurindia.net CHAIRMAN Gaurav Marya PUBLISHER Sachin Marya

ENTREPRENEUR MEDIA INC. CHAIRMAN Peter J. Shea PRESIDENT/COO Ryan Shea VICE PRESIDENT/EDITOR IN CHIEF Amy Cosper

CORPORATE OFFICE 405 B, The Pinnacle, Hotel Vivanta by Taj, Shooting Range Road, Faridabad - 121 001 MUMBAI OFFICE Unit 11A & 11B, Ground floor, Technopolis Knowledge Park, Mahakali Caves Road, Near Nelco Bus Stand, Andheri (E), Mumbai – 400093 DELHI OFFICE 3rd – 5th Floor, Charmwood Plaza, Eros Garden, Charmwood Village, Surajkund Road, Faridabad - 121009 CHANDIGARH OFFICE SCF 145, Second floor, Sector 17, Panchkula - 134109 PUNE OFFICE Office 203, 2nd Floor, Siddhivinayak Aurum, Behind Eden Garden Society, Nagar Road, Viman Nagar, Pune – 411014, Maharashtra BENGALURU OFFICE Phoenix Crescent, Second Floor, #10, Rest House Road, (Behind Brigade Road), Bangalore-560 001 HYDERABAD OFFICE H.No. 8-2-293/82/A/68, Plot No. 68, Road No.1 , Jubilee Hills, Hyderabad - 500 033 CHENNAI OFFICE Unit 704, 7th floor, Capital Towers, 180, Kodambakkam High Road (Opp Hotel Palmgrove), Nungambakkam, Chennai - 600 034 KOLKATA OFFICE Chitrakoot, Unit no-52, 230/A AJC Bose Road, 5th Floor, Kolkata-700 020

Published by Franchise India under license from Entrepreneur Media, Inc., 18061 Fitch Avenue, Irvine, California 92614 USA. ENTREPRENEUR® is a registered trademark of Entrepreneur Media, Inc. This publication is sold and distributed with the understanding that Publisher is not warranting the accuracy of the contents herein nor is it promoting or endorsing any third-party businesses or products/services referenced herein. While Publisher considers the sources of the information contained herein to be reliable and verifies as much of that information as reasonably possible, reporting inaccuracies can occur and readers using that information do so at their own risk. Each business opportunity and product/service herein offered contains certain inherent risks. It is therefore advised that anyone considering investing in or purchasing any such opportunities or products/services first consult with and seek the advice of appropriate experts, including financial advisors and attorneys. This publication and its contents are protected by international copyright registered to Publisher and Entrepreneur Media, Inc. Consequently, no part of this publication may be reproduced, stored in a retrieval system or transmitted in any form and by any means without the prior written permission of Publisher.

ENTREPRENEUR APRIL 2016

DIGITAL

APRIL 2016

I Really Look for Solid Business Models, says Actor Kunal Kapoor 223

Most Read

t ed s o M ent m m o c

How This Ecommerce Startup is Integrating Social Media to Stand Out in the Crowded Space tup is is Star h T w o H cquire ds to A n a r B g rs Helpin ustome C n i a t & Re eting il Mark a m E h Throug 246

Join e l g Goo Startup , b u ‘ H Tech o Drive tive st tia Hand dia’ Ini res In sha 324

Mosrted sha

10 Things Mebelkart’s Co-founder Learnt From His Startup

ps Startu h c e T n 8 India aised Over that R ion $1 mill in 2016 res 307 sha

What’s on Entrepreneur.com?

SAY NO TO ABSENT FATHERS, YES TO PATERNITY LEAVES!

Ankita Sheth in her blog has written about the post, posted by Facebook Founder & CEO Mark Zuckerberg about his paternity leave plans.

By Ankita Sheth, Co-founder, Vista Rooms

ENTREPRENEUR APRIL 2016

THEY CAME, THEY SAW, THEY CONQUERED: 4 WOMEN WHO CHOSE UNCONVENTIONAL FIELDS & EXCELLED

The article talks about four Shepreneurs who have chosen unconventional fields to pursue their passion.

By Samiksha Jain, Feature Writer, Entrepreneur.com

STARTUP HIRING: GET NOTICED, BUT FOR THE RIGHT REASONS

The article talks about hiring in startups which is still a vague and indefinite process as each startup has its own values and the work culture differs based on what the startup is about.

By Ritu Kochar, Feature Writer, Entrepreneur.com

FEEDBACK

WHAT READERS ARE SAYING

RNI No. HARENG/2011/39608-FBD/286/15-17

SMALL MEDIUM

Best-Dressed Male Entrepreneurs of India

www.entrepreneur.com DR JAMUNA PAI, FOUNDER,

March 2016 l ` 100 l INDIA EDITION

BLUSH

DEEPIKA JINDAL, FOUNDER, ARTTDINOX

Fantastic Cover Colors and the cover line – both are very eye-catching in the cover. Featuring leading woman entrepreneurs is a commendable effort as this would inspire many women to become entrepreneurs. Here comes the wave of shepreneurs! Ankita Srivastava, Bihar

VANI KOLA, MD, KALAARI CAPITAL

TARA SINGH VACHANI, MD & CEO, ANTARA SENIOR LIVING

SUCHI MUKHERJEE, FOUNDER & CEO, LIMEROAD.COM

Shepreneurs to

It’s New Zing Angels are investing in non-tech businesses now, which was not the case earlier. I can say it is a good sign for the Indian economy. One can’t ignore the contribution of non-tech businesses to the national economy.

Ravish Dhingra, New Delhi

WOMEN

ROMANTICIZING

BUSINESS: COUPLEPRENEURS

WATCH

…BEFORE

BANKS RIP

NON-TECH:

A NEW ZING FOR ANGELS

A Refreshing Read

Refer to your story “B2B logs above B2C” is a refreshing read to me. Refreshing in the sense it gives me a really new information that B2B e-commerce is picking up leaving behind B2C. By giving data, the author has reinforced his point.

JOIN US

Shivani Singh, Chhattisgarh

Accelerate Your Business 7 April 2016, The Leela Ambience Gurgaon Hotel & Residences, Gurgaon

Clean & Green India 7 & 8 April 2016, Hotel Pullman & Novotel, Aerocity, New Delhi

The Women Power

Refer to “Women Entrepreneurs The leading ladies of Indian Business” (Entrepreneur March 2016). Indian women excel in all fields and are no lesser than men in any way. No more there are exclusive areas reserved for men! It is fact that unless women are recognized for their achievements like men, no country can make progress. Some nations and societies are still backward because their women are not given the respect or the opportunities they deserve. Women who are successful and independent are usually the happiest ones. The recognitions of women achievement in respective field can have wonders of wonders in not only Indian society but across the world!

Mahesh Kapasi, New Delhi

The power Lies in Collaboration

The author of the article featuring couple entrepreneurs has beautifully captures the partnership of a couple in both home and at work. Couples like Meena and K Ganesh, Sandeep and Radhika Aggarwal, and Shubhra Chadda and Vivek Prabhakar have shared their personal and official stories and I liked it.

Amit Yadav, Haryana

FRO 2016 9 & 10 April 2016, The Lalit, Kolkata

India Retail & eRetail Congress 2016 29 & 30 April 2016, Hotel Hyatt, Gurgaon

Dear reader, got a thought, a question, an idea, a story or a comment? Write to us at editor@entrepreneurindia.org

IN THIS ISSUE

“The struggle is for everyone. Even star kids have to struggle. Their dads can make just one movie for them.”

Nawazuddin Siddiqui, Actor 12

ENTREPRENEUR APRIL 2016

“Like most other entrepreneurs, we will slowly build the company to $10,000 monthly revenue and become profitable.” Girish Mathrubootham, CEO, Freshdesk

“After Rahul [Yadav, Housing.com’s co-founder] got fired, the biggest fear in the company was that other people would also leave.” Advitiya Sharma, Co-founder, Housing.com

“Most potential entrepreneurs are risk averse because they are paralyzed by not only the fear of failing but also by the fear of fear itself.” Prahlad Kakar, Ad Guru

TRENDS & UPDATES

AS THEY SAID IT

HAPPENINGS

ENTREPRENEUR REWIND

What Went Behind a Decade of Tweeting? The first quality required is the ability to embrace change, not to resist it. In fact, being proactive with dealing with the rapid developments and disruption is a less risky option to resisting or stalling the change we need to do.” NANDAN NILEKANI, Co-founder, Infosys & Former Chairman, UIDAI

Jack of Tweeting : The first tweet on Twitter by Jack Dorsey, Co-founder & CEO, Twitter, on 21 March 2006.

orn in year 1976, he suffered from a speech impediment while growing up. So he spent most of his time with his parents’ police scanner listening to short burst of emergency communications. He was interested in technology and communications since his early age. By the age of 14, he was so much fascinated by the problem of logistics companies to co-ordinate with drivers in

real-time that he created an open-source dispatch software, which many cab service businesses use even today. He dropped out of New York University in 1999 and during his mid-20s, he even became a licensed massage therapist. He used to have a nose ring and wear his phone number on his shirt. Around 2005, he even applied for a job at a shoe store but was rejected

following which he joined a start-up called Odeo. Working at Odeo, he came with the idea of Twitter seeking inspiration from police scanner but was renamed as Twitter towards end of 2006 and which went to IPO in November 2013. Twitter turned 10 last month in March. Meet Jack Dorsey, Cofounder and CEO, Twitter with a reported net worth of $2.4 billion in 2015.

COMMENTATORS A corporation is a living organism; it has to continue to shed its skin. Methods have to change. Focus has to change. Values have to change. The sum total of those changes is transformation.” LATE ANDY GROVE, Former CEO, Intel

ENTREPRENEUR APRIL 2016

Start-up Bonding “By starting to reform the corporate culture, it means we will execute quickly, seek open communication culture and continue to innovate as a start-up company. We will also cut down on unnecessary internal meetings, simplify reporting procedures in order to improve productivity, reduce unnecessary overtime and weekend work and push employees to spend time with their families or take advantage of learning opportunities.”

“Cisco will make strategic investments in India that will total over $100 million including $40 million to fund early-stage and growth-stage companies. Cisco’s strategy is to have an active role at all stages of startup development, from identification, creation of incubators and accelerator programs, to directly and indirectly funding the most promising digital start-ups across India.”

Samsung

Cisco India

Impact investing gains muscle, sees enormous opportunity in India

mpact Investors Council (IIC), the national association of impact venture capitalists (investors in social enterprises) in India, recently said that 2015 impact investments crossed $500 million and are expected to hit $1-billion mark by 2020. The announcement was made by Sir Ronald Cohen, Chairman, G8 Impact Investing Committee, in Mumbai. “Impact Investing is disrupting traditional philanthropy and has a revolutionary promise of becoming a $5 trillion global market, of which $1 trillion will be in India by 2050. With recognition and support from the Indian Government, India can hope to be a world leader in this sector,” said Cohen in a statement. Impact investment has been growing at a CAGR of 24 percent in India since 2007, and over 50 impact investment funds in the country have invested a cumulative amount of $2.5 billion in more than 350 social enterprises, across a range of industries. According to IIC, excluding Infrastructure, it is expected, the $2.5 billion cumulative core investments will grow to $6.5 billion by 2020. Currently, the $60 billion global market is growing at 16 per cent. Emerging markets impact investment

START-UP THERAPIST

HOW CAN AN

ENTREPRENEUR FIND GOOD PEOPLE AT LESSER SALARIES?

funds have returned 9.1 percent to investors against 4.8 percent for developed markets impact investment funds, said IIC in the statement. The national association in order to realize this high-growth potential in India submitted a representation to the government on behalf of the investors and social entrepreneurs, seeking recognition for the Rs 16,000-crore sector, and easier financing for social enterprises. “Impact Investing with $1 billion

Entrepreneurs are runners who sometime lose the track and target in fun of running.

Gaurav Marya, Chairman, Franchise India Finally that day has come when Google has to advertise, what all can you search, and how, on a smart phone.

Vijay Shekhar Sharma, Founder and CEO, Paytm There will be special support structure for innovation based start-ups, including funding from the Gov.

Kalraj Mishra, Union Minister for MSME, Government of India

annual investments in reach; is on the threshold of an enormous opportunity of unifying all Sources of Impact Capital (For-Profit, Philanthropic, CSR, Government, Retail) and unifying all Social Ventures (For-Profit Social Enterprises and Non-Profit NGOs/CSOs) to seize this $1 trillion opportunity by 2050, which can truly wipe every tear of every eye in our lifetimes!,” said Amit Bhatia, CEO, IIC.

First thing to understand as an entrepreneur is that you can never pay market salaries, so you can hire those who have a greater purpose than earning money. Hence, you must have the ability to get people to follow you at any cost.

Women entrepreneurs have an edge-better understand consumer perspective, build trust & control household savings.

Amitabh Kant, CEO, NITI Aayog The longer u wait to plunge into that which you love and are passionate about, the more love turns to apprehension and fear.

Shekhar Kapur, Film Director, Actor & Producer

You are only as good as the kind of people you have. Many entrepreneurs have dead weights in their companies that slow them down. So you must surround yourself with young, thinking and passionate individuals.

First, it was fashionable to join software companies followed by consulting companies, then it was Google and Facebook, and now it is about start-ups. But the question should be: What is your purpose of doing entrepreneurship? Is it to earn or to make a difference and change the world.

M A H ES H M U RT HY Founder & Managing Partner, Exceed Fund

APRIL 2016 ENTREPRENEUR

EXPERT SPEAKS

HOW TO BUILD A SUCCESSFUL BRAND IN THE DIGITAL SPACE By Sandeep Goyal

The best thing that has happened to the entire ecosystem is that digital has brought certain amount of equality and right to access the Internet not just for masses but also for start-ups. So if you have a great product and customers are looking for it, you don’t really need marketing on platforms like WhatsApp, Twitter and Google to build a brand online. The benefit of digital and mobile is the viralability of a great idea. In fact, there are instances of brands being built on Snapchat (photo sharing app) and Periscope (live video streaming app). I have a lot of clients who have built audiences by using the telco data to know their customers, what devices they are using and whether they are roamers and this can be helpful for travel start-ups. But that doesn’t mean great products don’t require online marketing. Nontheless there are some key areas that start-ups should study to build a digital brand.

Understand 3Ds

has to be a transactional website. For example in latter’s case, when a customer clicks on a dress with a banner on the main page, then it must take him to the page where he can buy that dress. However, the most important thing for start-ups today is customer discovery. You should first know whether there are customers for you or not. There are few smart start-ups that have crossed a certain threshold of customer discovery and have started using digital marketing to enhance their customer connect.

Study consumer behavior

“While consumer insight can be derived from data analytics, it can also be derived by looking at consumer behavior far more closely.”

Building an brand online is not a question of marketing but of product discovery, differentiation and its desirability among people. For example, delivering food only from top restaurants cannot be a significant differentiator for a food delivery start-up. Differentiation has to be fundamental, and more brilliant the product is, the easier it becomes for a start-up to scale up and build the brand online.

Get the basics right

To start with, first, get yourself a light website, which is also mobile friendly. Second, the website should always be simple with diagrammatically represented icons, etc, which engages customers in a better way. Third, hire a good user interface designer so that the navigation on the site is smooth. Fourth, decide whether it should only tell about your company or it 16

ENTREPRENEUR APRIL 2016

Nonetheless, using digital marketing tools like SEO, content marketing, social media and e-mail to acquire new customers is actually a mindset because lots of companies in India don’t even understand how to use data analytics to improve digital marketing. Many e-commerce companies I work with try to wrestle with data reasonably inadequately even as their understanding of customer is fairly basic. So, while consumer insight can be derived from data analytics, it can also be derived by looking at consumer behavior far more closely. For example, a consumer at a mobile shop looking to buy a phone would also check Amazon, Snapdeal and Flipkart for the price and haggle with the shop owner for an acceptable price. This kind of consumer behavior won’t show up in any kind of analytics.

Flexibility in customer relationship

Often in the quest to find new customers online, start-ups don’t adequately focus on the existing ones. Today, a problem with start-ups is that they don’t lose existing customers, they just lapse customers as the average half life of an app today is three weeks in India. They start with using it thrice a day but end up deleting it after three weeks. So digital marketing offers you better flexibility in terms customer relationship/loyalty management. For example, as a Citibank card customer around 20 years back, there would be booklets and pamphlets you would get through mailers, but today all that can be done digitally. Sandeep Goyal is the Chairman of Mogae Media, Founder Chairman & former JV partner of Dentsu India.

EXPERT SPEAKS

WHY ADVERTISERS NEED TO TAKE WEARABLES MARKET MORE SERIOUSLY By Mohit Saxena

A few years ago, wearables would not be considered technology of the near-future. We had all witnessed such devices in science fiction movies and been ‘wow’-ed by them. Those were the days when even smartphones were clunky and slow. Fast-forward to today and wearables have become one of the fastest growing technologies of all time.

ads. Over the time, these have evolved to more sophisticated, dynamic ads, which are customized to the individual user based upon his browsing behavior. These ads still remain large and text-heavy. The vastly different screen types and device sizes make transporting existing web and mobile ads to these devices is extremely difficult. If advertisers do attempt this, it will hamper the user experience of both, the ads and the devices. That’s one of the main reasons wearable manufacturers have not opened up these platforms to advertisers.

Wearables boosting businesses

No dearth of data

While wearable technology has gotten the attention of the masses, even brands have begun to focus on these devices and the potential they might hold for their businesses. Waiters at restaurants were given smartwatches to help service tables. A glance would show them which table was ready to order and who was asking for the cheque. The advantage? The restaurants could service a lot more tables faster, with fewer staff! Other industries have jumped aboard the wearable bandwagon as well. In massive logistics companies, workers use head gear similar to Google Glass to free up their hands. Instead of carrying around a barcode scanner, t he worker can simply look at the barcode and blink. Notifications appear in their field of view, informing them about details of the next shipment – without needing to put down the package they are carrying.

“Wearable devices, which can augment reality, hold much more potential in the realm of advertising.”

Are advertisers ready?

The potential that wearables offer has pricked up the ears of advertisers as well. Most wearables have a display, either a full-fledged screen or a display that augments reality. Advertisers can use these devices to create an ecosystem of ambient media for the customer. But what has stumped advertisers so far is – How? Initially, advertisers had plastered the Internet with banner

Wearable devices are loaded with sensors of different kinds, such as pedometers, altimeters, accurate GPS modules, accelerometers and gyroscopes. These sensors can provide endless amount of data to the smartphones linked to them. Apps on the smartphone log this data to help with fitness tracking. For advertisers, this could be the jackpot. The problem with contextual advertising has always been lack of accurate data. Now with wearable devices supplying so much data to smartphones, advertisers can understand the customer’s context much better.

Augmenting advertising

Wearable devices, which can augment reality, hold much more potential in the realm of advertising. In the real world, the billboard remains static and displays the same message to everyone who happens to glance at it. The message might resonate with some people, but not to the vast majority. Augmented reality (AR) brings advertisers to change boring static ads into dynamic ads that are customized to an individual. It won’t take long time for these devices to become as ubiquitous as smartphones. Advertising has a long way to go before it can successfully tap into this vast potential. So advertisers, buckle-up!

Mohit Saxena is the Co-founder and CTO of InMobi.

APRIL 2016 ENTREPRENEUR

EXPERT SPEAKS

SYNCING ENTREPRENEURSHIP WITH GOVERNANCE By Gaurav Dwivedi

In less than two years, MyGov.in, which was launched as the citizengovernment interface, has become an instrumental force in garnering actionable feedback not just from citizens but also from young entrepreneurs on the matters concerning innovation and inspiration through entrepreneurship.

selecting them, for example, in Innovate for Digital India challenge, we invited ideas around financial services, e-governance, education and healthcare which could be handholded and taken to the market. So They (start-up initiatives) are not just idea contests where we get ideas and stick the good ones on the wall and then forget about them. They are about converting those ideas into marketable products immediately. We got 1,913 business plans for the challenge and helped the selected companies to tie-up with some companies to do marketing on their behalf.

Tapping into the start-up revolution

We have our own ways of tapping into the creative genius of young entrepreneurs. For example, in Prime Minister Office’s app development contest in 2015, 119 teams participated to submit design wireframes of their apps whose members were college students who had made apps earlier and released in the market. So, when we talk about allowing young entrepreneurs to participate in whatever the government is doing, I don’t think we can have younger youth than them. Similarly for the 98 cities selected under the Smart Cities Mission in August 2015, we received around 2.7 million responses suggesting solutions to the problems identified in different cities. But the question was how we should get this young crowd into working towards providing those solutions. For example, for Delhi we know there are problems in different parts of the city. So New Delhi Municipal Council (NDMC) has just initiated talks with us and hopefully in next month or two, we will post certain challenges on mygov.in for young entrepreneurs to create solutions. Since those solutions will be developed under the aegis of the NDMC itself, there won’t be any issues like contracting, lowest bidder or minimum turnover or qualification.

No ‘rejection’

“They (start-up initiatives) are not just idea contests where we get ideas and stick the good ones on the wall and then forget about them.”

Creating marketable products

We factor in market worthiness of the start-ups before 18

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First of all, as we have stated it formally, nobody is rejected. The remaining teams at Innovate for Digital India Challenge were advised to reach back to Centre for Innovation, Incubation and entrepreneurship (CIIE) to understand where they lacked in their ideas. I am being informed that several of them are in touch with CIIE and hopefully they will rework and come back to us in subsequent iterations of the program as we want this to be a continuous process.

Distributed teamwork

Currently, we distribute ideas that we receive among as many people as possible including my own team at mygov.in, people from the sponsoring ministries or other government organizations involved in that program. For example, in case of Smart Cities Mission, we sent back ideas to respective cities so that they can pick the most relevant ones. Then we prepare an executive summary of most exciting ideas and send it to concerned ministry and government department. Nonetheless we send them the list of all ideas received earlier so that they can pick some good ideas in case we have them. Currently, it is a manual process, but it will be automated shortly. (Comments from TiE Delhi NCR Urban Solutions and Smart Cities conference).

Gaurav Dwivedi is the CEO of MyGov.in.

EXPERT SPEAKS

WHAT SILICON VALLEY CAN LEARN FROM INDIAN ENTREPRENEURS By Pankaj Jain

There is tremendous amount of opportunity for start-ups to solve basic problems in India and earn money.

can learn from Silicon Valley. In a lot of ways a serial entrepreneur is somebody who is dabbling in businesses that they don’t necessarily have a strong background in. Take Elon Musk for example, PayPal to SpaceX, where is the connection there? So, it’s not necessary that you have to keep doing business in a thing that you understand. You are building that way of a thinking as a real entrepreneur.

Ideal start-up strategy

In general the ideal strategy for a start-up is to have a sustainable business model and try to make money. The faster you are growing the more money you are making, investors will chase you and want to invest in your company. I think some people have lost sight of that over the last couple of years and said, “Well, let’s grow on based on what investors are throwing at us.” That works at times, but sometimes it may not work. So if you are solely relying on that you are not building sustainable business models. Thus think of sustainable business models. It’s easier to do when you are doing B2B than you are doing B2C, still just think of a business model that is sustainable. If you grow that, it should be.

Lessons from Indian start-ups

Occurrence of evolution pace

The pace at which evolution is occurring in India, is far faster than it was in Silicon Valley. Where we are in 10 years, Silicon Valley was not in 10 years. So in 50 years where we are going to be, is going to be very different from where Silicon Valley is today. So short answer is, there needs to be success, there needs to wealth creation, there needs to be wealth distribution, before people are willing to take on more risks.

“I am confident and I have the capital, I am obviously going to be freer to take more risks either as an entrepreneur or as an investor.”

There is a difference between entrepreneurship in Silicon Valley and entrepreneurship in northern land. So somebody opens up a restaurant, he is still an entrepreneur. Some people (in India) becoming entrepreneurs are purely in need, they have no choice. To survive, they have to do business. There is a certain amount of intuitive understanding about business that they have when they do that, I think that is tremendous amount of learning people can learn from them. The way some of these businesses in India work, it’s amazing! They sit there and in their hands do all those number calculations, and it’s like how did you do that? You are absolutely right but I need to pull up my excel sheet to figure these numbers out, but you just did it in your hands like that. So those are the things that entrepreneurs globally should be learning from people here.

Learnings from Silicon Valley

I think professionalism is something Indian entrepreneurs

Understand the psyche of an investor and entrepreneur

Confidence will come from success, the money will come from success. I am confident and I have the capital, I am obviously going to be freer to take more risks either as an entrepreneur or as an investor. So don’t blame the entrepreneur, investor, help them find success. Once they find success, they will automatically look for edge case scenarios and say, “Hey, let’s go try something absolutely crazy that no one else is going to do. Today I am scared of putting food on my table, let me solve that problem first. Once I have enough food to feed my family for ten generations, then I will worry about something like, “Hey, let’s send somebody to Mars.”

Solve basic problems first

Everything like traffic situation, to water situation, to unused real estate, potholes, there are a million things you can find solutions for and make money. Instead if you continue to say, “I am going to make a loyalty program to help people earn points,” like really? That’s not a real problem. Pankaj Jain is the Partner at 500 Startups.

APRIL 2016 ENTREPRENEUR

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ENTREPRENEUR APRIL 2016

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Beyond ‘Angelic’ They shouldered the rise of India’s start-up ecosystem from the ground up but remained quite unsung until few years back. Despite backing so many start-ups in the last 10 years or so, in most of which they even got their fingers burnt, these angels along with new ones on the block now have an even bigger task ahead – to make the ecosystem as big as the Silicon Valley in the least time. Entrepreneur while celebrating this spirit, presents India’s leading powerpacked angel investors and their side of the story so far.

By Sandeep Soni

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I Turned Angel Because… Making money is the last motivating factor for these angels to invest. Getting their hands dirty with the founders through their experience and wealth, being close to latest of the opportunities, love for risk taking and taking pride in being called the first backer to a potential unicorn are some reasons why they put their money where their mouth is. “I do angel investing along with Rohit (Bansal) just to keep my thinking fresh as the most cutting-edge entrepreneurship is being done by start-up entrepreneurs. We can’t live in a bubble thinking what we are doing as a company is the most cutting edge,” says Kunal Bahl, Cofounder and CEO, Snapdeal. Haresh Chawla led multiple investments for media conglomerate Network 18 during his 12-year stint as its Founding CEO, which he quit in 2012. He has been investing in Internet businesses since year 2000 beginning with Moneycontrol, followed by BookMyShow, Yatra, Burrp etc. The understanding that he built in that time with Internet entrepreneurs got him to angel investment. “I thought helping entrepreneurs with my experiences successes and failures - would be very satisfying,” says Chawla, Partner, India Value Fund Advisors, a Mumbai-based PE firm. His first private investment came in Delhi-based ethnic products e-tailer Jaypore.com, and the realty portal Housing.com. “I saw an ad of Housing on the web

“I DO ANGEL INVESTING ALONG WITH ROHIT (BANSAL) JUST TO KEEP MY THINKING FRESH.” KUNAL BAHL, CO-FOUNDER & CEO, SNAPDEAL.

and the problem it was trying to solve in real estate impressed me. So I found a way to contact them while they were still at IIT Bombay,” says Chawla. For those, who have been in technology and entrepreneurship in the past and continue to be so, have become the greatest evangelists of the ecosystem. Through angel investments they get to be entrepreneurial though indirectly. “For me angel investment started as proxy-entrepreneurship. It has remained that way all these years. It’s my way of playing with non-linear change. I get to think about where does non-linear change happen? Why does it happen? What will it disrupt? And which white spaces will it fill out? For me, making money is the byproduct of seeing the start-up creating

“FOR ME ANGEL INVESTMENT STARTED AS PROXYENTREPRENEURSHIP. IT HAS REMAINED THAT WAY ALL THESE YEARS. IT’S MY WAY OF PLAYING WITH NON-LINEAR CHANGE.” SHARAD SHARMA, CO-FOUNDER & MEMBER, GOVERNING COUNCIL, ISPIRT. 22

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value,” says Sharad Sharma, Co-founder & Member, Governing Council, iSPIRT. K Ganesh, Founder, GrowthStory, a venture building platform, also took up angel investing for the love of entrepreneurship. “Angel investment allows me to live vicariously and enjoy the ‘pleasures’ of entrepreneurship without the attendant pressures,” says Ganesh. However, for someone like Sasha Mirchandani (previously co-founded angel group Mumbai Angels and currently runs early-stage venture venture fund, Kae Capital) his tryst with angel investment unlike others was out of an unfortunate reason. “I took up angel investing during the dotcom era because I got greedy to make money,” says Mirchandani who invested around half a million in a comparison website. The business however pivoted to avoid the dotcom bust and was named as Fractal Analytics. The company was reportedly looking to raise $70 million in January 2016. However, looking at the entrepreneurial spirit in founders of his initial investments, his greed to make money transformed into love for supporting entrepreneurship. “I got addicted to angel investments as I started loving interacting with entrepreneurs from all walks of life. This was a dream situation for me seeing their enthusiasm and passion,” says Mirchandani. .

Before I Invest…

First things first, passion, excitement, persistence – the ground rules to a

“BUSINESS PLANS MAY NOT BE successful start-up have today become FULLY THOUGHTthe most abused words for anyone coming up with a start-up whereas the ability to THROUGH, BUT I raise funding has gained importance. The LOOK FOR WHETHER onus hence lies on these angels which form the basis for these start-ups to enterFOUNDERS HAVE THE the next stage of growth. ‘DHANDA’ MINDSET.” “The investments are driven by the HARESH CHAWLA, PARTNER, INDIA VALUE FUND ADVISORS view that one get from the founders’ excitement, the sectors they are in and the level of innovation. If all those things are met, one makes an investment,” says Ratan Tata, Chairman Emeritus, Tata Sons, underlining the significance of founders’ potential to make it big. Bahl too is of the opinion of seeing how excited the founders are and the size of the problem they are solving. “We mostly invest in marketplaces that are reducing the asymmetry of information between demand and supply because India has completely been ravaged by middlemen over the years. If you can cut out few middlemen in your business, everyone benefits including our economy, customers and sellers.”

“THE INVESTMENTS ARE DRIVEN BY THE VIEW THAT ONE GET FROM THE FOUNDERS’ EXCITEMENT, THE SECTORS THEY ARE IN AND THE LEVEL OF INNOVATION.” RATAN TATA, CHAIRMAN EMERITUS, TATA SONS

Anand Ladsariya, Founder of Mumbaibased chemicals manufacturer Everest Flavours, who along with his son Siddharth has close to 80 investments, also stresses on the execution capability and an exit possibility but he doesn’t put too much faith in any of the ideas because of their high-risk nature at early-stage. “Half of the importance for me is about founder and his team, his/her passion, quality and ability, etc. as business plans keep changing. This is quite subjective assessment because there is no parameter to judge them on this. This is followed by the business and its ability to scale, market size, etc. Then comes how founder can execute everything and actualize the idea. Lastly, if there is an exit possibility or the ability to raise further funding,” says Ladsariya. Chawla too echoes similar factors before putting his money. But one

area where he remains more cautious is entrepreneur’s mindset. “Business plans may not be fully thought-through, but I look for whether founders have the ‘dhanda’ mindset. Also, how much founders are willing to give up to pursue their ideas, whether they are looking to make quick money and exit or they like to spend next 10-15 years in building the business. From my perspective, I am backing an entrepreneur more than a business opportunity,” says Chawla.

I’m Not ‘That’ Kind of an Angel As much as angel investment is about backing the idea and the founder, what doesn’t work out is an investor micromanaging founders by everyday calls and updates. The idea is to overlook from a macro level. “Angel is the only asset class where you can influence and help businesses grow to the next level unlike gold, real estate or listed equities. It is about contributing not controlling. If founders want to ask anything or if I have to share something important, we would connect. So around an hour in a month is enough,” says Sanjay Mehta, a serial entrepreneur turned angel investor. Rajesh Sawhney, Co-Founder, InnerChef, an online food discovery and delivery platform, and Founder, GSF, a multi-city tech start-up accelerator, echoes the same theory. “I meet my investee companies as often as required by founders, though I prefer to get monthly or quarterly updates.” Micromanaging, in fact for the sake of value addition as Ganesh puts it “do more harm than good.” “Mentally, I write off the amount when I invest. I neither have much time nor do I like offering ‘gyan’. You cannot do backseat driving of a start-up,” says Ganesh. Chawla, however, is in a league of his own. Not just his ticket size is higher than a typical angel deal, but his approach varies too. He firmly believes that investing few lakhs cannot give a significant headway to founders early on. “I invest Rs 2-3 crore in very few deals. Giving them a few lacs and asking them to set-up a business is not a great way to do that. I only invest when I can devote time to a founder and help them craft the business. I don’t call entrepreneurs; they APRIL 2016 ENTREPRENEUR

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“IF FOUNDERS WANT TO ASK ANYTHING OR IF I HAVE TO SHARE SOMETHING IMPORTANT, WE WOULD CONNECT. SO AROUND AN HOUR IN A MONTH IS ENOUGH.” SANJAY MEHTA, SERIAL ENTREPRENEUR TURNED ANGEL INVESTOR

call me whenever they have to.” Rajan Anandan, VP & MD, Google India & Southeast Asia, too doesn’t have to call founders as much as they do. For them, he is always a call away while on his part, Anandan prefers to get short monthly updates on start-up’s product, user, revenue, market situation, etc. from fellow investors in the group. “I run Google 18 hours a day. So I don’t have much time to spend with any one of the companies but I am always available on call,” says Anandan who unknowingly turned angel by investing money from his job at McKinsey & Company in start-ups launched by his friends from Massachusetts Institute of Technology and Stanford University in the US. He returned to India in 2005 and joined IAN with first Indian investment in Gurgaonbased e-learning platform WizIQ. “When I moved to India, I wanted to get more systematic about the Indian market and understand its intricacies as it was a new market for me. I invest in businesses where founders are able to build large businesses and also if the idea is interesting. WizIQ today is one of the leading education SaaS companies but it started as virtual classrooms provider. I am still there with the company,” says Anandan.

My Style of Investment Most of these angels prefer to invest in syndicate or co-invest rather than leading the round or being a solo investor as angel investment is one of the many things they do unlike a professional VC or PE. Moreover, leading the round requires more time, resources, interest and money to put in. “I prefer investing in syndicate. However, if other investors think that I would be better to lead it and if I too have interest in the start-up, I lead the round as well. The beauty of investing in syndicate lies in sharing the wisdom and efforts,” says Ladsariya who has 24

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led investments in four-five deal out of around 80 investments so far, rest all are his syndicate deals. “If you lead the round, you have to take the board seat in a start-up. So if you are a lead investor in let say 10-12 companies, you would have to commit yourself so much to them that you would start choking and you won’t be able to do justice to all entrepreneurs. It would be quite tough because it would be your money and on the other hand unlike a VC you wouldn’t be paid for your time and effort,” says Mehta who led nine deals so far and over 40 in syndicate. Moreover if the lead is known, “it gives lots of comfort to take the investment decision,” adds Mehta who has coinvested with Sharad Sharma and others. But Anandan never leaves it up to the lead, he makes decision for himself

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irrespective of who is leading the round. Although he too used to invest as a lead around four years back, now he prefers co-investing. “I won’t invest in a start-up just because someone known and experienced is investing in. I have to know about the space and talk to entrepreneurs first. I either invest with a handful of investors at IAN, with seed funds like Blume Ventures and Kae Capital or with venture funds like IDG Ventures or Kalaari Capital for complimentary skills to benefit start-up,” says Anandan. Chawla, unlike other angels, prefers to invest all by his own to “align his interest fully with entrepreneur” as he says and even avoids announcing his deals in public. Investing in consortium, Chawla believes nobody pays real attention to the founder. “The entrepreneur doesn’t know whom to reach out to. Investors are not able to give time to entrepreneur. Also my investments are not public unless it is necessary to do, as it is about the relationship between me and the entrepreneur. I have a very moderate expectation of returns from my investments as failure is par for the course for me,” says Chawla.

Oops! I Missed

From coming across an idea to cutting a check, the entire process is the result of many permutations and combinations between the investor and founder. While many investors simply ignore the idea or often the deals are called off midway for different reasons, all that becomes a part of the game with few hits and few misses. While there were none that Mehta missed because he didn’t want to invest in them or he and founder couldn’t get on the same page, he did lose couple of them to VCs. “I wanted to invest in CleverTap

“IT WAS THE ERROR WE MADE AND SHOULD HAVE PUT RS 50 LAKH WHEN BHAVISH AGGARWAL CAME TO US BUT THAT TIME WE WERE NOT SURE TO INVEST BECAUSE WE WERE RAISING THE FUND.” SASHA MIRCHANDANI, MD & FOUNDER, KAE CAPITAL

SaaS company Freshdesk and edtech company Simplilearn among others. “Sometimes we found market to be too small, sometimes we didn’t find the entrepreneur to be good enough. The learning is to move faster, the best deals never wait,” says Mirchandani. Ola was the biggest opportunity that Anandan also missed, and he has no qualms accepting that he misread the space that time. “It was very early on-demand cab space. I wasn’t quite clear that time how big

“I RUN GOOGLE 18 HOURS A DAY. SO I DON’T HAVE MUCH TIME TO SPEND WITH ANY ONE OF THE COMPANIES BUT I AM ALWAYS AVAILABLE ON CALL.”

The total deal size for the same period also dipped from $75 million to $25 million in angel rounds and around $235 million to around $65 million in Series A for the same period. “Angel investments are also choppy right now. What was around six months back, it is not very similar. In next six months, you might see drastic slowdown in angel funding as well. It will take another 12-15 month before the market picks up the momentum. Few sectors that will attract funding will be artificial intelligence, IOT, B2B technology, medical devices, QSR, media and entertainment,” says Mehta. However, Ganesh doesn’t believe

RAJAN ANANDAN, VP & MD, GOOGLE INDIA & SOUTHEAST ASIA

(Mumbai-based mobile engagement platform earlier known as WizRocket) and Haptik (personal assistant app) but I lost them to Accel Partners and Kalaari Capital respectively who offered them better term sheets. Entrepreneurs are attracted to glamour names and make the mistake of taking funding at seed stage from VC, which limits their opportunity to maximize in the series A round,” says Mehta. Towards the end of 2011 when Mirchandani was raising fund for Kae Capital, he got an opportunity to invest in a one-year-old app that offered cab booking but he couldn’t since he was in the middle of fund raising. He calls that as an error he made as he could have written a personal check to its 24-year old founder from IIT Bombay. “It was the error we made and should have put Rs 50 lakh when he came to us. I still remember that I and my colleague were blown away by his maturity. He was looking for money for quite a while so we thought that he would wait for three-four days but the next day he met other people and they invested in his start-up,” remembers Mirchandani. The start-up in just five years became a $5 billion company known as Ola headed by Bhavish Aggarwal. Not only Ola, he also missed

that space could become in India,” admits Anandan. The biggest learning for all of them is to invest the amount that you are ready to forget if a start-up fails. If there are chances of liquidity, it might take from around two years to seven or 10 years to get returns. Spend sufficient time with the founder as this would enhance the chances of success as it is tough to judge the founder in initial meetings. As far as exiting the businesses is concerned, while few like to invest in follow-up rounds and hang up till the end like Ladsariya, Mehta and Sawhney. Investors like Sharma and Ganesh prefer staying with their winners for a long time, but they avoid investing in followup rounds. Mehta, on the other hand, is happy to stay with the founder if he/she is willing to build business for next 10-15 years.

In the Downturn

The recent numbers on private investments in India suggests that investors have slammed breaks on angel investments too apart from Series A and beyond. As per data research firm VCCEdge, angel investments fell from 133 to 115 while Series A dropped from 66 to 14 in Q1 of 2015 and 2016 respectively.

“THE BEAUTY OF INVESTING IN SYNDICATE LIES IN SHARING THE WISDOM AND EFFORTS.” ANAND LADSARIYA, FOUNDER & MD, EVEREST FLAVOURS

in the downturn at the angel level. He rather expects the change in the type of angel investors who invest in the current markets. “Investors who came in because of the glitz and glamour of the start-up valuation would go away as they see the softening in the funding environment. I expect angel/seed valuations to come down to earlier reasonable level. I also expect venture funds that started doing seed deals will stop and focus on Series A and pre Series A deals, leaving angel investing to typical angels only. All this is positive for the ecosystem,” says Ganesh.

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THE ANATOMY OF INDIA’S ARCHANGELS By Sandeep Soni

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RATAN TATA, CHAIRMAN EMERITUS, TATA SONS TOTAL DEALS: AROUND 28

AVG. TICKET SIZE/SWEET SPOT: $15K-$745K PRIORITY SECTORS: SECTOR AGNOSTIC

SHARAD SHARMA CO-FOUNDER & MEMBER, GOVERNING COUNCIL, ISPIRT TOTAL DEALS: 25+ AVG. TICKET SIZE/SWEET SPOT: $37K-$75K PRIORITY SECTORS: TECH, DIGITAL, SAAS

VIJAY SHEKHAR SHARMA, CEO, PAYTM TOTAL DEALS: AROUND 35 AVG. TICKET SIZE/SWEET SPOT: $38K-$90K PRIORITY SECTORS: SECTOR AGNOSTIC

SACHIN BANSAL, EXECUTIVE CHAIRMAN & BINNY BANSAL, CEO, FLIPKART TOTAL DEALS: AROUND 16 AVG. TICKET SIZE/SWEET SPOT: UNDISCLOSED PRIORITY SECTORS: TECHNOLOGY-LED BUSINESSES

SUNIL KALRA, INDEPENDENT ANGEL INVESTOR TOTAL DEALS: 60+ AVG. TICKET SIZE/SWEET SPOT: UNDISCLOSED PRIORITY SECTORS: TECHNOLOGY LED EDUCATION, HEALTHCARE, LOGISTICS, E-COMMERCE & MOBILE BUSINESSES

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SAURABH SRIVASTAVA, CO-FOUNDER, INDIAN ANGEL NETWORK TOTAL DEALS: 70+ AVG. TICKET SIZE/SWEET SPOT: UNDISCLOSED PRIORITY SECTORS: CONSUMER INTERNET, TELECOM, IT PRODUCTS, HEALTHCARE, EDUCATION, HOSPITALITY, ETC

RAJAN ANANDAN, VP & MD, GOOGLE INDIA & SOUTHEAST ASIA

SANJAY MEHTA, SERIAL ENTREPRENEUR TURNED ANGEL INVESTOR

TOTAL DEALS: 80+

TOTAL DEALS: 50+

AVG. TICKET SIZE/SWEET SPOT: $5K-$50K

AVG. TICKET SIZE/SWEET SPOT: $23K

PRIORITY SECTORS: INTERNET, MOBILE, SAAS, E-COMMERCE

PRIORITY SECTORS: BIG DATA, MARKETING AUTOMATION, PRODUCTIVITY, CONSUMER SERVICES & TECHNOLOGY

ANAND LADSARIYA FOUNDER & MD, EVEREST FLAVOURS

ZISHAAN HAYATH, CO-FOUNDER, TOPPR TOTAL DEALS: 30+

TOTAL DEALS: UPTO 80 AVG. TICKET SIZE/SWEET SPOT: $7.5K-$30K PRIORITY SECTORS: TECHNOLOGY-LED BUSINESSES

AVG. TICKET SIZE/SWEET SPOT: UNDISCLOSED HARESH CHAWLA PARTNER, INDIA VALUE FUND ADVISORS TOTAL DEALS: UNDISCLOSED AVG. TICKET SIZE/SWEET SPOT: $300K-$750K

PRIORITY SECTORS: E-COMMERCE, TRAVEL, MOBILE, REAL ESTATE & EDUCATION

PRIORITY SECTORS: TECHNOLOGY-LED BUSINESSESAGNOSTIC KUNAL BAHL & ROHIT BANSAL, COFOUNDERS, SNAPDEAL TOTAL DEALS: AROUND 21 AVG. TICKET SIZE/SWEET SPOT: UNDISCLOSED PRIORITY SECTORS: INTERNET & MOBILE ANUPAM MITTAL FOUNDER, PEOPLE GROUP

K GANESH, FOUNDER, GROWTHSTORY

TOTAL DEALS: 50+ AVG. TICKET SIZE/SWEET SPOT: $38K-$75K PRIORITY SECTORS: CONSUMER INTERNET, MOBILE, CLEAN TECHNOLOGY, SAAS & HEALTHCARE

TOTAL DEALS: 50 AVG. TICKET SIZE/SWEET SPOT: $10K-$50K PRIORITY SECTORS: TECHNOLOGY, INTERNET, MOBILE, DIGITAL MEDIA & AD-TECH

AVG. TICKET SIZE/SWEET SPOT: $7.5K-$300K/ $37K MOHANDAS PAI, CHAIRMAN, AARIN CAPITAL PARTNERS & MANIPAL GLOBAL EDUCATION

PRIORITY SECTORS: TECHNOLOGY, DIGITAL & MOBILE LED BUSINESSES

TOTAL DEALS: 40+ AVG. TICKET SIZE/SWEET SPOT: $100K-$500K PRIORITY SECTORS: TECHNOLOGY-LED BUSINESSES

Source: Online, VCCEdge, Xeler8, Trak.in Note: Listing is based on maximum disclosed investments as on 16 March 2016, done individually and/or through an angel network. APRIL 2016 ENTREPRENEUR

Infographics: Manish Raghav

RAJESH SAWHNEY, CO-FOUNDER, INNERCHEF AND FOUNDER, GSF ACCELERATOR

TOTAL DEALS: 25

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LOVE YOUR TRASH Let’s face it, no one would pat on your back for keeping your area clean and keeping India ‘Swach’ (clean), it would still be a thankless job. This will remain as it is until people are incentivized to throw trash in the trash bins only. Mumbai-based Raj Desai and Pratik Agarwal, Co-founders, ThinkScream, figured out WiFi as that incentive towards making a bigger social impact. But the fun is in the way they are doing this. Entrepreneur caught up with Desai to understand the science behind it.

LAUNCHE D IN : October 2013

By Sandeep Soni

P R ICE : Rs 1.2-1.5 lakh SIZE : 4.5 ft x 2 ft

The idea – We did B.Com together from Narsee Monjee College of Commerce and Economics in Mumbai in 2010. We started ThinkScream in 2012 to set up WiFi hotspots at various places as there were no free WiFi hotspots in India unlike in developed countries. So we thought of taking the initiative and started with setting up WiFi hotspots at cinemas and music Raj Desai, Co-founder, festivals but we wanted to do ThinkScream something different. When we saw people throwing trash anywhere at music festivals, we realized how big the problem was. We thought of how we could make throwing trash more fruitful. So we decided to incentivize people to use trash bins by offering WiFi every time they throw trash in bins. This was July 2013 when we came up with the idea of making WiFi trash bins and rolled out the final product in October 2013. Timing it right - There are censors installed in bins. Once you throw trash in a bin, there is an LED screen that displays a unique code to you by which you can connect to the Internet. The duration of the connectivity depends on the use case basis and how frequent people move around the bin. If people are moving around the bin quite a bit, the time will be lesser; otherwise people will be using it again and again just for free Internet. But if people are passing by the bin let’s say 28

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ANNUAL MAINTE NANCE CHARGE : Rs 10k-25k per bin

UNITS SO LD SO FA R : 15 CO NNECTIVITY D URATIO N :

15– 60 min or more as per location

once in an hour, we will keep it for half an hour or 45 minutes. For the Internet, we work with the most affordable service provider including local ISPs for the particular area.

Throw it all– It doesn’t matter the

kind (organic/inorganic) or amount of trash being thrown in the bin, it will keep on sensing the trash thrown till it is full. We don’t want to sell just one or two of them for offices just because it looks fancy. We want around 2,000 or more of them to be set up at places like railways stations for a bigger impact.

Broader picture– The bin is aligned to all three priority initiatives by the government – Swatch Bharat Abhiyan, Digital India campaign and Make in India – since it helps clean your surroundings, it is a digital product and completely made in India. We have already spoken to few government offices to sell them, but it will take some time. Going forward There will be variations in size of the bin. Also we are working on a new bin which would auto segregate different type of trash in different compartments. Until the plastic or the circuit inside the bin breaks, it would last very long.

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WAYS TO START IT RIGHT

Looking to start up? Get your hands dirty and work your brain, VCs told new start-ups as they shared their experiences and insights over some freshly brewed coffee and revealed the nuances of the game at our Startup Kickoff event in March.

By Samiksha Jain

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. Validate your idea- Starting your own venture? Do you have a clear vision of what you want to do? Thinking of being an entrepreneur is easy but to live a life of an entrepreneur is difficult. It is essential for any budding entrepreneur who is planning to enter the start-up world to validate his idea. “Having an idea or clear vision of what you want to do is a typical way to get started. Unless you are completely sure of what you are going to do, exactly how you are going to execute it and what eventually you want out of it and that clarity in itself is a great start,” said Gary Dalal, CTO, Apptology. Similarly, Vikas Agarwal, Founder and CEO, Alpha Global Ventures, said, “At the idea stage, one tend to spend a lot of time in doing research, going through what other people have done, etc. instead of stepping out of the building and interacting with people. Once you go out, you actually discover the reality. So, it is really important that you validate your idea really well.”

. Find 3Fs- For entrepreneurs, the major challenge is to secure initial funds. To start any venture, you need to fetch the initial amount, and this can be done by getting 3Fs that is Friends, Fools and Family members on board to fund you in your initial days. “To get start with your business idea, it is essential for any entrepreneur to get some of those 3Fs who can give you the initial money to start,” said Rajat Tandon, Vice President, Nasscom 10,000 Startups.

. Get the right mentor- If you are starting up, make sure you are getting the right mentor not for the money but for his time and connections that can take you forward. Let the mentor go out and get you connected to angel investors to get angel funds so that you can take it across to

the chosen one

ROBOTIC RESEARCH IS THE NEXT BIG THING

A the next level. “People think money and market can make anything run. This is not entirely true. It’s not like that we put money in anything and it will grow like anything,” said Dalal.

. Go out, meet people- If you are planning to start your own venture, you must go out and meet the maximum number of people instead of just sitting back and conducting researches on what people have done in the past. “As a start-up you don’t really get stuck on to your idea because the idea has no value. The same idea will be thought by 20 odd people or may be 100 people in this country. So go out meet people, discuss your idea. Make sure that people are giving you guidance on whether you are building a correct product,” said Tandon.

. Be aware of the changed perspective of investors-There was a time

when investors used to say that a bootstrapped start-up has more chances to excel in the market as compared to funded ones. But I think now investors have changed their perspective. “In Silicon Valley, if you have bootstrapped for more than three weeks, they think you have got a fault with your product. So our fundamentals have changed now,” said Tandon.

t the third edition of NOT-SO-FAR BEHIND Startup Kickoff, investors Although JMoon Technologies clearly encouraged and appreciated was the hot favorite, other start-ups some good start-up ideas. also managed to gain the attention of In this edition, we found some startinvestors. Rajat Tandon of Nasscom ups were providing furnished homes 10,000 Startups liked the idea of to home seekers; whereas others Darakhshan Husain’s Glam Studio. were decking you up with their Glam Husain along with her two friends Studios. However, Jasmeet Singh’s founded the chain of technologyJMoon Technologies stole the show. driven and quality-conscious salons to “I was working as a freelancer suit the budgets of their customers. for Dexter Industries (US) since Vikas Agarwal appreciated the idea May 2012, till the results of Ph.D. of Salil Agrawal’s Zify Homes. Girish application came and I decided to Shivani liked the idea of Uttam take a break to think of what to do Kumar’s 3Dphy, a 3D augmented and next. Within a few weeks, I figured virtual reality start-up. Anuj Pulstya out I wanted to start my company, of 91 Springboard Investments where I could not only build robots, appreciated the idea of Akshay but also do research as I had planned. Pruthi’s Reach App. So, I started working towards that aim soon after. Being at a traditional nine-to-five job, it is difficult to imagine of creating a company; so entrepreneurship came quite naturally to me,” said Jasmeet Singh, Founder, JMoon Technologies. JMoon Technologies Pvt Ltd, which runs RoboRium.com, JMoon Jasmeet Singh, L.A.B.S., JMoon MakerSpace and Founder, JMoon Technologies MakerMandi.com, is the brain child of two brothers, Jasmeet Singh and Manveet Singh, working with a total team of 12 people.“We started with 30 international products and have recently crossed the 250-product mark. We plan to reach more than 300 by the end of May 2016,” said Jasmeet. The sudden rise of companies around 3D Printing and IoT in the world has proven that robotics is the next big thing. “We will be expanding of our verticals and growing our team and operations simultaneously. We will also be introducing one more (final) vertical of our company that will be announced in the mid or end of 2016,” said Jasmeet.

APRIL 2016 ENTREPRENEUR

START-UP

EARLY-STAGE INVESTMENT WACKY IDEA STARTUP KICKOFF QUITTER NEW INNINGS THE ‘TREP TRAINING ROUTINE

BEING REBORN Housing.com’s Co-founder

Advitiya Sharma

shares why he quit Housing and what lies ahead. By Prerna Raturi

e will be back from a Vipassana camp by the time you read this. It’s a 10-day camp where you don’t interact with anyone and learn to calm the mind by observing your breath and meditation, and Advitiya Sharma, Cofounder, Housing.com, says it’s just what he needs. Having spent the past year or so amid high-decibel speculation, glaring media attention and blinding gaze of investors, Sharma needed these days off the grid for sure. “Meditation has been a powerful tool for me. Every morning, I didn’t know if I was ready to face the day, but I had enough energy and passion to attack a problem. With god’s grace, brains came in handy, too,” says Sharma, chuckling. Despite having quit on 9 March, however, Sharma speaks as fondly about Housing.com as if he was still a part of the team. He harbors no illwill either. “After Rahul [Yadav, Housing.com’s cofounder] got fired, the biggest fear in the company was that other people would also leave. I realized this was the most critical phase and decided to stand by the company,” says Sharma, and reveals how he decided to continue to put his weight behind the brand to bring stability to the company. “It was only after this that my conscience allowed me to think of something else.” He concedes the past nine months were the toughest time for the start-up - the company had to shut down some departments, revisit its vision and strategy and even asked many people to leave. A chink in the armor had begun to show much before that, however, says Sharma. “We were the fastestgrowing start-up in the first two-and-a-half years. But fast growth is an erroneous feeling if that is the only thing that matters,” he warns, discussing how the company got “dragged into that” after it raised big funding. “We thought we could buy growth. And I think that was the inflection point of the company,” he says. But Housing.com was not just one of the heavyweights in the property business; it brought about a sea change 32

ENTREPRENEUR APRIL 2016

to the market, where the customer was indeed the king. “Before we started Housing, companies in the sector were merely phone directories of brokers,” he says, laughingly. Housing brought to the table answerability and credibility of the properties listed; Sharma claims there are no less than 100 unique data points for every property that are given. He also remembers how this verification of data was a big resistance. “We didn’t have a data collection team in the beginning, and I had to visit houses to collect data,” he recalls, sharing how he once had a door slammed on his face even as he stood at the step, sweating, with a DSLR camera slung around his neck. “But I didn’t go back and knocked again,” says Sharma, adding, “I looked into his eyes and spoke – such was our belief in our venture.” Calling his days with Housing some of the best days in his life, Sharma feels they taught him everything there is to know about parenting. “Parenting?” I repeat, to be doubly sure. “Yes parenting. When there is a threat to the baby, parents become strong. They take extra care of the child and do whatever it takes to make sure the child is healthy, happy and running again,” he says. Sharma is now looking at areas such as finance, education and green technology to start his next venture. He also feels most start-ups don’t address the fundamentals of business. There’s also the Bhagavad Gita, which Sharma seems to go to, to clarify, understand and strengthen his logic. A day after his resignation, Sharma updated his status with a line from the book: “As a human being puts on new garments, giving up old ones, the soul similarly accepts material bodies, giving up the old ones.” He ended it with: “Time to put life into something new. Time to get reborn.” Here’s to new beginnings, then.

Before we started Housing, companies in the sector were merely phone directories of brokers.”

NEW INNINGS

$2 million Incubation fund, Shooting Star LLP, has been set up in equal partnership with Franchise India and an initial investment of $2 million and will be expanded further.

ACE SHOOTER ABHINAV BINDRA LAUNCHES INCUBATION FUND

ce shooter Abhinav Bindra has floated a venture fund that will invest in startups. The Olympic champion has set up an incubation fund, called Shooting Star LLP, in equal partnership with consulting firm Franchise India and an initial investment of $2 million and will be expanded further. “This is my first widespread and extensive business venture. A start-up is very much like an athlete’s life... There’s no guarantee for success,” says Abhinav Bindra, the ace shooter. “There are only challenges but that’s a life I’ve lived for the last 20 years. Shooting is a great sport but not where you can make sustained economic benefits over a lifetime says Bindra who has also been the first ever Indian to win an individual gold medal in Olympic games. I have been contemplating “What More” and that is where the Shooting Star LLP’s Idea was born. Franchise India would bring the infrastructure and growth support across India and overseas at Shooting Star LLP. Commenting on the same Gaurav Marya, Chairman of Franchise India and partner in Shooting Star LLP, says “The fund will be used for making investments in such service oriented start-ups that have scalable formats and specialized domain expertise such as emerging sports academies, sports injury, Rehab, tech, equipment, training, health apps, child development, holistic wellness, organic food and dairy.”

APRIL 2016 ENTREPRENEUR

START-UP

EARLY-STAGE INVESTMENT WACKY IDEA STARTUP KICKOFF NEW INNINGS THE ‘TREP TRAINING ROUTINE

QUITTER

The’Trep

Running a business isn’t that different from running a race: Without proper preparation, you’ll flop.

Photographs by Travis Rathbone 34

ENTREPRENEUR APRIL 2016

TRAINING ROUTINE By Paula Andruss

veryone veryonein inthe thestartup startupworld worldhas hasheard heardthe the adage: adage:“Launching “Launchingaabusiness businessisisnot notaasprint; sprint;it’s it’saa marathon.” marathon.”But Butreally, really,the thecomparison comparisonisn’t isn’tkind kind totoentrepreneurship. entrepreneurship.AAmarathon marathonatatleast leasthas hasan an ending endingpoint, point,aaplace placeyou youknow knowyou youcan canreach reachand andthen thenrest. rest. AAbusiness businessjust…keeps just…keepsgoing. going.(If (Ifyou’re you’relucky!) lucky!)But Buthere’s here’sone one way wayininwhich whichaamarathon marathonreally reallyisislike likeaabusiness: business:Without Without propertraining, training,you’ll you’lldefinitely definitelyfail. fail.Shin Shinsplits splitsfrom fromthe the proper marathon,employees employeessplitting splittingfrom fromyour yourbusiness. business.Stress Stress marathon,

fractures from running, stress from ruminating. You might even puke from both. Passion and adrenaline will only get you so far. Way too many entrepreneurs show up at the startup starting line without so much as a stretch, and those folks may barely make it past the first mile marker. Seasoned entrepreneurs and advisers agree: Before you jump into the race and hope to go the distance, you need to go through basic business training. Here, your guide from a wide range of coaches.> APRIL 2016 ENTREPRENEUR 35 4/16 ENTREPRENEUR 75

START-UP

EARLY-STAGE INVESTMENT WACKY IDEA STARTUP KICKOFF NEW INNINGS THE ‘TREP TRAINING ROUTINE

Step 1

Train in your off-hours. you know the saying “Don’t quit your day job”? OK, seriously, don’t quit. New businesses can seem instantly promising and exciting and full of potential, but they are almost never going to pay you a living wage immediately. “So often people say, ‘We had this bit of momentum, and we all quit our day jobs and jumped into the company,’” says Duncan Logan, CEO of San Francisco coworking space RocketSpace. “And then the momentum died off and they realized they’d made a terrible mistake—that it wasn’t a business yet. It was still a hobby.” Logan’s advice: The best way to prepare for a launch is to run your new business as a side project and stay in your current job for as long as possible. Sure, this means you’ll be juggling two jobs and potentially stressed out of your mind—but that’s good training for when your new startup takes over your entire life anyway. (Of course, this also means you may be building your business on your current employer’s dime, so be mindful of that: If you keep your day job but are too distracted to actually focus on it, you’ll quickly lose it.) 76 36

ENTREPRENEUR 4/16 ENTREPRENEUR APRIL 2016

QUITTER

Step 2

Know why you’re launching. do you know why? It sounds like a stupid question, but take a moment to really ponder it. Why are you about to devote your life to this startup? Why is this a business the world must have? Do you believe that strongly in it—not just in its potential, but in what it stands for? If you don’t have a good answer, stop right now. Don’t restart until you’ve figured it out. “When you have a decision to make and you don’t know what the right answer is from a financial or traction standpoint, you’re supposed to lean on your values,” says Blake Smith, CEO of Cincinnati-based online personal stylist Cladwell. But in the early days of his business, he says, he realized he’d never fully clarified his values. “Instead, I would ask other people what they thought and lean on them, which really caused me to spin my wheels in my business.” Eventually, he says, he figured it out: His core business values were about authenticity and a desire to represent transparency in the clothing industry. That was his north star; every decision he made could be based on staying true to those ideals. “You have to be able to lead from your own values,” he says. Clarify yours at the start.

EN078__03F80.indd 2/24/16 9:14 AM PAGE 1

START-UP

EARLY-STAGE INVESTMENT WACKY IDEA STARTUP KICKOFF NEW INNINGS THE â&#x20AC;&#x2DC;TREP TRAINING ROUTINE

QUITTER

Step 3 Write it down.

the written-out business plan: It used to be a standard part of launching a business. But many â&#x20AC;&#x2122;treps today are dismissive of it, says Donald F. Kuratko, executive and academic director of the Johnson Center for Entrepreneurship and Innovation at Indiana Universityâ&#x20AC;&#x2122;s Kelley School of Business. They tell him that a business plan is old-fashioned and ineffective, a holdover from a simpler economy. Wrong move, Kuratko says. No matter the business and no matter the industry, every entrepreneur needs to study the market problem theyâ&#x20AC;&#x2122;re addressingâ&#x20AC;&#x201D;and that means understanding the market, and developing a concrete strategy for how theyâ&#x20AC;&#x2122;re going to land that first customer. Thereâ&#x20AC;&#x2122;s no room to wing it. â&#x20AC;&#x153;If you canâ&#x20AC;&#x2122;t articulate those things clearly, youâ&#x20AC;&#x2122;ve got a problem EN080__03F80.indd 2/24/16 9:15 AM PAGE 1 right off the bat,â&#x20AC;? Kuratko says, and the exercise of writing a business plan reveals those issues. â&#x20AC;&#x153;You want to make sure those points are addressed before you start, like making sure you have the right shoes for running a marathon.â&#x20AC;?

Step 5

Step 6 Prep your personal life.

just like with marathon training, the hours spent away from home during a startup launch can wreak havoc on your work-life balance and spur resentment among loved ones. But Scott Bailey, managing director of the startup accelerator MassChallenge Boston, has some good news for you: Itâ&#x20AC;&#x2122;s OKâ&#x20AC;&#x201D;important, evenâ&#x20AC;&#x201D;to leave work and see your family! â&#x20AC;&#x153;That feels like it goes against everything almost everyone else a running coach will be your greatest cheerleaderâ&#x20AC;&#x201D;up until the expects of entrepreneurs, because peopleâ&#x20AC;&#x201D;especially investorsâ&#x20AC;&#x201D; point where itâ&#x20AC;&#x2122;s clear that you wonâ&#x20AC;&#x2122;t reach the finish line. When want to know youâ&#x20AC;&#x2122;re full-time focused and dedicated,â&#x20AC;? he says. But youâ&#x20AC;&#x2122;re stumbling, a good coach will tell you to quit before you hurt nobody wants to see you friendless and alone. Thatâ&#x20AC;&#x2122;s bad for you, and yourself. Now itâ&#x20AC;&#x2122;s time to find your business coaches. v \HDU ROG SURYHQ EXVLQHVV bad for your business. â&#x20AC;&#x153;Sacrifice other things,â&#x20AC;? says Baileyâ&#x20AC;&#x201D;but not Logan recommends creating a â&#x20AC;&#x153;trust circleâ&#x20AC;? of two or three your relationships. people who can give you brutally honest, critical feedback on v 0XOWLSOH VHUYLFHV PXOWLSOH UHYHQXH VWUHDPV How? Set limits at the very start. Talk to your family about whatâ&#x20AC;&#x2122;s your business. Few people will provide that once youâ&#x20AC;&#x2122;re up and v (PSOR\HH GULYHQ PRGHO most important to them. Maybe itâ&#x20AC;&#x2122;s your doing chores around the runningâ&#x20AC;&#x201D;because they know how hard youâ&#x20AC;&#x2122;re workingâ&#x20AC;&#x201D;so he v before 7RS ORZ FRVW IUDQFKLVH house, or attending kidsâ&#x20AC;&#x2122; ball games, or not checking your phone recommends assembling this group you start. â&#x20AC;&#x153;As much as it at dinner, or staying away from the computer while on vacation (as might hurt, you need someone who will tell you, â&#x20AC;&#x2DC;Your babyâ&#x20AC;&#x2122;s ugly. v 7RS PRELOH KRPH EDVHG IUDQFKLVH much as is reasonably possible, at least). When you stick to these We know you love it, but itâ&#x20AC;&#x2122;s just not going to happen,â&#x20AC;&#x2122;â&#x20AC;? Logan says. agreements, your family will feel appreciated; you may be busy, but at â&#x20AC;&#x153;You need those people in place early on, because itâ&#x20AC;&#x2122;s so hard to see least they know when they have you. it as an entrepreneur.â&#x20AC;?

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ENTREPRENEUR APRIL 2016

Step 4

Take your benchmarks seriously.

EN081__03F80.indd 2/24/16 9:15 AM PAGE 1

you don’t begin training for a marathon by running 26.2 miles. You set your goals more modestly—start with a few miles, work up to 16, and so on. The same principle holds true behind the desk: Begin by laying out your interim goals, to ensure that you grow in a timely manner (you know, before the money runs out). These can be quarterly, six-month or even annual goals; it doesn’t matter, so long as you decide what success looks like and are realistic about whether you’re achieving it. And that’s the easy part. Now you’ve got to stick to them. Logan, the coworking-space CEO, is a cautionary tale in what happens if you ignore your benchmarks. When he started his previous company, he set some hurdles for the first year—and decided that if he missed them, he’d fold the company. Then he missed them… and instead of taking action, he says, he created excuses. He set new benchmarks and gave it another six months. Those weren’t met, either. Ultimately, he dragged the company along for two miserable years before finally shutting it down. He could have saved everyone a lot of time and just quit when he knew things weren’t working. “You need to have a very honest set of metrics and know that if you don’t meet them, you have to reevaluate before you’re broke,” he says.

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when training for a marathon, you cut back on pizza and run your own business in a thriving industry? At Pillar To Post, your success is our number one goal. beers. But when you prepare for your startup, well, you might just want some cheap pizza and beer. The rationale is the same: It’s • Great Work-Life Balance time to monitor your intake—less junk food for the marathon, and less-expensive food for your budget. • Flexible Scheduling Your startup may take a toll on your finances, which can put• Home Based like a running group that trains together, a community of other stress on your relationships. So before the business gets going, you entrepreneurs can help keep you on pace. Incubators, accelerators More, Do More should run the numbers on your personal finances and set up a• Have More, andBe other entrepreneur centers may provide an accessible network. strict budget. Join them. Reach out to entrepreneurs in similar situations to out more aboutinto why Pillarfor a while, but you “It’s OK ifFind you don’t put a dollar savings yours, and try to develop relationships with more experienced To Post might be right for you. can’t be upside down a dollar every month, either,” says Walter people who can serve as mentors. Contact us today! Knapp, CEO of Boulder, Colo.-based advertising technology firm “You can gain a lot from other entrepreneurs, even if they’re in franchise@pillartopost.com Sovrn. He knows it well: He’s helmed four startups and keeps a entirely different industries or have totally different ideas. What (877) 963-3129 careful budget to make sure he’s always able to pay his fixed costs they’re trying to achieve and the struggles they face are so similar,” at home. Otherwise, he says, you’ll create “too much stress on you Bailey says. “It’s a great way to gain insights and spark new ideas, and your family, as well as your employees and their families.” and everyone in the entrepreneurial community needs support.”

Step 8 Find your people.

pillartopost.com/entrepreneur

APRIL 2016 ENTREPRENEUR 4/16 ENTREPRENEUR

ECO-SYSTEM

FACE-OFF SYNTHESIS VALUE CHAIN KNOW YOUR CAPITALIST POLICY

ASK THE AD GUY

UNICORN KUNAL BAHL CO-FOUNDER & CEO, SNAPDEAL

SACHIN BANSAL EXECUTIVE CHAIRMAN, FLIPKART

40 ENTREPRENEUR

APRIL 2016

NS @ WAR Today, e-commerce is not an industry in India, it a small country by itself. And this country is dominated by five big league players and a handful of foreign funds and then by many small e-commerce players, who love taking digs at each other in the universe called Twitter. By Ritu Marya & Punita Sabharwal

ndeniably, e-commerce is a different ball game with disruption at its nucleus, it is anyone’s guess when these companies will turn profitable. Rather than profits, cash reserves are therefore most important in this industry, making their entire structure different yet highly complex in the business world. It is also a world where valuations are first pushed to shocking peaks and then pulled callously down.

We are not Heading Towards a Bubble…It will be a Bloodbath The start-up cult that takes pride in failure, putting cash flows before profits, discounting as a strategy for building customer habits is going to come under serious pressure with the government’s FDI policy for e-commerce and Flipkart markdown. There is a general consensus in the Indian capital ecosystem that Indian funds are driving the early funding scene while global funds are investing in Series B and C funding and beyond. If Flipkart’s valuation topples any further, it will be hazardous for foreign investors to look at signing large funding checks for promising Indian start-ups. On the other hand, the whole fundamental of start-ups, which is based on building cash flows that comes through funding, will get disturbed. Essentially, it means that Indian start-ups may get seriously

strapped for funds beyond Series A level and the next Flipkart story may never happen again. Early-stage funds will not know where to find their exits either and eventually may change their investment direction. It can kill the start-up sentiments as a whole and the Startup policy of the government can get completely defeated. This can possibly signal the beginning of the end of start-up entrepreneurship cult in India.

Valuations That Matter The optimism in the start-up e-commerce and tech spaces has been taking a tumble down for quite some time unlike otherwise believed. The investor

caution button was pressed in early 2015 with Housing.com bleeding over $100 million of investor funds. “Overall, we’re seeing a drop in valuations right across, from early-stage to growth to late stage. We think, this is a healthy outcome, as companies will be more fairly priced, investors will be investing at more realistic levels – you can term 2016 as a ‘period of right-pricing,’” says Sanjay Nath, Managing Director, Blume Ventures. According to TC Meenakshisundaram, Founder and MD, IDG Ventures, “Valuation is like beauty that lies in the eyes of the beholder. In the hands of the person who writes the next round of investment. Valuations are based on company to company and the investor’s perspective towards those companies. In year 2011, and then again in 2014-15, there was euphoria and then in certain categories like local delivery, hyper local delivery. Now there is a fair amount of conservativeness. Investors have to be objective. Eventually, it has to consolidate. No country can have five to six established players. Commenting on the possibility of a buyout, one of the Snapdeal investor on the condition of anonymity, says,

THE CURIOUS CASE OF ALIBABA’S ENTRY INTO INDIA

here have been volley of events between January and March 2016, that all seem to have a curious timing. The devaluation of Flipkart in January 2016. The announcement by Alibaba group President J Michael Evans about setting the e-commerce business in India in March 2016. Alibaba has also invested around $680 million in Paytm and passively invested through Softbank in Snapdeal. The Government of India announces 100 percent FDI in e-commerce rather suddenly. No investor is questioning how real are the valuations of Snapdeal or Paytm. The last two months have also seen the sudden top talent exodus from Flipkart. Is Flipkart being cornered out, as there is no big daddy to stand beside it? Is the Government of India breaking one monopoly only to give privy to another one? Is Flipkart being devalued only that someone could come and acquire it at the right price? The time will tell what the next Indian e-commerce phase will see, and if we know of this sector at all, it is not too far. APRIL 2016

ENTREPRENEUR 41

ECO-SYSTEM

FACE-OFF

SYNTHESIS

VALUE CHAIN

ASK THE AD GUY

KNOW YOUR CAPITALIST

POLICY

TESTING TIME FOR E-COMMERCE “You need deep pockets, which are not available in India to be sustainable in e-commerce and sometimes that takes 20-year horizon. This calls for large checks being written by foreign investors,” said a Snapdeal investor requesting anonymity.

Morgan Stanley cut down its share in Flipkart by

27%

, bringing e-tailer’s valuation down from $15.2 b to $11 b in December 2015.

Valuation markdown reflects on investors’ (mostly foreign crossover, mid-late stage venture and PE funds) growing pressure on mid and growth stage consumer facing e-commerce start-ups to build bottom line and optimize discounts and cash burn.

The Flipkart Woes Sachin and Binny Bansal, who earlier worked as engineers for Amazon, nine years later, the two Bansals find themselves in a situation where they are looking to sell Flipkart to Amazon. What makes the scenario all the more harder is that this is the same Amazon, which was being outbid by Flipkart in every 42 ENTREPRENEUR

APRIL 2016

Pankaj Jain, Partner, 500 Startups, had a slightly counter view. “This is a normal cycle. Just as start-ups got very hot very suddenly last year, markets are now trying to find equilibrium. For professional investors, it’s business as usual.”

“Unofficial conversations have been happening about the possible buyout. It was never held between people who are relevant. At this point, they are trying to get as much capital as possible if it doesn’t happen say for the nine months, then these discussions will pick up more steam. Price has to be more flexible to get larger checks in. It need not lead to consolidation right away.” “Markets will determine the true winner. Individual opinions don’t matter. The customer will decide who will be the winner. Alibaba was a local player in China, which is a different market. Homegrown advantage will be there, adds Meenakshisundaram on a positive note.

Voices for consolidation might grow stronger if companies are not able to raise money in around ninemonth period, to ease out some pressure.

In case of down rounds of any one unicorn, it will shrink the worth of founders’ stake in their respective businesses. This might lead to their stake sale and exiting the business.

The pressure that got Sachin Bansal to take a dig at Snapdeal on Twitter is becoming obvious.

100%

FDI in marketplaceled e-commerce firms will further heat up the competition but in the hindsight it will create‘real’ business with bottom lines and exit for investors.

Kunal Bahl and Rohit Bansal of Snapdeal together own around 9% of the business; Bansals from Flipkart own roughly

8-9%

unlike in the US where entrepreneurs have stakes in double digits.

way in 2014 – in terms of customers, investments, market understanding and Indian valuation. Flipkart took in more than $1.9 billion of outside money in 2014 and 2015, yet it’s valuations are back to 2014 numbers of $11 billion. It has upped the pressure on Flipkart from the front that really matters in the e-commerce businesses, i.e. the funding entities Sivaramakrishnan V, Finance Director, I2India Venture Factory, says, “The reason could be the possible fact that Flipkart might have to settle for a smaller market share than it was originally expected to, due to increased competition from the likes of Amazon, Paytm as well as from verticalspecific e-commerce players. We need to understand that PE and VC investments are essentially illiquid, and pricediscovery is not a continuous process.” It is a tide of time and the Flipkart’s current situation can even make God feel vulnerable and Bansals are just humans, and with not even a public listed company yet. Such pressures could make anyone to lash out.

While

The outlook for early stage or angel level start-ups however, as of now, seems less affected. “There won’t be much impact because angel has now become a fad where family offices, high networth professionals have stepped in,” says Haresh Chawla, Partner, India Value Fund Advisors.

The Face-off Between Friends & Enemies Understandably, the otherwise contained Sachin Bansal could barely control his aggression and bought it out on their favorite playground Twitter. As an editor, I have always thought over the years, Snapdeal was much inspired in their every day working from Flipkart, so this of course is a huge one-up for Kunal Bahl who still is holding steady ground at Snapdeal with his investors and claims to be a true marketplace unlike his competitor whose subsidiary companies are also the largest sellers at Flipkart. Snapdeal’s investor further says, “There is a pressure from Alibaba on its investee firms in India to make its presence more direct. The whole (Twitter) issue was blown out of proportion because of the way it was done.” Apparently, Sachin Bansal cannot be singled out for his verbal lash out on Twitter, everyone it seems is running on a short fuse recently in the Twitter world.

PLAYING OUT ON TWITTER & REDDIT

Government’s Trump card: Opening the FDI in E-commerce

So much for keeping distance as claimed by India’s startup policy, the government is making mischief of its own notifying new rules prohibiting the discount levels (and therefore the cash burn) and also capping total sales originating from a group company or one vendor at 25 percent. The opening up of FDI in e-commerce will only bring more competition, further stressing out the start-ups – which already have enough investor woes on their hands. Whether this policy is to ease out Alibaba’s big presence in India or get few other big leagues to set foot in India, but for once the playing field has been leveled in the country for retailers, e-retailers and foreign brands. But for e-commerce giants, it is like a whistle being blown on a boiling pot.

Would India Have More Flipkart Stories?

As Flipkart’s markdown has created a stir in the startup ecosystem, industry experts feel this can lead to more devaluations and anemic funding for the rest of the year. It is quite likely that 2016 will see a few more markdowns. Why? Because while the magnitude might vary, the patterns that led to Flipkart surpassing a $15-billion valuation and then seeing a markdown can also be seen in quite a few other companies that have raised large rounds of capital over the last year or two, says Shubhankar Bhattacharya, Venture Partner, Kae Capital. In such an environment, investors will obviously be much more discerning when it comes to funding decisions, which then has a cascading effect on the bargaining power that a firm has on its valuation. This effect would be much stronger in the case of a company like Flipkart given the large rounds of capital it has already raised and the relatively lower appetite for investors to continue waiting longer in the hopes of a favorable exit, says Bhattacharya. What is also more worrisome is that founders own stake in companies is no more than 15 percent at the top. It does not leave them with enough skin in the game.

Early Start-ups in Safe Zone...Still(?)

The current global trends suggest corrections, but the domestic consumption story is quite good, hence it seems more a short-term impact. The companies, which will be dependent on cash burn, will face some hardship, says Anil Joshi, Managing Partner, Unicorn India Ventures. If anything, Flipkart’s markdown is likely to bring to the fore entrepreneurs that are even more determined, and business models that emphasize profitability as a goal that cannot be ignored, says Bhattacharya. While such an event would obviously draw a lot of attention because of Flipkart’s size and stature, the outlook for early-stage companies in India remains relatively positive. Investors and industry experts feel that this markdown will help eliminate those investors who participate thinking it’s a fancy affair. (With inputs from Sneha Banerjee)

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Photos: Maker’s Asylum, Nuts and Boltz and Workbench Projects

MAKERSPACES: THE ‘LEGO’ OF

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START-UPS

Digital manufacturing, aka the third industrial revolution, has literally brought manufacturing to our computer screens. But what’s been the playground only for engineers or hardware enthusiasts as so called ‘makers’ has silently triggered a subrevolution called maker movement which is democratizing ‘making’ of things via community-led platforms called makerspaces. Already quite a phenomenon in India in last two-three years – makerspaces can change the face of hardware start-up ecosystem relatively much quicker than the online one. By Sandeep Soni

BUILDERS

retina specialist in Mumbai, Dr Rohit Modi made an ocular imaging device last year by reading few research papers online. While Dr Modi successfully made the device, he felt short on the image quality and optics of the device for which he sought technical help. He was suggested by his wife, who was in the same profession, to check out this space called Maker’s Asylum that looked like a mini factory with expensive machines like 3D printers and laser cutters to create different products. “The portable fundus camera that I earlier made at home was a jugaad. I knew what improvement it needed, but that was quite technical. And that’s where Maker’s Asylum was helpful. From the prototype, I created a pretty functional device though we are still testing it,” says Dr Modi who joined the makerspace in August 2015. Dr Modi believes that the cost of creating the device from other sources could have been more, as he has created his product at an affordable cost, he can now pass on the benefit to customers. “We are targeting to price it at one fourth of the market price,” says Dr Modi. Similar is the story of Abhishek Nandy who created a small matchbox-sized emotion detector from Kolkata-based makerspace MakersLoft. The detector reads facial expressions of the person driving the car. The device connects to the smartphone via an app and alerts people whose details are fed in the app about the driver’s mood to avoid any mishap. Nandy was the finalist of last year’s Innovate for Digital India Challenge by Intel and Department of Science and Technology in Ahmedabad. “We made this project for road safety. The best use cases for this would be companies like Ola and Uber. We will launch it next year because there are some modifications going on,” says Nandy who joined MakersLoft in October 2015.

The New Industrial Uprising

here are around 20 makerspaces existing in India that promote the concept of do-it-together rather than do-it-yourself (DIY) with likeminded tinkerers, artists, designers, innovators, hobbyists, students etc and not just engineers. The term was coined by USbased Dale Dougherty, Founder, Maker Media, in 2005 that publishes bimonthly magazine Make focusing on DIY projects. However, the concept of a maker is not new by any means. It is just a term given to the inherent human urge to create things whether at home repairing TV, bicycles, at garage or basements doing experiments, after college projects, as school kids creating science projects or as craftsmen creating different traditional goods and craft products. Cut to 2012-13, the rise of digital manufacturing along with a wave of makers or DIY enthusiasts stirred a quiet revolution of the maker movement or makerspace that allows any ordinary human being to work out on his idea along with other people for fun, knowledge or most importantly launch hardware start-ups. This even became the title of Chris Anderson’s (former editor of Wired magazine) book Makers: The New Industrial Revolution published in 2012. Anderson underlined

MAKER’S ASYLUM Year of launch: November 2013 in Mumbai Total members: 100 (Delhi & Mumbai) comprising 6 hardware start-ups, architects, students, professors, hobbyists, freelancers, etc. Size: 6,000 sq.ft Funding: Rs 7 lakh from crowdfunding platform Indiegogo to relocate to new space Charges per person: Rs 3,000/month; Rs 1,700/ month for students Revenue mix: Events contribute maximum followed by workshops and trainings (on 3D printing, laser cutting etc) and memberships WORKBENCH PROJECTS Year of launch: December 2013 in Bengaluru Size: 5,000 sq.ft Total members: 40 Charges per person: Rs 3,000/month Revenue mix: one fourth from memberships, rest from events, workshops and consultation and design projects from corporate like Philips and GE COLLAB HOUSE Year of launch: June 2014 in Hyderabad Total members: 25 comprising 15 start-ups (4 hardware and rest tech start-ups using it as a coworking space) Size: 3,000 sq.ft Charges per person: Rs 4,500/month Revenue mix: 60% from events and training on different topics and rest from memberships MAKERSLOFT Year of launch: September 2015 in Kolkata Total members: undisclosed Size: 3,500 sq.ft Charges per person: Rs 3,000/month Revenue mix – Training, workshops, events contribute maximum followed by memberships Source: Company APRIL 2016 ENTREPRENEUR

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ART OF MAKING M A K E S PA C E V S H A C K E R S PA C E

Generically, makerspaces are more hardware-centric and hackerspaces are more software-centric. But many people hack on hardware too so hacking is not just limited to coding only.” Vineel Reddy Pindi, Founder & CEO, Collab House

Almost similar though makerspaces attracts little more of a hipster crowd including artists, engineers while hackerspace is more about geeks.” Vaibhav Chhabra, Founder, Maker’s Asylum

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that this democratization of technology and tools TOTAL MAKERSPACES IN available for all to create products collaboratively INDIA: 20+ was the real revolution instead of mere developing such technology. “In a way this is a new industrial TOOLS AVAILABLE: All revolution as makerspaces are allowing the creation of makerspaces usually have niche and customizable products. Previous industrial tools like CNC machine, 3D revolution allowed large-scale manufacturing but not Printer, milling machine, much in terms of small scale manufacturing,” says sewing machine, laser cutters Vaibhav Chhabra, Founder, Maker’s Asylum. Chhabra and all kinds of power and started Maker’s Asylum in November 2013 as a hobby hand tools space but when he realized of more people joining the space, he quit his job to shift from the garage where he FACILITIES: WiFi, snacks, was running this to a proper space. meeting rooms, coworking However that doesn’t mean that one can commercialize his jugaad-based prototype right from spaces etc; 7-day open the makerspace. “Jugaad is good as long as you are in the prototyping phase and that’s where makerspaces COST: Might vary as per can help,” says Vineel Reddy Pindi, Founder and CEO, time and facilities opted for Collab House, a Hyderabad-based makerspace. Pindi (charges for WiFi and food earlier led community-building at Mozilla India. may be additional) Since makerspaces operate on knowledge sharing Source: Online the mentorship and handholding aren’t readily available while these makerspaces conducts regular trainings, workshops and events around different concept. So, one has to figure out himself to make things happen. “Making hardware product will take time and has to be persistent for few years,” says Chhabra. Maker’s Asylum offers a network of over 50 mentors globally for makers.

Aligned with the Vision

here is probably no better time than now and country than India to launch a makerspace that aligns with three government’s initiatives of Make in India, Digital India and Skill India. Workbench Projects, a Bengaluru-based makerspace accredited by Fab Lab (a network around 600 makerspaces globally by US-based Massachusetts Institute of Technology) conducted a workshop during the recent Make in India week in Mumbai. “The workshop was for design platform, India Design Forum at Make in India week around design simplicity for India’s future smart cities. We are already in touch with the government for more support but as of now there is nothing concrete,” says Pavan Kumar, Founder and CEO, Workbench Projects. Makerspaces expect the government to support them with funds similar to the US Government that offers grants to makerspaces there. “The government’s plans are completely aligned to us, especially Skill India, as we also help underprivileged kids as we have some boys who learnt carpentry part-time. I am trying to reach to the government to seek support,” says Meghna Bhutoria, Founder, MakersLoft, which is the first makerspace in east India.

Unique Opportunity

robably all of the makerspaces in India are bootstrapped as they are community platforms and not business plan-led businesses with growth targets that can attract private investors. “Makerspaces usually fall in the impact investing zone but impact investors relate impact to agro or rural-based businesses. So it may take a different approach for investors to look at makerspaces and that maturity can come by the end of 2016,” says Kumar. By 2019, the numbers are expected to go up from 20 makerspaces to more than 70 across India that will add up to the hardware start-ups count. No doubt the larger companies will tap on the innovation just like they are tapping online through corporate incubators programs. The first one to latch on to the opportunity is the global chipmaker Intel that launched Intel India Maker Lab in August 2015 for around 10 selected start-ups and innovators. “Intel India is committed to accelerating Digital India and Design in India by invigorating innovation across the ecosystem. The Intel India Maker Lab will provide a facility to offer that support,” said Kumud Srinivasan, President, Intel India, during the launch. This is however different from typical makerspaces where anyone can walk in and hence in a way defeats the purpose of open innovation and co-creation for all.

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The IoT is Changing the Way we Look at the Global Product Value Chain

he traditional product value chain has been shaken up with the unstoppable spread of globalization and the universal commodification of goods and services. Globalization has forced companies to adjust and respond. In fact, Internet of Things (IoT) products are playing a pivotal role in the alteration of B2C relationships, delivery channels and product pricing, and their continued proliferation is shaping the very nature of how we look at the product value chain. The "Internet of things" refers to objects that can communicate among one other through a network. IoT is becoming prolific and commonplace in everyday objects. And, with experts predicting that the IoT network will consist of some 50 billion devices by 2020, those devices will only become more and more ubiquitous. The IoT revolution is truly just a beginning, and it will most certainly be televised!

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Here are four changes coming:

. IoT allows for unprecedented interactions between manufacturers and consumers.

Credit the interconnectedness of IoT products, letting them, in turn, connect the buyer with the seller. By opening new channels for B2C communication, IoT products are providing manufacturers an invaluable opportunity to reshape a dusty and outdated product value chain. Interacting directly with consumers gives us valuable insights into products; and consumer feedback will help us mold future business and product strategies. Coffee giant Starbucks put this idea to action when it launched My Starbucks Idea. “Idea” is an outreach website where customers can submit ideas on how to improve the overall Starbucks experience. To date, the site has received more than 200,000 suggestions, and the company has implemented several, from energysaving LED bulbs to convenient lunch wraps. While this idea is a bit grandiose and presumably difficult to scale, the intent (and resulting customer satisfaction) is certainly worth consideration, and with help from the IoT’s proliferation, it can be more effectively implemented.

. Improved B2C 2 communications won’t benefit just manufacturers.

Improving and prioritizing B2C communications is also a critical component to boosting loyalty and repeat business from consumers. According to IBM, 80 percent of consumers surveyed said they felt that brands didn’t know them as individuals. That statistic suggests that considerable opportunity exists to capitalize on increased communication – and that brands that succeed in this regard will enjoy a considerable advantage over those who don’t.

barrier and direct communication tools through apps or cloud computing.

At our IoT product development company, TikTeck, for example, we sell LED smart bulbs for $9.99 apiece. A smart bulb is just one component in the IoT-populated landscape of automated homes, and it’s a fantastic first step to drawing in curious consumers interested in IoT products because of their low-cost barrier. Once those consumers have tried (and hopefully enjoyed) our bulb, they’re much more likely to come back and try our other IoT offerings, and they’re much more likely to create a fully functioning and streamlined “smart” environment in their homes. Meanwhile, we can gather data on usage metrics and consumer behavior, to predict what kind of products people may need; and we can offer them directly through the cloud or our IoT apps. That’s a fantastic cross-selling opportunity, and it’s considerably simpler, thanks to the new IoT product value chain. Also, there’s more than just crossselling possible here: There’s also plenty of simplified upselling possible with IoT products. We can sell a fully functioning, feature-heavy product for a very affordable amount, but we can also offer premium features that are restricted behind a pay wall or subscription requirement. That way, consumers can try our products at a low upfront cost, and if they like what we’re offering, they’ll pay more to access more. This consumer-direct relationship isn’t possible without a low-cost

model.

. IoT products allow for a unique and modern approach to both cross-selling and upselling.

Interacting directly with consumers gives us valuable insights into product.

. Upselling and IoT 4 proliferation can lead to a ‘free-mium’ business Given this promise of recouping capital through alternative revenues, manufacturers will be able to deliver their product directly to consumers at a very low (potentially zero) cost. This “free-mium” model means that value isn’t inherently attached only to the product itself, but to the actual, realworld use of the product. Monetization will come in the form of upgrades, subscriptions, product services or native (in-app) advertising. This will allow manufacturers to innovate by focusing on intangible features, products and applications.

Conclusion Challenges will arise as the product value chain shifts toward the future. Product differentiation will be crucial for manufacturers, and they will need cost-effective and proven development capabilities, with fast turnaround. Consumers, remember, are impatient: They want instant gratification, and that patience is only going to grow thinner as processing, handling and shipping becomes automated and streamlined. Manufacturers will need a supply chain that can handle both big and small orders. Those who can’t handle these things will be replaced by those who can. Overall, a revamped product value chain will not eliminate the importance of digital and social media marketing. In fact, it will most likely increase it. It’s one thing to develop a good product. But getting consumers to take notice is a whole other beast. The future is exciting, and as connectivity and IoT spreads like wildfire, businesses and manufacturers that wish to succeed on a global scale will need to be at the frontline of the product-value chain.

Rex Chen is the Founder of TikTeck, a brand offering consumers “Factory Technology Direct” IoT, smart home and health/wellness gadgets.

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“Entrepreneur is a bit of a gambler”

Observing that the Indian students are grappled with the fear of failure that prevents them to start their entrepreneurial journey, ad guru Prahlad Kakar has finally launched his own school of branding and entrepreneurship after dreaming it for 20 years.

By Sunil Pol

Why does Prahlad Kakar School of Branding and Entrepreneurship (PKSBE) get associated with Subhash Ghai’s Whistling Woods International? Subhash Ghai is a true entrepreneur and risk taker and the Whistling Woods is truly of international standard. Ghai believes that the curriculum and academia is cutting-edge with the intensity to make sure that students understand the rules of engagement backwards so that they can rewrite them.

PKSBE’s tagline reads ‘Beyond Fear.’ What is the philosophy behind it? The institute is one of its kind that will inculcate an extraordinary concept of education that will go by the tagline of ‘Beyond Fear’. The school is aimed at all those young dreamers who wanted to follow their dreams but are scared to even articulate them. Most potential entrepreneurs are risk averse because they are paralyzed by not only the fear of failing but also by the fear of fear itself.

At last you came up with a school after waiting for 20 years. Your comment? For the past 20 years, I was happy not to do it, but my wife was keen to start 50

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the entrepreneurial school. Originally, the idea is supported by three decades of experimental experience of running highly successful organization called Genesis, which has provided some of the best professionals in the country. And I believe one day everybody likes to take his learnings and teachings to the bigger platform.

How are you planning to overcome the fear among students to create successful entrepreneurs? To overcome their greatest fears and perform better, we provide students the opportunities and experiences through the path-breaking and rigorous activities like scuba diving, sky diving, mountaineering, global community programs, horse riding, golf and boot camps. Being the largest curriculum in the world, it mainly focuses on two courses: Ad Film-Making and Branding, and Fellowship in Business and Entrepreneurship. The ad filmmaking program focuses on creating free thinkers - individuals who are ferociously independent in their thinking, loyalty and commitment. In the Fellowship in Business and Entrepreneurship program, students will go through hugely demanding academic curriculum honing their capacities for entrepreneurship, decision making, crisis management, crisis prevention and believing implicitly

in Murphy’s Law: whatever can go wrong, will go wrong.

What is your criterion of selecting students?

I want to have students with hunger, dream and vision to be entrepreneurs. The students should be able to take risks. Entrepreneur is a bit of a gambler.

What is your vision with the institute?

My vision is to take the Genesis experience right to the doors of academia, catalyze concepts into applied science, convert students into professionals, breach the barrier of fear that inhibits creativity and growth, leap across the chasm of gentle learning to aggressive achievement and produce winners and warriors.

Where do you want to see your institute in near future? In the five years down the line, we might start another branch in Australia, but we will not go online.

Are you providing scholarship for the needy?

We have both scholarship and sponsorship. We are getting lots of people from different industries to sponsor students who are deserving but cannot afford it.

“Most potential entrepreneurs are risk averse because

they are paralyzed by not only the fear of failing but also by the fear of fear itself.”

How many investors and mentors do you have on board?

What is your view of global education of entrepreneurship?

Right now, we have some investors on board they will be able to invest around Rs 25-30 lakh in each student. Also we have around 30 -40 mentors on board that include prominent names like Subhash Ghai, Diwan Arun Nanda, Piyush Pandey, Capt. Gopinath and Lina Ashar. As we grow, we will bring in more investors.

The cultural and economic environment of the country determine what kind of entrepreneurship that you are going to develop. One size doesn’t fit all and that is the best part of entrepreneurship. Globalization in my opinion failed because it’s a lowest dumbest denominator, so if you want a quality product, you cannot have the lowest denominator.

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â&#x20AC;&#x153;GO BACK TO THE DRAWING BOARD, BUILD REAL STARTUPSâ&#x20AC;?

In an interaction with Entrepreneur, Subrata Mitra, Partner, Accel Partners, shares insights while stressing on the need to build real start-ups.

By Sneha Banerjee

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What does investors look for?

I think this whole branding start-up and funding in one brush is not the right way to look at it. What we do is when a start-up comes to us, we look at the validity of the idea and how big it can grow and whether the team is good enough and based on that we make funding calls.

Does receiving funding mean an insured future? For the right companies funding will continue to happen but if you are only in the business of going from Series A to Series B to Series C without having the accelerated value proposition, you might get into more trouble. Therefore, the my two cents to entrepreneurs would be go back to the drawing board, build real start-ups which have the potential for real revenues, show us how it is going to be built out, what are the differentiators when you guys put together. Those very basic fundamentals things if you put together, I think good companies will still get funding.

Your tips to adapting to the market? Entrepreneurs are very sophisticated people, they have done their homework and when the markets were going crazy they were actually taking advantage of it. So when the markets are not so crazy they have to learn how to live with it.

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and major cities, pilgrimage and tourist centers. There are 23,000 street food vendors in Delhi alone who are being trained, skilled and educated by our partners on hygiene factors. Based on the results, this will be rolled out in other places in the country.

You have recently launched a mobile app. How does it empower consumers?

STREET FOOD: NO MORE FOOD FOR THOUGHT

For all street food junkies who love lip-smacking roadside eateries but resist themselves due to hygiene concerns, can now enjoy them fully without any botheration. Through multiple initiatives, Indiaâ&#x20AC;&#x2122;s food safety regulator Food Safety and Standards Authority of India (FSSAI) has come down hard on street food vendors to sanitize their products. Pawan Kumar Agarwal, CEO, FSSAI, shares the changes underway. By Nusra

Tell us about your project Clean Street Food. How will it help India tackle the hygiene issue?

Through this initiative of capacity building of food vendors, we have found a model and we can do it across the country. This will benefit the poorest section of the society and also the citizens and consumers in many ways. As a country, we are not known for good hygiene. This initiative will help us in coming out of very crucial situation that is prevailing in the country. We are working with the Ministry of Skill Development and other tourism and hospitality partners under Pradhan Mantri Kaushal Vikas Yojana for capacity and skill building of food vendors.

How are you executing the initiative of providing safe street food? We are planning to reach out to the small food vendors and see if they adopt basic hygiene rules. In first phase, over two lakh street food vendors in identified areas will be taken up including all metropolitan

It is a free app that will help consumers make informed food choices and bring to light the vendors who are operating without proper licenses and violating safety norms. The app provides food safety tips, essential information about food products and establishments and hygiene ratings for food products and outlets.

Would there be any acknowledgment for these vendors from the government?

Vendors will receive a government-recognized certificate, which will further encourage them to continue upgrading their skills and knowledge through structured training.

Are food brands and restaurants also in the frame of quality testing? We are working on a plan to bring all restaurants in the food safety propaganda. We will partner with all food brands and restaurants in the country, train one member from each of them at FSSAI about the basic food safety and hygiene and they will be placed at these restaurants. Hence, it will become easier for us to make sure that the food served is meeting the basic hygiene tool and the person looking after it is trained by FSSAI.

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Nandini Piramal, Executive Director, Piramal Enterprises

Nudging Ahead the OTC Game Coming from a big business group, Ajay and Swati Piramal’s daughter Nandini entered the family business in 2006, grabbing the opportunity to learn something new across genre. In an interaction with Entrepreneur, Nandini unveils her role in business.

By Punita Sabharwal

andini Piramal is immersed in a sizable pharma business empire. She heads the Human Resources (HR) function at Piramal Group and looks after strategic planning for all businesses and the quality and risk functions at Piramal Enterprises’ Healthcare vertical. After doing MBA, she joined family business in 2006. She worked for a year in the UK doing operational excellence. Then she worked in the US and came back to India in 2009. After this, she performed different roles across the business and operations like supply chain and Over-the-counter OTC (business). She has taken over the HR function four years back.

Entering the Business

On joining the family business, Nandini Piramal, Executive Director, Piramal Enterprises, says, “I 54 ENTREPRENEUR

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also wanted to join the family business because the opportunity was to do much more while enjoying different roles.” On why being a part of the family business is good, she explains, “It’s an opportunity to learn and actually have an impact. You can have much more impact in a family business than otherwise.” The Piramal family was very happy with Nandini’s decision of joining the family business. When asked what quality her parents admire of hers, she says, “I am very relentless on pushing things that matter. That’s what my parents like.” On what she brings to the table, Nandini says, “I am a process-oriented person. I create processes and systems that actually work.” Although she learnt the art of dreaming big from her father, her focus on process and system comes from her stint with McKinsey.

Ajay Piramal, Chairman, Piramal Group Dr. Swati A Piramal, Vice Chairperson, Piramal Enterprises Ltd.

Knowing Nandini Nandini Piramal has been associated with the Piramal Group’s strategic planning since 2006. In April 2009, she joined the group’s board as the Executive Director. In 2014, she was recognized as a ‘Young Global Leader’ by the World Economic Forum.

Under her leadership OTC business moved up from rank 40 in 2008 to rank 7 in 2012. Piramal Healthcare’s branded generic-medicine business sale to Abbott Laboratories stood at a record 30x EBITDA. HR transformation strategy had a renewed focus on service delivery, customer centricity and operational excellence. Nandini Piramal has been actively involved with various initiatives of Piramal Foundation, the philanthropic arm of Piramal Group. Some of these are: n

Piramal Sarvajal (Water)

n Piramal Swasthya (Healthcare) n Piramal Foundation for Education Leadership programs

The Process Orientation

Emphasizing more on her role driven towards process and quality, Nandini says, “Quality is all about system and process. Once you create a system, you can make sure you have good quality records. If you leave it up to jugaad, it doesn’t work because there will be human errors. And it’s not like you can go back and fix it. Even in OTC when you have 3,000 people, you got to create systems as you can’t do it again. We can’t do it manually anymore.” Talking about the growth she brought to the OTC business, Nandini says, “We don’t necessarily talk about numbers and all but in our OTC business we are in single digit crore a month and now it is much more than that. Over the last four months, we have done two sets of acquisitions. We are growing consistently. Next year we really expect to increase our sales because of these acquisitions.” Nandini’s other interests include traveling, reading and cooking. Sharing the same, she says, “I read everything from fiction to non-fiction. Currently, I am reading this Anne Frank’s novel.” On how she would like to add more value in the business, she says, “I would

like to take my OTC business to a certain scale. That’s the next challenge.” She likes to talk to people to know what they are doing while using the best ideas for better results. For team building, she believes in hiring right people who have a diverse set of views and trusts the team to do it upfront. Piramal group has around 6,000 people. Heading HR she gives a lot of focus on developing the right talent. Nandini’s brother Anand, who is also a part of the family business, looks after the realty business. Nandini’s husband runs the critical care business, which is currently spread over 100 countries. “I would like to scale OTC as it is doing very well. We have been growing consistently. Eventually, we want to grow it and lead it to an IPO size. So that we can actually make it separate at some point in the long term,” signs off Nandini.

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Vishal Mehta, Founder, Infibeam

hakespeare had once said, “There is a tide in the affairs of men. Which, taken at the flood, leads on to fortune. Omitted, all the voyage of their life is bound in shallows and in miseries.” This could best describe the risk that Vishal Mehta, Founder, Infibeam, took with an IPO when all odds were stacked against him. The IPO might have only just made it, but it has opened the doors for the public funding that can feed the e-commerce and tech spaces in the next couple of years. In an industry that has been about cash burn, is it a bad or brave move to come out with an IPO that too in the market that has recently seen a nosedive valuation? Entrepreneur explores.

Straight to IPO

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joining the framework of buying online, e-commerce has been the chosen one for investors as well. There are 35 million shoppers right now, and it will be 180 million in next five years as per the Technopak report. It has further helped the company in positioning itself in the e-commerce business. At present, only 1.2 percent retail is happening online, it will further go up to 4 percent in the coming years as per the Technopak report. It has been a challenging turf for Infibeam over the years as it was never among the first two or three e-commerce players. Although the Flipkarts and Snapdeals of the world have been raising investment from VCs and PEs, Infibeam always stayed away from external investors. Talking about starting up Vishal Mehta says, “We saw a very unique business

opportunity with a fragmented ecosystem of supplying to merchants as well multiple destinations for people to go to shop. It allowed merchants to scale up on the top of our infrastructure.” What started as an e-retail website went on to operate an e-commerce marketplace as well called BuildaBazaar. Its other businesses are Incept and Picsquare. The Ahmedabadbased company has already ventured out of Gujarat with offices in Delhi, Mumbai and Gurgaon. As per Mehta, “We have 900 people and will continue to grow our company with professionals.” The company has been so far content operating out of Ahmedabad not finding it difficult to source talent. Although investors have been vary of keeping themselves away from the real silicon valley of start-ups: Bengaluru. With other e-commerce players

THE TURN OF THE TORTOISE The story of the only Indian e-commerce company to brave an IPO. By Punita Sabharwal

adopting multiple domains of offline and online, Infibeam doesn’t intent to get into omni channel. When asked of any plans to go offline, Mehta says, “We have not done that in the past, and there is no plan to do that in the future. We will be having merchants to build it out.” With the Rs 450 crore IPO fully subscribed, it has added to the success of a company all going the bootstrap way and coming out with an IPO. It’s further going to give start-ups a lot of boost in building it all up by themselves instead of knocking investors’ doors. Commenting on the performance on the last day, Amar Ambani, Head (Research), IIFL, says, “It sailed through so it might be a relief for promoters because there was a worry that it might be unsubscribed. It had lukewarm response given the kind of valuations and negative press the IPO received.”

Lessons learnt

The IPO has not been able to arise hopes on the e-commerce industry for making it gung-ho about upcoming IPOs. With all negative publicity it has gained in the past and exit of two bankers from the public issue it sailed through. As they say all is well that ends well. So far, e-commerce businesses have been raising funds from investors with different rounds and none of the e-commerce companies have raised profits so far. Infibeam posted profits for the first six months of 2015-16, which was Rs 6 crore at that time. On day three, the IPO got oversubscribed by 1.11 times. Will it lead to winning the battle against the big boys?

Vishal Mehta’s insights into e-commerce enterprises:

1. The idea should be original and inclusive. 2. Selection of right people to form the core team. 3. Driving through constant action plan. 4. The business model should be remarkable. 5. Be customer centric both internally and externally. 6. Keep track on profitability and achieving the goals – Both long term and short term. 7. Have a high-impact marketing strategy. 8. Invest in right people and keep innovation high on priority.

Financial Highlights

Turnover (net) 128 151 207 288 171 EBIDTA (excl other income)* (10) (22) (20) (2) 12 EBITDA Margin (%) (7.7) (14.6) (9.8) (0.8) 6.7 Net profit (11) (25) (26) (10) 7 Net Profit Margin (%) (8.5) (16.5) (13.0) (3.4) 3.6 EPS (Rs) ** (3.7) (6.6) (6.8) (2.3) 3 Source: RHP, India Infoline Research, * EBIDTA – Earnings before interest, depreciation, tax and amortization, **H1 FY16 Annualized EPS

Issue details

--Setting up of cloud data center and purchase of property for shifting of corporate offices of our company 235.2 --Setting up of 75 logistic centers 37.5 --Purchase of software 67 --General corporate purposes * --Total Net Proceeds of the Issue * Source: RHP, India Infoline Research

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FAMILY BUSINESS PATH-BREAKER IPO CHAT ON CHAAT LEARNINGS VISION STATEMENT INNOVATOR

GROWTH JOURNEY

The not-so-big million listing has bought one thing to the forefront that the time for e-commerce IPOs has arrived Infibeam, India’s first e-commerce IPO, scraped through on the back of retail and non-institutional investors, while the response from institutional buyers was quite faded even as mutual funds gave it a pass. Entrepreneur traces the buildup to the mega listing.

1 Vishal Mehta, a former executive of e-tailing giant Amazon, started an online portal for selling automobiles, Infibeam.com, around mid 2007. Around two months before Flipkart was launched by Bansals who were from Amazon too. Infibeam expanded rapidly to other verticals including electronics, mobile, home and lifestyle and books, in around a year’s time.

.ooo

By Sandeep Soni

10 Launched a new top-level domain for businesses called .ooo in October 2014 aimed at acquiring new merchants.

In June 2015, filed draft papers for IPO with SEBI to raise Rs 450 crore. Became the first e-commerce company going for IPO. Hired investment banks such SBI Caps, ICICI Securities, Kotak Mahindra Capital and Elara Capital to manage the IPO.

Mehta called the decision taken by the board as the ‘right time’, ‘in the interest of the shareholders’ and ‘the right way among multiple ways to raise capital’ and has got nothing to do with tightening of the venture capital in last few months as the time when company decided for capital raising and filing for IPO, the private investment flow in India for e-commerce was quite fluid.

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Around the same time, Infibeam launched ShipDroid, a SaaS-based logistics services aggregation platform, to help merchants deliver packages across India.

12 Infibeam never raised any external funding unlike other e-commerce players except for Rs 33.3 crore that it raised from media conglomerate Bennett, Coleman & Co Ltd via the ad-for-equity investment platform Brand Equity Treaties Ltd.

Turned profitable in the first half of FY16. It recorded net profit of Rs 6.6 crore for the period ending September 2015 with total revenue of Rs 171.3 crore.

6.6 cr Profit Loss

m r.co

printingportal.com

buil

. www

zaa raba

2 Forayed into digital photo printing and gifting market in November 2008 with the acquisition of Bengaluru-based photo printing portal Picsquare for undisclosed sum.

4 Expanded to B2B segment with the launch of e-commerce software solution BuildaBazaar (BaB) for retailers in June 2011. BaB allows retailers to create an online store for themselves rather than just list their products on other e-tailers like Amazon, Flipkart and Snapdeal. It had 48,724 retailers listed as on 31 December 2015. By the same time, it had more than 900 employees.

www.vishwagram.com

Signed a MoU with the Government of Gujarat in January 2011 to launch rural e-commerce platform Vishwagram.

5 Set up a platform called Indent in June 2012 tooffer digital music services to brands, music labels, OEMs, also partnered with music company Sony Music Entertainment for digital music distribution using Indent platform.

In May 2014, Sony purchased 26 percent strategic stake in Indent for undisclosed sum.

Inden

Acquired digital marketing firm ODigMa for $5 million in February 2014.

26%

Inden

SONY INFIBEAM

15 IPO

Within a week of its IPO, two of its investment banks – ICICI Securities and Kotak Mahindra Capital pulled themselves back. On the banks’ side, the withdrawal was due to reported disagreement over the valuation of around $334 million with Infibeam. However according to Infibeam, since the offering size wasn’t too big, they went with SBI Caps and Elara Capital, which took the lead during the marketing stage.

On 21st March, Rs 450-crore planned IPO was opened for subscription with the issue priced of Rs 360-432 per share. The stated purposes of using the total amount raised as per the draft red herring prospectus filed to SEBI are first, setting up of cloud data center and for the acquisition of property for shifting registered and corporate offices, second, setting up of 75 logistics centers, third, purchase of software, and fourth, general corporate purposes.

16 The IPO was subscribed 1.11 times on the last day of the offer. The response was unexpectedly good as it got bids for 13.85 million shares from 12.5 million share issue. The response however from institutional investors was timid as they subscribed only 86 percent of the total number of shares set aside for them.

13.85

IPO

million shares

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ENTREPRENEUR 59

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FAMILY BUSINESS PATH-BREAKER IPO CHAT ON CHAAT LEARNINGS VISION STATEMENT INNOVATOR

GROWTH JOURNEY

Vani Kola, Managing Director, Kalaari Capital

Ritu Marya, Editor-in-Chief, Entrepreneur India Media

“OUR INVESTMENT STYLE IS THE FOUNDER FIRST”

After spending around 10 years as an entrepreneur, Vani Kola turned Venture Capitalist in 2006 supporting entrepreneurs in building their companies. At present, she is the Managing Director of Kalaari Capital. She interacts with Ritu Marya, Editor-in-Chief, Entrepreneur India Media, in the chat on chaat, to share her views about woman entrepreneurs, leadership and the qualities that go into making a good leader.

What is your style of investment? There are sectors that we are constantly thinking about but also a lot is dependent on entrepreneurs we end up meeting. Because I might have a viewpoint on a certain sector but if I don’t meet the right entrepreneur in it, I am not in it. So our investment style is the founder first. The qualities of an entrepreneur are written at different places. It’s your judgment of it that makes a difference. We are looking for somebody who is a clear thinker, we are looking for someone who has thought about a particular problem and has a lot of deep insight about that problem, a differentiated insight about that problem.

What qualities of a fund seeker attract you?

ENTREPRENEUR APRIL 2016

He should have natural leadership qualities, because he has to build a team. Someone who is mature because as you build businesses, there are disagreements, there are conflicts, all of which are a natural process of the business. You need a lot of maturity as to when to listen, when to say no I am going to do this way and without maturity you could kill the company. Even a good product, a good idea can be killed if you don’t have the right maturity of how you deal with people.

Q A

Does being a woman investor make any difference? Being a woman investor is not any different. I think the mindset is important. If you make something in your mind very difficult, your probability to succeed, you yourself create a negative impact on that. You need to start with a notion that it is not very different and I can make it happen.

Q A

In general, women are more accommodating. Your view? Women are more accommodating, less conflict prone and they try to find solutions. And sometimes it’s good and sometimes that can be viewed as a weakness to be taken advantage of, the credit that is due to you might not be given.

Q A

Does woman entrepreneurs need special treatment? When a start-up comes to me, it’s a start-up. I am not negative about investing in woman start-ups, you have to be neutral. Why should I be pro, why should be negative. And I don’t think as a woman anybody is expecting a special quota. Why do we need quota? We don’t need any special quota. I think if we are good enough at least don’t be unfair with me. Nobody is asking for special treatment.

Your tips for budding entrepreneurs. I think in the context to do a start-up, there is a vibrant, infectious and fantastic energy in being an entrepreneur today. But you also need to be audacious and say, “I want to disrupt something big.” You also need to have the tenacity to really execute. You need to have a sort of angular personality, approach and mindset and say, “Next 15 years I am going to spend, whatever it takes but I want to be a disruptor.”

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WE ARE NOT ACQUIRING REVENUE, WE ARE ACQUIRING TALENTED TECHNOLOGY” A brush with a dreadful experience with customer service and a couple of start-up competitions helped Girish Mathrubootham and team curate the idea of forming Freshdesk – a cloud-based customer support platform. By Sneha Banerjee

irish, who had built four customer helpdesks prior to Freshdesk, understood the power of challenging bad customer service and other grievances over a social platform. This gave birth to a fresh approach towards the customer service space by allowing companies to respond to their customers via social media tools, apart from other regular mediums.

When Investors Came to Freshdesk The idea of venture funding was something that had never occurred to Mathrubootham while starting off, his team knew that they were capable of creating a customer service forum and could charge customers on the basis of their services. “Like most other entrepreneurs, we will slowly build the company to $10,000 monthly revenue and become profitable,” was the initial idea according to Girish Mathrubootham, CEO, Freshdesk. But little did the team know that a series of events would invite the attention of investors towards this fairly new company. Mathrubootham wrote a blog titled “The Freshdesk Story,” which spoke about how a simple comment made him quit his job and form a startup. The post went viral and Freshdesk got several calls, but it was in June 2011 when the company won the Microsoft BizSpark Startup Challenge in the cloud category that helped it fetch $40,000 in cash. These competitions really helped draw inbound interest from VCs. The company was in talks with five investors back then, one of them being Accel Partners.

Getting that One Interaction Right According to Mathrubootham, there is enough money available for 62

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Girish Mathrubootham, Freshdesk

FRESHDESK’S FUNDING HISTORY

early-stage investment even during the current environment of bearish funding. “I know that VCs are looking for good companies to invest in,” he says. He further says that new start-ups should understand that an investor will not write a cheque to them just because they happened to run into them at an event and pitched an idea amid thousand people. He stresses on the need of a one-on-one interaction between VC firms or partners and the start-up, where there is ample room to discuss one’s idea and product. If someone is building something remarkable, investors will come to you. You don’t have to run behind them. A good product speaks for itself. One can definitely write a blog to spread the word around, and the minute investors read about your product, they will automatically reach out to you.

SERIES E

$50 m Apr 2015

(Accel Partners, Tiger Global, Google Capital)

Acquisitions & Their Imprints As per Mathrubootham, most of the acquisitions Freshdesk had made were on the basis of their superior technology or a talented team or a mix of both. “We are not acquiring revenue, we are acquiring talented technology,” he says. Before making an acquisition, he mainly searches for an ideal leader who can fit into Freshdesk and take its journey ahead. An acquisition should be a win-win situation for both parties, and these acquisitions have taught Mathrubootham the importance of bringing different minds on board for a particular idea. Many SMBs across the world are directly coming on board using software in SaaS form even when they do not have any software in the first place. It’s like how Indian consumers are directly opting for smartphones and giving the landline a miss completely. Freshdesk is a global company, with customers spanning across more than 140 countries, with the US being its biggest market and Europe its second largest market. About 75 percent of Freshdesk’s revenue comes from the US and Europe and the rest of the world accounts for the remaining 25 percent.

Picking Chennai Over Uber-cool Bengaluru

SERIES D

$31 m Jun 2014

(Accel Partners, Tiger Global, Google Capital)

SERIES C

$7 m

Nov 2013 (Accel Partners, Tiger Global) SERIES B

$5 m

Apr 2012 (Accel Having spent a good number of years in Chennai and Partners, Tiger collating some precious contacts, Mathrubootham Global) chose to station Freshdesk in Tamil Nadu’s capital over Bengaluru, which was then gradually becoming a home to a SERIES A soaring number of start-ups. Mathrubootham says that even

$1 m

Nov 2011 (Accel Partners)

“When everyone was rushing to IITs, Freshdesk stayed away from them and eventually ended up hiring talent from sources other than IITs.”

though Bengaluru is the ideal start-up destination for India, one is also pitted against stalwarts like Google, Yahoo and Microsoft as well as other start-ups in the hiring space. In Chennai, Freshdesk is one of the finest start-ups to work for and the city is also a home to good amount of talent.

Hiring & Nurturing the Right Talent In the early days, the initial employees were all those who had worked with Mathrubootham in the very at some point. In 2012 a lot of the experienced professionals were hesitant to join Freshdesk as it was a fairly new name in the market. So the company ended up hiring a lot of freshers. The company believes that people who are smart and talented will eventually learn at their work and believes in investing in such people. They might not be productive immediately, but in six months to a year the company has seen a lot of folks who believe in the Freshdesk way of doing things. Freshdesk kept certain things in mind before hiring. When everyone was rushing to the IITs, Freshdesk stayed away from them and eventually hired talent from the sources other than IITs. Back in 2011, when the company could not pay bloated salaries to their employees, it would compensate by parting with some company stock. “Some of our early employees who joined Freshdesk in 20122013 have Freshdesk stock which is worth several lakhs today,” he says. He also believes a start-up needs to find the core talent rather than eyeing people who have years of experience. You need to find people who are willing to sweat it but have the core talent. They should be willing to grow with the company, in simple terms, if you can’t find a Sachin Tendulkar, see if you can a Rahane and give them that opportunity. Freshdesk today is backed by investor honchos like Accel, Google Capital and Tiger Global Management. Mathrubootham also dons the hat of an investor at times, with a sole motive to help nurture those companies who he has seen struggle during Freshdesk’s struggle period. However, Mathrubootham still claims to be more of an entrepreneur and less of an investor looking for market share and other intricacies. Mathrubootham mainly looks for a good product and a smart founder before placing his bet on a start-up.

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FAMILY BUSINESS PATH-BREAKER IPO CHAT ON CHAAT LEARNINGS VISION STATEMENT INNOVATOR

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Things VIJAY MALLYA Did That You Should Not Be Doing in Your Business The King of Good Times, Vijay Mallya, seems to be going through an ironic period in his life. Now that his “good times” appear to be far-fetched, I’m sure he’ll welcome “mediocre, debt-free times” with open arms. By Ritu Kochar

HOUSES

Sausalito – bought in 1987, features Picasso, Renoir, Chagall, and Turner,

Penthouse in Trump Plaza, New York – Said to be

worth $2.4 million

As per media report Mallya had 26 residences around the world

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A L LY A M Y A J I V ’

Chairperson of three companies - Londonbased Kingfisher Beer Europe Ltd (KBEL), California-based Mendocino Brewing Company Inc and UBICS Inc, based in Pennsylvania earned a little over Rs 2 crore per annum Mallya’s shopping spree

STS E S S YATCHS

Indian Empress -

$100-million, a 95-meter “megayacht” with a helipad, bought from a Qatari sheikh in 2006. Sold in March 2011

Boeing 727 and Gulfstream – Sold due to debt

Once termed the Indian version of Richard Branson is now a willful defaulter. Mallya is being chased by almost every institution in the country — the banks, regulators and, even the judiciary. What did he do? Well, not much! As everyone knows how big of a collector he is, he just gathered a consortium of 17 loans for himself from, mind you, state run banks, and they all add up to a whopping amount of Rs 9,000 crore. No biggie, right? And when everyone thought this would end, Mallya thought to himself, “Hmm... Wouldn’t this be a lovely time to go for a spontaneous vacation to my country house in London? Except a couple of loans, I have given people no reason to think I’m an absconder. Might as well pack seven bags in case I don’t forget anything.” Okay, jokes aside. It’s not that Vijay Mallya was always this bad at making business decisions (or any decisions for that matter). It was his skills and money, which he very conveniently inherited from his father that made him the flamboyant billionaire he is. His good days include the launch of Kingfisher Strong in 1999 that changed the consumption of alcohol nationally. He then expanded his range by buying brands like Royal Challengers, Bagpiper whisky and Romanov vodka. He launched Kingfisher Airlines and bought IPL and F1 teams. When everyone was busy getting impressed by his unstoppable shopping spree, no one questioned where he was getting the money for all this? We kind of went along with him ‘being’ rich. So how did his story take a 180 degree turn? He made some pretty terrible decisions along

ISLANDS

The Mabula Game Lodge, South Africa, 12,000 hectares of land Island of Sainte-Marguerite, the largest of the four islands of Lerins Islands, two of which are uninhabited Castles in Scotland and town houses in London – allegedly bought by money from Diageo Island in Monte Carlo for about Rs 750-800 crore (as reported in media)

the way. And we made a list so history wouldn’t repeat itself.

When your business doesn’t make a profit for eight years, take the hint This goes completely above me. Once the second-largest airline in India, Kingfisher Airlines was never once able to earn a profit and it still went on for eight years. In 2009, the net loss went from Rs 213 crore in 2008 to Rs 1,317 crore. And that didn’t stop Mallya from continuing. His delusional optimism of reviving the company went to such extent that the accumulated losses as of March 2013 stood at a whopping Rs 16,023 crore. He did cut flights from 300 to 110-125, but it never reached the skies Mallya was so hopeful about.

Lesson- Know when to give up. Hard work is appreciated but when it doesn’t yield results, you should know when to stop. When bankrupt and you see some money coming your way, how about paying the employees first

Employees maketh the company. Sure, employer will tell what work to do but it’s the hard working members of staff accumulated over the years that will make the work happen. At the end when company gets a big profit, it’s the owner that gets it. An employee gets his regular salary. Given that and how indebted Mallya was by 2012, it was his inability to pay salaries to 1,500 employees that stopped the beleaguered airline to continue operating. When asked why he couldn’t he simply answered, “I don’t have money to pay your salaries.” Okay, believable. But then Diageo acquired 27 percent stake in United Spirits Ltd. for Rs 6,500 crore in 2013, but no lender or employee was given a single penny, without any reasons stated. Mallya had his own wish list to fill. He spent Rs 9.5 crore to get Australian all-rounder Shane Watson to play for his Royal Challengers Bangalore Indian Premier League cricket team this season. In December 2015, his birthday became a gala with 200 people and featuring a firework display and performances

OTHER BUSINESS

Royal Challengers – Bought in 2008, Mallya paid $111.6 million for it

by Sonu Nigam and Spanish pop star Enrique Iglesias worth Rs 3.5 crore. The whole party cost him more than $2 billion. Money well spent, eh?

Lesson – If you’re in debt, a monstrous one, and your birthday is approaching and you have no plans to give salaries to your employees, it’s probably better to take it down a notch. Do not mess with the banks

If Mallya finds it hard to think in a reasonable business-like manner, he should probably think about the welfare of people as a member of the parliament. But how dare we think about him thinking about the welfare of people who pay taxes to state run banks when he can’t even pay his own employees. Mallya owes Rs 9,061 crore to 17 banks. Mallya claims to have paid Rs 1,200 crore worth of loan already. Hoping that the airline would revive sooner or later and pay back the money, banks kept giving loans and Mallya accepted them. Finally, when things got out of hand and banks panicked, Kingfisher, was declared an NPA by most banks, including SBI, towards the end of 2011 and beginning of 2012. The only hope for banks is if Mallya has a change of mind and decides to pay back banks from his personal wealth (Mallya has shares worth Rs 7000 crore in various companies and lot more in fixed assets). Chances of that happening seems as minimal as Trump leaving the 2016 Presidential debate.

Lesson – A stitch in time saves nine. The banks, instead of encouraging Mallya to take loans even when he was in debt, should have spent time on making him understand how bad debts can be. Have the courage to face your mistakes

Everybody makes mistake. Mallya’s happen to be worth Rs 9,000 crore. In any case, how is leaving the country with no prior notice the best idea he could come up with? We get that he messed up big time, but how about giving an explanation first. We don’t mind him taking all his extravagant vacations but expecting people to believe that he wants to go to his country home because he wants to ‘see his children’ is either him considering people are stupid or a bad excuse made in haste.

Lesson – Be smarter about your

mistakes. They’re going to be out in the open at some point. The better path will be to accept them and save the drowning boat. Right your wrongs always. APRIL 2016

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Sri Sri Ravi Shankar

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I don’t compete with anybody.” What started with the intent of sharing what he could whether its peacemaking or the Sudarshan Kriya, Sri Sri Ravi Shankar actually started a movement that completed 35 years of existence. This further proves the fact that bigger organizations need time to build which takes them towards bigger things and the people involved. His followers includes film stars, entrepreneurs and politicians. Padma Vibhushan recipient Sri Sri Ravi Shankar held the mega event with more than 35,000 artists on the banks of Yamuna, which further shows the impact the man has in India and world. He makes you meditate for relaxation; he helps you make it at ease not lesser with enthusiasm. Sri Sri Ravi Shankar, who promotes the Art of Living, has a host of products including ayurvedic medicines, protein shampoos and herbal tea. The daily consumption of these goods is increasing via online, though plans are on the anvil to come out with brick and mortar stores soon. Entrepreneur learns the art from Gurudev.

By Punita Sabharwal

When and how did the idea of organizing the World Cultural Festival come to you?

Five years ago, we did this in Berlin in the Olympic stadium and the response we got prompted us to do this in Delhi.

When did you realize the need to offer apparels, wellness and personal care products?

It’s a part of many service projects we are having. We have our own ayurvedic unit. Every day, we do R&D and come out with some wonderful products.

Who is looking after the ayurvedic unit?

It’s the group of our people under the trust Sri Sri Ayurveda.

But it goes with your branding?

I have no problem with lending my name. If there is anything for the betterment of the mankind, I lend my name.

Baba Ramdev started it, what are your views? It’s Ramdev’s style of functioning. I don’t find anything wrong about it.

Do you think Ramdev caters to lower middle class while you the upper middle class? Well that’s up to you to say to whom we cater to. As far as we are concerned, we are in villages as well.

What made you to start selling shampoo?

We are going herbal, we are talking about proper and healthy lifestyle, and it’s not a chemical thing we are using. When you go into health it is a holistic thing. It’s related with what you eat so we provide organic food. If want to you promote organic food, you have to promote all other personal care material like organic toothpaste and shampoo. It’s not done for commercial purpose; it is done for health, taste and philosophy. Personal care is connected to one’s healthy living.

So you will compete with Baba Ramdev? I don’t compete with anybody for anything.

APRIL 2016 ENTREPRENEUR

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FAMILY BUSINESS PATH-BREAKER IPO CHAT ON CHAAT LEARNINGS VISION STATEMENT INNOVATOR

Is mastering technology enough to succeed? Entrepreneur caught up with Author and Business Consultant Shiv Khera to understand his views on building sustainable enterprises. He unveils his upcoming works and why values matter more in todayâ&#x20AC;&#x2122;s time. He explains as follows:

Shiv Khera, Author & Business Consultant

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GROWTH JOURNEY

lobally, 50 percent of businesses fail within the first five years and in the US, 90 percent businesses fail in the first five years. With the speed of change, products are getting obsolete the day they get launched and knowledge is getting obsolete within two-three years. It has become a cliché “the only constant is change”. Going into the future the only people who will succeed who master three skills: (i) People skills (ii) Persuasion skills (iii) Prioritizing skills Why? (i) PEOPLE SKILLS: More than business problems, we have people problems. When we take care of our people problems, most of the business problems are automatically resolved. We are hired for our skills but fired for our behavior. The lower a person is in life, most of his time goes in technical skills, and very little goes in people skills. The higher a person goes in life, it just reverses. Technology and Technicians we can always buy with money, but the wealthiest person must build relationships. Why do you go to a doctor 10 miles away bypassing ten other doctors on the way? Is he the most qualified? Probably not! Something says that I am dealing with a right person. And what is that something? It is the trust factor. Unfortunately, today’s generation has become very comfortable with technology, but they have become uncomfortable with people.

Today’s parents are actually scared of their kids.”

(ii) PERSUASION SKILLS: means the ability to influence, convince, negotiate and sell. Some of the most successful people in the world also had great persuasion skills. What are all of them doing? 1. A candidate at a job interview 2. A boy and girl proposing to get married 3. A lawyer arguing in front of the judge 4. A politician giving speeches to get votes Aren’t they all persuading? People keep talking about the sales as a. B2B b. B2C. But every sales boils down to P2P People to People. People like to deal with people they like. BOTTOM LINE IS EITHER GET PROFESSIONAL OR GET OUT Professionals realize that in life, results are rewarded, efforts are not. We judge ourselves by our intentions but the world judges us by our actions.

(iii) PRIORITIZING SKILLS: Prioritizing skills are embedded in our core values. The number of time saving devices we have today, are more than what we ever had. Yet, we don’t have time to do the things we need or want to do. Why? Because, we forget to prioritize. We need to distinguish between: 1. What is urgent and what is important? Urgent may or may not be important and the reverse is just as true. But whenever we ignore what’s important, it converts into urgent. Example, health is important. Exercising every day is important but if I skip it one day, it’s not the end of the world. But, if I ignore it long enough, guess what will happen? It will convert into urgent. Same thing is true with relationships. 2. What is negotiable and what is non-negotiable. What we would stand for and what we would stand against. 3. We need to distinguish between making money vs. earning money. Unfortunately, most people only want to make money, very few want to earn it. Remember only good people are assets, rest are liabilities. Are you working on any new book at the moment? I am working on two books right now. One is on the lines of You Can Win. The proposed title is Achieve More. Primarily, the purpose behind this is we live by design not by default. Another book I am coming out is on positive parenting, which is very crucial today all over the world. Many times I am called by schools, colleges and parents to talk to kids. Their values are messed up, discipline is messed up and my answer is they are not messed up, parents are messed up. Today’s parents are actually scared of their kids. They don’t have the guts to say no to their kids. And that is sad.

APRIL 2016 ENTREPRENEUR

Live + Work

esquire guy

HOLD YOUR TONGUE

WHEN SAYING NOTHING SPEAKS VOLUMES. By Ross McCammon

onspicuous silence during any meeting makes you seem like one of two things: either the most engaged person or the least. Which one of those things you seem like is determined by the Seniority/Silence Bell Curve (or SSBC), which was established in 2016 by Entrepreneur columnist

ENTREPRENEUR APRIL 2016

Ross McCammon. According to the SSBC: Silent bosses always seem smart, silent interns always seem smart and everyone else generally seems dumb, freaked out, uninterested, intimidated and/or on doctor’s orders not to speak. But, like talking, silence is a form of communication. And it’s only conspicuous if it’s coupled with inexpression. >

WHY SPEAKING IS OVERRATED I try not to speak during the first 10 minutes of a meeting. It’s the meeting equivalent of not swinging for the first pitch when you’re at bat—and everyone else in the room is a pitcher. The first pitch is the banter or speech or lunch order tossed early on in the meeting. (OK, I speak if it’s a lunch order.) Even if that first pitch is a hanging fastball right over the plate—an opportunity that would allow you to deliver a prepared or unprepared pithy nugget of wisdom, reason or way forward—resist the urge. Wait till the next pitch. No one has ever regretted not speaking in the first 10 minutes of the meeting. Resist. And then wait. Your time will come again. Ready to speak now? Yeah? The question is not what are you going to say. The question is: Why are you going to say it? Mark Goulston, psychiatrist and author of Just Listen: Discover the Secret of Getting Through to Absolutely Anyone, suggests you ask yourself that question. I’ll let him talk. “There’s an acronym.” Oh, good. “It’s a cute one. I don’t know if you’ve heard it.” The cute acronyms are the best acronyms, Mark. You know what, I’ll be quiet. Please continue. “It’s called WAIT. Before you say something, you ask yourself, Why Am I Talking? What’s my evidence that what I say isn’t going to take the topic off-track?” The question, says Ethan Burris, associate professor of management at the University of Texas at Austin McCombs School of Business,

allows you to weigh the cost-benefits of speaking. He adds: “The costs usually come down to two different barriers. The first is the feeling of safety. Are there any repercussions for speaking up? And will this result in any change? So it’s a constant weighing the scales. Where you really want to change things, are you going to get kicked in the process and do you actually stand a chance at really making a difference?” Err on the side of waiting. Because a lot happens in a pause.

jumps in,” Tannen says. “Or try asking others what they think, which gives you the satisfaction of speaking without putting all the onus of talk on you.” HOW TO TALK WITHOUT SAYING ANYTHING “The irony is you’re most present when you’re noticing something or someone outside yourself,” Goulston, the psychiatrist, says. “Being present doesn’t mean talking a lot. You know someone who’s present?” And here, Goulston pauses for effect. “Pope Francis.” It’s true. When you think of a pope, you don’t think of a speech. You think of a smile, a nod. Does a flowing white robe and ceremonial headdress help with the presence? Yes. Is it necessary? Not at all. Does a cassock seem like it would be supercomfortable, versatile and authoritative all at the same time? Yes. Yes, it does. Did I just say that out loud? The point is: How we are silent is as important as that we are silent. Looking at people directly when they are speaking, reacting with a nod or a squint or a smile is way more powerful than talking for the sake of talking. Silence is a tool, a gift and a means to contribute—even (or especially) when you have nothing to say.

Silence is a tool, a gift and a means to contribute—even (or especially) when you have nothing to say. THE POWER OF THE PAUSE Georgetown linguistics professor Deborah Tannen says that how we respond to pauses is representative of how we communicate. “When two people have different senses of how long a pause is normal, the one who is expecting a shorter pause gets the impression the other has nothing to say when in fact the other is waiting for a pause to take their turn. At a meeting, this could mean that the person who talks too often thinks no one else wants the floor, whereas in fact the others are waiting for a pause so they can speak.” A common interview technique for journalists is to allow a pause to go on longer than is comfortable. More often than not, the interviewee will fill the silence—often with a great quote. Not a bad tactic. And one that can work for you, too. “Force yourself to be comfortable with longer silences to see if someone else

Ross McCammon is a senior editor at Esquire magazine and the author of Works Well with Others. To learn more about Esquire and to subscribe, go to esquire.com.

jargon

The Walk of Same(n.) The trudge down the hallway to the weekly staff meeting.

DEFINITION:

USAGE: Ned: “It’s 2 p.m ., Marv—want to join me for the walk of same?” Marv, wiping a tear from his eye: “If we must, Ned, if we must. How’s your job search going?”

ENTREPRENEUR 4/16

APRIL 2016 ENTREPRENEUR

Illustration by Patrick Vale

CREDIT GOES IN THIS SPACE HERE

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Illustration by Firstname Last

ou’ve Your ou’vegot gotaagreat greatproduct. product.Or Orservice. service. Or Or both. both. Your packaging, That’s packaging,website websiteand andtagline taglineare arecohesive. cohesive. That’s not story. notenough. enough.To Tobe beaabrand, brand,you youneed need to to have have aa story. As Asaa’trep, ’trep,you youmay mayfeel feelyour yourfounding founding tale, the one that thatliterally literallygets getsyou youout outofofbed bedin inthe the middle middle of the night, is unique. unique.ItItmay maybe. be.¶¶But Butyour yourbrand’s brand’sstory story needs to take that personal personalbackground backgroundand andcombine combineititwith withyour your company mission siontotomake makecustomers customersand andinvestors investorslisten. listen.We We deconstructed fiveofofthe themost mostuniversal universalstories storiesbrands brandstell, tell, with some advice five howtotouse usethem themtotowrite writeyour yourbrand’s brand’snext next chapter. ononhow

STORY 1: 1: STORY

“Theold oldway way “The hadto tochange.” change.” had It used to be enough to be the fastest, the cheapest, some kind of -est. Now companies talk in terms of disruption—an overused buzzword, without question, but there’s a reason this story is so sticky. “To be a disruptor, you have to maintain driving speed of the process and get the formula right,” says Clark Howard, best-selling author of Living Large in Lean Times. You’re saying that your way of doing things is so spot-on, it changed the competition. That’s a powerful endorsement. Consumers always like a leader. As a disruptor, you’re willing to launch a business that others thought was crazy. Uber sounded nuts—people jumping in stranger’s cars instead of hailing a cab? So did Casper—selling a mattress without a showroom? But Howard offers a word of caution: Don’t frame yourself as a disruptor until you’ve really disrupted something. That’s the difference between empty hype and, as he says, the “fresh and exciting” company you want to be.

THE STORY IN ACTION: Like nearly everyone on the planet, Ernie Garcia was not a fan of the way used cars are sold. So he created the Phoenix-based Carvana, a used-car-buying website that allows consumers to search for, finance, purchase and take delivery of their car without dealing with a salesperson. “We decided to build something that’s better by creating a better truth—and then tell that story,” he says.

“People regularly complain about buying a car, yet the industry has, strangely, been immune to change for 75-plus years. There has been technology to improve the car industry for a while, but the transaction process is complicated.” Consumers like seeing the old way knocked down. And that’s why, since launching in 2013, Carvana has raised $300 million from investors and is on its way to ringing up annual revenues of $200 million.

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STORY 2:

“Nothing else like this existed, so we made it.” This is perhaps the most common of all the brand stories: I wanted it, I couldn’t find it, so I made it. It’s compelling because it’s so simple and relatable: The CEO was once like you, dear customer. “Building successful brands today requires a mix of business smarts and being clever,” says Chadwick Boyd, a brand marketing executive. “Consumers want that. They want to be offered something that fulfills a need in their lives.” And there’s a trick to this kind of story: You can tell it even if, well, a product like yours did already exist before you came along. Why? Because it wasn’t your product, hitting your niche. Look at how Harry’s, the subscription razor company, describes its origin: “Like most of you, we’ve long had to choose between over-priced, over-marketed

razors that disrespect your intelligence, and low-quality, cheap razors that disrespect your face.” Is that true of every razor that came before them? Maybe not—but if Harry’s can convince customers of its story, the company just convinced them of its value. THE STORY IN ACTION: “If you go in a Whole Foods, you’re going to see 48 mustards and 57 salad dressings,” says Reggie Milligan. He traces the explosion of options back to the recession, when foodies began launching small-batch food products out of their homes. Now there’s amazing stuff out there, but Milligan figured consumers were all thinking, I need someone to make a

choice for me, and I need a brand I can trust. So he created that brand: Mantry, a monthly delivery of small-batch foods for men, which has spent $1.5 million buying such products since 2012. (Why just for men? Because it gives him a filter—a specific customer to serve. “If you’re talking to everybody,” he says, “you’re talking to nobody.”) Now “too many choices” is his brand's story. It does all the searching, so his customers can just focus on the eating.

STORY 3:

“We know your problem and have a solution.” If your business doesn’t solve someone’s problem somewhere, it’s obviously going to be a short-lived enterprise. But this story is more specific than problem solving: It’s about identifying a problem that your customer may not even be thinking about. “Speak to specific needs,” says Heather Stephenson, who heads up brand strategy at Super, a home-repair subscription service that raised $3.6 million in seed capital. “You really have to know your customers. ” This story shouldn’t take long to tell. Sometimes it takes just a few words. Here’s how

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The Grizzly Labs pitches its product, a smartphone app that scans documents: “Equip your employees with Genius Scan and you won’t need them to be back in the office to access their documents.” The story isn’t really about the product; it’s about the worker on the go. For the right kind of user, it’s totally relatable. THE STORY IN ACTION: HoneyBook offers a whole lot of complex services—bookkeeping, purchasing, invoicing, contracting and more. It’s the stuff that overwhelms people in the events industry, who are

HoneyBook’s target customers. But go to HoneyBook.com, and the first thing you see is a big line that says get your life back. That’s the company’s story: “It’s around benefits, not the features,” says Shadiah Sigala, its cofounder. And quite frankly, the features can sound daunting at first. That’s why Sigala keeps the focus on simplicity. “We solve the problem by alleviating personal pain points,” she says. How many people want to relieve that pain? The company has raised more than $32 million, and sales grew 25-fold in the past year.

STORY 4:

“We give back.” What could be more warm, fuzzy and human than a socially responsible business model? This: A socially responsible business model that customers feel is done right, and for the right reasons. Companies like Toms used to get great attention by telling their philanthropic story—but then hordes of other businesses followed, and questions started being raised about just how helpful some of these companies were being. A consensus has since emerged: A program that changes lives is far better than one that merely gives out free stuff. “Helping people by allowing them to utilize their talents and strengths to become employed or get out of poverty improves their economic, psychological and sociological state,” says Laura Ullrich, Winthrop University’s assistant dean for innovation and productivity.

THE STORY IN ACTION: Susty Party makes eco-friendly tableware that’s sold in Whole Foods. And the tale it tells borrows from two types of stories. There’s the “nothing like this existed” part: Emily Doubilet was hosting events in Brooklyn to raise awareness about environmental issues but couldn’t find nice, festive but compostable silverware and more. So she and cofounder Jessica Holsey made them.

they ask two related questions: “Whom shall I trust? Whom shall I believe in?” For some brands, the answer becomes the core of their story. These brands aren’t just reliable— as all brands should be—but also promise to reveal things about their business that competitors never do. That’s how, say, T-Mobile got back in the game: It kept calling out the phone industry’s pricing tricks, earning great press. Transparency can be a powerful statement. Just be sure to back it up.

STORY 5:

“Trust us; we have nothing to hide.” “My inbox is flooded daily from people who want me to buy their products and services,” says Kim Gorsuch, founder of Weeva,

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But wait, there’s more! Most of their wares are manufactured by nonprofit factories in the U.S. that employ the visually impaired. Together, that enables Doubilet to pitch her company this way: “Want to change the world? Change the system.” Susty Party has made changes at every step of its system; now it’s inviting consumers to do the same (starting, of course, by using its tableware).

an Austin-based startup that designs personalized books. So how do people decide whom to do business with? Gorsuch says

THE STORY IN ACTION: The online apparel company Everlane ran a thoughtprovoking sale this winter: For many products, shoppers could pick among three prices—but each came with information. The cheapest “covers our cost of

production and shipping,” the company said. Go up, and you help cover overhead, investment in growth, and so on. It’s part of the company’s “radical transparency,” as it calls it—which extends to offering details on its manufacturing, pricing and more. Its tagline: “Know your factories. Know your costs. Always ask why.” The story resonates with users: The 6-year-old company’s annual sales are now estimated at north of $35 million (though, ahem, it won’t confirm that). But perhaps more important, the story Everlane tells becomes the story others tell about Everlane. Press—like this article right here!—is almost always about its transparency and prices, reinforcing Everlane’s message. It’s a storytelling cycle.

MONEY

ECON

START-UP FINANCE

Tie-ups Chinese computer maker Lenovo tied up with Paytm to pay for expenses of sales representatives and distribution partners through Paytmâ&#x20AC;&#x2122;s wallet service.

Ed-tech start-up UpGrad co-founded by investor and entrepreneur Ronnie Screwvala tied up with LetsVenture, an online deal making platform, to launch an online angel investment program for people looking to become angel investor.

Harvard Universityâ&#x20AC;&#x2122;s South Asia Institute partnered with IIT Delhi and Tata Trusts to provide mentoring, workshop and grants, to 25 social start-ups leveraging science and technology.

IPOs ` 450 cr.

Electrical equipment manufacturer HPL Electric

g Fundin

Funds Launched

IPOs

M&As Tie-ups

WHERE IS THE MONEY?

& Power filed IPO papers with SEBI and would look to raise Rs 450 crore.

January 2016

M&As

Diagnostics firm Thyrocare and microlending firm Ujjivan Financial Services received IPO approval from SEBI, which was filed in January 2016

ENTREPRENEUR APRIL 2016

Business process management firm WNS acquired Noida-based Value Edge Research, a commercial research and analytics services provider, for around $17.5 million.

US-based marketing research firm Nielsen acquired Mumbaibased mobile usage measurement firm Informate Mobile Intelligence for an undisclosed amount.

Ticket platform BookMyShow bought fan relationship management firm Fantain Sports in Chennai for an undisclosed amount.

Home services start-up Zimmber acquired Gurgaon-based skills and services marketplace FindYahan for an undisclosed amount.

Call it a funding slowdown impact perhaps, Paytm and Flipkart raised funding in February 2016 from banks rather than from a large PE or hedge fund. In terms of tie-ups, there were quite interesting ones, first entrepreneur Ronnie Screwvala and deal making platform LetsVeture together offering courses on angel investment and second Harvard University’s South Asia Institute partnering with IIT Delhi and Tata Trusts to mentor social start-ups. In terms of new funds, IDG Ventures and 500 Start-ups announced their new funds while Hyderabad’s agri-research firm ICRISAT planned a Rs 100-crore fund for small businesses in agriculture and nutrition space. On the IPO front, there wasn’t much action except electrical equipment maker HPL Electric & Power filing for IPO.

Fundings

Ratan Tata invests in packaging material maker Bollant

$10 m Tiger Global invested $10 million in online

` 300 cr.

entertainment venture The Viral Fever.

$12.5 m

E-commerce logistics firm Xpressbees raised around $12.5 million from SAIF Partners, IDG Ventures India and other existing investors.

` 338 cr.

Myntra received Rs 338-crore investment by Flipkart, as per Registrar of Companies filing, to boost its leadership in online fashion segment.

Paytm raises Rs 300 crore in loan from ICICI Bank in two tranches.

Industries, retail tech startup SnapBizz and home rental marketplace Nestaway Technologies. B2B marketplace Indiamart raised Series C funding led

` 450 cr.

Flipkart raised Rs 450 crore from HDFC Bank by pledging fixed deposits.

by UK-based venture capital firm Amadeus Capital. Actor Dino Morea invested an undisclosed sum in Mumbaibased digital content firm Vertuals.

Funds Launched Early-stage venture fim IDG Ventures India launched its third India-focused $200-million fund called IDG Ventures India Fund III LLC.

Silicon Valley-based venture fund and accelerator 500 Startups launched $25-million fund for India, Sri Lanka and Bangladesh.

$25 m

` 100 cr.

Hyderabad-based rural focused agricultural research firm International Crops Research Institute for the Semi-Arid Tropics (ICRISAT)’s incubation arm is planning a Rs 100-crore fund to help small businesses in the segment.

Infographics: Manish Raghav

$200 m

Source: Online (recent and most prominent deals between 15 Feb. & 15 March 2016) APRIL 2016 ENTREPRENEUR

MONEY

ECON

START-UP FINANCE

startup finance

Create a Starring Pitch HOW TO USE VIDEO TO ASK FOR CASH.

By Michelle Goodman

hen flixel began hunting for $1.5 million in seed funding

in late 2014, it followed a well-worn path—sending a pitch deck to investors, waiting…and hearing nothing. So the Toronto-based company reassessed. CEO and cofounder Philippe LeBlanc read that investors spend less than four minutes scanning a deck, and he wanted to make the most of that time. “As much as investors are

looking for an ROI,” he says, “they have to empathize with the mission of the company and the founders.” So Flixel led with a video instead of its deck. The company had an advantage: It sells tools to make cinemagraphs, digital still photos with a smidgen of movement, and video showcases that product well. But a creative visual pitch can work for anyone—and it certainly did with Flixel, which pulled in $2.2 million. Here’s a breakdown of its successful pitch.

PICK YOUR MEDIUM

Video was the obvious call for Flixel, but maybe infographics, animations, apps or 3-D printed prototypes are better for you. Thomas LaVecchia, founder and president of X Factor Digital Marketing in Summit, N.J., has made all these for startup pitches— and says that there’s no limit to creativity, so long as the product is polished.

SHOW IT TO OUTSIDERS 1:14 CEO explains Flixel’s origin: He discovered and fell in love with cinemagraphs but was unable to find any easy tools to make them.

5:43 Former CCO flies to L.A. on his own and strikes a deal to potentially save Flixel. Everyone celebrates because…

2:42 The team expands. Video introduces Flixel’s CTO, who discusses the challenge of making this brand-new tech.

DON’T RELY ON FLASH

Investors want an authentic story about the evolution of your company, not rah-rah propaganda, LeBlanc says. Flixel’s video includes details of how the company ran low on funds, almost shut down and pivoted— good insight into how its team responds to adversity, and how its product was honed.

5:50 …Flixel is used on America’s Next Top Model! Its host, Tyra Banks, becomes an investor. Millions see the tech on TV.

DON’T BLOW IT UP (YET)

2:51 Flixel’s first vision was to be a social network: It would do for moving images what Instagram did for filters.

6:59 Flixel wins an Apple Design Award, the “Oscar of the software-developing community.”

4:23 Its new app gains 100,000 users in three weeks but is undercut by a competitor. Flixel’s CCO leaves to save the company money. 8:05 Flixel becomes a top-selling iOS app and is embraced by brands as a new ad tool—the “aha moment,” the video says. 78 66

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Before you put your video out there, “run it by someone who knows absolutely nothing about your business,” says Sean Higgins, whose St. Paul–based software startup, Ilos Videos, raised $700,000 using a video presentation last year. If an unbiased outsider took away the key points you hoped they would, you’re doing good.

Still hearing crickets? Instead of jumping to blame the medium, take a hard look at what information you conveyed. The first version of Ilos’ pitch video omitted critical customer and product development details, which confused investors. “If we didn’t correct that mistake, we never would’ve closed that $700,000 round,” Higgins says.

TECH CALL TO ACTION : THE X-FACTOR IN SPURRING CONVERSION RATE THE FIX

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he reason entrepreneurs love testing so much is that reflects how the digital age makes it easier than ever to be an effective marketer: You no longer have to make your best guess at what will resonate with and convert customers; you can test your way to real-time, actionable results. The tool? A/B testing that compares the data from two versions of your webpage or app or - the focus here - your call to action (CTA) to learn which one performs better.

Yet, while it’s possible to A/B test everything, the reality is that most businesses don’t have that kind of work/ time investment available. Add to that the proposition that you need to be able to test one changed element at a time –or else you won’t know what’s making a difference – and it’s no wonder that proper A/B testing often gets shoved to the backburner – despite the fact that it can boost conversions by as much as 25 percent. The good news is, even the smallest things can make a big difference when it comes to A/B testing. So, where’s the simplest place to start? Look no further than your humble CTAs. Here are three things to keep in mind when drafting new CTAs to test.

1. Inspire action Submit Now. Download Whitepaper. It isn’t called a CTA for nothing. Remember: You’re asking customers to do something; your copy should not only give direction, but should also hint at what they can expect to get out of this exchange. In fact, adding just one word after “Submit” on a button can boost conversion rates by 320 percent! When writing your CTA, lead with a verb, and don’t be afraid to tailor it 80

ENTREPRENEUR APRIL 2016

to your brand or target audience. While “Sign Up” is a perfectly acceptable and universally understood form of action, you should jazz it up, depending on the industry or customers’ expectations. Try out more fun or specialized actions, like Stay Connected, Get the Scoop or Be More Awesome, and see what attracts the most interest. Also,

experiment with adding copy that expresses a sense of urgency or highlights your unique value prop (Get A Free Quote Now).

2. Keep it simple

Make simplicity a priority, and test variations to find out exactly what that means to your target audience. Start with best practices (which usually tag effective CTA copy at two-to-five words, max), and then present the simplest of directions in new ways: more/less descriptive copy, varying button sizes, difference color schemes, etc. So, you will need to be especially mindful about the context you provide before you ask customers to act, and to focus on the most intuitive experience for your specific user (you can’t expect people to “Sign Up Now” before they’ve had a chance to learn about whatever it is you want them to sign up for).

3. Make it personal

Writing CTA copy in the first person that is, changing “Make Your Profile” to “Make My Profile” – also helps to frame the whole experience as if it were designed especially for your customer’s wants and needs. Even if first-person copy seems like something that is out of place with your brand or vertical, it’s one of the easiest copy tweaks you can test – and, honestly, you have nothing to lose in testing it out. (a 90 percent increase in clicks, anybody?) In-depth A/B testing never ends; there’s always a new style of layout, color scheme, banner or button size that might bridge the gap between abandonment and conversion. Luckily, strategically placing those hard-working CTAs, e-mails or ads around your website is one small, easy change that might change a lot. So, get started!

Zubin Mowlavi is an entrepreneur, musician and innovator. He is the Founder of Lucid Fusion, a full-service digital agency, Co-founder of LFPR, a full-service public relations firm, Co-founder of myStorey, a social commerce start-up, and Departure, an electronic dance band.

FOR THE

www.entrepreneur.com Find answers, discover solutions and explore new ideas to keep pushing the boundaries of your business.

TECH

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By Rustam Singh

Just bring your phone’s camera over text – and get instant translations into virtually any language – without the Internet or processing time.

DITCH YOUR TRANSLATOR

lthough augmented reality and Optical Character Recognition (OCR) technology have been around since long, the implementation in real-time translation apps has been nothing less than magic to witness. Ever since Google Translate acquired Word Lens’s technology, it has offered what no other translation app offered at that point in time, and quite literally revolutionized the way we understand communication. This has opened doors for changing the way businesses interact with each other, especially valid in a global scenario because translation and communication is now instant and without processing time. Not only does it open doors for international communications between individuals and businesses, but also offers options for inter-state communications – in the language of our preference. Here’s what the free Google Translate app is offering:

REAL-TIME TRANSLATION – WITHOUT PROCESSING TIME 82

ENTREPRENEUR APRIL 2016

There is less than a second’s delay is translating text. It works seamlessly, changing text in real time and the difference in processing/loading is not visible to the user. This eliminates the need to type out characters or copy paste e-mails – just hover your phone’s camera over and get real-time translations.

MULTIPLE INDIAN LANGUAGES

beforehand. Once loaded, you don’t need the Internet to translate anymore. The process is seamlessly quick!

PRECISE OCR

The OCR technology is remarkably accurate in picking multiple languages and picks from almost all possible font styles and formats.

The visual translation includes Indian languages, such as Tamil, Telugu, Urdu, Punjabi, Pashto, Marathi, Malayalam, Hindi, Gujarati, Bengali and Arabic, and is constantly including more. Businesses can now seamlessly communicate without manually typing/copying pasting translations.

AUTOMATIC LANGUAGE DETECTION

ACCURATE TRANSLATIONS

All language packs and the app itself are complete free of charge. You don’t need a license or pay any subscription fee. The crevasse of language in communications has finally been conquered in a seamless, easy and free manner, in a simplified technology that even those without technical skills can use.

The translations are surprisingly accurate – even for Indian languages, both grammatically and contextually.

NO INTERNET REQUIRED

Each language pack weighs around 3MB – which can be downloaded over WiFi

Seen a sign board, business card or printed text on a screen or in real life but have no clue what language is it? The automatic language detection of the app is faster than you can process.

FREE OF CHARGE

STARTU START SATURDA SATURD STARTU START SATURDA SATURD SATURDA SATURD

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DO YOU THINK YOUR STARTUP HAS THE RIGHT INGREDIENTS TO BE THE NEXT BIG THING? IF SO THEN COME PITCH YOUR STORY TO US AND WE JUST MIGHT FEATURE IT IN OUR MAGAZINE AND WEBSITE.

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FIND A BOOTCAMP THAT TURNS YOU INTO A PROGRAMMING WIZARD

As a hardcore tech entrepreneur, e-learning courses for programming can be great but that’s just scratching the surface. Beyond that lies intensive training programs like coding or programming bootcamps that impart training relevant to changing technology and market demands. Meraj Faheem, a Hyderabad-based serial entrepreneur and the Founder of The Hacking School – India’s first coding bootcamp in 2014 as he claims, highlights the path to finding the right bootcamp.

By Sandeep Soni

Do you find bootcamps similar to traditional technical institutes or MOOCs (Massive Open Online Courses) teaching coding?

Technical institutes or MOOCs impart theoretical knowledge, but at bootcamps, you get down to building your product from day one. While the fundamental concept of coding makes up for around 20 percent of the theory, the rest is practical. These are very rigorous and immersive around 11 hours, six days a week and 10-15 weeks duration programs where you have to fully dedicate yourself to it. You can’t log in and log out like in online courses. Moreover, charges for such programs run up to a lakh and above in different bootcamps. During the program, there is an instructor who would always be standing on your head and checking the daily progress of your product. Moreover at institutes, there is a set pattern of coaching, but at bootcamps, you can work on the user interface of your product on one day, on the backend the other day, etc. So you learn to connect things and that’s what required in doing a start-up. What happens at training institutes is something similar to what can happen in a well-structured center of an MNC.

Does that eliminate the need of a tech co-founder?

Most of the entrepreneurs join bootcamps because they either fail to team up with those who might be interested in their ideas or their team members seek equity in the company. While through bootcamp you would be able to build the initial two-three versions of your product or a Minimum Viable Product but that doesn’t mean you don’t require a tech co-founder.

On the entrepreneurs’ part, what’s important before he/she joins a bootcamp? 84

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The most important thing is applicant’s zeal to complete the bootcamp. Also, there are lots of people who join bootcamps to enhance their chances of job placement or they find learning coding as cool, so that shouldn’t be the case. On the other hand, there are many who are very motivated about programming but don’t know anything about it. That is the motivation required because these are the people who are most likely to complete the program.

In terms of bootcamp, what’s important for entrepreneurs to know?

Some of the things to look at are first, understand which language you want to learn or which one is easier to learn. Don’t focus on the one in fashion. If you have a non-tech background, you should be concerned about whether you would be able to learn the language in the limited time. There are different bootcamps focusing on different programming languages. For example, we focus on full stack JavaScript programming, while others focus on Ruby on Rails, etc. Second, what kind of programming fits you better – agile or competitive? In agile programming, you have to keep improvising and optimizing your product daily.

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Slumdog ‘Adtech’ Billionare Had Ambarish Mitra not dropped out of his school at 16, he probably would have been an engineer living off a handsome six-figure salary, which he never wanted because of his love for the Internet. So he started with being a runaway teen, a slum dweller, a magazine subscriptions seller on Delhi streets to a tech entrepreneur at 17 in 1997. His story, now with UK-based Blippar – a global $1.5 billion valuation visual discovery app, is nothing short of a classic rags-toriches tale. By Sandeep Soni & Sneha Banerjee

fter doing a couple of tech start-ups including an IPO in 2000, few tech jobs in start-ups and an insurance company AXA in London, Mitra’s next big eureka moment came in 2010 in the form of augmented reality, image recognition and machine learning. He along with his friend Omar Tayeb (now Cofounder and CTO, Blippar) were having drinks in a pub in one of south-west England’s remote village when the duo Ambarish Mitra, came up with the idea. Co-founder & CEO, “Blippar was literally born Blippar out of a joke. Looking at the £20 bank note that I put down for the bill, I cracked a joke to Omar that imagine if the Queen of England came out of it; but Omar, who had a dark sense of humour, took the joke too seriously and built the first prototype of Blippar app,” says Mitra. The trick brought queen to life by rendering the image in a 3D animated form that eventually turned into a business idea – an augmented reality and image recognition-based visual discovery browser that makes images more interactive for businesses advertising their products. The app gives information including pictures, web links, videos and games on the top of any image when scanned through a smartphone or tablet. This drastically

ENTREPRENEUR APRIL 2016

helps advertisers and their customers’ ad experience.

From Nowhere to Somewhere

However, things didn’t change overnight for Mitra and Tayeb. The technology that they were thinking to be a possible disruptor wasn’t enough for people to buy into their idea. “I went to more than hundred businesses but all of them asked me about my users, team and investment. The doors were just closed for us,” says Mitra. Nonetheless the last six companies he met agreed to his idea. One of the fascinating things Mitra remembers in Blippar’s journey so far is acquiring its bigger competitor Layar in June 2014. The acquisition catapulted Blippar into one of the dominant AR start-ups globally. “People thought Layar would buy Blippar not vice versa,” says Mitra who now has 14 offices across the globe.

The Minimalist Achiever

AUGMENTED GROWTH USERS – 65 m globally, 1.5 m nationally. To reach around 4 m by 2016 end. CLIENTS – 1,000+ including CocaCola, TIME, Pepsi, Nestlé, Jaguar and Disney. HEADCOUNT – 320 PRESENCE – 14 offices, including the UK, US, Netherlands, Turkey, India, Singapore and Japan. FUNDING – $54 m in Series D round led by Khazanah Nasional Berhad, strategic investment fund of the Malaysian Government. APP RATING – 4+ (iOS), 3.4 (Android), 2.7 (windows)

Despite a hockey-stick growth in his fortunes in just a decade, Mitra feels more connected to life’s bigger purpose than his business and values the power of relationships and culture more than money. Business for him is just one of the ways to fulfil that purpose, and that ideology is probably a reflection of his humble roots. “I am minimalist. I don’t have a single chair for myself across 14 offices worldwide. I sit on random tables and work. I don’t own any real assets like bikes and Ferraris. I don’t have any property. I can pack my entire life into three suitcases,” says Mitra. Going forward, Mitra is certain that Blippar will have a lot of impact on civilization digitally. In terms of numbers, Blippar saw 200 year-onyear revenue growth in 2015 with 65 million users globally.

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GET YOUR SMARTPHONE TO RUN YOUR BIKE By Sneha Banerjee

ltraviolette Automotive (UA) Pvt. Ltd, jointly formed by Narayan Subramaniam, Preetham Murthy and Niraj Rajmohan, aims to cater the market of urban commute with its dual vehicle that provides users with multiple modes of riding. The trio, who carries friendship since childhood, is betting on the gradual shift towards clean and pollutionfree vehicles in Europe and the affordability of their dual vehicles in the future. Twister, is a revolutionary vehicle that offers flexibility between motorized biking and manual cycling. This bicycle-bike

dual mode concept is a recipient of the “Excellent Design Award” at the Taipei International Cycle Show 2016. It has also been shortlisted as one of the top 10 contenders for the Move Awards 2016, a prestigious European Design Award. Inspired by the Aerodynamic hollow pneumatic bones of a Falcon, the unique design of Twister is centered along an oblique axis. The center of the body swivels 180 degrees providing for the two modes. The vehicle transforms into a bicycle in one mode and can be used as an electric bike in the other.

Another Pathbreaking Idea

Glide, another product in the making is a compact and lightweight personal mobility vehicle. It uses body pressure to navigate and enables self-balancing, and it takes very little time to get accustomed to it. It requires minimum effort and the company claims it can be used by people of varying age groups and sizes. Glide aims to minimize time and effort that goes into first mile commute. All of UA’s vehicles are going to have high-end IOT interface – which means your smartphone could be used to access your vehicle and also connect to the company on a real-time basis. The company plans to enter the European market with Twister and aims to build a niche brand of products in the automotive sector. But why Europe?

Because the continent has the biggest market for niche automobiles and one does not have to compromise on the price. Europe also has a very advanced transportation network in place that will support the usage of a niche quality product. After entering the continent, the company aims to beef-up its supply chain and lower its costs before it could enter the Indian market. UA expects the “Make in India” concept to be very beneficial to them because wherever they decide to sell the product, the manufacturing process will begin with India. UA raised its initial round of funding through family and friends and is looking to raise another round of funds very soon. The team plans to launch Twister by 2016 end.

1. ULTRAVIOLETTE- GLIDE SMART PERSONAL MOBILITY First - Last Mile commute (House - Train - Office) Highly compact & lightweight personal mobility vehicle High Technology - user experience focused vehicle 2. ULTRAVIOLETTE TWISTER New Age Urban commute bike - Offers you the flexibility between motorized biking and manual cycling When you want to save time, ride it as a motorized bike When you want to burn some calories, flip the frame and ride it as a bicycle.

To be launched in European markets in 2017, priced between $3,500 & $5,000.

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editorial@entrepreneurindia.org

FRANCHISE FOCUS

SEEING THE RIGHT PROPOSITION While working at Microsoft as a Product Manager Peyush Bansal got an overdose around consumers spending hours and hours with them on how to make their life incrementally better. That excitement made Peyush think about making life revolutionary

Peyush Bansal, Founder & CEO, Lenskart

better, which turned out to be his entrepreneurial moment. Today his company Lenskart has changed the way people buy eyewear. Bansal shares how franchising has supported the growth of this e-commerce giant. By Punita Sabharwal

From closing Bagskart, Watchkart Q and Jewelskart, what led you to focus on Lenskart?

The opportunity in eyewear was surprising us again and again. The problem, which we are solving, is attempted by nobody. Moreover, we saw that trend coming along our way. And we didn’t want to be distracted. It was not about other businesses not making money. It’s about keeping focus on where are we creating maximum value for consumers.

Q A

How has been the growth with Lenskart?

Right now, we are the largest in eyewear in online plus offline. We are shipping close to 5,000 specs a day. Offline, we have about 150 stores. They are all franchised. The way it works is people actually go to stores, they can have a look at our range and they can book orders with us online and then we ship the specs to them. That has turned out to be a beautiful opportunity. Average store size would be about 300-400 sq. ft. which is half the size of a typical optical store. It works really well in terms of branding and conversion.

have achieved expansion at a QYou fast rate. How did it happen? 90

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Incepted in 2010,

Lenskart servicing over 5000 customers a day The company witnessed 200% YoY growth in the last 2 years. The company has close to 1200

employees now. The company has around

150 stores at

present.

Lenskart plans to expand it to about

1,000 stores.

We don’t make any specs at the store. Typical businesses have to worry about larger spaces, inventory, fitting equipment, eye-testing guy, etc. But in our case, you don’t have to worry about; you are just assisting people to place orders online. You just have to do all the work centrally. Every month we are opening 12-15 stores. We are in around 55 cities.

keeping the QWhat’s franchisee hooked?

The brand is there, consumption is there, the product is 10 times better with 10 times lower price. The moment a franchisee opens a store, customers flood in. Franchisee

An entrepreneur’s job is like to be that of a farmer’s because you need to know when to sow, when to reap and when to cut. If you don’t know these three, you will keep sowing but you will never get the crop.

are making money, their ROI is much higher. We give 60-70 percent ROI every year versus a 8-9 percent they would get in a bank. We tell them go ahead and we will support you. One of our customers became our first franchisee. More than 50 percent of our partners are those who were not businessmen.

Q A

Is the manufacturing done in-house?

One thing we don’t like to risk is manufacturing. Our investment in our manufacturing plant is highest that anybody has ever done in the Indian optical space. It’s about Rs 60 crore. We never shied away from investing in our

backend infrastructure. The frames that you get are designed by us. But they are not made by us, they are made in China, Italy and Korea. The lens, on the other hand, is manufactured by us. The cutting of lens and putting it in a frame, I do myself.

QTell us about the funding. A

There is IDG. We have our early day investors till date. Ronnie Screwvala is a great partner, mentor and friend. I met him when I was looking to raise Series B. We have raised $22 million from TPG. We have begun talks for raising another round.

is your main QWhat challenge at this stage?

I think finding great people are one of the most challenging parts. It takes years to build the right team. Organizations are seldom built by an entrepreneur. I haven’t even opened a single store. I have not even visited more than 10 percent of my stores. I should have enough faith in the person building the store. After 150 stores, I should know how to get to 1,000 and for that we need to get different type of talent. That is most challenging.

APRIL 2016 ENTREPRENEUR

LIFESTYLE Learning from the Unconventionals SUCCESS MANTRAS

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The secret to leadership is no secret; you just have to be receptive. Inspiration can come from different walks of life – you just have to keep your eyes and ears open. Here’s what the non-entrepreneurs can teach you. By Punita Sabharwal

Learn it the ‘Maahi’ Way Being an entrepreneur is almost like being a captain, where you have to lead as well as perform.

Mahendra Singh Dhoni, Captain, Indian Cricket Team

veryone vouches for captain cool’s confidence and leadership that make team India win. The way he shows magic in last overs of many matches marvels his presence of mind. We always see him smiling even in crucial situations. He always has plans and takes calculated risks.

Lead by example

Dhoni is not one of those who just lead without delivering. He gets his hands dirty and 92

ENTREPRENEUR APRIL 2016

every time showcases what it takes to win, inspiring his team to follow him. The best captain of the Indian cricket team till date truly knows his hard work is the biggest inspiration for others.

Keep calm, I’m the captain

Calmness is Dhoni’s swag. He really knows how to keep his head firmly on his shoulders. This coolness has only helped the team in sticking together and performing under adverse

situations.

We before Me

The best trait Dhoni has shown so far has been giving credit to the whole team and taking the blame on himself. Only a man of courage knows how to do it. This essential trait makes him a winning leader. This builds mutual trust and respect.

Know thyself

A captain knows his best traits as well as worst ones.

The way he arranges the batting order and makes onthe-spot decisions has paid off well. He has rediscovered and adapted himself in every situation. Mahendra Singh Dhoni has been quoted in the media earlier saying, “I believe in giving more than 100 percent on the field, and I don’t really worry about the result if there’s great commitment on the field. That’s victory for me.”

“Confidence, perseverance, persistence and knowledge are the pillars of success” Launching your business is almost like launching a space mission; sitting at the helm is the founder and the astronaut in the latter. Here’s what entrepreneurs can learn from an astronaut.

lying an airplane was not something Capt. Sunita Williams had done earlier. In her words, “Never be afraid of trying something new. It was something that I had never ever done but I said, ‘Let’s try.’” It is possible to achieve anything if a person is qualified and determined with the will to make the right decisions. A person should aspire to try out new things and Capt. Sunita Williams, American explore new opportunities. Confidence, astronaut of Indian perseverance, persistence and knowledge play origin a key role in achieving the most challenging feats, said Capt. Sunita Williams, NASA Astronaut at an interactive session on women empowerment organized by FICCI Ladies Organization. Capt. Sunita Williams is an American astronaut of Indian origin. She is the second woman of Indian heritage to have been selected by NASA for a space mission after Kalpna Chawla. She holds three records for female space travelers – longest space flight, number of space walks and total time spent on space walks. Here’s how she’s creating entrepreneurial motivation. Having witnessed the spectacular view of 16 sunrises and 16 sunsets in a day while on her mission to space, Capt. Williams was of the view that nothing was impossible. Considering herself as a girl next door, she said that opportunities were aplenty and the need was to grab and explore them. She added that it was important to be a good student as it opens doors of opportunities. Speaking about her experiences in a male dominated field, she said that she often found herself in a minority but it never deterred her or interfered with her goals. She knew her tasks well and was competent to take on any challenges. Capt. Williams added that every woman brings to the table team work and willingly takes care of the team as it’s her innate nature. While narrating learning from her numerous space explorations, Capt. Williams said that these experiences had taught her to be spiritual and realize that it would be in the interest of the humanity to preserve earth. She added that

there was a need for all to be a little more friendly and understanding towards others. After all success stories, Capt. Williams has not changed as a person. As per her, “When you are up there for a long time, when space becomes your home, you realize how trivial everything is. It doesn’t matter if you are from country A or B, what matters is that you are from planet Earth.” She still carries Bhagvad Gita and samosas to the space.

APRIL 2016 ENTREPRENEUR

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The Real Mountain Man

BOOKS

Short, lean, dark-complexioned Nawazuddin Siddiqui is truly an antithesis of a Bollywood hero. It’s not just his appearance that lets you decide his fate but his background of coming from a poor family from a UP village. It took him 14 years to get recognized in Bollywood.

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THE OTHER SIDE

he rags-to-riches story of Siddiqui is soon coming out in the form of a book. At the recent Spring Fever 2016 by Random House, he spoke about his struggles. Entrepreneur features a few learnings he has to offer.

Giving up is not an option

When asked after all struggles and disappointments why he didn’t go back, Siddiqui answers, “This fear ensured that I never returned. The struggle is for everyone. Even star kids have to struggle. Their dads can make just one movie for them.”

Persistence pays

He went through a lot of struggles before he got the opportunity to prove his mettle in Gangs of Wasseypur. From a village to Bollywood was not an easy road. Success eluded him for many years but it was his persistence that actually paid off. Lesson learnt: keep knocking the door until you get an answer.

Pursue your dreams

His life has all been about pursuing your dreams relentlessly. “I never wanted to prove anything to anyone. I worked very hard – more than any other actor. I was happy to do even one. I wasn’t aiming to become a star I wanted to be honest with the scene,” he says.

Chetan Bhagat, Author

Nawazuddin Siddiqui, Actor

Lessons from the Reading Room

You may love him, you may hate him, but you can’t ignore him. That’s Chetan Bhagat, the celebrated author for you. He has some real life lessons for entrepreneurs.

Follow your dreams

Chasing his dream as an author, led Bhagat to quit his job and pursue what he wanted to do in real. His success story only instills the fact of pursuing your passion wholeheartedly. His life journey has been about following your heart and passion.

A marketing genius

He has been able to build a brand through his books. He surely knows how to tailor-made his product as per customer choice. His books may not be perfect A-class literature but he knows his target consumers very well.

You don’t need to be perfect

Being successful has nothing to do with being perfect. He is a bestseller but that doesn’t mean he is the best writer. He confesses not being the best student or best in writing. APRIL 2016 ENTREPRENEUR

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BOOKS THAT INSPIRE ME Ankur Warikoo is the Co-founder & CEO at Nearbuy (formerly Groupon India). He holds a Management degree from the Indian School of Business. He also holds a Master’s degree in Physics from Michigan State University. Here he shares books that always inspired him.

Rework

By Jason Fried & David Heinemeier Hansson This book changed me completely. It reflects the new age of work, especially for entrepreneurs, where past notions are challenged. My two best parts of the book are “Everything is Marketing” indicating that every single interaction with a customer is marketing, not something that is a department’s KPI, and “ASAP is poison” – laying emphasis on the fact that false urgency almost always leads to wrong results.

ENTREPRENEUR APRIL 2016

Hard Thing About Hard Things By Ben Horowitz

This is the naked truth about entrepreneurship. The book tells you that the world of entrepreneurship is not glamorous at all. It is really hard and unusual for someone to even choose the entrepreneurial path. But some people do and so did Ben Horowitz. He shares his story, and it is amazing how much I relate to it each time I read the book. Have read it seven times already and whenever I am struggling with a question, I refer to portions of it.

Ankur Warikoo, Co-founder & CEO, Nearbuy (formerly Groupon India)

Zero to One

By Blake Masters & Peter Thiel Peter Thiel is what I call a “theorizer.” He has the ability to convert his experiences into theory and share it in a way that seems like a course. That’s what Zero to One is all about. It is like a how-to-guide for start-ups, focusing on what is important by breaking several myths. I personally loved the “Building a Monopoly” section that suggests that going after a really big market isn’t as valuable as building a monopoly in the market you are in.

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AGE : 26 FAVO RI TE S P I RI T: Wine FAVO RI TE CUI S I N E : Thai FAVO RI TE G AD G E T: Iphone 6s plus FAVO RI TE S P O RT: Cricket WO RKO UT RO UTI NE : Yoga and swimming TH E WAY I UN WI N D : Catching up on classic movies I S P LURG E O N : New gadgets and accessories P E RSO NAL MAN TRA: Stay positive in all situations P L AY I N G SAXO P HO N E I S L I KE : Being able to express myself better by Punita Sabharwal

I G OT I NTRO D UCE D TO SAXO P HO N E : I have been a jazz and blues music fan and loved the jazz festivals I attended in New Orleans. So I decided to give learning saxophone a shot. MUS I C TO ME I S : My moment of peace

Vishesh Goel, Founder, FitMeIn

Always in Harmony

Vishesh Goel was a CA by profession and is an explorer at heart. As a consultant with Ernst and Young, where he spent six years, Goel was learning the tricks of the trade; but he always had an eye for entrepreneurship. The seed to his idea (FitMeIn) was planted when he was slogging for 14-16 hours a day at his workstation without any physical activity as such and was only getting into new and bigger pants on a monthly basis. He opted for fitness centers to help him de-stress. However, he was only bogged down by the rigid and stringent norms of these centers. Flexi work hours was still an alien concept back then. That is when he thought of FitMeIn. During his hectic work schedule, he takes out time for a game of Lawn Tennis and would love to go about the unfinished business of learning to play the Saxophone. By Punita Sabharwal

VOLUME 05, NO. 4, April 2016 issue, and it contains 100 pages including cover. 98

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