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Ask For Help / Startup

30 Crore Salary: NO PROFITS: NO PLAN: IS THIS A SCAM? FUNDING TO DO WHAT?

Hi Everyone,

I hope your startups are ROCKING and creating value! Will you pay me a salary of 2.5 Crores/Month if I promise to help you SPEND 3000 Crores of Funding money every year, create fancy PPT’s, and execute MASTER PLANS because I have BLAH BLAH Degrees and background?

I am writing to ask for your help as I have been sitting on hot burning questions for a while and thought will float these in this community! In your responses, you can choose to respond to any question(s) you know the answers to! I do not want to raise capital for the heck of it. I want to use money to expand the user base, but am unable to understand how to navigate through uncertainty.

Please see the image to get a health check of the Indian Startups. Everyone in this image is losing heavily! A lot of cash is being burnt. If you cannot see the image clearly, you can also check it here ( http://www.livemint.com/Companies/vtqiTC9VgJgnUfOAH2QdiL/Flipkart-still-Indias-top-startup.html )

See the image( Source LIVE MINT) – I understand that the game requires them to work on valuations but – I wanted to understand-

  • IF these entrepreneurs have gone SO WRONG, why do they get the Million Dollar Salaries?
  • What do you think were the initial projections/plans of companies such as Quikr/Olx? – How long were they planning to run the multi-million dollar campaigns before deciding to make the first sale in advertising? Before burning 50 Crores in Media/Advertising( without any plans to make revenues initially), did they evaluate- “How much can we sell the ads for in the future after we have acquired 100 Million users?” – The assumptions in these will be TOO Broad – with a lot of scope to go really wrong.
  • Flipkart is almost losing. Was everyone betting in plain darkness, and the entire GAME is driven by the valuation or did people( people who continuously kept funding this dream) have actual expectations? – Or Zomato for example- they have 180 crores of revenue and 680 crores of costs. Why will the next round of investors believe their story?

If the executives haven’t created value for the investors, why are they getting 35 Crores/year salaries?

  • I have heard leaders such as Paul Graham/Peter Thiel/Guy Kawasaki suggesting in their videos/blogs that it is quite okay to just let the BUSINESS MODEL Evolve/Grow- and one can wait to figure out the REVENUE MODEL- and many businesses grow in terms of users, but do not want to make money from them initially. Will a VC hear believe this story? Why?
  • What do you think are Quora’s plans? – I understand the business model- but – they can raise 300 Crores without even selling a single Dollar of advertising? They have started inserting TINY Ads right on the main pages. If you are the Quora founder, and if you have 100 Million unique users a month (15% from India), how will you price your Start up? How much Value do you think you will have – Help me understand your calculations. Your analysis and approach are TRULY welcome.
  • If you are the Quora/Olx/Quikr founder, and if you know that you want to build a TAIL of 5 Million Unique Users and get them addicted to your platform before you consider making Money out of them, will a VC believe your story and give you the Cheque- ( And if Not- then what will he look for – besides your background- and your CONVICTION- and your Blah Blah -)
  • What are the parameters for Success and Valuation in these models (When they have not even started defining the Revenue Model?) – How do the investors measure success? (Unique users/ etc. /cost to acquire unique users/# of unique visits/Repeated visits by users etc. – I could think of – but if you have to create an excel sheet to measure your success for next 1 year to 5 Year Horizon- and if you have to start reaching out to people in the investor community as you need investment to acquire more users- on what parameters will you measure your current state/value of the company?

Thank you very much for helping me with these. Your answers will make the scaling up game real for me. It has been very theoretical- and I understand the theory really well- but that has not been enough.

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