The Rodinhoods Open House is always an experience to cherish, because of the varied opinions, startups, people and perspectives that we come across. There is always something to learn, something to disregard, something to let go and something to take away with us. The latest edition saw the highest turnout till date. After amazing posts by Mohul, Manish, Megha, Hardik and Himanshu – I’ll be very brief and cover the key takeaways from all the conversations on stage.
“If you can get away with it, do not raise venture money. Raising funds is not an accomplishment, the journey starts then. The first step, the biggest one, is to start a company. And one has to be really creative then.”
Echoing the opinions of all top entrepreneurs and VCs, Sumant clarified that best businesses don’t need venture capital. Building a business is about making a mark on your own through budget constraints and all the issues everyone faces. Money can be raised to grow and grow fast, if needed.
“Do not try to keep up with stuff others are doing. Focus on your work, avoid a case of irrelevant information overload. Focus on your sector and your ecosystem.”
It is essential to understand what he really means. Read TechCrunch but don’t overdo it by pressurizing yourself with irrelevant news. When that happens, you end up trying doing everything at once, which takes you nowhere. You cannot be into cleaning and repairs at the same time, as a startup. Also, Read TechCrunch because it keeps you ahead of the curve, which helps you as an entrepreneur. Understanding trends in the relevant sectors makes you better than you are. Worrying yourself sick about things that don’t really matter makes you worse.
“How to identify winners? Instinct. Then due diligence to prove it right. Early stage VCs invest in people. A common belief regarding the opportunity in the market proves helpful, since the product/service can change according to the evolving needs.”
Building relationships is about intuition, instinct and then taking steps to validate them. Usually, even in a conversation you’re having with someone you’ve just met, you’ll look for a common thread, an indication that you’re on the same plane. Though it sounds basic, that is how it works 🙂 Ta da.
“What to measure in a growing company?
Look for one metric, that is core to the company.”
I remember this advice given to me by my first seed stage investors. If you look at all the numbers, all the exhaustive spread sheets that run your company, you’ll understand patterns and certain things (keeping costs low, maintaining margins go hand in hand with finishing cleanups in one day with a limited number of people in my case) and that is what you track. Lose track of numbers and company goes haywire!
“Philosophy of losing cash to build something? Depends on investors, stomach for risk, confidence in the market that the product will take off. Their own perspectives matter and since there is a lot of hope involved, justification is needed for losing cash. We need to keep an eye on the amount of value added, and if it is worth it. Often companies have to compromise due to no stomach for this kind of a risk.”
Interestingly, the Indian mentality of playing safe also makes its presence felt in the job scenario at startups. Since there is a certain stigma on failure, we take our own sweet time to grow a business, and to help an employee fit in. Instead, it can be a ‘Quick Hire, Quick Fire’ culture. It is as helpful for the employee (helps him find his sweet sport faster) as for the company (that is bleeding red due to a bad fit). “The same goes for hiring/firing CEOs,” adds Sumant.
“Transitioning out is the term I prefer. Other than clinical reasons and personality problems that come into play while transitioning out CEOs, there is also a case of new skill sets that are required. The competencies required to build a company from scratch (conviction & aspiration) to 50 employees are drastically different from those required for the transition to 200 employees.”
And frankly, this is where TechCrunch and other amazing books & blogs come in.
They help you keep growing.
“Teams are important. Co-founders are especially important because one person cannot build a company. They can talk to each other. Ideally, a startup should have multiple co-founders with one clear leader. It’s important, since it’s very hard to hire senior management in India. VCs don’t want to risk looking for them after they invest. That’s where Angels come in, who bridge you to a gap where you can build a team”
The discussion then veered to the fact that we’re not building many global companies in India.
This is what Sumant had to say,
“It is essential for the startup to be close to their customer, physically close as well. Building a faraway sales force is expensive and not worth it unless you have a strong network in place (Israeli entrepreneurs have a very strong network in the US). Airbnb managed to get off its homeland by building a solid base where it started off then investing money to grow overseas. That is always the second step, priority should be building a formidable fort at home first.”
Insightful and valuable as these pointers were, we discussed the Indian startup scene. Sumant believed that there is no dearth of talent in India. Though there is a culture bias against risk taking, change takes time and the ecosystem will take around 10 years to really evolve.
“Most successful people have one defining characteristic- they live in the moment.
They are acutely aware of what is happening around them.”
It was one of the best sessions with a VC speaking I’d attended, certainly comparable to the stuff you find online. He did have powerful inputs for four presenters as well, which will be shared in my next post.
Thank you Alok, Asha and Akancha for building this platform and adding so much value to what we’re upto. Thank you once again.