There comes a time when all businesses meander. Hence, entrepreneurs must ensure that they are driven and focused for the long haul. It does appear that there is a bubble in India’s consumer tech space as every startup is fixated with raising money. Good old bootstrapping has become passe. Irrespective of the external environment, a smart entrepreneur will always find ways of outperforming.
The investment decision
For me, the equation is fairly simple when it comes to investing in startups. My investment decision is influenced manly by intuition, chemistry with the startup’s team and whether more savvy and knowledgeable people are putting money in that firm. I have had the pleasure of being associated with a few individuals who are true stalwarts in terms of their understanding of markets and the advice they provide. Clearly, Snapdeal co-founder Kunal Bahl is one such person. Manish Godha of Advaiya Solutions and my US partner Vivek Bhaskaran are also true stalwarts. Most importantly, one checks if the investment is ‘affordable’ or not. You then know whether money should be put into the startup.
Specific sectors of interest
In terms of specific areas, I tend to understand B2B scenarios better than B2C. Having said that, I am also associated with consumer companies though not necessarily from an investment perspective but in terms of rendering advisory service and helping with board-level work. So I try to be eclectic and have a certain catholicity in my approach.
Can startups really plan for success?
I believe that success is not foretold. Some folks are lucky while some folks have pluck. Some may have money, other may have connections and then there are those who are just brilliant. The smart folks are the ones who are dynamic and driven. Most investors construct ex post-facto myths about ‘always knowing’ something. The truth is that all businesses meander at some point.
The Rahul Yadav episode: Is it the end of the road for maverick entrepreneurs?
Let me confess that I have no inside information about what went wrong at Housing.com. Whatever I know is from what has been put out in the newspapers. To me, Rahul Yadav comes across as a person who should be lauded and not victimised. He should be lauded for the courage and desire to follow his mind and persist with what he thought was right. In the process, he may have sacrificed the desire to make hundreds of crores. As far as the VC community is concerned, there is nothing sacrosanct about investors or about this ‘club’ that we belong to.
Has bootstrapping gone out of vogue?
You hit the word – ‘vogue.’ Tech people are like automatons (a moving mechanical device made in imitation of a human being) these days. It is insane that every young entrepreneur is talking about Series A or Series B funding nowadays. What people seem to forget is that most successful businesses, including tech companies, are built through the bootstrapping route. You don’t hear about them but such companies do exist. Entrepreneurs are nowadays too caught up in ‘the motions’ and are not focusing on doing what is right.
High cash burn rate
Yes, the high rate of burning cash is always an issue for all businesses. However, I am not one of those who believe that leanness is the right way to go. Sometimes you need to spend heavily to drive results and for attracting the right kind of talent into the company
Are we in a bubble?
In general, I see a bubble for sure in the Indian consumer technology space. So many technology companies out there are useless to say the least. Many people who strut about being the CEO have little metal. It is much harder to be smart in a bubble-bursting scenario than in a bubble scenario. However, the smart ones will do well regardless of the extrinsic circumstances.
If you choose the entrepreneurial way, work and life are not different. Happy people integrate things that matter into everyday life. They do not wait for some future date to ‘live’. I am a happy husband and dad, an avid reader, a writer, a traveler and a serious friend. None of these prevent me from working fairly hard.
American entrepreneurial culture v/s Indian ecosystem for startups
Lexicon wise, there is not much difference between the American and Indian systems for startups. Having said that, there are clear divergences in terms of work culture, pay, office space, transportation and philosophies of openness versus restriction. However, it is not easy to do well in either country. So the similarities outweigh the differences.
(US-based Romi Mahajan is a marketer, advisor, author and serial investor. He is the founder and president of KKM Group, a boutique advisory firm focused on strategy and marketing. He has also worked at Microsoft along with Kunal Bahl, who later co-founded ecommerce marketplace Snapdeal. As an investor, Mahajan’s portfolio includes startups such as Advaiya, Jelli, Tripoto, Socedo and Investing Channel among others. He has put money in over ‘two dozen startups’ in India and the US.)
As told to our Senior Assistant Editor Adith Charlie.