85 Things I learned being a CEO

  1. It is going to be an extremely hard job. No amount of preparation or education is going to prepare you for what it demands.
  2. You will feel like quitting at so many instances. Don’t, just persist.
  3. It’s a lonely job. There will be no one who you can tell everything about your work.
  4. Uncertainty is the hallmark of entrepreneurship. You have no guarantee that you will last a year, at times a month and sometimes even a week. Learn to embrace this uncertainty.
  5. You will wake up crying at times. Don’t fret about it, deal with it.
  6. If you are married, your spouse will play a very crucial role. They are going to be the only person who you can tell everything. They can give you the third-person view to take unbiased decisions. They are going to be your rock when you are the lowest.
  7. Being a CEO is all about transitioning from doing everything in the early days of the company to delegating everything as the company matures.


Key Responsibilities

  1. You are going to make a lot of decisions in the company. If you are overly careful in your decision making you will slow down the growth, if you are too impulsive you will end up taking the wrong decisions.
  2. Setting the vision and talking about it is your responsibility. You cannot crowd-source the vision from your team. You must listen to everyone but at the end you set the vision.
  3. You define the culture and most importantly you guard it. People will ultimately emulate what you do.
  4. As a founder-CEO it’s your number 1 duty to ensure that the company never runs out of money.
  5. CEO should always be involved in the product. You can go away from any other function but not product.
  6. The success of your organization depends on how well your team is equipped. No one comes knowing it all at the job, it’s your responsibility to ensure that you train everyone.

Decision Making

  1. You will never have the complete information that you need to make decisions. Your gut/hunch will play a big role in such situations.
  2. It may sound counter-intuitive but gut-thinking can be developed. Great founders take right decisions not because they have all the information but because they have vast amount of knowledge. That’s what constitutes the gut-thinking.
  3. You will be wrong more often than you will be right. The trick is to detect your mistakes early, learn from them and never repeat them.
  4. You must stand by the wrong decisions you make. People will respect you if you are willing to accept your mistakes.
  5. Take time to explain your decisions. People around you need to know what is the thought process behind your decisions.
  6. Don’t fall in the trap of over-deliberation. Most of the times speed is more important than the right decision. You will always get time for course correction later. Good is better than best.
  7. There will be times when you are going to take decisions that nobody will believe in. If you have 100% confidence in yourself, go forward unabashed, because no one else has the full picture other than you.
  8. When taking strategic decisions, step out of your day-to-day operational work. Decompress completely. Swipe the board clean. Forget everything that’s going on currently. And then think about whatever you want to think. Think, how your future will change if you take this decision and not what benefit your present will get out of it.
  9. There will be some decisions that can significantly alter the direction of the company. You can’t always white-board a conclusion out of them. At times, you need to mull over them, you need to let serendipity happen.
  10. All good decisions seem obvious in hindsight because it’s easier to explain a chain of events, rather than predict one. Don’t mistake yourself in believing that you have found a pattern.
  11. For decisions like letting a misfit go, shutting down a product line etc. it’s always better to do it sooner rather than later.

Culture

  1. You are the guardian of the culture. You define what is to be appreciated and what is not acceptable. If you don’t do it ardently you are fucking up the culture.
  2. It’s always easier to hire people who believe in your culture than to try and convince non-believers. If someone doesn’t fit your culture, don’t hire them no matter how good they are on skills.
  3. You have to speak, shout, repeat, chant, recite and roar about your culture. Culture becomes culture only when it’s spoken about all the time.
  4. There is no definition of what a good culture is. More than being Utopian it has to have universal resonance.
  5. Your culture is never set in stone. The basic tenets will be defined but the shape and form of culture will rapidly evolve as the company grows.
  6. A good culture must breed 2 things — respect for each other’s work and open communication.

Leadership

  1. Soon you will realize the impact you can create through your individual contribution is meaningless when compared to the impact you can create by leading people.
  2. The best way to lead is to lead by example. A good leader tells you how it’s done, a great one shows you how.
  3. As a leader, the biggest thing that you can give your team members is your time. A lot of them will go through a bad phase or will be clueless about what to do. At those times, they need to know you are there.
  4. People will look up to you. At times, even for things in which they are far more skilled than you. You don’t have to take their decisions, just provide them your confidence so that they can take their decisions.
  5. Good leadership is when people are not afraid of bringing bad news to you.
  6. Politics starts at the top, if you start taking sides, everyone else in the company will too.
  7. In no situation can you afford to shout at your people. Things will go wrong, you will loose your calm, you can be stern with them but not disrespectfully shout at them.
  8. People need inspiration. To be a leader you will have to inspire them and it’s best if you do it by story-telling.
  9. Talk to/address the entire team at regular intervals. The format and frequency depends on you. It could be for 30 mins every week or 3 hours every month. I do an ‘All Hands’ every month. It has been 3 years and the All Hands has always had above 80% attendance.
  10. Very few employees are going to critique your decisions, particularly if you are a vocal leader. It’s very easy to get blindsided because you will rarely get a critical feedback. There are two ways to mitigate it a) have a close network of advisers who can say harsh things to your face b) consciously create a culture where people are not afraid of you.

Self-Management

  1. The first thing you need to learn is how to manage your time. Your time is a scarce resource, you must be very protective about it. Say no to anything that doesn’t add value.
  2. Learn to manage emails. No matter what communication tools yor organisation uses, you cannot escape emails. This particular trick has been extremely useful for me in managing my inbox — https://blog.hubspot.com/sales/email-multiple-inboxes#sm.000a54r0d14a2ct5r3d1yoluod5vf
  3. Manage your calendar — every Sunday spend 30 minutes analyzing your calendar for the week.
  4. Learn to manage your cash-flow situation. You need to keep track of the following every month — cash outflow in the month, revenue collected in that month, money spent on salaries and money in the bank. Setup a process so that you receive this information regularly.
  5. Every thing that goes on in the company will come to you. Very soon it becomes over-whelming to manage this information barrage. You need to learn to deal with it.

People Management and HR

  1. Hire a HR early in your company. 30 employees is the right stage to hire a HR.
  2. The sooner you introduce an objective performance management system, the better it is. In the early days you know about what everyone is doing, but as you grow you will loose control. The right stage for introducing a formal process is when you are 40–50 employees.
  3. One on Ones are absolutely critical. Ensure that you do one-on-ones, at least once a month, with everyone who directly reports to you and so do the other leaders in the company. In his book ‘High Output Management’, Andy Grove talks about the right way of doing one on ones.
  4. Set Goals — Every employee needs goals in order to contribute effectively. Most of the time people don’t under-perform because they don’t want to work but because they need direction. A quarter is the right time frame to set goals.
  5. Providing Feedback — Provide both negative and positive feedback with the same demeanor. It’s very important to come prepared when giving feedback. Provide negative feedback not based on your feelings but based on facts. Don’t use the Sandwich Approach, discuss the positives and the negatives as is.
  6. Just providing negative feedback is not enough, it’s your duty to also provide them a direction on how they can improve. If you are feedback is not accompanied by how they can improve then you are wasting their time.
  7. Appreciation — Everyone needs appreciation, do it often. Appreciate people at the time they do well (don’t save it for later) and be genuine when you appreciate.
  8. People don’t leave because they are underpaid, they leave because they feel you haven’t been fair. You are not supposed to compete with the best paymaster out there, but you do the best you can and they need to know that you are being fair.
  9. Setup an on-boarding process. When the company is small it’s easier for people to understand everything happening in the organization. Once you are beyond 30 it can be daunting for a new employee. Setup an on-boarding process where they get introduced to the product and people.
  10. Set a rigorous reporting process: Having access to the maximum amount of information across organization is going to be your biggest asset. As the organization grows you will find extremely hard to get all the information. You need to set up a rigorous process of updates with your direct reportees. Every function head should share updates with you in-person as frequently as every 14 days.

Meetings

  1. Whether you like it or not, you will have to do meetings. The point is how to make sure that your meetings are productive. There are only 2 types of meetings that you should attend — a) where you have to take a decision b) where you get updates/information. The productivity of the first depends solely on you and the latter on how you have trained your team. Step out from any meeting where you are not going to take any decision and you are not getting information you already don’t have.
  2. In his book High Output Management, Andy Grove talks about the concept of ‘Chairman of a meeting’. This is the person who is going to lead the meeting, facilitate discussions and take decisions. You will be the chairman for a lot of meetings as a CEO. If you are not going to prepare for these meetings you will waste everyone’s time. As a rule of thumb for a 1 hour meeting, you must spend at least 30 minutes in preparation.
  3. You don’t have to take charge of every meeting. As founder, you would be tempted to do that in any meeting you are part of. Refrain!
  4. Explicitly ask people if you are needed to be part of a meeting. Wherever you are needed, ask them for an agenda and also ask what is expected from you in the meeting. Else say no.

Hiring

  1. No matter how careful you are, you will make wrong hiring decisions. There is no definitive science for interviewing so don’t beat yourself up for wrong hires.
  2. Add a layer of objectivity in hiring. Every role should have some form of objective evaluation, like a task.
  3. Don’t interview people on what they have done in the past, interview for the role they are coming in for.
  4. Go prepared to interviews — put down a list of questions that you definitely need to ask. You don’t have to ask them in any specific order but you must ask all the questions.
  5. Ask your interviewers to give a Yes, Weak Yes or No. If there is a single No then don’t hire. There should be a majority of Yes in the verdict.
  6. Ask people where they screwed up in the past. Their failures will tell you more about them, than their success.
  7. Set an interview target for yourself — commit to doing at least 15 interviews per week in the first 2 years.
  8. Don’t look for patterns, there are none. Some people are good at giving interviews some are not.
  9. You need to create a circle of people (not necessary everyone in the company) whose loyalty is unshakable. These are the people you will rely on when shit hits the ceiling. Look for this trait when hiring key people.

Fundraising

  1. Whether you like it or not you are always fundraising. Practice the pitch incessantly, so that you can pitch anytime, anywhere.
  2. Fundraising is not a milestone, it’s not an achievement, it’s just a necessary evil.
  3. Fundraising is about story-telling. More than facts, investors are interested in your story.
  4. Choose your investors carefully. These are the folks with whom you are going to take some of the toughest decisions for your company, you want someone you can play with.
  5. Choose friendly terms over extra money. It’s okay to get half a million less in the bank if you can get less restrictive terms.
  6. You don’t raise money when you need it, you raise money in the good times, and as soon as possible.
  7. Raise as much as possible. Your company can fail because of reasons completely out of your control. Having a war chest at that time could be invaluable.
  8. Become immune to rejection. Most of them will turn you down not because you are not good but because they don’t understand what you do. 99 rejections are worth it for that one who says yes.
  9. Don’t let fundraising get over your head. It’s your number 1 duty but not your only job. You can’t compromise with running the company just because you are fundraising.

Things you should do

  1. Read voraciously, set a target to read at least one book a month.
  2. Network — In the early days of the company meet as many people as you can. In the later days of the company, choose who you want to meet and reach out to them.
  3. Take holidays — don’t feel guilty about it, you need it more than anyone else. Take spontaneous and frequent holidays, you will be amazed at the kind of thoughts that will come to you when you are relaxed.
  4. You will have to do a lot of public speaking — internally to your employees and externally to the world. Rather than being forced to do it, do it consciously. Practice before every major speech.
  5. Your job is to protect the downside of the company. The upsides will anyways take care of themselves. You should be constantly sniffing for what can go wrong.
  6. Exercise — Being a CEO will take a massive toll on your mental health. One way to keep your sanity is to exercise. Make it a habit to exercise at least 5 days a week (you can pick a sport).
  7. You are always negotiating — negotiating with your investors, your clients, your employees, prospective hires and everyone else. Master the art of negotiation, at the end it’s all give and take.
  8. Every time you say ‘Yes’ to something, you will be saying ‘No’ to something else. Choose your ‘Yes’ wisely.

Guest Post by Sachin Gupta @ HackerEarth. Original Post can be seen here

Tax holiday for startups should be provided in first few profitable yrs instead of first 3 yrs

Progressive steps taken by the Union Government for the Startup Community in its Start-up India initiative are encouraging. We hope the Union budget will reflect a similar sentiment and introduce policies around tax relaxations and process simplifications.

The structure of taxation and corporate laws in India is not very conducive for startups and early stage companies. A lot of these issues were addressed by the Union Government in their Start-Up India policy.

The industry is hoping for a fair budget and has a lot of expectations from the government to help ease setting up businesses. There are a lot things that can be improved to make the environment more friendly for startups and here is what we feel can be done to boost the ecosystem:

Income Tax: Mr. Modi recently announced that startups will not be charged Income Tax in the first 3 years.

Though that’s a step forward in the right direction, it’s common knowledge that very few startups are profitable in the first 3 years, and if that is the case they will any ways be not paying tax.

Instead of capping it on based on the number of years, tax relaxation should be provided in the first few years of profitability.

Additionally, while a company is making losses, they still have to pay tax (through TDS) and the tax gets refunded after 5-6 months at the end of the financial year. For a startup any proportion of liquidity is critical. Government should propose a solution such that loss making startups don’t have to part with critical liquidity.

Capital Gains Tax: Creating personal wealth is one of the core motivations for entrepreneurs to build startups. This ambition of personal growth often leads to creation of large enterprises that benefit thousands of people and is an enabler for the overall growth of the country.

Lesser capital gains tax in countries such as US and Singapore makes it more lucrative for entrepreneurs. Mr. Modi has announced relaxation in capital gains if they are invested in government schemes, however the relaxation should be across the board.

Simplified Policies: There are lots of policies, especially in the Companies Act where the processes are too complex for early stage companies, which often do not even have an accountant on board.

For instance, ‘Rights Issue’ has been made the mandatory process for allotment of shares. For startups, which often go through multiple rounds of funding these procedures are not only expensive but also time consuming and confusing. Simplifying such processes will go a long way in enabling founders to focus on core business areas.

Guest Post by Sachin Gupta, Co-founder and CEO of HackerEarth

HackerEarth: an online technical sourcing and assessment solution – Sachin Gupta, Co-founder. #PNHangout.

HackerEarth is a Bangalore based start-up which helps companies hire programmers. It was started in 2012 by Sachin Gupta and Vivek Prakash, both of whom are alumni of IIT Roorkee. HackerEarth provides solutions for the technical recruitment space – one is an online assessment tool which is used by organizations to assess both internal and external candidates. Another solution acts as an engagement platform for companies when sourcing employees. With respect to internal candidates, companies typically use HackerEarth to conduct online challenges to assess their employees’ abilities. On the other hand, when we consider recruitment, there are primarily three stages during recruitment – sourcing where you source candidates, assessment which involves psychometric assessment, technical assessments, etc. and selection which is obviously where the candidate is selected. Our focus is primarily on stage one and two and our approach to these two stages differs from that of a typical recruitment agency. Our approach is to conduct an online hiring challenge. It is like an open test that we conduct on our community of developers. People come and participate in these challenges and based on their performance, we shortlist candidates. Since we began we have conducted numerous challenges, so we now have a large user base whose skill sets we’re aware of.

The test, or the challenge, as we call it, gives us a good understanding of a candidate’s programming proficiency. If they have performed well in the challenge, we know the candidate is good. We then aggregate their coding activities from online sources like StackOverflow, GitHub, etc, combine all this data to understand their core skills/strengths and we match it to a company’s requirements.

When we began HackerEarth, we were keen on working with early stage start-ups but we quickly realized that even if we give them good candidates, the number of hires wouldn’t be very high. So we decided instead to focus only on series A, series B funded companies. At that time InMobi, was a marquee client for us. Later on, Practo, FreshDesk, came onboard and we were able to fulfill their hiring needs too. We found great success in working with growth stage startups. Once we’d established some presence in the market we realized that the SaaS assessment tool could be sold to larger corporations too. Companies like Symantec and Citrix became our customers because our tool because of the time it saved them in assessments. Also, the product was much more stable and much more mature by then.

On the non-hiring front, we conduct exciting programming challenges which engages the developer community. We have a big following now. In addition, all the users on our platform are high on quality, high on skill sets and this in turn made sourcing from HackerEarth very effective.

Obstacles overcome:

The three main challenges that we have faced since we started-up are:

  1. Selection/Identification: As our company has expanded over the last 20 months, the most recurrent challenge that we have encountered is identifying our focus and priorities at different stages. If you can do this, you can actually build a very good company. When it was just the two of us, our challenge was to identify a MVP. We had interacted with a lot of people but there has to be a point where you need to sit down and start working on a product and in spite of this you will always feel that you don’t have enough information. You need to rely on your gut instinct and know why you entered that market or why you are building your product. Combine this with the initial user survey that you did to come up with an MVP and then proceed.
  2. Sales: Another big challenge for us was sales as both of us co-founders have a technical background and we had very little connection to the industry and even lesser knowledge of how to sell. In addition to the MVP we also needed to identify who are our target customers were because in many instances, potential customers expressed interest when we discussed our idea with them but their responses when we spoke to them after having built our product was very different. In our case especially, since we are a B2B solution in some sense, it was very important for us to identify our customer set as we were going after the entire technical hiring gamut. So we had to be extremely choosy. Now that HackerEarth has grown, we have a strong client base, revenue has been coming in and people are becoming more aware of HackerEarth. Building a good sales team was very important for us.
  3. Scaling: After a few successes, we realized that we needed to expand our customer base and accelerate in that direction. User acquisition is one of the most pressing things for us because we are essentially a marketplace as we have developers on one front and recruiters on the other side. It is similar to a chicken and egg problem. If you don’t have developers, you don’t have recruiters and if you don’t have recruiters you don’t have developers, so we have decided to focus more on getting developers to our platform and this is currently a challenge that my team and I are tackling.

Metrics is a must

Being a tech intensive company, the first thing that I would absolutely look for in a Product Manager is how driven the person is with metrics – you should be able to define what numbers you should be tracking, what are the time lines, you should be able to understand the sales figures, etc. By using tools like google analytics, he or she should be able to use a CRM to track sales, they should be able to use analytics to see how users are performing, they should be able to work with mix-panel and other tools to understand how users are interacting with the product and then be on top of these numbers because personally I believe product management is about tracking these numbers and making actionable decisions based on them.

HackerearthSecond is someone with actual previous hands-on experience with technology. If they still work with technology that is even better because sometimes, say you want to build a hack for marketing or you want to implement a small feature that your customer requested which typically would take say half an hour of work and you don’t want to disturb your team, you can go ahead and implement it yourself. So this is hands on technical skills, if not current, then at least experience with working with technology in the past.

Third is having domain knowledge. So somebody who has worked with programmers, somebody who can understand what programmers want and also understands recruiting because at the end of the day, the problem that we are solving is recruiting. We are helping companies hire programmers better. So if I can’t understand the pain point of a recruiter then I would not be able to build a product for them.

In addition, I believe that some sensitivity towards design is required. HackerEarth is a very design sensitive company. So the product manager also should understand what good design is. I don’t really expect them to create good designs but they should be able to understand what is good, what is bad and then work with the designer. One of the challenges of being a PM is actually working with the designer because designers tend to form a certain view point about certain things, so they are very passionate about what they see and sometimes what they see or what they feel or what they think or believe in may not actually translate to what the users want or what the business wants.

At the end of the day, being a product manager doesn’t mean you know everything. You could be wrong but to be a good product manager you need to be someone who is really passionate about solving a particular problem.

#PNHANGOUT is an ongoing series where we talk to Product Managers from various companies to understand what drives them, the products they work on and the role they play in defining the products success.

If you have any feedback or questions that you would like answered in this series feel free to email me at appy(dot)sg@gmail(dot)com. 

 

We invested in Ezetap, the Square for Emerging Markets! Mobile, Internet, Payments interest us! AngelPrime #ThinkInvestor

ThinkInvestor is iSPIRT and ProductNation’s new initiative to serve as a catalyst between Venture Capital firms, Angels, Angel Networks and Entrepreneurs. It is to go beyond brochure ware and dig deeper into the whole life cycle of a typical investment; from introductions, funding, styles of on-going engagement, to exits. And in the process, capture their views on global and local trends, and the entrepreneurial ecosystem in India.

AngelPrime is a Seed-stage fund that sits between incubators/accelerators/angels and large VC firms. Started by serial entrepreneurs, Bala Parthasarathy, Shripati Acharya & Sanjay Swamy, Angelprime believes in getting deeply involved with the companies they invest in. They have been serial entrepreneurs that understand that entrepreneurship is a long and lonely journey and having multiple minds spend sleepless nights on the business dramatically increases the chances of its success.

ThinkInvestor-AngelPrime

ProductNation sat down with  Sanjay Swamy, Managing Partner of AngelPrime for this interview.

Here’s what we heard :

What is AngelPrime? What’s your Stage, Focus and typical investment sweet spots?

We are a group of serial entrepreneurs and we bring the perspective of an entrepreneur to our fund. We are very seed stage and we are hands-on investors. In the early 70’s  in Silicon Valley, VC firms worked side by side with entrepreneurs building their companies. Later on, they evolved to become more of financial investors. India now is somewhere in the middle. However, we believe in working side by side with the entrepreneur in building companies. We help our portfolio companies in product definition, building teams, building products, getting them validated in the market and building a global strategy if needed. There are Angels and Incubators that may invest in the order of a few lakhs. Typical early stage VC firms may do $2M to $5M and do 8 to 10 deals a year. We are in the middle, and we can dedicate a lot of time to the companies. We have bandwidth only to do 3 or so highly curated deals a year.  Our typical investments have a broad range,  from  $100K to a $1M. Our sweet spot is $400K to $600K.  Our focus is Technology-led Start ups, Mobile and Internet, Financial Services and Payments. All three founders of AngelPrime were volunteers with the UID program in India and so we are very interested in Identity related start-ups. We are seeing a lot of companies in the healthcare space and have invested in a recruiting start-up. Most important thing for us is how much value can we add.

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What’s the best way for an entrepreneur to get in touch with you? What works and what does not?

Referrals are still the best way to get in touch with us. However, we still get to know entrepreneurs and their companies through email. One of our portfolio companies HackerEarth, we bumped into at a conference! We are also finding early stage incubators to be a rich source of deals. We have found interesting companies at incubators like the Microsoft Accelerator, GSF India and Morpheus. We find that the deals we come across at these places have gone through some level of curation already, with something of a team in place, and some limited level of product validation already done. These are the kinds of referrals that we like! Typically we are the first institutional money and we are also the larger lead in a seed round.

How long does it take for you to decide on investing? What is your due diligence process?

The first thing we assess is the caliber of the entrepreneur; we look at the scrappiness of the entrepreneur and the typical two person (or so) team.  If the members of the team are similar in backgrounds, that’s not necessarily a plus. We are looking for teams made up of people who are complementary in backgrounds but work well together.

The second thing that’s important is the size of the market. This is not something you can create. It is what it is, but we assess how the entrepreneur is wanting to go take a piece of that market.

Coming to the due diligence process, we try to move very fast. We don’t believe in stringing the entrepreneur along but sometimes additional market validation may be needed. Typically at this very early stage, very little has happened that we can do do due diligence on.  However we look at how the company is structured and clean it up if we think it can create problems downstream.  We make sure that the founders, vesting schedules, CAP structures are all set up properly.  We look at the legalese and make sure that’s all good. We are very strong believers in clean and simple Silicon Valley style term sheets. No funky clauses; our liquidation preferences are usually 1X, non-participating.

Typical timelines for a decision have been as fast as 24 hours where the company is ready and it’s in our sweet spot. Sometimes we may need to go do some research on our own before a decision. Sometimes it becomes a question of our learning an area as well.  Due diligence and paperwork takes about 3 weeks.

Once you have invested in a company, what’s your engagement model? How do you interact with these companies?

There are two ways we interact with our portfolio companies. The first one is the formal weekly or bi-weekly meeting. More interesting is the informal interactions we have. We have a co-location space in our office where many companies situate themselves at this stage of their development. It helps us to have a number of water cooler-type conversations with them. We learn about new things and we also provide our advice as relevant, and asked for by these companies. We tell these companies that we can take on a variety of roles for them all the way from mopping the floors to wearing a suit and meeting with bankers with them.

There is another way to look at this hand-holding, in three phases:

1. Experiments: We help them in do a series of experiments both in the technical approach, and also with the business model. These days the cost of doing experiments is very low and the cost of not doing them, very high!  For example, in payments,  is it a per transaction fee or a subscription model? The cost of doing A/B testing these days is not much. Many times we  end up learning something from the entrepreneurs,  when they push back and say “this is today – this is what works unlike something five years ago”, because they may be  closer to the market.

2. Narrowing Down: The second phase is the weeding out of those experiments that failed and narrowing down the business and building the team for “scale-hacking”

3. Scaling: The third phase is scaling the business and in parallel preparing the company for the next round of funding. We address questions like – Do we raise additional monies here in India or the US and help facilitate introductions to suitable investors.

What are some of the exciting companies in your portfolio now? Exciting new business models?

Ezetap is a company we incubated, invested $5ook initially. It is a very exciting company where we took a very different approach than Square. We designed and developed the hardware in India instead of the usual approach of going to China for it! We took an Apple-esque approach to keeping all of the hardware and software development in house. The business model is also not a per transaction fee model like Square but a SaaS based subscription model. We raised a $3.5M Series A round from Social+Capital. Chamath Palihapitiya brought in other investors like Peter Thiel and David Sacks in this investment. Ezetap has gone on to raise another round from a consortium of Helion Ventures and Berggruen Holdings who are very well connected in Europe.

HackerEarth is a company that has put a nice business spin on TopCoder!. They are providing a very useful solution to the problem of sifting through 100’s of resumes in India to find those few programmers whose skills are  excellent! HackerEarth has solved this problem with some clever algorithms that automates this sifting process. Top companies like Adobe, inMobi and Symantec are using this solution for their hiring. The two founders are from IIT Roorkee, in their early 20’s and are phenomenal in their speed of implementation of ideas!

We have invested in another company in the Mobile Wallet space that we have not yet announced. This was also founded by two young entrepreneurs whose ability to execute is phenomenal, have boundless energy and ultra capital efficient! We have invested in another company, SmartOwner. SmartOwner is a company that allows individuals to invest in highly curated real estate deals for investment purposes.

ZipDial is not technically part of this fund but I am a co-founder, and we all individually are investors in the company. ZipDial makes clever use of the “Missed Calls” phenomenon in India where a call is made but never completed by mutual agreement. ZipDial piggybacks various kinds of actions – marketing, customer service, etc. You could send marketing messages or customer service can send back a message about being very busy now and other suggested times to call. Political parties in India like the Congress and BJP are using it for increasing engagement of voters. Out of AirTel’s 200M customers, only 60M or so have ever sent a text message. Text messaging literacy is not that high but number literacy is. They can dial numbers easily. By dialing a number toll-free (since it is a missed call), you can get feedback or information. For example, a market survey ZipDial missed call sends back a question about your MLA’s performance. It sends two or more phone numbers for each of the possible responses. You just do a missed call to the right one and it is done! This is a completely India-based business model but the funny thing is that the founder is an American, Valerie Wagoner! ZipDial was rated #8 in FastCompany’s most innovative companies!

What kind of advice would you have for someone interested in becoming an entrepreneur, especially from a stable job like at a services company?

There are some very great fortunes to be made in the entrepreneurial ecosystem. I think we need more people willing to be early employees in start-up companies. The risks look daunting but the rewards, especially in India could be huge! Get out of your comfort zone and take some risks! The opportunity cost of not trying is very big! The technical challenges involved in putting together an innovative start-up that changes people’s lives, could be rewarding in itself.  You get to conceptualize products, test them in the market and if it works out, watch it scale. If it doesn’t work out, you can always go back to a safe job.

A lot of entrepreneurs hesitate to say that they are in it for the money. Culturally, we are not yet attuned to this but there is no shame in it! Secondly, we are not accustomed to failure and fear the stigma attached to it! We don’t celebrate failure – the best lessons are when things go wrong!

Exits are crucial for Product companies to have money come in through the front door as investments. What are your thoughts on what’s happening in India?

There have been very good exits like  Little Eye Labs and the Redbus, The Little Eye Labs was a good technology company exit and Redbus took a dis-aggregated market and consolidated it nicely. MakeMyTrip had an IPO exit. There were also a number of exits that were not talked about – VentureInfoTech was a $100M+ acquisition by a european company. Prizm payments was acquired by Hitachi for over $275M. For technology companies,  Silicon Valley still seems to be the destination. Services companies are being acquired by European entities. Considering returns,  we need a little more patience in India. Things take longer but have started happening.

We advise our companies to think they are building houses as if they are going to live in them! People will come to buy the house at the right price if it is built right!