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Founders: you are not doing it right

I see a lot of founders requesting 15min time from me for quick advice. They are clear that it is not a funding pitch, but, more to get my opinion on some of their questions – is this a right market, whether idea has legs, customer size, product feedback, etc. Based on who is requesting, I tend to allocate time for few and discuss, which usually goes for 30min+. I know that 30min is not sufficient to give deep/quality actionable items, other than some calculated guesses based on what I would have heard. My worry with such meetings is that I am guessing and my comments may not be based on a lot of input data/context and may not be right for the startup. So, I usually put caveat to founders to validate and test before taking my ideas as it is. I also know that most of the founders ignore all the comments that were contracting to their current thoughts and move on to the next mentor.

I say the whole mentoring, where, mentors are spending less than few hours with founders is completely bogus. I am being on the board of many young startups, it takes lots of meetings to understand the contours of the idea, market, team, capability, and strategy. At most one can help is bit tactical, but, doesn’t change the outcome for the startup. If it is the case what should founders do?

Founders have two important things to do before they get into startup-mode: a) Deep understanding and building their point of view of the startup-model and b) Executing the startup with their understanding of the model.

I see that most of the founders don’t do (a) at all. They want to take as many shortcuts as possible by talking to other friends, founders, and not spend time required to dig deep and build their opinion and model of “what it takes to build a world-class startup/company”.

Knowing what I know, I would ignore every mentor, event, startup pitch session, hackathons. Instead, I will get an internet connection, a decent laptop, personal notebook and sit at a quiet coffee shop. Start researching on web on all the topics that matter. I would first figure out the most insightful writers of the topics that one has to research and read. The goal is to build a Point of View about your product/market/idea/hiring/pitching/scaling etc. that you are an expert and you are better than any average mentor.

Once the rules of the game/knowledge is gained, you would have built a framework of thinking about your startup. Then, get into execution mode. During this phase, you try to interact with mentors, pitch sessions, hackathons, and investors so that these interactions are meaningful and actionable.

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My typical meeting with founders…

My job is to meet as many founders as possible to see whether their startup matches our mandate to invest. Any meeting of startups, where, there was no pre-qualification (say at an event or a conference or at a friend’s place etc), most of these meetings go this way:

Founder: I am the founder of the startup …. I started this journey… My cofounders are ….. We want to build a large company to do ….
Me:Who is your customer?
Founder: My product has extraordinary features, it can do magic… Customers login through … If you click this menu we see these features….. Great product… Our UX is awesome….. iOS, Android, Our CTO is from …. Built-for-scale……We have been working for 18 months…. Just now launched…. We need money to scale sales….
Me:But, who is your customer?
Founder:Hmm, anyone with a PC or Phone. It is very easy. They just have to download our app, press this button and they start discovering these features…. We can be a large company if we get funding….

We would have spent 15 min or so in discussion. Founders think why am I asking such a simple question instead of asking about their architecture, technology, scale of their work and in general their might in technology.

I think as human beings, we tend to do what we know best. Since most of the startups in India are started by engineers they start doing what they know best – write code. I usually close such meetings with some philosophical statement – “Please don’t do what you know. Focus your energy on things you don’t know about making your startup successful…” Some of them understand it, but, ignore as this is hard thing to do for all of us.

Post such meetings, I get into my eco-system mode and call my friends at iSPIRT and discuss “what can we do? We are not doing enough. We are trying to help those who have already have an idea of the game. But, more folks are getting into the system without understanding even the basic rules of the game, ….”. We discuss and typically console ourselves saying “new founders will figure out over time by seeing other successful founders. We as volunteers have limited bandwidth. Let us focus our energy on those for whom we can materially help. Can we think of a program for some of our companies that are starting to scale….”

I get convinced until I go to one more conference and meet few more founders. Again, I call my friends at iSPIRT. Applying my own philosophy, I need to work on things that I don’t know – “how to educate at scale the first-time founders?”.

Thanks.

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Startup Founders: Give no room for confusion

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As part of my job I meet a lot of startup founders. These Founders, despite numerous job options, have chosen entrepreneurship as the way forward. They are dead serious about their startups; highly passionate; and very hardworking.

What bothers me the most is that many of the Founders don’t critically think through what makes teams and companies fundable.

All founders must critically assess their team, as well as their idea, and bucket their startup into one of these two categories:

  • a) our startup is fundable or
  • b) our startup is not fundable today. Therefore, I need to get to profitability with minimal angel money.

A majority of startups that I meet, unfortunately haven’t done their homework to understand what type of companies get funded and whether their startup belongs to the category of fundable companies. Most of the Founders, for some reason, postpone understanding the rules of the funding world and spend way too much time trying to raise money, when the idea or team itself is not fundable.

Please note – not all teams and their ideas are fundable.

It doesn’t mean these startups have no future. A significant number of high-quality profitable companies are built with no money from VCs. These companies focus on revenues from day one and continuously iterate in making their products for revenue generation. By generating revenues and getting to profitability, these companies become self sufficient and they are not at the mercy of anyone. Many times, these companies raise growth capital when they want to scale as well, or for liquidity.

The worst thing for Founders is getting stuck in between the two options: they can’t raise money and they don’t have enough runway to get to profitability. Once they are stuck, it is not an easy escape, and this impact  can be detrimental to the startup ecosystem.

Founders, before time runs out, critically assess your team, idea, strategy and pick your path accordingly.

The purpose of this article is to get all entrepreneurs to take action of discovering their path. There is enough content on the web on what makes companies fundable or how one can build bootstrapped companies. The other way is to talk to those who have done it, but, get on this work sooner than later

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iSPIRT Welcomes Product Circle Donors

The world has been witness to several movements that have changed the face of history. India is not alien to these – Mahatma Gandhi’s silent revolution that finally led to Indian Independence is a shining example. About 18 months ago, a group of software product entrepreneurs got together to charter a course that would make India a Product Nation. Today, those 30 early pioneers of iSPIRT are joined by 50 Product Circle Donors who represent a cross section of the software product industry and add weight to the cause of the industry.

These Product Circle Donors role model the industry. For instance, 60% of the company’s focus on Enterprise Software, 30% on B2C software and the remaining 10% focus on the SMB space in India. 55% target the US market, 30% India and around 15% on the Emerging markets. 60% companies are funded and around 40% are bootstrapped. 65% companies are SaaS based, 30% are On-Premise and 5% are using Tech to enable their business (like Ola Cabs, Taxiforsure, CommonFloor), 50% companies are at a growth stage… 40% are early stage and 10% are Hyper growth stage. The Software Product Companies represent Enterprise Mobility, Big Data, Cloud, analytics, Security, Heatlhcare, Elearning, Workflow, collaboration spaces.

This group of 80 is now small and niche enough, yet deep enough to champion the industry cause.

Though the intention was not to exclude (there may be many who are not part of the group), the invitation to join was designed to build the momentum slowly yet surely by including companies that have visibly demonstrated their zeal in championing the software product movement in the past. And these champions will certainly grow over a period of time. Rest assured, for those who still feel the urge to volunteer there is room for everyone! (email: [email protected] and become part of the movement).

Then, the question is often asked: Why handicap yourself by not having VCs, MNCs and Service Companies as Product Circle donors? We believe that Donors provide the financial muscle for iSPIRT to achieve its mission of making India a Product Nation. While we appreciate this contribution, there is a risk, albeit, a small one that donor clout can result in mission capture. We manage this risk in two ways. First, we ensure that we have a broad base of donors and no one company is a dominant donor. Second, we exclude categories of donors where future mission conflict can happen. For this reason we don’t have certain categories of donors on board.

Finally, while our steps are still baby ones, be assured our voice has been heard. Our resolve is even stronger with the 50 new Product Circle Donors on board. The time has come to join hands and redouble our efforts to make India truly a Product Nation.

As Anchor Volunteers for the Donor Campaign, we’d like to thank Sandeep Todi, Sanket Nadhani, Peter Yorke, Avinash Raghava, Harrshada Deshpande and Sagar Kogekar from BillBooks for pulling together the collateral and logistics for this.

Shekhar Kirani and Anand Deshpande
Anchor Volunteer for the Donor Campaign

Below is the Donor Campaign deck that the invited companies received:

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iSPIRT Seeks Technology Intern(s)

banner-who-we-areiSPIRT has over 40+ volunteers who belong to different organizations. The volunteers are working on many initiatives that are complex, need a lot of analysis/thinking, experimentation, and outcomes take time. Currently, iSPIRT internal communication and interaction has been happening via email, google docs, attachments, etc. The current set of tools have worked so far, but, we need a comprehensive toolset for iSPIRT to be able to manage its internal needs.

iSPIRT is looking for a platform that helps in 5 areas:

a)    Managing volunteers, expansion of volunteers, and creating sub-groups of the same.

b)   Managing information about product companies – mini CRM.

c)    Managing initiatives, projects, tasks, and discussions around them by a group of volunteers.

d)   Critical decision making, polls, and feedback online

e)    Information management – presentations, docs, info graphics, spreadsheets, etc.

Requirements

The intern or volunteer must come from a product/technology background and understand iSPIRT requirements, catalogue them, and identify a product that can be used for this purpose. If possible, facilitate the deployment of the solution among a test group initially and expand into all iSpirt participants. Ability to work independently is a must. Familiarity with open source tools is a plus.

Who should consider this internship

Volunteers who take on this gets an opportunity to work with the top executives of various companies, VCs, Angel investors, entrepreneurs, marketing specialists, sales specialists, and overall highly energetic engaging volunteers in India. Those who are in between jobs or those who are starting out their own startup, would be ideal to get their feet wet and build their network in the startup eco-system.

Location

Bangalore or Delhi

Duration

We are open to both full-time and part-time interns. The expected duration is 3 calendar months and the total effort may be around 25 hours.

How to Apply

Please send your detailed resume with cover letter explaining your motivation for undertaking this internship to avinash(at)ispirt.in by 28th April 2014.

After the Internship

At the completion of the internship, you’ll get a letter of work experience. You’ll also get a chance to network with industry leaders that are iSPIRT Founder Circle Donors, Fellows, Mavens and Saarthis.

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What is win or loss means in the game of enterpreneurship

I have been interacting with various startup teams over the last several years, predominantly around ideation, product-market fit, funding, scaling, and strategy aspects of the companies. Before I was an investor, I spent a lot of time around product creation with two successful startups in the Silicon Valley and managing business in a large Internet company. In recent times, I have been spending a lot of time on the board of several Indian companies who are starting to scale.  Over many years of this engagement with startups, I have come to believe in few things, and one of it is what I call “Rules of the Game”. The sporting analogy is deliberate, as I use it throughout this article.

The Rules of the Game

In India, most of the founders get into their entrepreneurial journey with very little preparation and knowledge. In fact, it looks like most of them jump in based on how their friends have done or the founders in the company they work have done. Some of the serial entrepreneurs are starting to plunge in their second attempt, much more prepared and know a lot more about how the game of entrepreneurship is played. However, most of the entrepreneurs haven’t thought through the rules of this game, especially, the difference between a win, a draw and a loss in the game of entrepreneurship.

What is a win, draw and a loss?

Most of the entrepreneurs start their journey with an intention to solve a problem that they have identified is important and useful. If one has setup a small company with a tiny team, has solved the problem well and has great number of customers, and customers are paying, the game is already looking interesting for you. If you are making profits, and you are paying yourself a market salary, and you are self sufficient with enough room to grow, make no mistake about it, you are winning the game.

If you have raised money, built a great team, an outstanding product, a defensible growing business and you know how to take the company to profitability, and you are geared towards an exit or have already done, you are a role model.  This is definitely a BIG win.

On the other hand, you invested time and effort in building the product out, you made attempts to find product-market fit, you learnt how to market, sell, and support customers, hired few good team players, and overall you have done every thing possible. However, you come to know that the business model is not viable and you cannot service customers within the budget. After all fixes to business model, if things don’t change you may decide to shut down and look for your next gig. From my point of view this is definitely a “draw”. It is draw because in the process, you have learnt a lot of things around entrepreneurship; the rules of the game and you come out very strong in your next gig.

A loss is when you are caught in a rut. You have built some sort of a solution, you have few customers, but they are not very happy.  You are not able to scale the company as the product-market fit is not yet accomplished and at the same time you have just enough revenues to pay your bills and manage your employees.  You know at the bottom of your heart that you can continue the way it is for several years, but you don’t see a big change. This is a classic “loss”.

I’ve always believed that the loss is where you don’t want to be, because of the uncertainty about which direction you need to take. Conversely, a draw can be bounced back from. Everything you’ve learnt and gone through is invaluable. You’ll be a far better entrepreneur the next time around.

But is there a better way to learn, to get the experience of the win, draw, loss without actually playing the game? That would be brilliant, wouldn’t it?

Ideation vs. Execution

Of course there is a better way to learn. In fact, there are reams of startup literature out there; the best of them are free, actually, and your first step should be to read them and read up on your domain as much as you can. In fact, I have even counseled people to do nothing except read for a month before getting into the game. Read interviews of very successful entrepreneurs and grasp around “why” they were successful. What was the context under which these folks operated and how they tuned their operations to be successful against others is a great learning. This knowledge is out there. You just need to take it and apply to your world.

However, most of the time, reading and understanding isn’t going to be enough. Reading about it and executing it are two completely different things. This is where the value of the ecosystem and mentoring becomes very useful. A mentor can take all that knowledge you have imbibed and help you translate it into meaningful, decisive actions in your context. And again, the quality of such mentors matter. A mentor who makes a business out of ‘guiding’ startups is not a mentor. An excellent mentor is very articulate, keen observer, and some one who has gone through their own iterations of their idea, started a company, learnt every thing possible about their customers, and eventually was able to scale the company. Your best bet is to find such mentors and interacting with them is of significant help.

In a fledgling software product ecosystem like ours, finding enough successful mentors to support many of our startups is very tough. This is where, I see the value of efforts like the inaugural #PNCamp. Throwing in just-started practitioners with experienced practitioners and having them help each other is in my view, the best thing that can be done to push the ecosystem to accelerate faster. I am hoping that many other such practitioner lead hangouts happen in the country to boost our eco-system to next orbit.

Looking at the agenda and participants of #PNCamp, it looks like there will be an incredible amount of exchange of practical knowledge among attendees and also bit customized as each session being small (around 20 folks).

If you want to see an example of practitioner-lead-mentor, see the movie “Miracle” based on the real-story of US Olympic ice-hockey team winning against the invincible Russian team. The credit of the win goes to the player who turned coach; Herb Brooks who guides and empowers the team for a win that no one thought was possible.

All the best for the #PNCamp and thanks to Sairam for putting this together.