Finally it happened, after too many misses, delayed email responses etc etc and after a gap of almost 3 years, StartupAvenues offline meeting did happen at Connaught place New Delhi and surprisingly of the total attendance, three people namely Umesh Sethi, Nalin Savera & Shailesh were also involved in previous meetings ( held in 2003).

Following is the detail of event which has been logged by Umesh Sethi of CreativeSparks who was kind enough for agreeing to minute the event.

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On a bright and sunny afternoon on 30th June, startup avenues meetup was held in C.P . I would like to thank all who made it or RSVPed. Here is a short recap of the meeting.

Event Photograph

There were 8 of us : Shailesh our moderator who works in a private equity funding company, myself and Manish Pahuja running our own web solutions consultancy, Jaspal working in an NGO in handicrafts exports, a gentlemen whose name i can’t remember (my apologies) working in in a software company, Siddarth , an Human Capital consultant with a big consultancy firm, Rakesh running his Property company and Nalin , running a software consultancy.

We first had a round of introductions in Cafe Coffee Day and then when it was getting bit crowded , we moved to Banana Leaf, next to it, on Rakesh’s suggestion , which was a nice and spacious South Indian Joint.

Shailesh told us about his and his partners experiences in starting and running coolavenues which were pretty interesting and humorous. Of how they managed to negotiate with big companies, run the company while working in a fulltime job and keep their expenses low. How they had to finally exit the business on a nice profit . All in all i guess it showed that the company succeded because it was solving a problem and had a revenue model attached to the solution.

We also talked about the fear of some VC’s copying ideas and the fact that this practice is unfortunately prevalant here. We talked of whether funding is needed or not and how seed funding is neither easily available nor at time needed. There were some jokes and we remembered a couple of times we had met 3-4 years back.

All in all, i think it was a pretty nice experience atleast for me., I got to know 2-3 people who i feel may be able to advice and assist me in some future plans . We closed the meeting at 7.00 and i think all of us were happy with meeting once a month. Shailesh clicked a couple of snaps and perhaps we shall see them soon somewhere on startupavenues.

Going forward i would like to put forward some points for open discussion as i felt arose from holding this meeting and other experience i have seen in networking meetings abroad.

1. While meeting in coffee day or restaurants is great, one to one interaction is bit difficult. Most networking events have a group presentation or discussion or introduction then informal one to one circulating and talking to people who you may share area of interest with. Ideal place for that is a small hall or something with snacks and/or soft drinks available on tables. If someone has any suggestion how this can be acheived without bearing any cost for hall etc. in Delhi, wouldnt this be a good option ?

2. I would suggest we have a proper contributory ticket for events like this IF they take-off. I know some people have disagreed with this. But honestly it is a bit embarrasing to either go one by one and order when sitting on same table or let a guy order for all then exchange fifties and tenners on a table or outside or let the guy forget it. Its a professional meeting with bit of food and drink – whats wrong with charging a basic 50-60 buck ticket… if less are spend on a meeting they can go into the meetup’s bank. someone can keep track of bills.

3. In terms of organizer , rather than having a fixed organizer or organizers i think this should be voluntary and by rotation. Reason for this is i believe the organizer comes in contact with multiple people before meeting on phone and is generally first people who the guys meet, so its good if everyone becomes an organizer one so that the whole group feels involved, and more and more contact is generated.

Well, thats my opinion on the whole issue. Networking is a great way to meet new people, share ideas, get domain knowledge. Perhaps we can discuss on see how we can make our networking events productive, interesting and successful.

Regards
Umesh Sethi
Creative Spark Solutions
98680 81408

Making of Mindtree is about the whole journey and a chronicle of its early days when Subrato started thinking of the company as early as 1998 and able to kickstart whole thing by 2000. The Saga of Mindtree was executed almost in text book style fashion where the targets were achieved with mission statement in place, funding intact and one of the best team from Corporate India leading from the front with no less than Ashok Soota as chairman of the company.

Very interesting read

Making of Mind Tree Part I

Making of Mind Tree Part II

However majority of entrepreneurs are not as lucky as Mr Bagchi as there is no successful track record, no friends in right place who commit USD 5 million in advance and no such dream team to execute the show. Overall Mindtree was more of a disguised MBO in place where very capable corporate executives, well backed by deep pockets decided to chart on their own and ride the well established Indian story.

One of the key questions an entrepreneur faces is about recruiting the team with right talent and focus, as nothing can be more detrimental to the success of a startup than lack of right team with right passion and focus, and unlike a giant corporation, you as an entrepreneur can’t afford to loose any guy in your long walk to success.

However, for a person who is planning to embark a career with start-ups, there are always temptations to work with those big companies and have a sense of stability and perceived peer respect or to be part of a dream, which might not be a 9 to 5 job but may bring great challenges and excitements, which one might not get while selling sugared water or being a super support staff to some global backoffice.

Amar Goel, Entrepreneur and founder of Komli – a technology and media company in advertising space - discusses challenges of working with startups. Read on the following interesting article by Amar Goel: -

Read on following interesting article by Amar Goel

“Are you marrying me or the company?” One of the engineers on our team at Komli told me that the other day. This is probably one of the best lines I have heard in a while. He was talking to one of his friends about joining a startup and his friend was concerned that if he joined that startup his parents and his fiancé’s parents would be very concerned about the stability of his job; they might even break off the engagement. The engineer on our team didn’t understand why everyone was so focused on his friend’s job.

When I got engaged I was actually unemployed. I had just left the startup I had previously founded when I graduated from college (Chipshot.com, an online e-commerce company focused on golf), and was figuring out what to do next. Nobody called off the engagement or threatened or even hinted at it.

This stark contrast helped me realize a huge disconnect in India’s ability to really innovate and build companies like Google, Yahoo!, Microsoft, and Oracle (interestingly enough, all four of those companies – four of the best technology companies ever started – were all started by people who dropped out of school and NEVER had a full-time job before they started their companies). Generally speaking, youngsters in India are still too concerned about the stability of their jobs and getting married.

There are both logical and emotional arguments to why this might be the case. I am going to present some thoughts on why this concern with job stability just doesn’t make sense if you are really good at what you do and are confident in that.

Reason #1: The spoils go to those that take risks — the ones who work at startups, very early on.
Microsoft is the most successful technology company of all time (though Google is hot on its heels). The first guy at Microsoft made about $50 billion (Bill Gates). The second guy (Paul Allen) made about $25 billion. Steve Ballmer who was one of the early few and joined in a leadership role made about $15 billion. If you were in the first 50 people and got 1/10th of 1% (common for a startup today) you made about $200M. So the first guy made $50B, the 50th guy made $200M. Guess how much the 1,000th employee made, probably about $20M. And the 10,000th employee maybe made $2M. This is in the most successful technology company of all time.

If you want to make some serious money and you join a really good company (where the numbers will be 1% of Microsoft’s) as the 10,000th employee or even the 1,000th employee you are not making the right decision – the math just doesn’t work in your favor. If you want to make some serious money you have to take some risk and join something early, at least among the first 50 employees. I’m not saying that every job you take should be at a startup, but if you never do it, it’s going to be hard to make serious money in the tech industry, unless you work for 20 years and climb to the top of a big company.

Reason #2: The right startups are not that risky.
What is the worst case in any startup if you are not the founder? The startup goes out of business. Your downside is that you have to find a new job. Going back to my original caveat, if you are good at what you do and confident about your ability, then in India it will be relatively easy to find a job. India’s overall economy is growing so fast (2nd fastest growing economy in the world in 2006), and the hi-tech industry is growing even faster, that most people seem to get a 25% pay increase when they jump from job to job anyways. If you add in to that a startup that has a good working environment, good management, good investors, good customers, and you feel that the products are useful then the risk is dramatically reduced. You’ve gone from a 5% chance that something good happens to a 35% chance that something good happens (I made those numbers up, but you get the point).

I know a number of people in Silicon Valley who have made a career of working at startups, and are fully aware that some will be winners, and most won’t. They figure if they work at 5 startups over 10 years maybe one or two will be successful and that’s more financially rewarding than working at an already successful company as the 2000th employee. Crucially, for all 10 years they were excited about the work they were doing. Here is what Paul Graham, a well known entrepreneur and writer, has to say about this: “Economically, you can think of a startup as a way to compress your whole working life into a few years. Instead of working at a low intensity for forty years, you work as hard as you possibly can for four. This pays especially well in technology, where you earn a premium for working fast.”

Reason #3: Often that stable job isn’t so stable.
I have seen a lot of people go to the stable company and then leave after 1 or 2 years because they just don’t like the work or the company. What is the difference between joining a startup that you like and the worst case happens in 2 years versus you join a “stable” company and in 2 years you leave because you don’t like the work?

Reason #4: Do you want to make your parents happy by a) always working at a stable job or b) potentially being Narayana Murthy (who took a lot of risk to start Infosys and almost went out of business early on)?
I’m serious. Wayne Greztky, probably the greatest ice hockey player ever, once said “You miss 100% of the shots you never take.” I’m lucky to have a wife who tells me “The only thing worse than failing is not even trying.” I’m sure you are saying “Amar, you don’t understand, you don’t know my parents or my in-laws, or it just seems too risky to work at one of these little startups.” You are right, I don’t understand. You get more ownership of the work you get to do, you can make the same salary as a big company, you get a meaningful percentage of equity – what’s not to like?

Reason #5: It is probably the best time in the last 25 years, if not ever, in India to start a company.
If you are smart, have a good idea, and can assemble a good team, then statistically, you have a lesser chance of failing today and in the next 10 years than at any time in India’s past.
India has entered a period of fast and sustained economic growth, as long as the government keeps on its current path of increased economic liberalization. With a demographic bulge in the 10-25 year age bracket, the country is virtually guaranteed a consumption boom for the next couple of decades. There are so many industries in India that are already growing at 20-30% per year. More opportunities will also open up as the government makes hitherto closed sectors open to private sector participation and competition. With a fast growing economy, solid worldwide economic growth, and a large talent pool at your disposal, it has never been a better time in India to start or join a startup as an early-stage employee.

What does this all mean for India?
In the US there are tens of thousands of people employed at startups, working hard to innovate and build products and services. The US has tens of thousands of hi-tech startup companies. India has a few thousand. It’s unlikely that India’s thousands of tech startups are going to create more winners than the US’ tens of thousands of hi-tech companies, the US just has too many more chances at success since it has so many more startups. If you think the US example is too far-fetched in that the US already has it good with great infrastructure and a society that is historically not as risk-averse then just look across the border to China. China’s economic growth and pace of innovation over the last two decades has been stunning; in large part this is due to the entrepreneurial culture that has taken hold among the young. What is really interesting about this is that China was traditionally as hierarchical and custom-bound a society as India.

Until India’s culture begins to shift to embracing risk takers rather than eschewing them it will be difficult for India to become the global technology leader. Surely society plays an important role here, but the easiest way to begin the transformation is for each individual to look within and really understand and push her own risk appetite.

About the writer
Amar Goel is the CEO and Founder of Komli, a startup in the media and technology space trying to simplify online advertising. It has offices in Bombay, Pune, and New York. It is currently hiring India’s best and brightest.

However after considerable time spend in startups and VC space, I realized that though mission and vision may sound some big jargon, it is a very essential piece of business plan and help a budding entrepreneur a lot in terms of strategizing, focus and identifying their core strength as well as key deliverables. And hence, majority of VCs insist on giving a simple single statement about your company purpose or say mission or vision if you like to say that way. But you must define your company purpose in a single statement as this holds tremendous value and become your guiding principal in future times and also helps potential investors to understand about your core focus area.

However majority of us being fed on jargons and in order to in order to impress upon VC / Investors tend to create a company purpose, which is verbose, very generic and don’t give any idea what you as an entrepreneur wish to do. People also talk of a very large market so as to fire their imagination and tend to think in a manner which just exposes their lack of focus as well as inability to plan the execution.

Read this company mission statement from a very bright young team of entrepreneurs:

QUOTE

“[Company name] goal is to provide products, services and consultancy reflecting the best ideas of people around the globe, encompassing a vast spectrum of technologies. We envisage moving the technological capabilities of our nation from what they are, to what they can be. We believe in creating enduring partnerships and stop at nothing short of fully complying with terms agreed upon, with our partners.”

UNQUOTE

Is it a company vision or a political manifesto (read it “Technological capabilities of our Nation”). They are raising funds or contesting election!!! And then no clear market, no clear skill area, as they say as global as it can be. And to add the knowledge that this is done by couple of young students and then you wonder what they are trying to archive???

Or read this, now from a team of seasoned professionals, but when coming to creating your company purpose, this is what you get:

Quote “
[Company name] is a Telecom Solutions and Consulting outfit, which provides end-to-end telecom solutions to those associated with the ICE (IT, Communication, Entertainment) sector including the Telecom operators/Service providers, Content providers and the consumers.”

Unquote

Is there any left to do??? By a team of five core people !! Give us a break!

Think of VC as a human only. He is not a god who will be able to see through all the clutter, read your mind, map the world and write you a 2 million USD cheque (hope you are not thinking about pre / post money valuation right now). Imagine a scenario where somebody after having a long lunch is trying to read this business plan where the challenge is to remain awake as well as make sense out of it and if there is something like that, I am very sure he will fail on both the challenges!

By using jargons or using open ended big statements, you are not helping yourself but just confusing yourself and potential investors as while you might be bloating with a vision of USD 50 billion market potential, the potential investor might be thinking as what this guy wish to achieve and hence the investor may remain a potential only??

Company purpose should be able to define your target market, your key deliverables and your overall goal and should be focused enough for example if your are now planning to enter in say online travel market, then you can’t have a mission statement like “ To give cheapest, effective and prompt service to all people who are looking for travel services”

In the above mission, no clear market as been defined and the author is trying to capture all segment of audience, all travel related services while at the same time trying to offer best of both words that is “Price” as well as “efficiency”. Will the entrepreneur be able to fulfill the tall claims?? Chances are he wont and there lies the seed for his first failure!!

The mission statement / company purpose shall capture the basis essence that is what your core market is and how do you wish to dominate it. Probably you might just wish to address “Air ticket for Domestic airlines” or you wish to “dominate local travel requirement for China or looking to capture “Student travel market for Australia, USA and Canada”. In all these there is a definite market, definite service and clear visible goals and competitors.

Hence write something which is simple, free of jargon and put in clear terms what do you wish to achieve say in 5 years. As when things will go wrong and you might be desperate for revenue, majority of us will loose focus and will start running here and there in search of that top line and in turn loosing focus and energy, this simple statement of purpose will help you aligned to reality and will probably be the factor in your “to be” or “not to be”.

Hence these leads to a scenario where the entrepreneur in making suddenly find himself with a big stumbling block and start looking around and probably that is the start of journey towards confusion.

StartupAvenues (SA) started to look around and came across various websites, books and tools which offer good advice and support to anybody who is trying to write a business plan but are they catering to VCs or they are talking of the usual business plan creation scenario which is done in a general corporate setup!!

Hence after going through various business plans, and talking to many venture capital analysts, partners and associates, we will take you through a general business plan writing exercise which is aimed at venture funds / angel investors.

For a sample we will take business plan format as given on Sequoia Capital website as this plan presents what a VC expect the entrepreneurs to present to him. Here a important point to note is that business plan is not for VC it is for yourself as it forces you to ask certain questions which you might not be addressing at all whiling building blocks of your idea.

basic format of the business plan :

Company Purpose
• Define the company/business in a single declarative sentence.
Problem
• Describe the pain of the customer (or the customer’s customer).
• Outline how the customer addresses the issue today.
Solution
• Demonstrate your company’s value proposition to make the customer’s life better.
• Show where your product physically sits.
• Provide use cases.
Why Now
• Set-up the historical evolution of your category.
• Define recent trends that make your solution possible.
Market Size
• Identify/profile the customer you cater to.
• Calculate the TAM (top down), SAM (bottoms up) and SOM.
Competition
• List competitors
• List competitive advantages
Product
• Product line-up (form factor, functionality, features, architecture, intellectual property).
• Development roadmap.
Business Model
• Revenue model
• Pricing
• Average account size and/or lifetime value
• Sales & distribution model
• Customer/pipeline list
Team
• Founders & Management
• Board of Directors/Board of Advisors
Financials
• P&L
• Balance sheet
• Cash flow
• Cap table
• The deal

In next series we will discuss what a VC expects you to provide in a business plan and elaborate above mentioned points as well most common mistakes in business plans.

Alo read “Business Plan Essentials part II: Writing Mission, Vision“.

2) Be realistic: You will not get funding for 1-2 years. The Banks, Financial institutions and Venture Capitalist will not fund the company at idea stage. They will all come when there is a proof that the idea is workable and when the clients are on the horizon. So be ready to sweat it out. Personal finances, funds from family and relatives will be the only available sources of funding till the idea generates proof of concept and clients.

3) Do a through research: A through research will give you insights into your prospective client’s business and the pain points. Understanding the customers requirement will not only help in providing solutions but also in marketing your product. Unplug yourself from the computer, and speak with others who have succeeded to discover what really works. The real-world information you gather will save you time, money and frustration. Passion sometimes clouds judgment. Thinking that you know what is best for your customers is one of the most common mistakes in starting a business. To avoid “selling only to yourself,” seek real-world advice by discussing and interacting with prospective customers.

4) Protect your idea: For the business to be successful, being at the right time in right place is very important. The business not only needs time to set up and get customers but also needs time to scale up. Till such time, the idea should be protected.

5) Create Marketing Strategy: Do not believe that the product is good and hence does not require marketing. Marketing expenses will require lots of resources in terms of people, finance, ideas and time. Once the company is in place, the product/service is well developed, approach Venture Capitalist for funding the marketing and expansion expenses. VC are more favorable to fund at this juncture.

6) Think Big: Do not limit your ideas in terms of industry and geography. In this age of globalization market is vast and the products and services with a little tweaking can be applied across many industry.

7) Business plan has to constantly evolve depending on the market condition and customer’s needs and preferences. The adage “Nothing is constant except change” holds good. The strategy, the area of focus, additional verticles etc need to be constantly evaluated and adapted.

8 ) Commitment: “I’ll have more time to do what I want.” Do not start a business with this thought. Business takes up lot more time than a job. You have to embrace the concept that being an entrepreneur is a lifestyle, not a job. You may have time for the family but not necessarily more time. So prepare yourself for the long haul for immense demands on your time.