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Category Archive : Artha

My PR Experiment

Yesterday was an interesting day. I started off by tasting different blends of single shot coffee made by a start-up that we have been eyeing for a while now. They have been some gaining significant traction and the tasting culminated in the issuance of a term-sheet. In my next appointment, I visited several branches of a food aggregator that provides home cooked meals in an IoT enabled device. The heavy dose of caffeine from the morning helped me stay awake after an extraordinarily heavy lunch, but I really liked what the company was doing, and so we issued them a term-sheet too. In the last meeting of the day, I was with two entrepreneurs who are looking to fill the niche left open by Bira in the beer industry, and so I ended up tasting their different beers. Their product, taste, packaging and brand positioning are all unique and I’ll be honest, we are contemplating issuing them a term-sheet too. But no, this blog isn’t about tasting and issuing term-sheets, it’s about the commonality I observed in all three funding outlays, which I asked the founders to rectify i.e. instead of outsourcing it to an external agency, build an in-house marketing team to manage social media channels, PR and internal-external communication.

I used to erroneously advocate outsourcing PR and media management, but that viewpoint was permanently altered. I conducted a yearlong experiment in which I discontinued the services of our external PR agency and brought those functions in-house. Not only did I gain more control on what Artha (and I) wanted to communicate, but we also got more media mentions, got covered by the top journalists and were invited to renowned events around the globe. We also started publishing separate monthly and quarterly newsletters for our LPs and well-wishers.  All this effort has paid off through a marked increase in business for all the Artha entities, but most importantly, we achieved all these objective at 60% off our previous costs.

All of our PR (yes, all of it) was organic and genuine i.e. unpaid for. We did not sponsor events, pay for advertising in publications or authored articles. Things are moving so well that this year we are expanding the internal team by bringing in a Social Media Head that can move us from prose to video. Since we understand that the entire process isn’t a one-man job, we are allocating him/her a budget to recruit a team to facilitate this transition.

This massive cost saving got me questioning the PR/Media management agency model and whether it really works for an early-stage startup. I am afraid it does not. It takes many months and a lot of effort to get a brand new startup relevant and unpaid media attention. Unfortunately, early stage start-ups do not have the budget to compensate top-level agencies for their effort or even tier 2 or tier 3 players (unless they can secure a strong referral). Therefore, start-ups end up working with PR firms that themselves are starting up.  These PR firms overload their staff with multiple projects, to make ends meet, distributing the employee cost over the projects to make operations profitable. However, that divided cost also means divided time and focus on each project – a situation that does not bode well for start-ups trying to make a dollar for every penny invested in marketing. In fact, I have seen PR agents pitch 4-5 ideas to the same journalist in a single bid hoping to get any of them published. Is that really how you want your start-up to be pitched?

Another issue that works against the interest of the start-up is when a PR agency works hard to meet the KPIs they have promised and manages to do so in the first 15 days of the month. Having met their KPIs, they go radio silent for the rest of the month. This essentially means that their promised KPIs are the limit and not the base on which the agency works – completely opposite to how founders set KPIs for their internal team. After all, you can only create value for your company when you get more value than you pay for, isn’t it?

Therefore, I have come to a conclusion that PR agencies are useful for short sprints or Big Bang announcements, but the marathon work of building an image and brand for your startup should be done by an in-house team. In fact, even the 22 Immutable Laws of Marketing recommends the same!

37/2019

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Catching Dragons

An LP who had read AVF’s monthly newsletter inquired why we had rejected one of the deals based on the fact that the founders were raising 12 crores. He asked why we didn’t co-invest or take a small chunk of a larger round if the deal was good. This is a common and frequently asked question not only by our LPs but also by founders, their advisors, our advisors, our investment committee and almost every employee. Despite the overwhelming number of times we reject deals based on their valuation or the size of their raise, I continue to stick my neck out on the line for our investment strategy. It has been devised with an important mathematical, strategic and logical reason.

While later stage funds invest at a time when the business has achieved a product market fit, positive unit economics, solid revenue streams, etc. we, as an early stage fund invest when the founder is still contemplating the answers to these questions. Therefore, I stay grounded to reality in expecting that 90% of the early investments we make will fail and return nothing, and the remaining 10% should:

  • Return the total corpus of the fund
  • Deliver a return to the fund’s investors

This is difficult unless there is a clear strategy and discipline while investing.

A fund makes money for its investors by selling its ownership stake in what is called a ‘liquidity event’. This liquidity event can take place in many ways; by selling our ownership to buyout funds, to an acquirer or to the public during an IPO. But how much we make from a liquidity event is decided by two numbers

how much stake we own * how much the company is valued at = size of exit

Considering the small percentage of successes I expect, it is important for each successful investment to have the capacity to return the whole corpus of the fund or be what Kanwal Rekhi calls a “dragon” exit. To figure out at what valuation an investment becomes a dragon for the fund, you can use the same formula

20% X 1000 crore valuation = 200 crores

10% X 2000 crore valuation = 200 crores

5% X 4000 crore valuation = 200 crores

2.5% X 8000 crore valuation = 200 crores

The chances of an early stage fund getting an 8,000-crore exit are slim but if the fund team has picked and worked on such a winner, they should ensure that the exit will have a significant return i.e. multiple times the fund’s corpus and not just the corpus. Therefore, holding a 2.5% stake in such a winner will only return the corpus and I would need 4 such investments to return 4X of my fund – the odds of which are far and wide.

I have modelled our portfolio on an exit ownership between 15-20% with exit scenarios of 1,000 to 2,000 crores over 4-6 years. One such exit will return the fund’s corpus and the rest is just the icing on the cake.

Such a portfolio construct is good for the founders as well. Chasing $1 billion exits promotes behaviour like excessive marketing spends, massive hiring, multiple (and massive) fundraises, lots of founder dilution and an overall impatience to deliver results which cause long term issues. It is simply not sustainable.

Therefore, while I regularly review our investment strategy and thesis, changing the portfolio construct to have lower average ownership just doesn’t make mathematical sense to me. And while numbers can tell a story, they cannot lie.

33/2019

Things Not To Do if You’re in the Entrepreneur’s Inner Circle

I have to admit that after my interaction with Dr Marcel, I have been a little obsessed with researching about entrepreneurial stress. So, over the last weekend, I read the treasure trove of links I had been collecting on Pocket and what I learnt was eye-opening.

Some of the most hard-hitting articles I found were The Psychological Price of Entrepreneurship written by Jessica Bruder, The Quiet Price of Entrepreneurship by Chris Cancialosi and 7 Reasons Entrepreneurs Are Particularly Vulnerable to Mental Health Challenges by The Failure Factor podcaster, Megan Bruneau. All the articles were written from a personal point of view and I could relate to them because not only have I been through what they were talking about (as an entrepreneur) but have also witnessed (and continue to) the emotional turmoil that foundership entails as an investor/mentor/board member. Let me assure you, it’s not all rainbows and butterflies.  I should also admit that the strong urge to write these two posts came from a personal episode, I recently faced.

The last 12 months have been nothing short of roller coaster ride in both my professional and personal life. The stress of operating a new business (read: launching a fund) while handing over the reins of businesses that I was previously managing to other partners was exponentially increased due to the diagnosis of a serious and life-threatening illness to an extremely close confidant and family member. This episode took place when things were just starting to look brighter after another close family member’s life-threatening illness was successfully cured. Just when it looked like there was a light at the end of the tunnel, I realized that it was a freight train coming towards me at full speed.

It helped that things at Artha were on a roll. Everything we were doing, we were doing well, and the recognition of our efforts wasn’t happening only in India, but on a global level. However, my stress levels were increasing unchecked and I was working myself down to the bone. However, I did keep up a strong image that everything was okay, that I could handle all that was being thrown my way, until the day my 25th flight of the year (yes, its been that sort of year!) was about to take off.  

Just as my flight was taxiing out, I got some shocking advice from one of my closest advisors which went completely against Vision 2022 for Artha. Normally, I would have reinforced the vision to my stakeholder, and I have done that several times in the past (and at times, even to myself) but somehow this particular advice upset deeply me, and I couldn’t put a finger on why.

The advisor, who was a part of my inner circle had acted on the advice of a third person who did not have a complete understanding of all the things that were happening at Artha.  Therefore, the advice was an opinion stated as a fact and did not hold up to any scrutiny. It was advice that was both, dangerous to provide and to hear.

That I went through this episode at a time when I was researching the importance of mental health for entrepreneurs made me realise the importance of sensitising the founder’s inner circle and the role they play in deriving peak performance from the founder.

As I had mentioned in my last post, most top creators/performers/founders have tight inner circles which provide a cushion from the noise of the outside world, as though it were a sanitised bubble. This inner circle acts as a sounding board that at most times aids a founder to discover answers for themselves. The members of the inner circle could exist in the background, but they have a vital role to play and their importance can be gauged from examples of people like MS Dhoni, Sachin Tendulkar, Warren Buffet, Virat Kohli, VVS Laxman, Michael Jordan, and many more who have openly spoken about the important roles their inner circle has played.

Therefore, while it is as important for the inner circle to keep a check on who they give access to in order to maintain the cleanliness of this sanitised space, it is also important for them to keep a check on the advice that they provide. I have personally witnessed the destructive power of polluting this sanitised space in the case of the swift destruction of my ex-boss’ legacy and have read about it in the case of Vijay Mallya, Anil Ambani, Vinod Kambli, Amanda Byrnes and several others.

I am quite sure that there need to be some clear guidelines for the inner circle to follow, on the things they should “not do”. Essentially, what I have realized is that just like it takes a village to make a man, and an ecosystem to build a start-up, it takes a strong inner circle to build an entrepreneur. So, if you are a friend, an advisor, a mentor, parent, sibling or a family member to an entrepreneur, this is a list of things you have to stop doing (seldom against your best intentions) because it is causing us ‘entrepreneurial- stress’.

  • Projecting your own doubts onto us

By nature, every successful founder has ton of self-doubt. We doubt the assumptions we’ve made on our business plans, whether we will achieve all the goals we’ve set, whether we will have enough time or money to achieve those goals, whether the market is changing against our expectation or whether our competition is pulling a fast one on us. I could go on for days on these self-doubts, but you get the idea.

We do not need any more doubts added to this list (unless it comes from someone working with us). In fact, we need space to clear our own doubts, therefore, adding additional ones (which sometimes aren’t even well researched) is detrimental, period.

  • Making us focus our attention on results v/s the process

The media judges a company by how fast they achieve results, but it is important to remember that the best businesses are (and will be) the ones that spend time developing the right processes which in turn, deliver consistent results, even if it might take a bit longer. Just like instilling good habits in a child, building the right processes take time and patience.

When our closest network lets outside influences cloud their best judgement and then (they) attempt to colour our lenses, it is going to lead to a long term disappointment. Instead, it is imperative for our support system not to judge us based on results – good or bad.

  • Constantly chirping in our ears about our mistakes

We often make mistakes, tons of them, and we will make tons more. Our failures are scars in our memory and I rarely come across a founder who hasn’t learnt from his/her mistakes. What is important is that we understand the reason for the mistake, learn from it and avoid repeating it. Our inner circle can help by ensuring we do not drown in failures. But it is fatal to consistently chirp in our ears about where we’ve gone wrong causing us to relive that stress yet again.

  • Publicly sharing our failures and privately praising our successes

I have learned that the best way to protect a close relationship with anyone is to praise them publicly and criticize them privately. However, I see many inner circlers doing the exact opposite. This creates an excruciatingly difficult social & personal situation for us.

I simply do not advocate false or effusive praises.  In that case, you can avoid praise altogether. But criticizing us openly (or behind our backs) and putting us in a defenseless position is honestly as good as shoving a knife in our back, and I’d request that you avoid it at all costs. Just speak to us directly in private if you have any criticism whatsoever.  

  • Drawing comparisons

Like there’s an Afridi for every Sachin, a Djokovic for every Federer or a Suarez for every Messi, every business has a competitor or peer that could be performing better or worse than them (at some point in time).

While I agree that it is important to be aware and informed about what our competitors (or compatriots) are doing, our business model and path to success do not need to be the same. I believe in emulating versus imitating, but the choice of whether we should change (or not) should be left to us.

  • Forcing on us the opinions of advisors we have not chosen (most important!)

Maybe you’re at a party or a social gathering and you meet someone who gives you their opinion on our venture (with whatever titbits of information they have). You find their opinion/ judgement to be awesome and it completely changes your outlook towards our business. Now, instead of challenging your newly acquired opinion by first researching the advice you’ve been given or checking the credentials and the experience of your advisor, you blatantly pass that advice on to us and present your acquired opinion as fact.

Our entire business plan that could be moments away from validation, is now asked to be altered because you believed this ‘new advisor’ knows more about our business than us. This causes major stress and can affect our relationship in the long run.

If you have been doing this to the entrepreneur who counts you as their inner circle, please stop. Instead of meaninglessly passing on one person’s opinion, you should either put in time and effort and do some research or discuss it with us with full disclosure on who provided the advice so that both you and I can collectively come up with the right way forward.

Just remember that not all inner circle members are needed for advice on the business and each person plays an important role but as long as they do not try to become what they are not. So just like an expensive car should only be tinkered with by a well-trained technician, business models should only be tinkered with, by people who are or have been deeply involved in the business and have an experience in doing so.

You should adequately challenge any ‘random’ opinion you hear, before uttering it to the entrepreneur. Even then, that suggestion should only be followed if (and only if) the entrepreneur is convinced to take action. After all, it is the founders who have to run the business and not the person whose half-baked advice you have been listening to.  

32/2019

Your ‘Growth’ is Hurting Your Job Interviews

Currently, I am in the middle of interviews to fill several positions at Artha and one of the first questions I ask candidates is why they are changing jobs? The common answer I receive is that they are looking for growth.  Most of these people have been at their current jobs for less than 24 months, so it makes me wonder whether the growth they seek is truly in terms of experience or in the size of their pay-check. Usually, it is the latter and their feeble attempt at answering this truly important question hurts their prospects with us as it does with most employers. Allow me to explain.

I have been a part of the workforce since I was 16 years old and the first job I got paid for was in my first year of college at the age of 18. In the next 4 years of college, I went through 4 jobs and ran 2 businesses from my room. One of those jobs was selling retail jewellery which I did throughout my 4 years. In that, I found my calling i.e. sales. My next job was door to door sales, a position I held for 5 years before becoming an entrepreneur within the same organisation. When I came back to India, I went through 3-4 jobs in a (relatively) short span of time before deciding to dive full-time into setting up Artha.

Having cycled through almost 10 jobs I am in no way advocating that a person should not change jobs or look for better salary packages. In a free marketing and capitalist economy this is exactly the type of behaviour that is expected and encouraged. However, I could, as I expect anyone should be able to decide whether they love a company/opportunity/job within the first 6-12 months. Therefore, if I was investing any time beyond that in the company, it meant that I was certain I would make a future for myself there.

It’s not that I didn’t feel like quitting my jobs several, several times. For example, there were times when I felt that I was going to be stuck in my position for ever or that I was getting looked over for promotions or that I was getting jaded, but I stuck it through those times. Then seemingly out of nowhere a new opportunity, office or position would open up and due to the fact that I was there at the right time, as the right person, just like that the juggernaut was rolling again.

So I feel that if temporary situations would have affected my decision to stay with the company, then that should have happened in the first 6-12 months, because in my opinion, that is usually the timeframe when a person should have decided whether they like the job role, the boss and can live with the hygiene factors at their workplace. However, if it takes over 24 months for someone to decide whether their current job will excite them or not, that doesn’t build my confidence in your assessment abilities or more likely questions them.

There could be several situations that could have forced you to change your job (location change, family obligation, bankruptcy) and these might give you a good story to tell that is both convincing and genuine. However, if you are changing jobs for “growth” related issues but it took you more than 24 months to realise it, then you need to have a bloody good story for me to believe you (and my standards are high).

30/2019

How to Secure a Job in Venture Capital

My team and I have been actively looking for 2-3 members to join us at Artha Venture Fund. The excitement around the opportunity to identify high potential business models in India and slew of new funds (including ours) that have been announced in the last 12 months, have created a lot of job opportunities in VC firms. Also, there is something inherently sexy about venture capital. For the fraction of capital that we manage (in relation to the entire world of capital management), we carry a disproportionate amount of media attention and importance.

Therefore, it isn’t surprising that our job openings received hundreds of responses. Our HR head, Jimmy has had his hands so full, that I was forced to call him in on an off-day (when there is relatively less buzz in the office), to sift through the stack of resumes. While Jimmy and I agreed on shortlisting about 10% of the resumes, I was surprised at how little thought the applicants had put in before sending in their applications. I realized that most of the applicants wanted to become venture capitalists without truly understanding the necessities, expectations and restrictions of the job.

Instead of replying to each person with a questionnaire to evaluate their understanding of the job, I read Seth Levine’s posts from 2005 (How to become a venture capitalist), 2008 (How to get a job in venture capital (revisited)) and 2019 (How to Get a Job in Venture Capital); and added my thoughts to create this list.

1. Understand how VCs make money

We make money by charging management fees on the total amount of capital we manage and a carry on the profit we make from the fund’s corpus (some funds charge a carry per deal basis, but I do not agree to that method).

The management fee is paid to the fund’s partners to cover their salaries, rent, travel, etc. Since the management fee is fixed unlike a Mutual Fund (a post on this later), a VC does not encourage (or appreciate) annual increases in salary. As Seth accurately puts it, the partners will (as Seth puts it) hire you if you cost less than the opportunity cost for the partners having to put in their own time. VCs are much more accommodating when it comes to carry and you should expect a large portion of your compensation to come from it.

The simple math for a carry on a VC fund that returns 25% IRR on a $50 million fund over 8 years with a 20% carry would be almost $50 million infused into the carry pool. Most funds distribute 50% of that to the team (in our case it is over 60%) but even a 2% share would make you a millionaire!

It was surprising how little research the people sending in their resumes had done on our fund. This is despite the fact that we have an expansive website, over 100 media mentions in the last 12 months, a daily blog (almost every day) written by yours truly and our CFO, Vinod has the most connections on LinkedIn after Reid Hoffman. If you are clueless about us (or any other fund for that matter), it does not bode well for your job’s prospects since a large part it involves conducting tertiary research!

2. Research the VC before applying

Note: It is mighty important you look at the size of the fund and multiply it by 2% to understand the total pool of resources a fund has to pay out its expenses. If you feel that you need anything beyond 10% of that pool, you will have a tough time getting the job. 

3. Be in it for the long haul

If you tend to switch jobs every 2-3 years for “better prospects” you should not join a VC firm. It takes at least 2-3 years (in my experience) to understand the investment philosophy of a VC firm and if you switch jobs right as you are getting the hang of it, you are committing hara-kiri with your career as well as your pay check, as you will (and should) lose most of their carry.

Your career path, should you choose to persevere would be:

  • 2 years to move from an analyst to associate
  • 2-3 years to move from associate to junior partner/principal and
  • 2-5 years to become a partner

4. Do not expect quick answers but persevere

VCs can easily fit 42 hours of work into a 24-hour day (if it were available) and you are essentially a “cost centre” for us so getting in is very (very!) difficult. In one of his posts, Seth talks about how it took 3 months for a “hot referral” from a fellow VC to even get a first meeting with him. Therefore, do not send in your resume and sit tight for an answer. Keep reminding us that you are someone we should meet (and why) and that will change our view of you into a profit centre instead of a cost centre.

5. Find a way to break-in

Breaking into a VC can be difficult, so you should take whatever opportunity you get and start. You may even need to start as an intern or join one of the companies that the VC is investing in to get started. You may even handle something completely irrelevant to the final position you are seeking but get in there, into the meetings where VC’s evaluate new investment opportunities and portfolio companies. It will be worth the effort IF the goal is to become a partner in a VC fund.

6. Get connected in the ecosystem

To get into a VC fund, you must be noticed and talked about either amongst founders or investors. Find out about the start-up events taking place in your city and try to network at those events. Once you find the VC fund you want to get into, connect with their top brass by giving them good startups that they could look into (make sure you know what they invest in as well) or find a way to help one of their investee companies.

This takes some effort but when your name gets referred through the ecosystem, it carries a lot of weight.

7. Become an angel investor

The best way to display your understanding of venture capital is to become a venture capitalist! It is quite easy to find and invest in companies today, so deploy a little bit of capital, carefully though. This is not the sure shot way of getting a job but if your investments can be held up to intense scrutiny from the partner who might interview you, it would set you above the rest.

8. Get the relevant experience

I am not an MBA from any fancy school. I got my MBA from doing 5 years of door to door sales and 9 years of being an entrepreneur. Therefore, I am staunchly against getting an “empty” MBA i.e. without relevant work experience prior to joining the MBA as well as doing the MBA just because it was the next most logical thing to do. But it does help to open a few doors if you have a fancy MBA school tag. I know there are several funds that almost exclusively hire people that went to an IIM or top 10 schools.

However, what’s really important is that you have on-the-job experience prior to joining a VC fund. So, get an internship at a VC fund or join an investment bank where they will teach you how to create financial models, investment memorandums, etc. Experience in negotiating term sheets, shareholder agreements, etc. is a big plus.

9. Join a startup

Coming from an entrepreneurial background, I have a lot of respect for people who have worked for 2-3 years in a start-up i.e. a company that started from scratch and built itself into something. If you have experience of chaos turning into something, you will have the attention of many a VC (including an early stage fund like us).

As Seth mentions in his blog, if you have management experience from working with a start-up, you could directly walk into an associate’s role. And if you are a founder of even a moderately successful start-up, you could easily get the role of a principal or junior partner with a fund.  

10. Build a social profile

Nowadays, it is common for a VC to go through your social profiles, blogs and articles (if any) to get a better sense of the person you are, and if you are someone they’d want on their team. Therefore, it is important for you to have a blog where you put down your thoughts on the trends in the VC space (or even blog about your problems with finding a job in this space!), comment on the blogs of other VCs and follow them on Twitter and LinkedIn. These efforts will pay off in a big way when you are being researched by your target VC.

It is important for us to understand how you think just like it is important to know what you have done.

11. Make a VC job your Plan B

I differ with Seth here. He recommends having a Plan B while you are on your quest for a VC job. While I believe that despite all these tips, it would be advisable to avoid taking a VC job. It is a tough, tough, tough (I can’t emphasize enough) industry to break into, therefore, you should keep a VC job as your plan B. You can always be a part of the ecosystem without becoming a VC, so why endure the headache? It isn’t a job for everyone, only a few get successful at it.

I became a venture capitalist by accident. But am looking at my foray into fund management as an entrepreneurial opportunity to create multiple funds with several fund managers that can manage money with responsibility and excitement. That’s why I am in this role.

What is your reason?

29/2018

What a Bank Should Do for My Business

After what seems like an eternity, the relationship manager of one of the largest private banks in India sat down with me to understand my grievances with this bank. Recently, I moved one of our business accounts to a competitor bank and that triggered the RM of the current bank, to question why I was looking elsewhere. When asked, I pointed out the inconvenience of needing a specific certificate to be issued and installed on each device to be able to log into my business bank account. If for some reason I ever found myself without the certificate ordained devices, I was locked out of all my business accounts (which for obvious reasons is a hassle). While I am yet to understand how this process made it off the drawing board in the first place, the fact that one of the biggest banks in India was still using it, years after expiry, clearly indicates how little the bank understood about the requirements of a business today.

The RM promised that a completely revamped system was coming into place in 7-8 months and tried pitching the “support” that they provide for start-ups. As a response to this, I asked if I would have to continue to write physical letters to be able to change the address of my digital mailbox (aka email address). While he could not answer my question, I got the exact answer that I expected – to put it bluntly, large banks take their business customers for granted because of the lack of better options. While the start up support initiatives that banks put on marketing creatives look good, their backend continues to operate like it did in the 1990s. It is high time that this changes. Though the RM left with promise to do what he could, we both knew he was just a small cog in a big mess.

When I woke up this morning and replayed the interaction in my head, I had serious doubts whether the relationship manager could do even 10% of what he had promised. Therefore, I created a wish list of what I would like my bank to provide in order to have me and my business as a customer…  

  1. Single-day opening and shutting of bank accounts
  2. Business savings accounts to park excess monies
  3. Painless and easy ways to obtain a corporate credit card
  4. Seamless processes to add/edit/remove employees from company accounts
  5. A smart and all-encompassing mobile application
  6. An automated overdraft facility based on corporate credit history
  7. Easily accessible innovative lending products
  8. Quick and simple access to company investment accounts to park excess funds (in mutual funds or other investment products)

Do you have any to add?

17/2019

Nikunj’s Wedding and a Business Idea

Over the last weekend, AVF Associate Nikunj married Chandni in a beautiful and intimate ceremony that took place in Vapi. The newly-wed couple looked like they were made for each other and I wish them the best for their married life together!

A bunch of us from Artha attended the nuptials, witnessed many memorable moments and made some amazing memories that included dancing on the streets of Vapi.

One of the things that struck me during the wedding was the omnipresence of the camera crew during the ceremonies and many other moments. Since they were right in the front, they got the best view of everything that was going on. It caused the people behind them to strain their necks just to get a glimpse or end up with a partial view of what was going on.

The obstruction caused by the camera crew who were capturing moments for future viewing actually took away more from the moment than their work could deliver in the future, because:

  1. There was no way that the camera crew could have covered all the angles
  2. 99% of the people that attended the wedding won’t be watching the wedding video. In fact, many of them were trying to capture the moments on their own cameras!

Camera crews are present at almost all Indian weddings and corporate events. The 3-4-person teams usually charge up to 25-30K per day which shows that there is a large enough budget. I do not need to establish the number of weddings or events that take place in a country of 1.2 billion people that have such video crews – so there is a sizeable market to figure out a better solution for!  

Nowadays, everyone owns a smartphone with a decent camera. Hence, it could be a good idea to find a way to aggregate the photos, classify them based on time and place, curate the best ones and eliminate duplicates to provide a wholesome view of the event.

This collaborative project would lead to an amazing collection of some of the never-before-captured moments. It will also give the guests a feeling of having added a personal touch to the special moment of the bride and groom. Quite a power pull. Lastly, it would ensure that all attendees get a full view of every moment of the event.

I did a simple Google search to see if there were any companies working in this area and I found a list of companies curated by Shutterfly but none of them were building it for the Indian audience… maybe it’s time someone did!

15/2019

Aakash, Artha and Designer-as-a-Service

YourStory did a profile on one of Artha’s in-house companies Artha Creative Studio, led by Aakash Jethwani. He is a thought leader in the design thinking space and his thoughts were covered today in this ADC article.

I have known Aakash for almost 5 years since he first sent me a funding proposal for his EdTech start-up that taught ethical hacking to coders. I asked him to provide a hacker’s analysis  for one of the start-ups I was leading a round of investment in. His report was so thorough (and shocking) that I recruited him as the CTO for the company he had analysed!

As the CTO, he taught himself web design and built a fantastic website at only a fraction of the market cost. During the process, he experienced the limitations of an in-house designer first hand and saw a niche in creating innovative web and app designs for start-ups. He reached out to me saying that his work with our investee company was done and that he was ready for a bigger challenge.

Around the same time, I noticed that although many of our investee companies had in-house staff to help them with designs, most of them were mediocre. This did not make any sense and I learnt that:

  1. Start-ups cannot afford experienced designers as they are very expensive
  2. In-house designers that start-ups can afford are juniors with little experience, who need access to several tools to produce unique & innovative designs. Those tools could cost as much as ₹25-40,000 per month – as much or higher than an experienced designer’s salary!
  3. The in-house designer’s design suggestions are overridden by the tech heads because they lead to extra development work. Therefore, designers are instructed to build designs that cater to the needs of the tech team rather than the company’s target customer.  When this design fails, as it should, who gets blamed for it? You guessed right – the designer!
  4. Designers suffer from tunnel vision as they are only working on a single project within limited boundaries drawn by the tech team. Over a period, their enthusiasm dies down or they leave for greener pastures. The new designer that comes, brings in new energy but that dies again soon.

When Aakash proposed creating a design studio where he would…

  • create innovative web/app designs for start-ups
  • work with the tech development team to implement the design
  • monitor the audience’s interaction and make incremental changes

 it was music to my ears.

I asked him to test this thesis by working on in-house projects first. He provided the designs for:

Next, I introduced him to my close network who raved about the design as well as the results they received from his work.

I could see that he was onto something big so after all the tests we decided to induct him as the CEO of an Artha brand. Aakash has been baked over hot coals to get this job but I am happy to have him on board.

If you are looking for an innovative design for your company, I would strongly recommend that you reach out to aakash@artha.studio.  

11/2019

The LenDen Challenge: Peak 2k

You might win some, you might lose some. But you go in, you challenge yourself, you become a better man, a better individual, a better fighter. -Conor McGregor

In December, I threw the LenDenClub team a challenge to reach a number that far exceeded their own estimates and capabilities. The prize would be an all expenses paid party hosted by yours truly, something that Yash called “an expansive gift”.

The experience (if LenDen achieved it) was surely going to burn a hole in my pocket, but I fondly remember the times when I was apart of a core group of 25-30 door to door sales-people, that were both, talented and committed. However, we went from good to awesome when we were thrown a challenge, especially when the reward was a party sponsored by our boss! Under the pressure to perform, all 25-30 members would come up with superlative performances that the members of that team reminisce about when we meet.

So, I set a target for that would be possible to achieve only if everyone on the team performed to their fullest potential i.e. 2,000 loans to be disbursed into the borrower’s banks accounts by midnight of December 31st, 2018. The previous best had been just over 1500 so this was asking them to grow 30+% in a month, which is much more challenging than it sounds because achieving this target required multiple teams to work in perfect coordination

The underwriting team had to ensure all the borrowers were credit checked, qualified and approved. The operations team had to match the lenders to the borrowers and ensure that the loans were of an accurate amount of each was disbursed from the investors’ accounts into the borrowers’ bank accounts by midnight which meant that the banks too had to operate at peak efficiency, during the holidays. There are no prizes to guess how difficult that can be.

While this was being handled, the investor relations team had to keep the investors engaged on the platform and ensure that there was enough money in the investor accounts to fund the loans. The tech team had to keep all systems up and running and ensure the minutest of transactions were correctly recorded. The 48-person LenDen team had to collectively deliver their best and if even one person faltered, the target was going to be missed.

I knew that Bhavin & Dipesh would get close but what they did was stupendous!

The team smashed past their number delivering a mammoth 2,107 loans disbursed by the end of December! Some of the numbers they achieved on the way were nothing short of sensational for the stage that Indian P2P lending industry is in today.

While the graphs made by Karishma capture the LenDenClub’s amazing growth … let me put it into perspective that it took 43,119 mapping transactions between lenders and borrowers to achieve 2107 funded loans i.e. 1 transaction every minute in December.

Congratulations to Bhavin & Dipesh on capturing Peak 2k which is a stepping stone on the way to Mount 200k!!!

3/2019

Join Artha as an Entrepreneur in Residence

Vinod and I have been playing around the idea of setting up our own version of EIRs (Entrepreneurs-in-Residence) at AVF (Artha Venture Fund). Vinod proposed this idea during our Monday morning pow-wow as a possible solution to the difficulty we have faced in finding an entrepreneurial teams that work in areas where we identify a significant market opportunity or wish/want to deploy funds.  

So, I read about EIR programs and best practices today, and as Vinod has had previous experience with these programs, I believe we could build a similar program at Artha which will be beneficial to both, the entrepreneur and us.  

EIR programs have existed for a while in the developed VC eco-systems,  several CVCs and US universities have successfully utilised the EIR position for their requirements.  

For Artha Venture Fund’s requirements, I found a few articles that provide a good context on what I’m looking for.  

I am convinced that we should try hiring an EIR for a 6 to 12-month period and test out whether this would work for AVF.

The objective for the EIR would be to work on creating a business plan while simultaneously working with the fund team on evaluating start-ups for investments and helping the investee companies. Therefore, the program can only be for people that have been a part of a founding team (or core team) of a funded start-up, big or small.  

While many of the details are yet to be worked out (and I will share them in future posts), here are some that come to mind- 

  • Contract period: 6 months with a mutual option to extend for 6 months 
  • Salary package: 8.00 L / annum (includes a 5% communication allowance) 
  • Work timing:
    1. 9 am to 7 pm
    2. Monday- Saturday
  • Perks: laptop, cell-phone, company paid phone service and a desk 
  • Minimum requirement:
    1. Attending all evaluation sessions 
    2. Helping portfolio companies  
    3. Writing their own business plan  

While most the EIR programs have left the choice of where to focus his/her entrepreneurial energies to the EIR, my fund (as Vinod will rightly remind me) does not have the luxury of millions of dollars coming to its coffers in management fees therefore each penny has to be accounted for to operate a sustainable VC business.  

Therefore, I want to make it clear that we are looking to pick EIRs that have a tech orientation and would like to work in B2B, B2C or B2B2C start-ups (but nothing in deep tech for now).  

Some of the plays that have my team and I interested are:  

If would like to apply for the EIR position, please fill out this form and attach your resume.

102/2018