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Sunday, June 26, 2016

Entrepreneurship - In the words of Mr. Venkatesan Seshadri, Founder,

DoT club had the privilege to have Mr Venkatesan Seshadri, Founder, to give a guest lecture on entrepreneurship and technology. Here are the edited excerpts of his speech.

Starting up is like coming to IBS - Setting everything good, plan to come within time but road works happen in the middle, a tree falls en route and you are 20 minutes late. In a serious note, it is about handling uncertainties.

With technology, startups can scale rapidly without requiring proportionate resources. Startups grow exponentially once they get their execution right. No physical presence is required to grow to new avenues. Very few startups are not technologically oriented. Many think, technology is an enabler, but in actuality, technology is the business! If you are starting up a tech business, it is strongly recommended to have a programming background.

For starting up there are few basic questions one has to answer.
  • Look at a problem.
  • Question yourself whether you have faced it before.
  • Research, on totality, how many people face the problem (Market size of the problem)
  • Execute it perfectly.
For you to test the market, a simple way is to go with a prototype of the product and show it to the customers. If enough customers open their wallet and pay, go ahead with the implementation.

You should be embarrassed with the first version. Very few get it right the first time. Don’t settle. Point in case is IRCTC. The website is ugly, slow, painful but people have no option but to go to irctc again and again. That’s the kind of service or business you want to build. Even Amazon’s UI is not exceptional. No body buys in Amazon because of their UI. They buy because of low prices and wide selection. UI is not the business of Amazon. Efficient Supply chain is. Try to find out your core competency. 

Change is permanent is what people hear and say a lot. Yes, you have to change. We have pivoted 3 times till date and we plan on doing it further because market is dynamic. Its not that you take a decision and you can stick with it for lifetime. You cannot. You have to change. Steve Blanc said “No business plan survives first contact with a customer.” So be dynamic and change accordingly. 

Odds of making money in startup is 1 in a million and I’m being very conservative because people of India are not buying products. They are buying the discount. Peppertap recently closed its operations in 6 cities because they ran out of investments. 

When Pranav (Cofounder of and I were working at Microsoft, we travelled business class, stayed at luxury hotels, had a comfortable job because the client bore all the expenses. It was very tough to walk away from that kind of a comfort zone. Can I stay without pay cheque for 2 years? Can I scale down my standard of living for 2 years? If I fail every day, can I still start a day excited for the next 20 years? are the questions everybody have to answer before they contemplate on starting up. 

Now let me say good things that happen to you when you start up:
  • You are the boss.
  • There will be very few decisions you can make if you are in a corporate. Maybe, at the age of 55 you might take a decision that matters but as an entrepreneur, you take a decision every day.
  • Get to talk to people like you.
  • You get a meaning to your life. The notion of giving back to the economy and creating employment excite you.

Questions from the audience:

Question: What technologies do you use at
Mr. Venkatesan: For cloud we use Microsoft Azure. We have an android and an iOS app, so we use objective C, Android SDK, Java, .Net, MySQL, etc.. We have about 1 TB of photos on the cloud. For compression and optimising the delivery to moblies, we have built some algorithms in-house. For tracking, we use a stack of analytics tools as well.

Question: Lot of us MBA graduates want to work of startups. What do startups expect from us?
Mr. Venkatesan: Firstly, you’ll get real work because in startups we don’t have luxury of having Project Lead, Team Lead, Module Lead, Fresher, Trainee, Associate Trainee, etc.. From Day 1, you’ll have some responsibilities and a time is given. No body will ask you about your progress but probably come back after the time and say, “Is the work done?” and if the answer is “Yes, I did it but have a small problem with this,” no problem we can work through it. But if the answer is “No,” you probably don’t belong there. 

So you need to get productive ASAP. That’s the key. You are free to do new things. We expect you to bring skills to the table because we don’t have the luxury of training you. We don’t value ideas. We value implementation. I strongly recommend, Go work for startups!

If you go to a very early stage company, the idea will keep changing. You might get more equity but you might not get pay cheque on time. If you go to Angel Funded companies, you’ll get the paycheque, idea is already proven. When they get to series A, you get a steep pay increase, you get stock options, which means your company is already starting to take off. You got into the plane before it took off, so you are in the journey. 

If you go from Series B onwards, the company is already starting to collate from a startup to become a large company, typically having about 150+ employees. So the manager has already come. HR manager will be there. Once an HR manager enters, everything is over. (laughs) 

Earlier you go, higher the risk, higher the return.

Question: Is cofounder really important for startups?
Mr. Venkatesan: Good Point. If you are starting up, I strongly recommend you get a cofounder. Mainly because, it is a very stressful journey. If you keep failing everyday, one day, it’ll be too heavy to handle alone. You also need somebody to talk to about stupid ideas. You need somebody to respect. Finding a cofounder is one of the key tests to find out whether you are capable of starting up or not. If another guy does not trust you — to leave his job and say “I’ll do this full time” — you can never inspire a team. 

How do you find a cofounder? There is no magic answer. You have to trust him, you have to be comfortable around him because they have access to your code, bank accounts and everything. You spent more time with him than your wife. Its a live-in relationship basically. So be judicious in selecting your cofounder.

Another important tip is to find a cofounder with complementary skills. If you both have the same skills, what’s the point?

Question: Many times we see a scenario where the company starts up, idea grows well, people start to accept the idea and then suddenly big companies who have huge investments and deep pockets enter the same area where these startups are playing and pump in huge marketing investments and take away everything from these small companies. Is there a way other than selling the company to these big players to stick to your ground?
Mr. Venkatesan: Firstly, it is an unequal battle. There is no justice. A start up means you are fighting with people who have way more resources with no to minimum resources. Even if you do everything right, somebody might take the market away. That’s the reason 99.9% startups fail. There are things that you can’t control. If somebody is taking your market, keep hustling. If the idea is working, you’ll be able to raise the resources and if a big company is coming to that space, you will actually find investors that invest in you that see a possible acquisition. Acquisitions are not bad. They provide exit to the investor. 

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