The first day of any large conference is usually marked by strict form, as people get acclimatized to the situation. At Menlo Park on Day 2, right at the start as participants moved about briskly and purposefully, it was evident that a certain degree of comfort and familiarity had set in, kid gloves were off and sleeves rolled up in a state of preparedness, awaiting the opportunity to be part of the deep-dives which were to follow. Mr. R Chandrasekhar, the President of NASSCOM delivered the opening remarks and touched briefly on the NASSCOM Product Conclave, a hotbed of new ideas and ventures that get unearthed every year. A toast of sorts, to the spirit of entrepreneurship. We moved on to the first panel discussion of the day, “Building a Great Enterprise Startup.”
Moderated by Prem Taleja, Fabric, the other speakers were: Kamal Anand (Appcito), Joseph (VeloCould), Jon Baer (Threshold Ventures) & Animesh (VISA). Let’s look at individually on what they had to share.
Kamal: His company Appcito offers cloud-native, software-as-a-service (SaaS) solution for web scale application delivery, that works across any cloud. Kamal himself takes much interest in developing and executing market entry and growth strategies, scaling businesses and attracting venture investments for new businesses ideas. He was very clear that customer focus ought to be upfront, agility being a mandatory clause, and yet at the same time it is important to say NO to remain focussed. Else, there will be pulls from multiple directions which will soon spiral things out of control. It’s important to take a step back and think from the investor’s perspective as well. What would be some of the things that he would like to hear in a pitch session before releasing Series A funding? Are we on track to get all those “things” in place and script the story in due course? A reflective outlook coupled with a vision, and backed by unbiased stock-taking of situations, will go a long way in attracting investments.
Joseph: VeloCloud, a Cloud-delivered SD-WAN pioneer, simplifies branch WAN networking by automating deployment and improving performance over private, broadband Internet and LTE links for today’s increasingly distributed enterprises, as well as service providers. Yet again, the resolve to say NO at the right time without adversely impacting relationships, was strongly articulated by him. Business is a constant battle between immediate survival and building for future, at least in the initial years, and there may be instances where the two positons are at loggerheads. That is when, the temptation to give in to low hanging fruits is very strong. Once you give in, you’ve taken the first step towards diluting your core objective and end up as a me-too player without any significant value proposition. Temptations, as much in life as in the world of business, simply build on each other and get bigger and more difficult to resist with passage of time.
Van: He has been both a venture capitalist, as well as the founder and CEO of two venture backed companies. As a principal and founder of Threshold Ventures, Jon works with companies around the world, serves as an advisor/mentor, works on specific projects and when appropriate, takes on interim operating roles. He has worked with a wide range of software, telephony, hardware and services businesses. As a “venture architect and builder” he helps new ventures draft and refine their business and move past each threshold to the next stage of business success. He stressed on the importance of knowing one’s market and taking into account this knowledge to build a successful organisation. Often founders are saddled with, if not actually overwhelmed by what they do not know. At such junctures, the need for validation and its significance can never be overemphasised.
Animesh: He is presently working in the Global Operations and Infrastructure Division as Senior Director in the Visa Operations Command Centre, responsible for System Management Tools Support. They work with startups which are 2-3 years old. “The younger ones need to know how their products would work in other VISA enterprises in the ecosystem”, said Animesh, taking a cue from the validation remark which was made earlier.
Three pointers for a bootstrapped company:
The unique standpoint for them is that they have very little leeway, and have to strike it right the first time, and everytime thereafter. A gospel of sorts that has come to pass.
- Make the first customer happy, after all they are the brand ambassadors. The very first. Someone once said, that making the first million is always the hardest.
- Aquire customers through cost effective ways and figure out where is the real value add.
- Identify your vertical, and the target users like Whatsapp did in markets outside of US. Scala is another example – even if early adopters were in India, the primary market was outside India.
On Validation in the US market – there is no tangible number, but scalability is an important factor at an optimal level of efficiency and price point, that will sell.
The other panels during the day were no less lively. What stood out in the “Transitioning to a valley startup” panel, were the reasons to come to the valley, and there were several: Being close to the customer, better business environment, larger customer base and equality. Silicon Valley is fair and gives an equal opportunity to everyone, irrespective of socio-economic and cultural imbalances. The cost arbitrage that India is known for was harped upon yet again: “entrepreneurs in India do have a cost and talent advantage.” It was rather heartening to note that “talent” was mentioned in the same breath as well. Clearly, the country was well on its way to secure prominent mindshare.
The India focussed VC Panel highlighted a few things:
- VCs are generally more favourable towards companies which have global ambition
- Need to have a vector defined and being adhered to, including checks and balances in place.While comparing Indian founders to others
- The usual tendency is to focus on products alone and not paying enough heed to business plans. People underestimate the time that is required, to build credibility in a newer market. Things happen organically if the right plan is adhered to.
- Keep market focus as the primary objective – What are you building and who are you building it for, really matters. It clearly resonated with what was said earlier.
The takeaways from the US-focussed Panel:
- In a world which is interconnected, one also needs to have a focus on investors who are global. Typically, VCs look at shaking up (disrupt?) the economic model and improve on results many times over. Their ultimate aim of making “good” exists will fructify, if the RoI on total investments is at least 2-3 times.
- The Valley puts primacy on IP, more than IT. VCs are known to change their stance accordingly based on the targeted market – be it Indian or global.
- On diminishing valuations – A lot of healthy rationality has set in. This usually happens during every downturn, and afterwards for those who survived, and thrived. Clearly, this time there has been a shift from GMV to RV.
See you again, tomorrow with more insights.