Launching an Experiment to Spot Problems Worth Solving

It is a little over ten years now, since I started working with the Startup Ecosystem here. Much has changed – and I’d say for the better. Funding has improved. Startups are mainstream. And Entrepreneurs are celebrated. Yet, when I look at some of the companies and startups that we showcased at ( Between 2004 – 08), it seems some of them were quite out of the world, compared to the me-too startups we see.

Chennai, a tier-2 city by most metrics, has 52 food delivery startups (that we know of). In a conversation with a group of students in IIT and when I prodded them asking why they aren’t going after some of the bigger problems, their answer was simple; “Sir, we read that some of these companies have raised 10s of millions. We look at their venture and it seems so simple and we believe we can do it better”. While the audacity is to be applauded, It also makes me wonder if the best and brightest need to be going after ventures that are essentially time-bound courier service ventures.

As part of The Startup Centre, we’ve been running In50hrs (a prototyping event) for four years now. We’ve been active in 8 cities across the country – organizing close to 14 events a year. I personally love it – seeing entrepreneurs from each of these hubs, and their ideas. But it seems that most of them are drinking out of the same watering hole for their inspirations.

I strongly believe that the ecosystem will sustain as long as we are solving real problems. Inflation and frothy valuations only kick in when there is excess of capital but not enough opportunities to chase. Capital being available is a good thing; I wish if we could direct it to a better purpose.

A few months ago I started talking to a few people to collate problem statements (alok was kind enough to send a few of his own). We are trying to see if we can seed these problem statements – not ideas, but problems – so that the ecosystem can benefit out of.

We put all of them in a Google spreadsheet and shared. I have an inbox full of requests to show that people were indeed interested (or perhaps just curious). But there wasnt a way for folks to interact, and build on it. I opened up the access priviledges and it only took a few minutes before it got vandalised.

Building from the learnings, a week ago we launched Ideaspace. We are building a community around problem solvers – the same community that came together for In50hrs, but this time centred around problem statements – both seeded by us, and those that the community throws up. We’ve a little over 400 users on the platform right now. If you’d like to participate, do let me know. You can signup via If you are simply curious and just want to have a glimpse of the problem statements then you can do so via

I’d love to have your feedback – and thoughts on the same.


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Reflections from IIT Session

I was at IIT Delhi today for my duties at FITT (runs the IIT Delhi incubator). Few months back, IIT Delhi decided to support a deferred placement program for students wanting to skip placement in interest of pursuing entrepreneurship. Today’s meeting was a review and approval meeting for four of the cases. Some things that struck me.

  • All the students seeking deferred placement outlined “comfort of parents” as the first reason to seek deferred placement. “Even if my startup doesn’t work, I can tell my father that IIT will still allow me to sit for placements”. Many of the applicants were clear that they are not going to actually seek placement with big companies, even if they failed – as one guy mentioned “I can’t imagine myself sitting in a cubicle working for a large company.” Now some of this might be the most convenient answer (and I suspect that, given how uniformly this reason was given,) but it was amazing to see the conviction of the applicants towards startups, as also the social bias against startups that young entrepreneurs still have to work with.
  • Interestingly, none of the four startups which applied for deferred placement applied for incubation at IIT Delhi incubation center. I have been noticing this for a bit – younger entrepreneurs are moving at a faster pace than mentors/ incubators are used to moving. It is a serious issue for long-standing incubators – will they manage/continue to attract the best deals?
  • Most of the ideas being presented were another one in pack of 50 companies already out there doing the same thing. The founders often didn’t know about competition, nor about previous failed attempts. This was worrying – the level of awareness towards one’s immediate context has to improve. Perhaps something to think about for many of us who are looking forward to supporting young entrepreneurs.

I did ask the question on who their role model is. Though its not a large sample, Rahul Yadav got mentioned. I was only half surprised – guts is glory in today’s times. Am back at the institute for Speranza this weekend – looking forward to meeting more entrepreneurs.

Join the Net Neutrality debate

Medianama has a good analysis and initiative on the Net Neutrality issue. Read up and make yourselves heard here.

This debate has had interesting arguments globally. To the extent, I have been able to follow, there have been a ton of bogus arguments on both sides, thereby confusing the core issues. In my mind, the core issues are around (a) adherence to standard protocols to ensure that applications can rely upon the same; (b) creation of open communication platforms, as a goal in itself, to spur innovation around those networks; (c) clear communication around inclusions, exclusions, and dampeners in any given telecom package – an issue of consumer protection; (d) curbing monopolies that can be promoted by telecom service providers also being in app business and providing unfair advantage to their own apps/services.

Join in on the conversation!

Lufthansa Runway to Success – Call for Entries

Lufthansa and TiE are bringing you the next edition of Runway to Success. Runway to Success is a TV series which will be broadcast on ET Now, and the training camps all over the country would be conducted in association with TiE. Some highlights of the program:

  • The winner of this series would win a seat at Stanford University’s prestigious Design Thinking Boot Camp, along with A Lufthansa Business Class ticket to the US and mentorship at TiE, which alone is sufficient reason to jump into this program.
  • Each episode of this TV series will have two segments: In the first, a success story of a path breaking entrepreneur will be shown to inspire you. The second segment will have three selected entrepreneurs present their business idea to the star entrepreneur. Winners from each episode will be elevated to semi-finals and then grand final where the winner would be declared.
  • Participation is absolutely free!
  • Besides the winning part, there is the absolutely incredible opportunity to connect with the who-is-who of Indian start-ups eco-system, biggies of entrepreneurial world and fellow passionate entrepreneurs which can be a huge boost to your confidence and acumen ship.
  • Last year, 20,000 entrepreneurs from all over India applied for this program, fighting for 27 precious seats.
  • TiE sponsored boot camps would be conducted in major metropolitan cities, where leading entrepreneurs would share their stories and teach how to become an entrepreneur.

You can register for #RunwaytoSuccess Program right here. You can follow the hashtag #RunwaytoSuccess on Twitter for latest updates and stories. More information about this program can be found here.

Why you Do a Startup ?

Why you do a Startup ? By Chance or you are totally frustrated with a Problem you face on a regular basis or You want to make big loads of Monies or You are passionate about something or You do not want to miss the Wave ??

There are lot of Questions you ask or should ask and be clear and concise about why you are doing this Startup. First , you have to figure out the real reason of Doing the Startup – May be in any Domain.. !! Why I am Doing this ?? Find the Real Reason !! Think in Think Out and Find the Real Reason while putting yourself into Customer shoes (If you are customer , would you buy that Product/Service and why you should be even looking at this kind of company and Would you shell Money from your own pocket !!

If this is in Enterprise Software/Consulting Domain , you could figure out the Total Market opportunities by reports from Gartner/IDC etc and then can see the Subset of the Total Market and clearly reach on to the Niche Area of that Market and what Pain Point you are solving for the customer !! Me too Approach could work in some situations but generally not !! There has to be real value proposition for your customer as it would be too difficult for him to change for the Vendor or Software or SI they are currently working with !!

In Consumer Internet Businesses , is it only about Traffic or more Numbers adding to your App. But Real Question to answer is to find whether these guys would buy that even if its $10 Per Month or which way you could monetize from the same and make Monies out of that.. !!

Finally, Be in Any Business , Company would be successful only if they could make Right Product (Finding the Need) , Pitch on Right Market and Finally Customers are feeling WOW factor to shell out the Monies to buy that Product/Service.

Any Questions !! Send to :


Virendra Sarna

The Billion Dollar Startup Club

The Wall Street Journal and Dow Jones VentureSource are tracking venture-backed private companies valued at $1 billion or more. See how the club has expanded since the project began in January 2014 and select companies to learn more about each.

Accelerating Time to Market Cap for Internet/Mobile Companies

Must read analysis by Playbigger for Internet/Mobile entrepreneurs. Summary at beginning to report,

Metrics for Early-stage Mobile Apps

Have been talking to many “mobile app” entrepreneurs of late, and one question I get consistently is around how they should think about metrics for mobile apps, to gauge early traction, and with an eye on first round of investors. Here are some thoughts.

In my view, valuable mobile apps fall in two zones – apps which will have tens of millions of users over time, but might not have a short term monetization model; and those which would have fewer users but strong anticipated monetization (think few hundred rupees per active user – a million monthly actives and Rs 100/monthly active gives a $20M annual business.) By and large, I am seeing the first kind of businesses in the Indian market, perhaps because mobile payment and monetization is still nascent. Getting stuck between these two end goals is generally not attractive to venture investors looking for scale.

Here are some metrics that startups and venture investors are using to assess early traction:

  • User growth: Installs and active installs are the first line metrics. Some notion of active users measured at a frequency which depends on usage context of the application – could be daily actives, weekly actives or monthly actives. One thing that seems to have lost emphasis since web days is the virality coefficient – have not seen great examples of viral growth of apps, perhaps because content sharing to app install workflows still seem broken. At a more operational level, tracking the pre-install and uninstall funnel can provide great optimization tips.
  • User engagement: This is perhaps the most important one, and where I have seen most distortion. Active users and/or percentage of users active, IMHO, are not great ways to measure these, because they interfere with user growth metrics – higher growth can lead to larger number of active users without improvement in app experience; lower growth can make the percentage metric look better. In my view, measuring cohorts is the best way of gauging this. First, active user cohorts (i.e. what percentage of users who installed in a particular period are still active). Second, activity level cohorts (i.e. how is the cumulative activity by a cohort of users growing). Active user cohorts provide an insight into leakiness of the bucket. The second one, of rising engagement – for great apps, activity level cohorts are rising charts, not falling over time. The metric of activity at the app level could be sessions per day, average screen views, time spent, or other metrics important for the business (such as messages sent for a messaging application). Note that the DAU/MAU metrics are sometimes used to assess user engagement, but for reasons mentioned above, they are not great metrics for engagement.
  • Key application tasks: A measure of how well and how often are business tasks being accomplished. These depend on the application intent – for example, in a match making app, this might be the funnel into generating a match. Very often these might be “funnels” and not single metrics, and it is a very useful tool to figure out where the flow of actions is constrained (i.e. conversion to next stage of funnel is low), and then fix those to optimize the funnel.

I have not included monetization metrics above because for the first class of applications, that can be solved at the next stage of business evolution. However, providing a directional sense of monetization mechanism and per user potential is important in setting scale expectations from the business. I have also not included a measure of “design excellence” above for lack of an objective measure – it is certainly something that is very important to provide a great user experience, and attain some of the metrics listed above.

Would love to hear from mobile app entrepreneurs on this forum on what they have found effective to gauge the progress of their businesses.

How to effectively use the Rs 10,000 crore allotted for entrepreneurship

I wrote this Op-Ed piece in Economic Times on how the government can effectively use funds allocated to entrepreneurship fund-of-funds.

Key points:

  • Leverage the funds to generate private participation and hence enhance the size of the pool
  • Leverage capacity that exists in corporations, microfinance institutions and the like
  • Emphasize under-served areas that align with national priorities, such as job creation, manufacturing, defense, social sectors etc.
  • Promote geographical and social inclusion to ensure a balanced growth

Comments welcome!

Back to the future

Last few months have been full of uncertainty and choice. It is rare that life provides us with an opportunity to step back and ask ourselves the all important questions of what makes us happy, and what do we really want to do with ourselves. It is even more rare that it simultaneously provides us with the right context to help us answer those questions. Over past few months, I was offered both, due to circumstances ranging from tragic to serendipitous on personal and professional front.

I am glad to share with my friends that my instincts have led me towards attempting to do another startup, instead of continuing with the venture investing business. At Canaan, we have built partnerships with entrepreneurs who we feel very proud to be associated with. We will continue to back and support those relationships, both institutionally and personally. However, I will not be making fresh venture investments. I am now on a lookout for a co-founder and an opportunity, which provide me with an uncompromising mix of fun and challenge over next many years. I look forward to help, support and guidance from my friends in startup, investing and corporate world, as I charter into what is always an unknown territory.

As I discussed these options with few close friends early on, something strange happened. Two of my good friends, entrepreneurs themselves, came back and solicited help on issues they were facing, in a way they never had before. Perhaps my position as a prospective investor in future drew boundaries on what they felt comfortable sharing with me. With those boundaries gone, new conversations opened up. I hope that I will continue to have the opportunity to share perspectives, which being on both sides of the table has allowed me to earn.

42 is a good age to begin. Again.