Archive for the 'Interviews' Category

Early stage entrepreneurs will see huge opportunities

Peerzada has done a great job of reflecting our thoughts on early stage entrepreneurship, and what excites us about the Indian market.

Its interesting that while we pride ourselves in being able to leverage our operating experience and help build companies, the best entrepreneurs know enough to run their businesses, and tend to involve us in very specific issues where we can add perspective.

Lessons for a 1st Gen Entrepreneur – Managing cash flow

I had often heard of the importance of cash flow and thought that I had taken adequate steps in year 1 to guard against running dry. But, when a fully charged technical team is at work, minor details like cash flow are sometimes temporarily ignored or wished away till reality stares you in the face.

I guess until you reach the brink, you never realize the true importance of managing cash flow. There was one VC I met around the same time we demoed at Proto that gave me the words of wisdom – “If you truly believe that your idea will work, you will have to make it work yourself”.  

Until then, I guess my vision was clouded by the wish that some angel will give us money to take us from lab to market. “Save” is a better word, I now ponder. 

Spurred to action, we got cash started by consulting. We continued to fund the technology development, but choked it enough to remove any inefficiency that might have crept in. Consulting revenue grew rapidly (we were good), but, with growth came larger cash flow management challenges. 

I guess it is true that when faced with challenges, solutions come from unexpected quarters. In an earlier assignment, I had worked with State Bank of India and helped customize an Aussie banking system to match SBI’s products. One such product was called Packing Credit – a revolving receivables financing product tailored for export business and subsidized by the Government of India to enable SME organizations generate more export revenue. 

Armed with the knowledge of structuring a proposal for credit with a PSU Bank, we got a healthy overdraft sanctioned at a very decent rate of interest. Thanks, Canara Bank. Funding growth based on booked business was now not a problem. 

The other big advantage of going through the process of getting credit sanctioned from a PSU Bank is the rigors of reporting they put you through. Added to this were the really well thought of clauses within the Packing Credit product which spurs the business availing this credit to constantly (every 90 days) get fresh business into the system.  

Once the concepts of finance take hold of the running of an organization, I guess it’s in the right hands.

Neeru Khosla On Education and Doing a Startup

Neeru Khosla ‘s name might ring a bell for some people. She is married to the legendary venture capitalist Vinod Khosla. In all these years Neeru has remained firmly under the radar and took care of her family. But for the past couple of years Neeru has been diligently working away on a non-profit organization that runs more like a startup called CK-12. The organization is focussed on creating flexbooks or customized content in math and science for US highschool teachers and students. All you need is access to the Internet and a printer and anybody around the world can create and print these flexbooks. Neeru and her co-founder Murugan Pal have ambitious plans and are also working on creating a social networking site for teachers and students. CK-12’s offering will be unveiled later this year in August.

I met Neeru a couple of times this past month in her Palo Alto office to find out more about CK-12 and what prompted her to do this non-profit organization and what kind of help and feedback she got from her husband. Does Neeru have a better understanding of her husband’s work now that she is running a startup? How is she juggling home and her startup life? How is her husband pitching in to help her? You can listen to the interview where Neeru talks about CK-12, entrepreneurship and her husband.

Two Entrepreneur Interviews: Deepak Shenoy of Moneyoga and Girish Saraph of Vegayan Systems

I recently did two interviews with two very different but passionate entrepreneurs: Deepak Shenoy, co-founder of Moneyoga and Dr. Girish Saraph of Vegayan Systems. Over the past year or so I have spent a fair amount of time talking to both of them and have followed their journey as entrepreneurs.

Deepak and I have spoken at length about entrepreneurship, startup environment, Bangalore, etc over the phone, but never got around to meeting over that cup of filter coffee in Bangalore. Blame it on the messy traffic congestion in Bangalore that precluded me from going to his part of town! Deepak is a passionate and seasoned entrepreneur and it was great fun interviewing him. In the interview Deepak made some great points about entrepreneurship in India.

Girish is an academician turned entrepreneur that I met at the TiE Mumbai conference in 2006, where I interviewed him the first time around. He was very excited at having won the TiE_Canaan Challenge for that year and was looking forward to going to INSEAD Singapore to spend 6 weeks there. I remember how Girish patiently and methodically answered all my questions about the software his company was building and gave me the big picture overview that also helped me in getting a better grasp of his company. Methodical is the word that comes to mind when I think of Girish since that trait or character is reflected in the manner in which he has plotted the course for his startup and in the way he did this interview that I did earlier this week.

Pradeep Khosla: The Entrepreneurial Dean of Carnegie Mellon University

How does Carnegie Mellon University (CMU), a renowned research US university foster research and a spirit of innovation among its students and faculty? How does CMU do tech transfer? What is unique about the US university system that helps in creating startups and companies?

Is there something that India can learn from the US University system? How can India establish a US style research institute and create an ecosystem for entrepreneurship? Can India learn to leverage research conducted at universities at an economic level? These are some of the questions that Pradeep Knosla, Dean of School of Enginering Carnegie Mellon University talks about in this audio interview.

As Pradeep points out there is no major Indian company that can trace its inception to university research. India has to figure out how to leverage the research money it spends to bring about economic development.

Pradeep is an entrepreneurial dean, who combines his passion of being in a university environment and also pursuing his entrepreneurial dreams. He helped found two companies, one of which succeeded and the other did not. In this candid interview Pradeep shares his thoughts on what he learned from the failure of their company, which was in the hot new space of virtualization and received seed funding from Silicon Valley’s Kleiner, Perkins, Caufield and Byers.

Video: Rohit Bhargava on Branding and Personality

Since Alok wrote the previous post on branding I thought as a follow-up I’d post this video interview with Rohit Bhargava, who has a new book out called Personality Not Included.

Rohit is Senior VP of Digital Strategy and Marketing at Ogilvy. He has a very popular blog aptly titled: Influential Marketing

This interview was recorded at the AdTech Conference in San Francisco on April 15, 2008.

How did you fund your startup?

In the US it is quite common for a startup to get its 1st round of funding from SBA (small business association) or an overdraft of $100K from the neighbourhood bank. After that if cash flows can support you should be able to get more credit from the bank. Then there are Mezzanine funds which will give you convertible debt. Infact VC funding is considered very rare in the US.

In India most lending is asset based lending and not cash flow based, meaning you have to have some kind of asset such as a house inorder to raise any debt. Or you have to have parents and family that support you. But how does the average guy get started? There are some inspirational stories about how some did it and it would be great if we can hear them!

So how did you fund your startup?

Do Indians Lack A Flair For Entrepreneurship?

Do Indian lack a flair for entrepreneurship? When I first read that question on Trackin’s post I instinctively and vigorously did the Indian thing: shake my head in a strong no-no, that is not what I have uncovered. I think entrepreneurship is alive and kicking in India, but what is lacking is education, role models, access to information, a supportive environment…variables and factors that help nurture entrepreneurship. What are some unique variables that apply to  entrepreneurs and startups in India? For instance, the role of parents and the diminishing returns in the marriage market for folks working in startups is a fairly significant factor.

Before we go any further first, a definition of entrepreneur. According to Wikipedia:

“An entrepreneur (a loanword from french introduced and first defined by the Irish economist Richard Cantillon) is a person who undertakes and operates a new enterprise or venture and assumes some accountability for the inherent risks.”

Who and where are these entrepreneurs of Indian origin and how did they get there are some of the questions I constantly explore in my blog, internet radio show and video clips. Through this primary field research (maybe I should enroll in a PhD program in some school) that I do via these interviews I see a pattern and that pattern is one of entrepreneurship in India and the Indian diaspora community.  At the global level, The Indus Entrepreneurs (TiE)  is now the largest network of entrepreneurs in the world. Prof. Anna-Lee Saxenian has written extensively about the contribution of immigrants to Silicon Valley and has examined the role of Indian entrepreneurs.

In India there are countless, undocumented and untold stories about entrepreneurship. Some are a single owner business, while others may be a small, family-owned business and some are first time entrepreneurs. But they all do the same thing: take risks and create and operate their business.

Take Indu Sharma, the mallishwali in Bombay who has a fire in her belly to earn money and be successful. (Warning: this podcast interview with Indu is in Hindi.) Lack of education or access to information has not stopped her from her goals. Years ago when she did not know how, she simply persisted and opened a bank account for herself. A couple of years ago she got herself a cell phone and expanded her business and increased her revenue stream by a few hundred percent, an increase that any entrepreneur will die to achieve. Talk about being driven, motivated and looking at every obstacle as an opportunity to make more money. She certainly demonstrates a flair for entrepreneurship. Indu Sharma is a CFO’s dream, a micorpayment company’s ideal customer and the stuff CFO’s dream about.

What about the kirana store in Basvangudi, Bangalore that was founded by an enterprising female called Subamma in1940s? Subamma certainly saw an opportunity for home-made savories and in the process of created a unique food item with a fantastic and memorable brand name “congress peanuts.”  This family-owned store still continues to operate and has a thriving business as you can witness in this video. The store is an institution in Bangalore that has morphed to include IT terms in their food items. Talk about the success and ubiquity of the IT industry in Bangalore. (Warning: the clip has a liberal dose of Telugu.) The folks at Subamma don’t own a computer system or a CRM system to generate bills, instead their focus is  on the quality of their product and listening to their customers, which are key takeaways from any entrepreneur or company.

Or, what about Thangavel, the fruit seller in Malleshwaram’s Hosa market in Bangalore? He has continued to operate from the same space for the past 30 odd years. His offering of fruits has gone from selling local fruits and Kashmir apples to kiwis from New Zealand, apples from Washington and pears from China. His store and profits have expanded over the years as he points out in this video. (Warning: this video has a liberal dose of Tamil.) How did Thangavel survive during the leans years of his operations especially when the inflation rates were high in the country? Buying fruits is probably not an option during times of inflation, when the price of your vegetables like onions and tomatoes are over Rs. 50 per kg!

Or, what about the veena maker, who painstakingly creates his veenas from scratch and has a backorder for them? This veena maker demonstrates in this video that what is needed is dedication, passion and a desire to succeed. (Warning: this video has a liberal dose of Tamil.) The veena maker is in a niche market and has built a loyal customer-base, again something that other entrepreneurs can emulate. When you build your service or product, who is your target audience?

Then there are entrepreneurs and venture capitalists who have achieved success with no business background. Many of them belong to regular middle-class families and went on achieve success. Kittu Kolluri of NEA comes to mind, as does Alok Mittal of Canaan. Alok founded his business in India and not in Silicon Valley. There are many entrepreneurs like Kaval Kaur, Anu Shukla and others I have interviewed with similar stories and background. Many of them talk about failures too like Kaval and how she and her husband had to re-engineer their business plan when they hit a major speed bump on their road to success.

As Yogen Dalal of Mayfied Fund pointed out what Silicon Valley offers is a supportive and safety net that helps entrepreneurs. It is that safety and supportive net that is lacking in India, but that clearly has not deterred many people from starting and operating their own business. When that supportive and safety net is set in place you will suddenly find that quite a few Indians have that killer instinct and want to be entrepreneurs. Yogen also talks about failures and how to handle them. Failure is part of any entrepreneurship journey.

If you look at the Indian diaspora community around the world there are many entrepreneurs. Whether it is the bespoke tailor in Hong Kong or Thailand or the business person in East African nations like Uganda or Kenya or that business person in Mauritius or that owner of a high-end hotel chain in New Zealand or the curry king  or steel king in UK…these are all instances of entrepreneurship. These people migrated to a new land to build their business without any safety or supportive net. Oh, I almost forgot…the Gujarti hotel and motel owners, who own 60 percent of the hospitality market in the USA.

Do you think Indians lack a flair for entrepreneurship? Or, do you think the right environment, knowledge, government policies and other factors come in the way of an Indian’s entrepreneurship? Or, is it a combination of both?  Does your drive and flair drive you to do business, or do you need supporting environment to venture out and do business? What kind of an entrepreneur are you?  Do you come from a business background? Who was your role model? Why did you start your company? Why did you become an entrepreneur? And are you enjoying the bumpy ride?

This is also cross-posted on my blog

Podcast Interview: Gopal Srinivasan of TVS on Entrepreneurship

Gopal Srinivasan belongs to Chennai-based TVS family, which runs the TVS groups of companies. TVS has led to the growth of Chennai as the automotive capital of India, and today Chennai is known as Detroit of India.

I caught up with Gopal in Manhattan, to find out about the unbroken culture of entrepreneurship that has continued for almost 100 years within his extended family. How did they do this and become a multi-billion group of companies?

You can read more about Gopal here.

I also have a second interview with Gopal about Tamil Nadu and Indian economy.

Podcast Interview: McKinsey’s Rajat Gupta on Health and Eduction in India

A couple of weeks ago I caught up with Rajat Gupta of McKinsey at the Pan IIT Global Conference in Silicon Valley. The theme for this year’s Pan IIT conference was “Changing the World Through Technology.”

I wanted to find out about his interest and passion in health and eductation in India. What is the connection between citizens health and economic growth of a nation? How does poor and bad health of a nation’s population impact its productivity and economic growth? How do you institute good and effective health policy and healthcare in India? What are the the challenges that India faces in the area of healthcare? What are some of the public-private initiatives in this area?

Inclusive growth is a line that has crept into every decision maker that is doing business in India. How does this inclusive growth happen?

Mr. Gupta is a senior partner and a former managing director of McKinsey & Company worldwide. Mr. Gupta sits on the advisory boards of Harvard Business School and Northwestern University’s Kellogg School of Management. He is on the board of trustees of the University of Chicago and is the Chairman of the Board of the Indian School of Business at Hyderabad.

He is Co-Chair of the American Indian Foundation and private sector representative to the Board of the Global Fund for Aids, Malaria and Tuberculosis.

Mr. Gupta is a trustee of the Rockefeller Foundation. Mr. Gupta advised McKinsey’s work with the Bill and Melinda Gates Foundation. In 2006 he was appointed as an independent director at Goldman Sachs.

Mr. Gupta is a graduate of IIT, Delhi and Harvard Business School.