To Scale or Not to Scale: Shailendra Singh and Gautam Gandhi Provide Perspectives on Two Sides of a Coin
Panelists: Narendra Bhandari (Director, Intel Software and Services Group – Developer Relations (Asia-Pacific)); Shailendra Singh (MD, Sequoia Capital); Gautam Gandhi (Head – New Business Development Emerging Markets, Google); Joe Ziegler (AWS Evangelist for Australia and New Zealand); M. Maheshwar Rao, IAS (Commissioner for Industrial Development and Director of Industries and Commerce, Govt. of Karnataka); Dr. Wido Menhardt (Vice President, Head, Philips Innovation Campus)
Moderated by Ravi Gururaj (Vice President, Cloud Platforms Group, Citrix)
The two extremes of passion and conviction and the ambition to capture the market share driving scale were highlighted in the duel between Gautam Gandhi and Shailendra Singh in the panel discussion on “Scaling Your Startup.” For Gautam, the scale is a natural fallout of doing something out of passion and that going on to sustain the business. The focus is on doing what you relish and if that scales, it’s good enough. But all businesses are not meant for scale. As a former entrepreneur and now working with a few entrepreneurs he brought this contrarian and a tad biased perspective. Shailendra, the investor, thought an aggressive drive to capture the market should be the motivation to scale up the business. Gautam began by asking, “why should you scale?” and that sounded a bit philosophical too. Shailendra said that ambition fuels scale and such ambition is driven by capturing the market. “If you have captured the market you are in, you have scaled” was his conclusion. But capturing that market is not easy, as you should have understood. If Gautam focussed on the heart aspect of doing what you want and loving it for a lifetime, Shailendra looked at moving fast, capturing the market, and creating awesome returns for investors.
No two clocks agree and no two men agree on scaling. Despite this disagreement, the panellists sought to bring in diverse perpectives to think over for entrepreneurs. Narendra Bhandari looked at the human resources side of scaling, Joe Ziegler looked at dispruting businesses and technologies that enable scaling, whereas Dr. Wido Menhardt sought to communicate the innovation around scaling. Maheshwar Rao, IAS, brought in the regulatory framework perspective and sought to understand entrepreneurs’ scaling challenges.
The first seed to scale is sown by paying customers who think the product is valuable, opined Dr. Menhardt. If this value proposition is not understood, the business cannot scale, he added. Joe Ziegler angled his aim at technologies that have disrupted massively and have brought down the investment and lifecycle of a product. For example, Cloud is a great enabler of scale. He said that “barriers to global business has been broken.” Maheshwar Rao felt that the government should act as an enabler of these entrepreneur objectives and the state of Karnataka has a small VC fund for entrepreneurs and two more are in the offing. He also quoted the Budget proposal of SIDBI lending a hand to MSMEs to the tune of Rs. 500 crores. The details are being worked out, he informed.
Continuing his focus on human resources, Narendra said that the CEO defines the culture and cultural misfits should not be hired. When cultural misfits are present, it acts as an impediment to scale. A lot of thought has to be spared before the hiring process and not after the selection has been made. He added that adding people wouldn’t necessarily mean adding capability. Instead bringing in diversification in terms of talent would help the overall vision of the company in taking it to its heights.
Gautam Gandhi strongly stressed upon the need of the CEO to “live” his business. He said that surrounding yourself with smart people would help you do well. “The first product is always wrong and it’s the smart people who drive the product in the right direction,” said Gautam. Joe Ziegler provided another dimension to building the product in stating that any product is conceived to solve a personal problem. “If the solution is an answer to the problem of thousands of people like you, then you are successful,” he said. Thinking of problems, Gautam said India has plenty of problems and therefore presents plenty of opportunities.
Shailendra said that the way risk capital operates world over has changed with the ecosystem full of angels and investors willing to take the risk of investing in products. He said that investors are always looking for companies that scale. Now “tons of capital are waiting for opportunities,” he added.
Narendra suggested a hypolocal perspective of defining the geographical operational boundary as local and business offerings spanning across the world, through the Internet. In this way, operations need not be established in different geographical locations and offerings that are local initially can be expanded to global scale later. Joe Ziegler sought to highlight the fact it’s easy to reach the global audience quickly.
All the wise men were unanimous that the focus should be on a single product and not spread out. Dr. Menhardt words can be counted as conclusive: “Unexpected things happen. When you develop a product for the local product, you find that it’s suddenly in demand in Germany. When you scale, it can be sideways or vertically. But always focus on one thing and do that.”
Ravi Gururaj was an enabler of this conversation by directing questions at the panellists and kept the tempo upbeat throughout by asking the right questions: first on scaling and why, on capital, on people, and on technology.
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