Building a company from scratch- Takeaways from a TechSparks panel discussion
In the second of the panel discussions at TechSparks 2013, Alpesh B. Patel, dealmaker at UK Trade and Investment and founding principal at Praefinium Partners, Sanjay Anandaram, venture partner, SeedFund, Saumil Majumdar, co-founder and MD, EduSports, Srikanth Iyer, CEO, TutorVista and Pearson Education Services, Saju Pillai, co-founder, idea Device and Shashank ND, co-founder, Practo discussed the intricacies of ‘Building a Company from Scratch’.
The session was moderated by Pankaj Mishra, national editor, at business newspaper, Mint.
Things to keep in mind other than culture
Majumdar: One of the first things is to identify the big problem to be solved and even if you are reasonable successful in doing it, you can achieve big success just because the pain-point itself is humongous.
Shashank: Ensure that you are doing two things: 1) Get the product management right; and then 2) positioning the product to sell - pitch to customers and not to media.
Quitting or doing the startup as a side project
Majumdar: The market and customers are willing to work with you if you are willing to quit your job and focus on the startup full-time.
Patel: Should you quit your job? If your dream is not big enough you won’t quit. Scale idea till it's big enough to quit, you will know, because you can’t bear not to start off the next morning.
Building your product
Pillai: Don’t build in a cave or in your office, go out and meet customers even if you have a few slides to show, they need to know what you are making, and most of them are open to talking.
On not doing everything
Anandaram: Sometimes you have a superstar, and you have other employees, and sometimes you have a more equitable structure.
Superstars are not aware of weaknesses. Self-awareness is important, founders find that they are maxed out, even when they hire somebody to do the job they do backseat driving. You have to remember that what is good for the company is good for me but what is good for me is not necessarily good for company.
With founders there’s ego and emotion. The important milestone is to be self-aware.
Patel: Well you have heard of the 3 D’s- do, delegate and delete, you should add delegate, delete or die. Don’t do everything yourself.
We need more dumb entrepreneurs, if you look at some of the earlier founders like Bill Gates, he did not finish school they let other people do it. Find out who is the best person to do it.
Iyer: We built an education company and proved that there is a market. After reaching scale we had opportunity to merge with Tutorvista and asked whether they should merge or go off on their own. We hired the right people and did not do backseat driving.
Raising money
Anandaram: Raising money should not be an end in itself. Lot of people who have taken money from unsavory sources have lived to regret it. Make sure that you take from it from the right sources.
Iyer: My advice would be to delay taking money for long period of time, It could be one of the smartest things to do. If you really need it there is no lack of resources.
On communicating to employees
Iyer: We had to let go of 75 people but explained to them why they were being let go by conveying the message with sincerity. This is extremely important. That was 11 years ago, still half-a-dozen of the 25 are still there.
On parental acceptance
Iyer: You should consider your parents as one of the first stakeholders and convince them about your idea.
On hiring
Anandaram: Most companies are started with friends, but they may not be right people for the job. You need people for business development, marketing and other needs.
On offering bribes
Pillai: Business is done on merits, it's a no-brainer about offering bribes. These questions have been asked earlier, when the market gets to know that we don’t accept bribes, they stop approaching us.
Patel: The ease of doing business is better in the UK than in India, Indian companies need to have their base in India, but could also source from other countries like the UK.
Anandaram: In 1987, I was asked to sell computers in Bihar, I told my boss that I might be asked a bribe. He asked me what per cent of customers will ask for bribes, when I replied 90 per cent, he asked me to get business from the remaining 10 per cent.