At AWS Startup CXO Mixer in Ahmedabad, established founders and VCs share confessions and best practices for success
What are the best practices to launch a successful startup? What are the challenges while scaling up? What do VCs look for while funding? These questions and more were answered by Amazon Internet Services leaders, startup founders, investors, and accelerator heads at the AWS CXO Mixer held on February 6, 2020 in Ahmedabad.
Why startups build on AWS
“There is a reason why startups choose to build their applications on AWS. We know what a good business plan is, what works and what needs to change,” said Matt Fitzgerald, Principal Technical Evangelist, AWS in the opening keynote.
One of the advantages of AWS is that there's zero upfront cost which allows you to create an account, test your idea, and stop using it if it doesn't work. "The elasticity of the cloud enables you to move much quicker and try new things at a lower cost and lower risk, and focus on your core business." The cloud platform has consistently been launching new services and features based on customer feedback.
AWS has a bunch of programmes to help startups accelerate their startup journey, including AWS Marketplace, AWS Well-architected, Amazon Launchpad, Amazon Alexa Fund, AWS Activate, among others.
Talking about how the funding opportunity landscape in India has improved, Matt said that in 2005, startups required $500,000 from VCs to start up. Fast forward to 2020, that number has come down to $5,000. "It means that founders now have more opportunity to get some of that funding because VCs now have $500,000 to spread around. This means there is an increased chance for you to get a foot in the door.”
Start local, go global
Next on the agenda was an interesting fireside chat between Sandeep Laxman, Startup Evangelist, AWS and Ashish Tandon, Founder and CEO, Indusface. Ashish shared his journey of how he went from being a cricket player to a CEO. A first-generation entrepreneur with three ventures in his portfolio, he considers himself an accidental entrepreneur.
On how he managed to close his first customer, Ashish said that as a security consulting company, they had no background in building a product. So, when they did, he went to the top three or four customers - these were people who mattered to the country. "The reason I did it was so that when I give a reference while selling later, I need to showcase a customer that matters to others."
Talking about the AWS partnership experience, Ashish said that the pay-as-you-go model enabled them to decide what services you needed and build your architecture on top of it. "From a data centre and architecture perspective and to help meet all our customers’ expectations, this was one of the most mature services."
Ashish also spoke about acquiring customers outside India.
"The challenge is to establish your brand there. Because we were successful in India, we had enough case studies ready to pitch outside. Do well in India first, and then go global," he said.
How to pitch to VCs
When is the right time to raise capital? How to pitch to VCs and how do you choose a VC? Sudeep Bhatia, Group CFO, LendingKart Group shared best practices on fundraising at the event.
"At some stage in your startup journey, you need support from the entire ecosystem. But if you're an entrepreneur who requires capital on Day 1, you're not ready," he said.
Startups should know exactly how they want to pursue their dream and what can make them successful. They need to be wary while looking for advisors. "Don't be an employed promoter. Start slow and down the line, you can think about equity money," he added.
Sudeep said that for those who want to become entrepreneurs, it should not be about money alone – the essential part is the purpose you want to attain, and the money will eventually follow. "You have to remember that you're working for a much larger vision. If you talk about money on Day 1, you won't get funding."
Startups also need to showcase what expertise they bring to the table. Another aspect that VCs look for is if the startup is scalable and socially sustainable. "The last thing that you want to talk about to an investor is about the money or exit," he said.
Fundraising for early-stage startups
Asutosh Upadhyay, Head of Programs, Axilor Ventures, hosted a workshop where he shared insights on how to get your first cheque.
"The biggest question people have is why funding is so tough. It's not tough, it's misunderstood," he said.
According to him, funding is more complex than marriage, where both entities are trying to get into a business relationship.
Axilor Ventures is India's largest accelerator, and in the last five years, it has supported around 135 companies. Sharing his views on operating while investing in a startup, Ashutosh says having a team with an unfair advantage, business idea, domain knowledge, market growth potential, product-market fit, competition disruption and investment-fit is essential.
"You came to a fuel pump, talked it out, and want to reach a certain stage. Do you think you have enough financial efficiency to reach it? If not, calculate back and see if you can find a way to fuel up. If not, we're going to lose our cheque, and you will lose time," he said.
Candid confessions of a founder
Dr. Harmitsingh Sikh, Founder and CEO, Foodmemories.com, took to the stage to share nuggets from his startup journey. Foodmemories.com is an early-stage startup dealing with regional speciality food. Dr. Harmitsingh shared six things he learnt over the last few years - trust your gut and back it with numbers, confide in your business partners and vendors, be patient and not emotionally attached to your mistakes, constantly ideate, momentum is key to surviving in the long run, and that there are no second chances.
Reverse pitch: VCs take the stage
Usually, entrepreneurs pitch to VCs. At the AWS event, the tables were turned, and two VCs took to the stage to pitch to startup founders.
Vipul Patel, Partner, Seed Investments, Bharat Innovation Fund spoke about how their objective is to help entrepreneurs through innovation and inclusion and deliver quality at scale.
"We are not an incubator – we are in innovation continuum, working to support entrepreneurs," he said.
Apart from investment and acceleration, they also have a research team that is focused on building case studies. Last year, they supported 150 startups, right from acceleration to funding,
Pitching to the audience, Vipul said, "If you're a failed entrepreneur, people view it positively and accept that you will use this learning to do better next time. But if you're a failed investor, you don’t get a second chance. There's more risk on the investor side, which is why they take their own time and style to invest."
Sunil Parekh, Senior Mentor, Indian Angel Network (IAN) said the reason why IAN has become quite popular is because it has successfully created new ventures with the help of successful startups, unicorns, businessmen, and entrepreneurs who have already reached the mature stage.
"If you want to create disproportionate value, you are required to give a massive amount of support to the startup, which comes in the form of high-quality mentoring, vast network, inclusive strategy, and health and execution."
On average, IAN gets 11,000 deals a year and the average deal size is about three and a half to four crores.
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