[YS Learn] Business tips from the ‘startup mafia’ of Flipkart and Paytm
The “startup mafia” now forms a sizeable section of the Indian startup ecosystem, as former executives from the likes of unicorns, , and have gone on to launch their own ventures.
Startups founded by such former executives typically attract a lot of buzz; there is investor euphoria as well. Many of them raise more funds than startups founded by fresh-out-of-college entrepreneurs or those lacking high-level corporate exposure.
The deep expertise and experience possessed by these former executives, along with their potential to generate more jobs and products for the market, make their ventures often the ones to watch out for.
The term “startup mafia” is derived from “PayPal Mafia”, a group of former PayPal employees who went on to start or develop some of the most influential technology companies in Silicon Valley, namely LinkedIn, YouTube, Yelp, Yammer, Tesla Inc., and Palantir Technologies. There are other mafias as well: those who branched out from Google, Facebook, Twitter, and other top tech firms.
Apart from the buzz quotient associated with the “startup mafia” and their ventures, there’s a lot other startups and their founders can learn from this group.
Building for scale from day one
Having built successful products or having been part of companies that witnessed massive growth and scale, these former executives-turned-founders are trained to think of scale from day one. The operational experience that comes from working in such teams brings in a trust factor that makes it easier for them to hire talent, get funded, and even build the product.
Shankar Nath, who co-founded Junio, a fintech startup whose product caters to children, says that one of the most significant things he learnt at Paytm is the power of collaboration.
“At Paytm we learnt there is massive power in collaboration. We worked closely with more than 100 brands on their consumer promotions with Paytm cash as redemption. Win-win for all. It is not a zero-sum game,” he says.
Shankar witnessed 15X growth during his three years with the company. “They plan for a large market, look at MVP (minimum product viability) and product building with that very lens,” he adds.
For Udaan Co-founder Sujeet Kumar, building for scale started happening “automatically” due in large part to his earlier stint as Flipkart’s president of operations.
“You view things in a different light,” he says. “The idea is to build something that reaches every single person. You want to build and create an impactful product.”
Recalling his experience with the ecommerce pioneer, Kumar says: “When we started with Flipkart, we too were figuring everything out. But you learn on the job. You learn things when you do them on the ground and that learning never goes away. We or any other mafia have seen the entire journey, the struggle, the highs and lows, the firefighting that needs to be done — everything.”
Indiagold Co-founder Deepak Abbot, who was earlier with Paytm, says: “The way we define startups is that they are either trying to disrupt an existing model or creating something new. Most of it is a four or five-year plan and these things are vague, and that is true even for a unicorn like Paytm that is thinking four-five years ahead.”
Pay attention to customer experience
According to Amit Lakhotia, Founder of smart parking solutions startup Park+, everything about a product and its scale is determined by the customer.
“Consumer options and view matter the most,” says Lakhotia, who was earlier vice-president of Paytm Payments. “While you talk to a customer you get a better understanding of what they want and what you need to build for. More than that, it is about simplifying an experience.”
He offers an analogy: “Is your startup solving a deep-rooted problem? Many times a person doesn’t even realise it is a problem.”
“One of the biggest mistakes we make is in believing that what a customer is saying is what he or she actually wants,” explains Deepak. “You need to understand that the customer is telling you a problem and while they may say they want something, the solution will not come from them.”
Building robust and simple products
Apart from building for scale, the simplicity of a product matters as well. Junio Co-founder Ankit Gera, who worked with Shankar at Paytm, says their experience at the unicorn helped them understand what makes systems break and what one needs to take care of while building a product.
“Apart from the back-end tech, the front end has to be built in a simple and usable manner. This we have learnt from Paytm: to build it in a simple and extremely easy manner,” he adds.
Deepak says that building an extensive app doesn’t always work. “Can it be done one-on-one to understand customers’ needs? Do they want more money, lesser interest rate, lesser tenure? What are they thinking? For that, you don’t need tech. You need people who attend to real consumer needs,” he adds.