Sanjeev Bikhchandani on why academia may be better geared to cater to the AI revolution and more

Sanjeev Bikhchandani, Founder and Executive Chairman of Info Edge (India), the parent company of Naukri.com, 99acres.com, JeevanSathi.comand other businesses, is no stranger to building a technology-first business ground-up. He has played a key role in identifying successful consumer businesses in India as an early-stage investor in companies like Zomato and PolicyBazaar. 

While his early bets have been largely in the consumer-internet space, Bikhchandani believes startups will increasingly use Artificial Intelligence (AI) in the coming years. 

“Every product, every offering will have some AI element to build a better product or to create a better customer experience,” Bikhchandani tells YourStory. 

Steering Info Edge since 1995, Bikhchandani strongly believes that a founder has to wear multiple hats during the journey, and there are no clear boundaries defining the founder versus manager mindset–it largely depends on what the company needs at the moment. 

Info Edge recently partnered with Mohali-based Plaksha University to set up the Info Edge Centre for Entrepreneurship to extend mentorship and resources to student entrepreneurs. Bikhchandani said that Indian educational institutions were beginning to see early signs of companies starting out of ideas formed there, a common story overseas. He added that student entrepreneurs need to be mentored to think through the problem-statement they are trying to solve. However, selling the idea “is not teachable, but it is learnable.”

Edited excerpts from the interview:

YourStory (YS): Info Edge also runs Info Edge Ventures, its early-stage venture capital arm. As an investor, what do you look for in a portfolio company? 

Sanjeev Bikhchandani (SB): In a company, we seek evidence that the customer will want what the company is making. That’s another way of calling it Product-Market-Fit (PMF). Is there an unsolved problem? Is there some natural traction? What is the evidence that the customer will want this or does he want it already? Second is the quality of the team, and both PMF and team are non-negotiables. 

YS: What makes for an ideal founding team?

SB: A lot of it is human judgement, where we are asking whether this person can make it happen. Can he or she attract talent, do they understand the consumer well enough, are they fundamentally honest and ethical? Are they humble, will they be fair to other shareholders? Will they be fair to employees with ESOPs? Five years from now, can they run a large team? How good are their people skills?

YS: What are some of the key sectors you have been evaluating of late and has there been a marked change?

SB: We evaluate companies bottom-up. We meet about a thousand companies every quarter, and if someone looks like a good person doing great stuff, we might invest in them. 

The risk with a top-down approach is you will likely miss many good companies. 

In 2008 or 2010, if somebody had told me that you should look at the restaurant listing sector–there was no sector like that. We met Foodie Bay, which became Zomato later on and we met Deepinder and Pankaj and we liked them. Good people doing interesting and useful stuff, we decided to back them. Likewise, for PolicyBazaar, there was no insurance comparison sector and they were a pioneering company, just like Zomato. So, when you are going after pioneering companies, you do not look at sectors.

YS: How have these bets worked for you?

SB: Both these bets have paid off. The worth of our shares in Zomato and PolicyBazaar is over Rs 40,000 crore today. 

YS: What are some new sectors from academia and educational institutions where startups are making an impact?

SB: AI is going everywhere–every product, every offering. Most of them will have some AI element built into them for a better product or to create a better customer experience. This does not mean you are an AI company–we will see this over the next three years or so.

At Naukri itself, we have a hundred-member strong team working on AI, ML, analytics, and data sciences. We have already introduced 22 features in the product which harness AI. I believe universities will do well to expose students on how to build stuff with elements of AI in it. 

YS: But India is largely being touted as an AI-applications market, rather than a product market. 

SB: To build those models requires a lot of resources and compute power, and therefore you might not find many companies building foundational elements. India has a need for vertical applications–we have a lot of people; a billion mobile phones. So, vertical AI apps will have a huge market in India. 

YS: A lot has been said about the founder versus manager mindset among entrepreneurs to run a successful startup. What are your thoughts on this and how does it help run a company better?

SB: To be an entrepreneur and a founder, you need to wear multiple hats–leader, follower, CEO, errands boy, techies, salesperson, receptionist, manager–you have to do everything. So as a founder, you need to be 360 degrees, similar to what a good manager does. So, there may be very little difference between a good founder and a good manager. 

YS: At what scale does a company need formalised management?

SB: As they grow, founders will figure this out as they are not going to be able to cope with certain things which need to be done. So, they get help and will evolve. 

In our case (Info Edge) for example, we were 16 people. We raised venture capital and the investors said we need a CFO. We did not see the need but they insisted and we got a CFO very early on. That was a significant addition to the team. 

When we reached a headcount of 200, we said we need a separate HR function. Till then we had an HR executive who used to report to the head of operations. When we wanted to go public, we got a full-time company secretary. We also established a second layer (of leadership) in finance. 

As needs evolve, founders respond. But it is generally a good idea to staff-up a bit early but not too early. 

YS: If you were to start out today, what would you do differently?

SB: We started talking to customers early on. I became an entrepreneur in 1990 and we launched Naukri in 1997, and raised venture capital in 2000. I might have raised venture capital earlier than that. 

Overall, bootstrapping teaches you fiscal discipline and forces you to do more with less money.

YS: What are the key tenets to starting out in today’s market?

SB: I would say the four principles that remain constant are–solve an unsolved problem, be close to your customer, be frugal, and dream big but start small. 

YS: What is the need to teach / talk about entrepreneurship at college-level?

SB: If you can inspire enough young people to be entrepreneurs, it is a good thing. I went through a course at IIM Ahmedabad called Laboratory of Entrepreneurial Motivation–it was a lot about reflection, introspection, and understanding my own motivation. 

First you need to clear your mind about what you want to do and why, then you go about implementing it. Of course that means there is a product, technology, and a customer and sales. Put your team together. 

If you look at overseas, several successful companies have come out of universities…increasingly, there are stories of Indian successes. There are a couple of alumni from IIM Ahmedabad who started something called Grad Capital, which funds student-entrepreneurs. 

YS: Can academic courses spark entrepreneurial ideas?

SB: I do think so. You can create an environment where people are thinking about it, talking to others about it, sharing ideas and learning from those who have done it before them. And then , hopefully, they can get focused and that can be a purpose they have in life. 

YS: Can you tell us more about your association with Plaksha University?

SB: Hitesh Oberoi, the co-promoter, CEO and MD of Info Edge, is one of the original founders of Plaksha, and has backed it personally. He also brought it up to our CSR-committee to contribute. We have contributed to the Info Edge Centre for Entrepreneurship.

I found the logic of setting up Plaksha pretty compelling. A bunch of IIT alumni felt that India needs a new kind of technology university in the private sector–and they got together to form Plaksha. We found this cause worth backing at Info Edge. I think it is about solving an unsolved problem, a need gap.