Been there, done that: these women show how to build sustainable businesses that matter
Panel at HerStory's Women on A Mission Summit on 'Building high growth, sustainable businesses that matter.'
India may be among the world’s most thriving startup environments, but the entrepreneurial ecosystem in the country, much like in Silicon Valley, is heavily male-dominated - fewer than nine percent of startup founders are women.
A March 2018 study on Women Entrepreneurship in the Indian Context revealed the many problems female entrepreneurs deal with: financial constraints, lack of credit facilities, marketing problems, stiff competition, shortage of raw materials, high cost of production and family conflicts.
But despite the challenges more and more women are choosing to follow their heart and turn entrepreneurs. Starting up may fall into place, but women then face the next big hurdle: scaling up. How do the smartest women leaders and entrepreneurs navigate the risks and challenges of building businesses to drive value and growth? This was ones of the topics of discussion at HerStory’s Women on a Mission Summit 2019 at Hotel Lalit Ashok in Bengaluru on March 6.
Three women who have made a mark in the startup community took the stage to debate how women can build “high growth, sustainable business that matter”. Anjana Sasidharan, Principal, Sequoia India, was in conversation with Neha Singh, Co-founder of data analytics platform Tracxn; and Yamini Bhat, Co-founder of Vymo, an AI-enabled Personal Sales Assistant.
Starting up and scaling up
Anjana Sasidharan - Principal, Sequoia India - who moderated the panel
Anjana started the discussion by making a relevant point on women entrepreneurship: how many women founders have raised beyond Series B for their startups? Statistics show less than 20 percent of startups led by women entrepreneurs in India and the US have been able to raise VC funds. Anjana added that perhaps women entrepreneurs thought “differently” about growing their companies and adding value.
But it’s well known that women across the world find it difficult to talk money matters. In a study conducted by Merrill Lynch, 61 percent women said they would prefer to discuss the details of their own death rather than talk money! But it’s important to walk down that path to grow. The 2018 State of Women-Owned Businesses report by American Express reveals a “significant gap between the number of women who start businesses and those who commit to growing them. Unlocking the potential of women-owned businesses represents a powerful opportunity for economic growth”.
How can women impress investors and get the funding they need – and deserve? Neha’s response was quick. “We elaborated on how well we executed, how good the team is, and sold the market well, explaining what a large opportunity it was.”
Neha, an IIT-Bombay graduate and Stanford MBA holder, was an investment analyst at Sequoia India before starting up with her husband Abhishek Goyal. Tracxn is today widely regarded as the Bloomberg for startup research. She recollects that she started up to solve a problem she could relate to as an investor. “There was a major market gap; I felt that this product should exist. But the question was: who would pay for this product?” she says, adding that the VCs who she piloted the prototype with eventually became investors.
Yamini, an alumnus of IIM-B and BITS Pilani, has spent almost six years as a consultant at McKinsey. She said her first step to cover was ensuring product-market fit. “Then every dollar will bring in momentum. We went from quarter million in revenue to three-quarter million revenue in a few months’ time. That’s when investors took note. It is also important to watch out for what is working and not working for your competitors and in different geographies.”
Vymo, an AI-enabled Personal Sales Assistant, was born out of Yamini’s fear of stagnancy after her years at McKinsey. The opportunity was obvious, she says, as she has seen large corporates spending millions of dollars for solutions for their CRM problems with consulting firms like McKinsey, yet not getting what they want. “I knew that they would not hesitate to pay a startup well if they could deliver exactly what they needed. So we decided to build a mobile solution for CRM,” she reminisces, adding that she knew the safety net of a job would not make her “desperate”. “I quit my job, although McKinsey had offered six months’ leave of absence,” Yamini said.
The product-market fit conundrum
Yamini Bhat - Co-founder, Vymo
The importance of product-market is bandied about all the time. A term coined in 2007 by American entrepreneur and investor Marc Andreessen, this essentially means "being in a good market with a product that can satisfy that market”. This fit is critical because without it an entrepreneur won’t know whether or not what she is building solves a real problem with a large enough market.
Finding the right product-market fit was no easy task for a mobile-first sales effectiveness solution. Yamini said since she and her co-founder had software and consulting experience rather than sales, every step was a new discovery.
“We started with broad field sales in all sectors; our clients included Airtel, Haldiram, Monsanto etc. We then narrowed in on BFSI as deal cycles, sizes, payability, payment discipline, and nature of field sales were very different. Then we started aiming higher and went upmarket,” Yamini said.
Anjana said the product-market fit in B2C startups often comes from the founders’ experiences, be it in parenting, food tastes, education, or fashion. “These different sensibilities help you tailor the product to the market need much better. It is better to not focus on a small problem for a large number of people, or a large problem for a small number of people,” she said.
She added that it was important to speak to lots of potential customers/clients to get a good understanding of how pervasive the problem is. “Avoid building a hammer first and then going looking for a nail.”
According to Neha, the US is the biggest market for Tracxn. “We wanted to start working with customers in the US initially. Coincidentally, Lightspeed Venture Partners had a summer programme for startups to be trained at Stanford University. We launched the product there, and worked with one of the founding partners of Lightspeed Ventures. They were impressed that our product was not a copy-paste job; we were creating a product for a new demand,” Neha said. She recounted how most of her clients – mostly VCs – gave valuable inputs at that time. “It helped us prioritise which features to launch at the beginning.”
Getting the right team
The team – and team-building - is often the most undervalued part of a startup. But getting the right team in place is vital. Like Silicon Valley-based evangelist Guy Kawasaki famously said: “Ideas are easy. Implementation is hard.”
Neha revealed what worked for her. “A friend told me this hack and it was brilliant. I made a list of 15-20 people whom I respected, asked them about the top three people that they would recommend based on whom they had worked with. This got me a really high-quality list of people who I did not need to assess; all I needed to do was check for fit and interest,” she said. “Always look for people who fit well with your company; do not focus on previous experience or college degrees. Drive is what matters,” she added.
Yamini faced a tough time hiring the right team, as she had just returned from the US and had no connections in the startup community here.
She shared her insights: “When you are interviewing for a role you know nothing about, get the interview done by at least three other people. Also, it is mandatory to give the candidate a detailed assignment. Only if they are really keen on the role will they research about Vymo and put in the work. This proves their drive and hunger.”
Stressing on the importance of “coachability”, Yamini stated that the best candidates take and bounce back from negative feedback. “So you know they are coachable and adapt to feedback quickly.”
Building the right culture
Neha Singh - Co-founder, Traxcn
Neha believes that communication is of paramount importance. “We created a culture document when we became a 100-member team, and we take it seriously. Daily meetings help communicate across teams,” she said.
For Yamini, and Vymo, what has worked is “ownership”. “Everyone has ESOPs. We focus on keeping things transparent; everyone knows our sales number as of date. Every quarter we share updates with the teams on things we will stop doing and things we will double down on,” she said.
Neha also urged entrepreneurs to keep updating their skills. “A 50-member team is run differently than a 500-member team; so at some point you want VPs to take more responsibility,” she added.
Yamini said she sets an internal milestone that helps her do that.
“What I do today should be done by someone else after three months; so I hire for skills. We need to be patient; but in four-six months you will know if your hire has a culture fit. Mistakes are unavoidable; so we have budgeted around 20% of our people costs as cost of wrong hires.”
The elephant in the room
Although women entrepreneurs and employees continue to be viewed differently owing to domestic needs, Anjana said being a mother had made her a better investor. “Becoming a parent has been another pivotal transition for me, personally and professionally. As a parent, you develop a new level of empathy and even creativity in how you engage with people. Your ability to step back from a situation where you don't have control - and look at it from a different perspective - changes drastically”, she said
Yamini, who started up immediately after having a child, said emotions at the workplace used to confuse her.
“But kids give clarity. With them, you can do elimination of a set of their problems and solve them easily. It’s the same with your team; they have issues with their boss, salary, and work. Motherhood is an advantage, not a bottleneck, in that sense,” she said.
Confidence is key
Rounding up, Anjana said that when women were assertive and articulate, gender biases would fade away.
“Five minutes into a conversation with an investor if you can show that you know what you are talking about, there will be no more reason for doubt. Once you start making sense and are comfortable in your skin while selling an idea, biases fall away,” she said.
To scale, women founders should often speak to other founders and mentors, help each other problem-solve, and learn from each others’ successes and failures. An inner circle is what can help you start up, scale, and continue on the path to growth.
A big shout out to HerStory's Women on A Mission sponsors – Co-Presenting Sponsor Microsoft, Sequoia Spark, Innovation Valley, NetApp Excellerator,Servify, ZOHO, Meesho, Arctic Fox, DROR, and Gifting Partners WoW, &Me.