|Ashish Gupta, MD Helion Ventures Pvt Ltd. Of Junglee.com fame talks about being an entrepreneur and a VC....The dream to make it big is universal and when 5 boys who just finishing school and on the threshold of their lives make it happen, you want to know what makes them tick. The story begins in Stanford where these young hopefuls are in various stages of finishing their studies, but the common thread that runs through them is that they are bursting with self confidence, high levels of energy but surprisingly none of them is enamored to work in a big company. They want to prove their worth on their own merit and this is fostered by the place that they happen to be in.|
What has happened over time is not so much that Stanford has produced talent but these developments have helped Stanford too. Companies like HP who have an extremely efficient work culture helped attract a combination of hungry folk who were overachievers. This combined with the right environment and the right finance gave rise to a spate of companies big and small.
There was no fear of the unknown.
The Junglee Story
I personally had worked for IBM and Oracle and realized by then that I could not work for someone or in a big company. I quit and started moon lighting in Stanford doing some research and as part of that research I came across something that I found interesting. It was a way of creating a structured database out of the unstructured data which was available in the World Wide Web. Its applications were many including comparison shopping,. At that time there were no on line applications by which you could do a specific search... a search typically forced you to read every entry. So this application - seemed like a good idea.
A group of close friends got together and proceeded to build a prototype, and tried to raise funding. Its just luck and also the ecosystem which attracted like minded people that David Filo of Yahoo fame happened to be a dorm mate. It was him that we approached first. Things turned out different.
There are basically two types of search: Parameterized search and Keyword search. When we started on the parameterized search engine we were excited and believed that it was the way forward and it would be the future in search for a class of things. But it has so turned out that even for the class of things that we thought parameterized search was important, keyword search has proved to be more relevant and comes first. So although we turned out to be dead wrong on that front our application proved to be a winner earning 100 million dollars in revenue and over 30 million dollars in profit. Fortunately and quickly we realized that we should build applications instead of technology.
Being an entrepreneur
I have to be honest here by saying that part of it was naiveté, that is - we did not know what it took to start a company and we felt there was nothing to lose at that point of time.
Another aspect was downright foolhardy optimism that kept us going. In our case Rakesh Mathur (CEO) is the eternal optimist while I am the pessimist or a realist, as I prefer to call myself. But the optimist keeps the excitement going while the pessimist can keep a reality check.
The team is of paramount importance and I still miss the Junglee team. We were never shy of taking in people better than us. This kept the excitement going. We were very lucky that some excellent people joined us. In fact I can't think of very many people from that initial team of 70-75 people who have not become very successful in their chosen fields. If you hire people who have their head and heart in the right place and are willing to work hard, have the right attitude and the willingness to learn, with basic competence in their chosen fields, then you have the recipe for success.
Serendipity of course you cannot discount. If you are not lucky it does not matter how good you are. The flip side is, when opportunity knocks who opens the door.
You have to march forward with complete belief.
Versatility in the team is the next aspect that is of great value. Everyone on the team should be prepared to do what is necessary. It does not help if the person says he can't do it, the attitude should be one of being ready and rising to the occasion.
The spouse of the entrepreneur needs to be stronger than the entrepreneur independent of whether the entrepreneur is a male or female. This is because the entrepreneur is in his own world with an adrenaline rush trying to conquer the world and all other stuff needs to be handled by the spouse. I have been lucky to have such support from my wife.
I feel that running a company and the way you run your life is similar. You cannot apply a different set of rules in your life and a different set of rules for the way you run your company.
This Indian sense of Duality, where you should be detached yet care enough to do your best and there is no better place to apply this than in a startup. One needs overconfidence in oneself which almost borders on arrogance (meant in a positive light), for example an undue belief in oneself. The odds are so highly stacked that maybe mere confidence will not be able to sustain you. You should believe that this is the way to go forward but you should not get too caught up and not listen to the market, then you are dead. One cannot go into the office everyday doubtful; "Am I doing the right thing?", You have to march forward with complete belief, yet you have to keep asking am I in the right direction? Another way to view it is, can I do this better?
The VC should have a fair picture of all the risks involved and yet be ready to put in the money.
At the same time equally important is the Question what am I doing wrong? This question has to be asked constantly. People who don't ask this question especially in evolutionary markets get killed.
Also according to me there is no shame in copying but make sure you do it better, anyway at the end of the day execution is much harder than innovation in the business world. But intellectual honesty is something I have to stress on.
A VC's Perspective
As a venture capitalist my advice to entrepreneurs would be to have a dream that you believe in totally. So much so that you should be able to convince the VC that some adverse conditions cannot pull you down. The first stage when you approach a VC is selling your dream. If you can get the other person to be excited enough about your dream then you have a partner. Companies find it far easier to get the first round of financing than the second round because then you will have to have some evidence that the dream is reality. Set the expectations low yet get the VC excited enough to give you the money. It is possible to strike the right balance.
Vision transplant on the other hand is fatal. Your vision is your reality . The VC can't translate your vision nor should he attempt to transplant his vision to the team. It is the responsibility of the entrepreneur to work and prove himself worthy of the money invested by the VC. The VC must realize that the entrepreneur is putting his life on the line while he is asking the VC to merely put his money on the line. As long as you have given it your best shot you need not feel guilty of the VC losing his money. That is solely his responsibility. For example decision making in engineering is based on 80% known and 20% unknown. In sales it is 40% known and 60 % unknown, in marketing it is 20% known and 80% unknown and in investing in a venture it is 5% known and 95 % unknown. This 5% known has to be transparent and the rest of the 95% is about compatibility between the people.
The other things a VC can do is ask the right questions and connect the entrepreneur to the right people, encourage the entrepreneur to think in new directions. Anyway the joke is that it takes 7 years and 40 million dollars to spot a bad VC!
Finally the basic premise that needs to be followed is the willingness to do what is right as opposed to saying the words that I will do what is right.
Arathi. P Balaji
Issue BG74 May07