Thread by @marginalideas

Book 20 – How I almost blew it by Sidharth Rao

The book is a brief chronicle of some of the digital entrepreneurs of India. he author tries to get some common thread and leanings across their journey and it’s a good refresher read on these firm’s journeys.

@sidharthrao

@sidharthrao 1. Some of the most common reasons for failure or almost blow up is consistent across the firms – Desire to grow at fast pace without being profitable, spending too much money without the commensurate revenues, ambition to diversify without getting the core correct and...

@sidharthrao ...incorrect market sizing. Incorrect market sizing is amazing given how small the real market for internet consumer in India is.

2. One of the most consistent themes across the founders which did succeed is their sense of fairness with their employees and investors alike –

@sidharthrao ..Kunal Shah is amazing there, so are others. Ashish Hemrajani ensuring that laid off employees get 6 months severance from own pocket and others helping them with jobs till they find one is what ensures that even though business do fail at times, if you are able to ensure...

@sidharthrao ... good relationships, you will always have a second chance. This is an important learning for a lot of founders who are not sensitive to their people’s need and requirements.

3.There is no framework for success except for sheer determination. Stories such as BookMyShow and..

@sidharthrao ...MakeMytrip shows the same. So does InfoEdge (starting with Naukri.com). Sanjeev Bikhchandani, the founder is a firm believer in the role of luck. Acquisition of Jobsahead.com by Monster and then destruction of the same by monster is a great example.

@sidharthrao The story also proves one thing which is consistent across the stories – It’s always the B2B business which throws the cash and most of the companies who use the same to subsidize their B2C business end up destroying the both. The story of Rahul Yadav and Softbank who told him..

@sidharthrao ..not to worry about revenues for 10 years is another interesting story. A better product and a better-looking product are two very different things. 99acres was being used by people and hence a better product, not housing. The core of any business is the value of its....

@sidharthrao ..proposition and its ability to sell itself to its targeted market. Does it have what it takes for a customer to loosen his purse strings?

@sidharthrao 4. Kunal Shah – FreeCharge – more than anything else, his idea of ensuring that everyone gets a fair deal is what appealed to me the most. Wealth equations are created not by keeping wealth but by sharing it. He made Alok Goel the CEO very early one and this speaks volumes..

@sidharthrao ...about the man -He wants the best man in charge for his business and that can be anyone. He knows how to create a culture at a company and probably that’s the reason he is being chased by everyone for his next venture – CRED. He has raised more money than any other founder..

@sidharthrao ... at the stage CRED is in and this is a testament to the kind of founder he is and the trust investors have in him.

5. Murugavel janakiraman – Matrimony.com – A classic story of spending money without proper planning and not spending it wisely. Getting into too

@sidharthrao ... many verticals, not focussing on the core vertical, led to spending of the money that could have been saved. This coming from someone who refused a deal from Tiger Global as early as 2004! Other mistakes included spending Rs. 57 crore on ads on 2007-08 without even roadmap..

@sidharthrao .. to generate 1x that amount in revenues. Key lesson here is that when you want to expand the services that you are offering to customers, it is important to stick to the core category...

@sidharthrao ..Though they were doing reasonably well in other portals, looking back, focussing on matrimony as a core area would have helped them scale faster.

@sidharthrao 6. Ajit Balakrishnan – Rediff.com – This is some story of boom, bust, boom and then bust. He planned to build Rediff.com as a media company, different from Rajesh Jain’s IndiaWorld. Rediff was probably the last IPO before the dot com bubble burst...

@sidharthrao ...raising $55 mn at a valuation of $300 mn. But then, with advertisers scaling back, stock price fell to $2.75 in 6 months of listing, from $19.31. Ajit turned around the company by focusing on enterprise solutions once again with the company’s share price reaching to highs ...

@sidharthrao ...of $25. Unfortunately, Rediff.com’s glory was short-lived, challenged by Yahoo! and then Google. The key moral of the story is that Indian consumer markets are minuscule, particularly for newer technology. Another reason for its failure – It was a jack of all ...

@sidharthrao ..trades and master of none in the age of specialized players (Just Dial’s fate, anyone?).

@sidharthrao 7. Anupam Mittal – People’s group. Now focussing on Shaadi.com. A serial entrepreneur born with a silver spoon. Not much impressed by the constant pivot and lack of focus, raising tons of money and blowing it up. Though Shaadi.com has been doing well now

@sidharthrao 8. Ashish hemrajani – BookMyShow – One of the best case studies in the book. Sample this - A unicorn is a fucking mythical animal. It doesn’t exist. It’s a horse with a horn and it’s ugly. When I am asked whether BookMyShow will ever be a unicorn, my response is that I don’t...

@sidharthrao ..know. But what I know for sure is that we are cockroaches. We are survivors, we can survive a nuclear holocaust—you put us in the microwave, and we will make it. I couldn’t care less about anything else. And boy, survive they did! They blew it up, fired people, paid 6 months’..

@sidharthrao ... salary to cushion the impact, helped people find jobs, shut down their consumer facing business, built software and then again made an amazing comeback – a must read story. If you have to read only one case, read this one. Perseverance, doing the right thing almost does...

@sidharthrao ...the job. Another key learning is - failure to distinguish between ‘internet users’ (India Two) and ‘internet consumers’ (India One) has messed up every estimate of the market.

@sidharthrao 9. Brijesh Agarwal – Indiamart – Stick to one’s core and don’t fight people you can’t fight – you will burn money and achieve nothing. This is the key lesson here. And look at IndiaMart’s stock now! Another key learning - first mover advantage is mostly a myth engraved in a..

@sidharthrao ..start-up playbook. Nearly half of the companies that go first fail. The ones who succeed are the companies that entered the market early but not first. Also, a good board is comfortable telling the entrepreneurs not to obsess over something that isn’t working.

@sidharthrao 10. Jitendra Gupta – Citrus Pay – Founders conflict, A classic case of B2B company almost being shut down due to fascination with consumer facing business. Also, focus on sales. That is the most important thing a start-up can do – You need revenues to survive.

@sidharthrao 11. Deepinder Goyal – Zomato – While you can start slow, you can scale up really fast and money in account and an initial success can screw up your brain – That’s the story in nutshell. Market size estimates in India are not even half as big as people think it is ...

@sidharthrao ...(A consistent learning throughout the stories). Don’t think success in one geography means success in another and don’t bite off more than you can chew. While they hated deal seeking customers, this is exactly what is happening with Zomato Gold program though now!

@sidharthrao 12. Deep Karla – MakeMyTrip – Second best story after BookMyShow. They started with consumer business, focused on NRI since it was a stable segment, blew up and had to return investors money ( A good lesson on if you don’t ask, the answer is always no here), core team foregoing..

@sidharthrao ..salaries for equity in tough times and then fighting it out. Some lesson in picking investors here - always pick investors who are a) quick decision makers and b) someone you are comfortable with. VC’s taking infinite time in the name of process, please take note.

@sidharthrao 13. Pradeep Kar – Microland. He is the original pivot guy. It had a revenue of Rs. 180 Cr in FY18, Infosys had Rs. 260 Cr the same year. A market scandal stopped the IPO. Indya.com was his brainchild to compete against Rediff.com and he even raised...

@sidharthrao ...$50 mn PE capital, a big big sum in those days. After ups and downs, blown up money on scale, the firm does $100 mn revenues in Global IT Infrastructure.

@sidharthrao 14. Rajesh Jain – Communications Limited. Indiaworld.com. From domain name issues wiping out 2 years of hard work to making a perfect exit, if there ever was one, Rajesh saw it all. Lots of failed investor’s meeting, with most of them investing in the competitor Rediff..

@sidharthrao ..was a classic case of fund raise pains that founders are so used to now a days. That Sify (another interesting story in itself) bought them for more money they had is one heck of a sell timing decision.

@sidharthrao 15. Sahil Barua – Delhivery – An obvious pain point and a difficult execution business is what Dlehivery sough to do. Overdriven PR exercises made it and killed it. And lack of understanding of the space they were operating in (Dealing with blue collar workers) almost had a..

@sidharthrao ....detrimental impact on the business. They did crack the COD code though. And then, late reactions from industry leaders helped their cause. The planned IPO is now not the priority given the Softbank’s money, but whether it’s the boon or the bane remains to be seen.

@sidharthrao 16. Alok Mittal – jobsahead.com. Lesson number one, don’t rack up costs till the committed investment is in the bank. Lesson number two, in tough times, be very realistic about the revenue and costs. One more lesson learnt: never be in a hurry to sell a company that’s..

@sidharthrao .. profitably growing three to four times a year. We could only wonder what the space would have been now with Naukri and Jobsahead had they not sold to Monster for a paltry sum of Rs. 40 Cr.

@sidharthrao 17. Girish mathrubootham – Freshworks. He worked with Zoho for 10 years before jumping to launch his own SaaS company. How one firm’s pain (ZenDesk) is another’s balm! Experience trumps excitement every single time. Sell people what they want to buy instead of trying to create..

@sidharthrao ... a need itself in the first place. And never be afraid to take on larger firms if your product is better and better priced.

Overall, though the book is not detailed and feels repetitive at times, its a good intro to the Indian digital start up world. This will serve as..

@sidharthrao ... fooder to dive deeper into the Indian VC and the startup world.

Taking the learning forward, I am now reading The Mooshoot Game By Rahul Chandra and Big Billion Startup (Flipkart Story) by Mihir Dalal.

For history doesn't repeat, but it does rhyme!