TechSparks 2012 kicked off to a fantastic start with the keynote address by Sashi Reddi, founder and chairman of AppLabs. His current company SRI Capital is a seed stage venture capital fund serving start-ups focused on the Indian market. His talk titled the “Thinking Man’s Guide to Sure Success (or Failure)” was a compilation of the various lessons he learned as an entrepreneur. He had ten key points that he wanted to share with the audience and alluded to his personal experiences to drive them home.
“Don’t think: just jump’ was his first point which he fleshed out further by mentioning that to succeed as an entrepreneur you will need to take the risk along with the possibility of failure. He spoke of ‘analysis paralysis’ meaning that you’ll never has all the information before beginning and it’s quite likely that you have the wrong information. It’s better to get on with it knowing you could fail rather than waiting for more information.
His second recommendation was ‘think big – big markets – big growth’. Big markets allow for room for everyone and new players can enter. Some of the questions that are serious food for thought were ‘what are today’s big trends? What are VCs investing in?’ “In smaller markets you have to work as hard to succeed and the probability of success is less as mature players exist. Pick a market that is big and rapidly growing,” he advised. “You have a better shot at success if you can move quickly and do something new and disruptive.” He also mentioned that if there was a lot of buzz around something, you’re probably too late at riding that wave. “News is really old news – you have to be well ahead of the curve.”
A seeming contradiction to this was his third point ‘think small – execute well.’ The essence however, fits in with his previous point of think big in terms of markets and growth. He elaborated that it’s better to pick a small problem and solve it really well. The focus should lie on process and quality. “Execution will be the only differentiator eventually so embed process and quality into the organizational culture,” Sashi instructed. Humourously, his powerpoint slide explained it best – great execution will always beat great ideas (unless you are Steve Jobs). Some of the thought provoking questions he asked the budding entrepreneurs seated were – how will you solve a small problem and how will it be supported and sold? “Ideas are dime a dozen. Any good entrepreneur has five good ideas. Execution is the only thing that matters.”
“Be #1 in something” was his next nugget of truth. Essentially, select a tiny area of the huge market and become #1 in that and then you can always expand that box and try to continue to be #1. Focusing on that allows all stakeholders to remain aligned with the company. Naturally, this has to be a realistic goal that you can achieve within 3-4 years.
Sashi then spoke about how when he started AppLabs in 2001, he had to figure out how to make the company stand out. He asked himself “how do you structure yourself to be #1?” He answered his own question by setting himself up for a goal of becoming #1 at testing services for software product companies in 4-5 years which he then went on to achieve. The lessons learned from this? Having such a clear focus “gets the whole team aligned and everyone knows what you’re trying to do. If you’re clear, all your questions are automatically answered. You don’t have to stay in the small box. If you’re able to get your goals, expand the box.”
He also spoke of his other venture FXLabs which did well but was not necessarily solving a problem or addressing a market need so it’s important to be #1 but also address a market need, he endorsed.
As an entrepreneur, his next lesson highlighted the need to answer the question “why should you exist?” Do not lose sight of the value you bring to customers. It’s great to be faster, better, and cheaper and to be in it for the money. You must show value to your customers as well as all stakeholders. A good way of understanding this is to be clear about this statement: “Because I exist, something in the world is better.” What are you doing for customers that no one else is doing and what are you doing better than anyone else? What’s your value proposition to a customer?
“If you’re doing it for social good – be upfront and run a non-profit,” Sashi advocated. As with any other business venture, you exist to make money for shareholders. Other questions for folks in the room to think about were “how will I be able to make money for investors and others in the team? and am I really adding value? “Just because you’re getting business, it doesn’t mean you’re adding value. Key relationships help you get started but are you really adding value?” Sashi asked.
His next tip was simple, ‘keep thinking.’ The context for this is constantly changing markets and competition which translates as a flexible approach that could mean changing business plans a dozen times before getting them right. A good question to consider as a team he posited was “what have you done different today, this week, and this month?” He felt employees should be allowed to stay abreast of the outside world and an hour spent browsing the internet to do so wouldn’t be wasted time. “If you’re doing the same thing, it’s going to ride out the wave to the extent it can and then go away. Where is the new thinking? You want a culture where people are looking at the world and coming up with ideas that impact the business.” The start-up’s strength is that it can adapt to change so that ought to be leveraged when business plans demand a change.
Along similar lines was his next recommendation, ‘think different.’ He felt that there was a cultural aversion to failing and his advice was to ‘fail often and fail early.’ “There are times when you analyze everything to death. On paper you cannot know what will and will not work,” he cautioned. “No amount of theory can tell you whether it works or not. Try and see what happens. I would rather see entrepreneurs try something and fail. It’s easier to fail early in the cycle than to fail later after spending money. You cannot walk away easily when you create something, but you’ve got to be prepared to walk away and build another idea/company,” he rationalised.
On hiring, Sashi’s counsel was get a team that isn’t very similar to you. He emphasized the value of diversity whether in age, gender, race or experience. The responsibility of attracting great talent remains with the founder as ‘you will be judged by the people you are surrounded by.’ Sashi mentioned that during his early days he worked with friends or classmates that were very similar to himself and he quickly realized that if everyone’s technical, who fills the gaps of knowledge when it comes to going to market or recruting? “A sign of a good entrepreneur is the ability to attract smart people who think slightly differently and get comfortable with varying sets of opinions,” he maintained.
Towards the conclusion of his presentation, Sashi encouraged team spirit and fun at the workplace. The ability of a team to be able to work together will always be better than having experts who cannot see eye-to-eye, he opined. “The secret is having clearly defined roles and letting people do their thing,” he shared.
His parting shot was ‘forget what I just told you.’ “There are no rules so feel free to make up your own and go with your instincts and evolve a winning strategy,” he concluded.
A brief Q&A session followed Sashi’s talk where he mentioned that several challenges that existed for entrepreneurs have been overcome in the last two years since the ecosystem has improved. He felt the entrepreneurs he’s met so far are comparable globally in terms of what they have to offer. The Hyderabad Angels group, the ISB incubator, VC funding options, along with more mentoring and networking opportunities have all contributed to this healthy ecosystem.
He also challenged the myth of ‘no innovation is happening in India.’ He felt “innovation is seeping out.” He projects that in the future, there will be more innovation in the product space coming out of India.
With Hyderabad, we conclude the TechSparks Roundtables for 2012. Up next is the Gala Event, TechSparks Grand Finale, scheduled to happen in Bangalore on 8th September. Block your seat today to witness India’s Top 20 emerging tech startups of 2012 ( the tickets are selling super fast, so hurry up! ).
We thank our sponsors Intel, Sequoia Capital, Amazon Web Services, Qualcomm, CNBC TV18 and VentureBeat for their continued support which was instrumental in making all the Roundtables successful.
- Jessie Cherian