The panel discussion at TechSparks 2012, Hyderabad regional round table, moderated by founder of YourStory.in Shradha Sharma, encouraged questions from the audience and answers from panelists on the smartest ways to scale a startup. The panelists included Aakash Goel, Sequoia Capital India, Joe Ziegler, AWS Evangelist for Australia and New Zealand and Aviral Pandey, AVP: Product and Business Strategy, Apalya Technologies.
The first question was directed to Aakash regarding a VCs ability to look at a product and judge whether it will work or not and the criteria applied to the ability of a product to scale.
Aakash’s first response was the caveat “never tailor a company for a VC. VCs will come and go. You will stay longer than a VC.” From there he went on to speak about the quality of an idea and whether it solves a customer need or a real, central problem and doesn’t provide an extremely complex solution. The quality of the team and whether they were able to chase the vision outlined was another important consideration. The ability to understand the size and scope of a market and gauge the market reaction to the product all go into the consideration process as well. Apart from this, quality of revenues (lumpy or recurring), traction of the business, defensibility of the product and quality of the financials were other key aspects that VCs look into. These are broad principles but are applied selectively depending on product and industry.
Joe was then asked what it takes to build a venture from scratch that becomes huge. “Those great IPO days are gone. These are acquisition days,” Joe opined. You have done a good job if you put together a business and when you exit out of it, you find a higher return on your time than if you had worked elsewhere. Some practical words of wisdom from him were ‘focus on your core competency and don’t waste time on anything apart from developing the product. Have your idea, execute early, measure and test on that idea (it’s a version of the idea that gets acquired).” He emphasized getting feedback from the market and building into your culture the ability to get feedback and then feeding that back into your product development.
The last moderated question that the panel looked at was the actual building of a good product and what goes into the nuts and bolts of product development. All panelists unanimously agreed that the product must solve a need. Need identification is a rigourous process that might change every day but the product must make life easier. Other key considerations for the entrepreneur are what does a customer want? Is the market ready and is this the right time to launch? Are you targeting the right people and are they the kind that can scale the use of the product?
The live Q&A opened the floor for further interaction between the participants and panelists. Aakash tackled the question of whether Sequoia invests in the early stage and as an exception he said they do. He also said “VCs are suckers for traction.” It’s great to have recurring clients in order to get funded at an early stage.
Joe tackled the question of at what stage of product development should the launch be planned by stating, “the smallest stage possible. It’s always better to launch as early as possible” Aviral added, “market feedback is also valuable,” and can be gathered with an early launch. Joe also shared his perspective on how Amazon tackles the aspect of data security with respect to cloud computing prompted by a question from the audience.
On customer acquisition, Aviral said, ‘you have to be your own customer and use your own product.’ He also mentioned using employee networks or targeting different channels of customers and figuring out which mode and channel work the best. Aakash mentioned that early traction is usually seen from friends and family and then it’s important to understand the return on investment from the various channels that you’re reaching out to. Shraddha’s personal lesson was to meet people and attend relevant events or even provide free trials initially to get started.
A spin-off from this was Aakash’s idea of co-developing a product along with a client or a small set of clients first and using the deep engagement to figure out requirements as well as points of customization and then use the same features to scale to other clients in a similar industry. From this, the panel moved onto the question of patents and Joe clarified that very few ideas are unique. The ability to execute and bring a product to market is unique. An inventor is someone who builds something completely new and he felt that there was a distinction that ought to be noted. Aviral felt that uniqueness comes from ‘being close to the customer’ and the challenge lies in doing that right.
In terms of hiring at an early stage, the panel advised that it’s best to start with folks that you’re most comfortable with. You will need to know where your target folks are hanging out and tune into the right forums. Aviral felt that getting the right people was one aspect and ensuring engagement with them was another one that needs to be considered as well. Delegation of responsibilities could be one way to start this process.
About dealing with the competition, Joe felt it was important to focus on the customer and innovate on behalf of them. Aakash also rallied that entrepreneurship is very rarely about pioneering ideas but it is about execution. “Don’t assume you’re the first in the world, promise that you will execute better than anyone else in the world,” was his take on innovation.
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