Startups should focus on customers not competition, say experts
Techcircle Startup Summit 2015 held in Bangalore turned out to be a packed house where close to 300 companies, including established ones and startups, engaged in knowledge-sharing sessions with accelerators, mentors, VCs and angels to understand the facets of disruptions and innovations driving the Indian startup ecosystem. While the first day of the city edition of the annual event was noted for TC Walkabout, where participants were taken on a guided tour to offices of a few startups, the second day comprised a series of engaging networking sessions between entrepreneurs and investors.
Here are a few takeaways:
Take up the capital offered, but be discreet
During the first session, which saw intense discussions on what drives investors in various industries, investors advised budding entrepreneurs to be discreet in their negotiations and not to 'give in' as they look to raise funds. "Be discreet in your negotiations because there are lots of investors looking for talent," Vikram Gupta of IvyCap Ventures said. However, Arun Menon, founder and CEO of AppsDaily Solutions, opined that startups and entrepreneurs should not attempt to wait for the perfect offer but accept the available investment options because they would need capital to scale up.
Don't be carried away by big valuations
Early stage startups looking for potential investments should be beware of the fact that every market works in cycles, experts said. Citing the example of ecommerce in India which saw a big boom in 2011, went down in 2012-13 and again picked up pace in 2014, Deepak Gupta , partner, Equity Crest, said entrepreneurs should not get carried away by a significant seed round or high valuations. "If you are a very early stage startup and you are getting carried away by a big VC and a high valuation, just be aware there are cycles in the market. You are building a business for 7-10 years. Right now the market is fine; six months or a year later, the market will decline and the investors many not have the bandwidth to support the seed rounds they did earlier. You have to understand that market works in cycles," he said.
Companies should be built to scale, not to sell
Companies should scale and operate for years. Therefore, the motive of building a company should be to scale and last for years and not to sell, according to Raghunandan G, co-founder, TaxiForSure. Startup companies should have long-term growth potential and revenue models irrespective of who own them, he said.
Angels are good at offering mentorship
"You should essentially look up to a VC to give you an effective structure to your business, and not step-by-step instructions. If you are looking at mentorship, angels are the best option because they give you more time," opined Sai Srinivas Kiran G, co-founder and CEO, Teewe.
Focus on consumers, not on competition
"You are not going to go anywhere if you focus on competition; instead, you should focus on consumers. If you are growing consistently and if you have an increasing number of consumers sticking to your product and services, you don't really have to worry about anything," Kunal Shah, founder of FreeCharge, said. In an interactive session with Sahad P V, founder and editor of VCCircle, Kunal and Raghunandan said the Indian ecosystem is still at its nascent stage for internet companies where the growth potentials are immense and therefore, staying true to what you believe in (your product or service) is the key to success.
Ecomm 3.0 is a transformation towards mobile and hyperlocal
Ecommerce version 3.0 marks the revolutionary transformation towards mobile and hyperlocal approach. The online market is showing great levels of traction that every retailer, offline and online, wants to initiate some promotional material online and that's where the prominence of ecommerce comes in to play today, especially with a strong smartphone-enabled young generation. However, Saurabh Kochhar, CEO of Foodpanda said, "We are yet to see an innovative, better customised tech solution for last mile delivery."
(Edited by Joby Puthuparampil Johnson)