We realized that there are a lot of companies who are making the world their market place and they are not necessarily IT/BPO companies. They are changing the rules of the game as well, not because India is the lowest cost destination, but because of the value that companies can add due to which they are able to attract global customers. So we got an expert panel of techno-entrepreneurs who share their experiences on how they are catering to the global market.Hopefully many more will start walking this path. 

The panel Members were:

Anurag Agarwal,
CEO, Natural Remedies

Kumar Ramachandran
CEO, Vignani

Ravi Kumar Menon
Director, Aetos Design and Engineering

EXCERPTS :

Q: How do we find funds for a start-up when you have uncertainty in ensuring cash flow in the early days?

Kumar: Lot of smart people in India don't raise any funds at all. They begin earning their money right from the day one. But I follow the Silicon Valley model where you don't own the company but rather stay as unpaid employee till you raise the funds. We raised a million dollar with help of friends and we got going. Our priority was not to make money in the first three years but on building credibility. For that we needed lot of money as working capital. Then we began talking to venture capitalists. We were lucky in a sense that within two months we got Intel as an investor.

I was really in a dilemma whether to focus on my business or to raise money.  In that situation, I squeezed my time to talk to VCs to raise 4-5 million dollars. After wasting six months, I stopped and I went back to my roots in Silicon Valley and somehow we raised our money from a Japanese VC and Intel and one of our customers. I told them to look for 10x returns in three years rather than 2x returns in 2 years.

You have to be extremely careful in your first business plan. As an entrepreneur you may be aggressive and you want to excite the VC by throwing in some fantastic numbers. But they will come back to haunt you. So the important thing in fund raising is that you have to freeze upon what model you want to use. If it is a product company you will not be able to make money until the product is launched. VCs respect a cautious entrepreneur rather than people who are very aggressive and don't deliver on their promise.

Ravi: We had a different approach in starting a company. It is like giving birth to a child; it takes nine months of real hard work. We did not go for a large funding initially; we started small with our money. The first thing we did was to build a fantastic website so that people can see what we do. Once we knew things were moving, we went step by step slowly and steadily rather than grow very aggressively.

Kumar: If you are looking for only money, go to anybody in any village, there are lot of guys who want to invest their money. You go to a VC for the name and the other intangibles. If you have big VCs funding you, they actually make doors open for you. My challenge was about hiring the right talent in the initial days, when we had to use Intel's name to get the initial team on board. The problem in India is employees don't care for stock options, they only care about their CTC which is very sad. I am ready to give 10000 shares today worth 20lakh in 2 years. In the US, even my CTO in Silicon Valley did not take a salary. Here a person with 18 years experience from GE is asking for CTC. We need to change the work culture.

My own experience has shown that many successful entrepreneurs who don't like to be dependent on external funds, suffer from growth stifle somewhere along the line. They may have an excellent business model, but I have seen it happening to people who are scared of borrowing and at the end they have no growth rate.

Q: We make tall commitments to our customers on our capabilities, but how do we manage to execute our commitments?

Kumar: Be a man and confess to your customer that you cannot do it. Be honest and your customer will step in for you. Never accept a job just because you are desperate, unless you are competent and capable. Customers will come back to you if you are honest.  So if you have a problem tell it in advance and don't wait till the last minute. Failure is a part of everybody's life; you have to get up, dust your bum and walk on otherwise you will remain there.

Anurag: Large companies can afford to lie and make mistakes. They may have 20 orders and they lose one, it will not bother them. For you and me, one order makes a big difference.

Ravi: We often make mistakes in calculations since we make them based on a perfect setting. If you say the work is going to take 15-20days, you are sure to be failing because in India there are so many things, which can go out of the gear at the last moment for no fault of yours. So, if you need 15 days ask for 30. If you deliver early, they are on the top the world. But if you  are late, you will be in deep trouble.

They were speaking at a Panel Discussion organized by Businessgyan and Tasmac.

Compiled by Levine Lawrence for Businessgyan 

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