What investors want is irrelevant. You can opt out

After 22 years in the US during which she founded two startups, Vani Kola returned to India in 2006. As MD of Kalaari Capital, she has helped transform India’s startup ecosystem, as well as the VC business itself

How do you see the nature of entrepreneurship changing in India?

One radical shift is, there is a bunch of people who really want to be entrepreneurs, willing to take that risk and fail. Their riends want to do it, very senior guys want to do it. The quality of ideation and innovation has changed significantly. A decade ago, it took three or four years to ust prove an idea. Now, within six months, they are able to reach that stage because they are not hesitant about bold execution. They pivot faster too. They quickly realize nobody is interested and they go to a new model.

In the case of Housing, it is said that investors wanted the company to grow too fast and gain market share, but the company did not have processes or systems to grow at that speed, and nobody to guide them…

I am not taking any names here and this applies to any entrepreneur: what the investors want is irrelevant. You have an option of opting out. There is no point in say ng the pressure of IIT or Olympics got to me and I was not ready for it. If you want a gold medal in the Olympics, there is a process. Some people break and some people earn. Otherwise you should not be in the big boys’ game. Nobody asked you to sign up. Investors are asking you to run faster… but aren’t you supposed to when you take money from them? If you want to grow slower, don’t take so much money and get such high valuations. You can’t feign ignorance saying you are young, because even a 15-year-old runs for the Olympics.

Who would you choose as an entrepreneur–an experienced person or a fresher?

A person with maturity, common sense and an ability to listen… and he can leave ego at the door. See, you can work for three or four years and still be pig-headed and immature.Or, you can be young and mature.The key is, if you are offered a fortune by investors and the opportunity to lead people, you should go and hire a team that will make you successful.

What differences do you see between entrepreneurs in India and Silicon Valley?

I don’t see a difference in terms of quality of innovation or competence. Maybe there is a difference in the context of building their advisory networks. If you have an advisory network that has done startups before, how a venture system works would be apparent. In the old school corporate model, how many companies can raise $100 million in two weeks? So, the venture model is different.The model is you have to grow fast and become the market leader before others come up. In the US, they know the consequences if they fail in that.

You are about to raise another fund. What are the new opportunities?

Several segments are going to be disrupted when some services go mobile. We are in the food space already . We believe that payments, logistics and other infrastructural enablers will continue to be revolutionized. Some financial services like insurance are still nascent and will continue to be interesting.Health and wellness is a space that will grow. There are a plethora of other consumer services waiting to go online.

Do you think market leaders have emerged in most online consumer segments?

There is something we can learn from the horizontal e-commerce space. Many were there, but two have emerged, discounting Amazon, which is not a VC-funded startup of India. If I take that as a good framework, over the next threefour years we will have players with real momentum. At this moment, we can only say that there are companies doing interesting things. They have got traction but it is not clear whether they are established brands or market leaders.

We have the top three players in segments like food, lingerie and furniture, right?

Sure. But a churn can still happen.Funding might yet determine the top three positions. There could be a new idea. And these players need to have size. You can’t say they will be the winners. I definitely think there are more opportunities.

Unlike the US, India is not a proven consumer internet market in terms of generating long-term profits. Consumer traction exists because of discounting. How big a risk is that, considering the volume of money going into these ventures?

If the consumer models are tweaked slightly, these companies will become profitable. Online has become a way of life. It’s not like the consumer will stop buying if the discounts go. Amazon has Amazon Prime, Uber has surge pricing. Once we are used to convenience, quality, transparency of pricing and selection, we use it. We don’t mind paying extra for that quality service at midnight.

TimesofindiaSource : Times of India

Published on 17 July, 2015

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