Rohit (Bansal) and I decided to leave our jobs and start a coupons business in 2007-2008 when the internet was still in its infancy in India. The business had strong initial momentum and, to seek investments, we started cold calling investors through different websites, as we weren’t sure who would be interested in investing in our kind of business. We met (venture capitalist) Vani Kola through one of these calls — she was actually the last call we made — because we were worried a portfolio company of hers would conflict with us.
It, however, took one call and a meeting with her in perhaps the smallest and shabbiest office she’s visited before we had a chance to present (and later be backed by) her fund.
Entrepreneurs with dreams of building India’s best unicorns need to be aware that the rules of the game have changed. Now, the cold calling has dropped one level lower to try to attract the attention of the burgeoning angel investing community. I get 25-30 proposals from wannabe entrepreneurs — some as young as 17 trying to build a business they dreamt of last night and others more seasoned professionals with a company even registered in their names. Getting the right angel backing you helps with strong introductions to the right venture capitalists.
When starting up, I’d say the most important first step is to always think big. Don’t be constrained. Be unreasonable. Think freely. Let people laugh at you. The more ridiculous they think you are, the better it is. Don’t try to solve a problem for three people; instead, start with a big problem, impacting millions of people — for instance, there are 40 billion utility payments made in India, of which over 39 billion are made manually.
While there are hundreds of angel investors in India today, future unicorn-builders must be aware that they come in all shapes and sizes. Each angel is passionate about a specific area; while some are financially motivated, others bring domain and operational expertise to the table.
You don’t need to have a company in your mind to idolise — you’re welcome to build another Snapdeal, if it can be bigger, better and more efficient. Inspiration for your idea can come from multiple sources. For example, we made multiple visits to Alibaba in China because both Rohit and I are sons of small traders and were fascinated with the effect the Chinese giant had on their livelihoods.
If you’re going to build a startup that stands out in the crowd, you have to be willing to take risks. We evolved and learned from our mistakes and kept moving forward by taking intelligent risks; eventually things started working out pretty well. Today, we are building an impactful digital commerce ecosystem , which caters to multiple consumption needs of consumers through a single user login. We are making goods and services accessible, plugging leakages in the economy and bringing efficiency in logistics and supply chain management.
Don’t be afraid to get your hands dirty when you’re building your company. As Snapdeal moved from the coupons business to ecommerce, we realised our early processes and systems were not well set up. When this happens, you inevitably disappoint customers. I used to reply to 3,000-4,000 emails a week directly from customers to try to understand their disappointments. As entrepreneurs, we had to be like a sponge; willing to absorb knowledge and inspiration from multiple sources. Coupled with that you must be willing to change and evolve your business idea.
The two things that can make or break a business I believe are culture and objectivity. I feel culture determines the speed of growth of a non-traditional business like Snapdeal. Culture is determined by the people we hire. We have grown fast and have managed this growth well only because of the people we hired. You can leap ahead to the next phase of growth only if your team believes and shares your vision, your passion for the organisation.
If your company embarks on this highgrowth path, you will need to attract millions of dollars of funding to fuel your ambitious plans. The type of investors you target will also evolve; when we were a small company, a $200 million venture capital seemed huge. As we have grown, Snapdeal has partnered with several global marquee investors and individuals such as SoftBank, Foxconn, Alibaba, BlackRock, Temasek, eBay, Premji Invest, Intel Capital, Bessemer Venture Partners, and Ratan Tata. Be prepared for much more stringent fiscal discipline and audits — we do a quarterly audit to make sure our numbers add up since we’ve some publicly listed backers.
Building India’s next unicorn boils down to impact. We are giving choice and convenience to consumers in tier II cities and beyond like never before. The huge volume of orders of health products coming from non-urban areas on Snapdeal is a great example of the impact our marketplace is having on people’s lifestyles. Through our efforts, traditional handicraft and handloom artisans, NGOs and homepreneurs are now accessing pan-India markets and growing their businesses by leaps and bounds. This makes me believe we have accomplished something big and seeing the impact on our sellers’ lives has been the most fulfilling moments in this journey.