How to build a scalable business: GHV Accelerator Founder

What is scalability?

Scalability is the capacity of a company or system or a process within an organisation to manage the increase in demand. That is, a business is said to be scalable when it can be expanded enough to accommodate the growing business needs. Scalability helps a business grow as per its full potential. Scalable conditions provide a room for economic growth within a company.

_Investors invest only in businesses that are scalable. Scalability is important criteria for investors in deciding whether to invest in a particular business or not. Better the scalability, higher the economic value of the business and therefore higher the investor interest.

_Outsource non-core tasks: Transfer some specific tasks that can easily be contracted out to another larger company that is focused on that task. Think of the production of some specific components. Can some other company produce it? If yes, would it make your business more scalable? That paves the way for your organization to focus on the core of your business, as also leveraging the cost and operational efficiencies of someone else that is focused on doing what you outsource.

A scalable business model helps you capture the full potential of your concept. It allows you a better chance to be a leading brand in the market. Scalability also allows you to quickly adjust plans to capture additional, unplanned demand. Often when opportunities come up, organisations are not ready for scale and they miss on a chance to move into a different orbit of scale and growth.

For example, consider that you own a drug manufacturing company. In case of an epidemic, there will be more demand for drugs so the company should be able to meet the increased requirements.

Why scalability is critical for businesses?

_Scalable businesses are more attractive to strategic partners. Scalable businesses have a greater chance of attracting strategic investors or partners and a strategic buyer is likely to be interested if the future potential of a venture is higher.

_Scalable businesses attract better talent. People want to join organisations that have the potential for growth. Scalable business models allow businesses to grow, thus making them more attractive for professionals to consider joining.

What can you do to make your business scalable?

_Process orientation: Introduce process as your venture scales up. Make the processes simple and easy to understand so that training and on-boarding time for new employees is lesser.

_Reassess your portfolio of products and services: Evaluate the efforts, management time and investments required to produce a product or a service line against the contribution that particular product or service is making to the overall business. Is it worth it? If not, then assess if that business really needs to stay or can be hived off, or if required, discontinued.

_Automate routine processes: Delegate everything that you can in your business using the “self-service” approach. That means, delegate work to non-human systems that require no human intervention. For example, consider using the online ordering system, improved Web services, automatic updates to the customers etc.

Every start-up business model need not be scalable. But if your concept has a large base of potential customers who can be serviced profitably – you should think of creating the right processes, building the right infrastructure, making the right investments and hiring the right talent to ensure that your business is able to capitalise on the full potential that the concept has.

The author is the Chief Mentor and Accelerator Evangelist at Gurgaon-based GHV Accelerator. He is also the Founding Board Member of the Indian Angel Network Incubator.

For More Details - http://www.ghvaccelerator.com/

Source : e27.co 

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Why due diligence is important for entrepreneurs (ENTREPRENEUR INDIA)

In today’s complex business and financial environment that has witnessed several companies, including some of the most trusted names in the business, compromise on integrity and getting caught under the net for fudged accounts, with the intent to siphon off money and evade even the best scrutiny, it is increasingly important for investors and buyers to insist on a thorough due diligence before making the final move.It is critical for a buyer or investor to know about the financial or legal health of the company they are planning to buy or invest in. Due diligence is a vital tool, based on which investors/buyers gauge the effectiveness of corporate governance and make up their mind on merger or acquisition, after validating whether the assumptions and assertions made by the company are true and fair.

This critical step is what enables the interested parties (buyers or investors) take that leap of faith. It is through due diligence that they can check for any unknown issues, which should have been brought to their notice earlier and evaluate the growth prospects of the company. These important inputs help decide whether the investment or acquisition will be worthwhile or not.

In several cases, where issues are uncovered during the due diligence process, companies are told to put them right before any further moves are made by the investors.

What do investors look for in the due diligence process?

First and foremost, investors need to know beforehand about the company's current and projected financial details, organisation information, market size, team structure and level of competence, potential to compete in the market and future growth prospects.

These are the key areas of interests for Venture Capitalists. They also want a perusal of all stockholder communications, customer and supplier agreements, credit agreements and loan/debt obligations, partnership and joint venture agreements. From a legal perspective, it is important for them to know the structure of the company, staff headcount and cost, further requirements in staff to grow the business, and liabilities and lawsuits if any.

Any conflicting claims already made, hidden or unresolved problem areas cropping up during the review will put a halt to any further progress with the investor. Any missing or incomplete information, missing signatures on contracts or facts that arise, which are inconsistent with previous claims or discussions, undisclosed debts and liabilities, will raise all the red flags with an investor and put a halt to further movement in the process unless resolved and clarified.

That is why it is important to ensure that all these necessary documents are well organised and ready to produce as and when required during the process.

Moreover, the company must have detailed presentations together (factually correct and on time) prepared by various teams, giving a detailed overview of that respective function or department to ensure that the right information is shared with the investors and any queries or doubts addressed. Also, the business should keep all lines of communication open with the investors and immediately act on clarifications sought with factual explanations.

Importance of a legal advice

A good legal team can prove to be immensely useful to manage the due diligence and securities offerings and in making the right pitches to the investors.

After the basic information sharing, assimilation of facts and verification of the same is over; the investors will rectify the problem areas, if any. While some problems can be addressed and corrected, others may be beyond the control of business, hence difficult to resolve.

In such case, investors might insist on making changes to the transaction documents, they might adjust the bidding price for the business, the shareholding structure, or investor rights and responsibilities.

It is only when these issues are settled, the due diligence process will be completed to the investor’s satisfaction, which in turn will help the transaction follow through to the signing stage.

Thus, due diligence help investors to get an accurate view on what the company has done so far and how it might fit into a broad portfolio or investment strategy. For an investor, this research helps them from missing something that could be vital to their decision-making process. What was once a short and rather perfunctory process has now grown into a highly detailed and quantitative process offering insight into the future prospects of business.

Though there is no one formula for this process, businesses that understand the criticality of this process and its components are certainly at an advantage, when it comes to attracting investments. They can leverage it as a stepping stone to a bigger and brighter future.

I highly recommend that companies keep this in mind, even as they are just starting up. With good legal advice, keep the records clean right from the beginning. This will save any problems at a later stage and also the aftermath of cleaning up process.

Conclusion

For Investors Due Diligence to be a cakewalk, the entrepreneurs need to have self-discipline in maintaining the records of the venture, such as daily operations documents and details. It is always good to split the responsibilities amongst the Co-founders for recordkeeping and timely reviews. This not only helps the entrepreneur to keep the due diligence outcome positive, but also ensures that they have daily data on their fingertips.

To sum up, the top 10 priority tasks every entrepreneur should religiously follow, irrespective of the stage of the venture, in order to ensure complete compliance for Investors Due Diligence:

1. Do Indexing of all the signed documents and official records
2. Keep the records at one safe place
3. Label your files with color codes and time stamping
4. Do regular and frequent board meetings
5. Review all the pre-decided agenda one by one and check if the documents are in place
6. Entrepreneurs should know the financials and record them
7. Interact with your Legal Advisor/CA or the financial consultant on regular intervals
8. As early stage Entrepreneurs, you might not be perfect in processes, but be honest in your data and remain transparent
9. Never ever hide or fudge your data from your investor, because you think it’s not worth sharing.
10. Last but not the least; never be ‘Penny Wise Pound Foolish.’

For More Details - http://www.ghvaccelerator.com/

Source : EntrepreneurIndia. 

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With the ‘Uber’ Syndrome Catching Up, Indian Startups Should Gear Up Big Time! (IAMWIRE)

A large country like India, and one with several infrastructural challenges, offers some unique opportunities for innovators. One such opportunity area is security & safety. The Uber case that took place in December 2014, brought into focus the need for solutions around safety & security.

A technology startup headquartered in San Fransico, Uber connects passengers with taxi drivers in 200 cities across 53 countries and enjoys a valuation of over USD 40 billion just about 6 years into its inception. The success story of Uber would have been a commendable one had the Company not become synonymous with flouting safety regulations and indulging in unfair business practices in order to make a quick buck, thereby leading to legal tangles in several countries where it operates.

Unfortunately, over the past few years, there has been a rapid increase incases of sexual harassment and assault, economic harassment (e.g. not paying daily wages in time or in full), murders, etc. in India. Women and senior citizens are particularly vulnerable.As a result, safety has become a prime concern for both, individuals and the government. Going by the incident of the rape of a woman executive in an Uber cab by its driver in Delhi, the company cannot escape the liability by virtue of the fact that it is only a cab aggregator and does not directly operate any taxis. It is ultimately a taxi services company, albeit an app-based one, and therefore cannot shirk the responsibility of ensuring the safety of passengers who hire a cab through them.

In fact for any business where customer security is involved, it should be built into the core of the operations rather than going the Uber way and resorting to shortcuts to achieve growth targets. As a result of this fiasco, all app-based cab services were banned in Delhi citing security issues. The ban will be lifted only if they agree to follow the rules meant for Radio Taxis.

Where Can Startups Innovate

While the government has to take necessary steps to ensure that it is able to keep the citizens safe & secure, it is not going to happen in a hurry, as India is too vast a country for the government or public infrastructure or policies or resources (security agencies, police etc.) to address these issues immediately.

And this is where I think that technology-enabled solutions can contribute significantly, in making India safe & secure. Innovators are already thinking of how to address security issues using technology. Some of these innovations could be in areas related identity verification; databases of track records of publicly accessed private individuals (e.g. cab drivers); performance and compliance tracking; reporting; alarms & alerts etc.

Software, as well as hardware products can create solutions across different types of cases, and the scale of the opportunity provides opportunities in India for tremendous cost-efficiencies to make these solutions affordable.

Biometrics and digital identity technologies are now commercially available, and inexpensive to use as one of the platforms for safety and security solutions.

Some of these solutions could be company specific (e.g. Uber or OLA may use a proprietory tool or process solution for due diligence on drivers and tracking), while a number of these solutions can be managed by third-party innovators/entrepreneurs who can offer their solutions as a managed-service offering.

Think about it. India is a developing country with a population of 1.2bn. We have 925mn mobile phone connections and a smartphone penetration of 350mn. Our GDP is 1.87tn USD and is expected to go to 3tn USD by 2020. The size of the market opportunity is large. One effective solution can make a whole world of difference to people who no longer feel safe outside their homes (or even inside). Moreover, India has the capability to create and outdo many such ‘Ubers’, keeping the integrity of the system intact.

We believe that the opportunity is real, the opportunity is NOW and the problems need to be addressed. And we also firmly believe that only technology innovations can address some of the major challenges related to security at the scale and speed at which we need to address them.

Here is what Startups can do, to avoid getting ‘Uberised’ –

• Have tech-enabled processes in place, to ensure accountability. And make it a norm. This can be critical for future collaborations
• Regular mystery audits to ensure compliance by even the ground staff
• Legal compliances and processes to ensure interest protection and liabilities of not only your company, but all stakeholders
• Gauge the risk factor – from your point of view AND also from the customers
• Have an escalation matrix, whereby customers can connect directly with you

For More Details - http://www.ghvaccelerator.com/

Source : IAMWIRE. 

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Why Intellectual Property is critical for startups (ENTREPRENEUR INDIA)

When entrepreneurs embark on that unique business idea that they have no doubt would be a commercial success in the market, their prime focus initially is how to actually start giving shape to the venture. In the midst of numerous things that go into building a startup from scratch, the word ‘Intellectual Property’ (IP) is often not their priority. And even if they consider IP protection, it seems too expensive a proposition for a startup to act on.

But what entrepreneurs should remember is that assessing IP implications is not just about protecting the work you are doing. It is also to check if someone else has an IP for similar work. Often, there could be others in different parts of the globe working on a similar idea, which you may not be even aware of. What will happen if you find out one day that someone else has already patented that idea or product or solution that you have painstakingly developed?

Importance of IP protection

In today’s competitive and dynamic environment, IP can be a unique selling proposition (USP) of the product or service, and it helps create a sustainable and defensible differentiator for the company. By owning IP, a high entry barrier is created, thereby helping you to grow your venture faster with respect to your competitors’ offerings. Note - IP is always given high weightage by the investors and creates good value for your venture.

IP has, in fact, been identified as the key ingredient for startups across the world to get a competitive advantage in the market, according to the Start-Up Genome Project that aims to map, model and analyse what it takes to make startups tick.

IP assumes even greater significance for technology startups, where new innovations are being made every day. There is a huge brand value attached to IP, in both the manufacturing and technology sector. It gives investors, clients, and other stakeholders a tremendous sense of confidence in your commitment and passion to not just succeed, but also become a market leader in your area of operation.

There are essentially three ways in which a startup (or any other organisation) can protect its intellectual property (i.e., the idea or concept/ product/ process/ associated symbols, logos etc. that define the brand), namely, through:

1) Patents
2) Trademarks
3) Copyrights 

Intellectual property is, in fact, an asset for its owner and has a commercial value attached to it.

Payal Chawla, Founder, Juscontractus says, “Protecting IP requires thought and strategy. A novel technological innovation, like Tetrapak, would be worth protecting through a patent, which can be very expensive. In certain situations, it may be possible to seek a trademark protection or simply protect through a trade secret. This can be done through investing in marketing, and creating a recall between the owner and the product. The point is - there are different strategies available for different goals. Intellectual property can be very valuable. It is not unknown for a brand to be three times the turnover of a company. IP, if correctly and strategically protected, can take the valuation of a company to a completely different level.”

Also remember, if someone else happens to do so before you, then you are likely to be pushed out of the game (even if you had started working on the idea first), lest you are found guilty of patent infringement or copyright violation.

Companies can even leverage these patents as a means to further boost their revenues through licensing. For instance, Ford and Toyota have both bought licenses from Paice LLC to use its patent covering hybrid cars.

In summary

While startups are constrained by a paucity of funds when it comes to protecting intellectual property, what is important is that they should still continuously work on identifying IP and at the same time consciously work on setting aside funds to protect IP.

Since international patents may prove to be expensive at this stage, a good start would be to apply for a domestic patent/trademark/copyright. As the company scales up, it can set aside a budget for patent/trademark/copyright in the international market. Failure to do so can affect the company’s prospects to scale up.

It’s not just at the startup stage that IP is important. Businesses are constantly reinventing and redefining themselves in today’s day and age, where change is the only constant. This means greater focus on innovations, which in turn, means a greater need to protect IP.

The importance of IP cannot, (and should not) be undermined by startups, and established companies alike, because of the long-term sustainable advantages it offers.

For More Details - http://www.ghvaccelerator.com/

Source : EntrepreneurIndia. 

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Why Y Combinator type models won't work in India (ENTREPRENEUR INDIA)

India has seen the emergence of several accelerators and incubators in the past few years. Some of them are doing an excellent job, but many others are still getting their act together. Many of the accelerators and incubators are already running 3-5 batches, and have now started realizing that blindly copying the Silicon Valley style accelerator models will not work in the Indian context.

Most of the accelerators and incubators, who replicated the Y-Combinator model lost precious time, and as is with most organisations, they now find it difficult to completely redesign their offerings. As a result, they end up making modifications on their existing models, which may not have been as effective as perhaps a homegrown model, that is relevant for the Indian entrepreneurial eco-system, could have been.

Mimicking Silicon Valley

India’s entrepreneurial eco-system has often tried to mimic the Silicon Valley, largely because many of our initial entrepreneurs and angel investors hold rich amount of experience in the US – particularly from the Valley. As a result technology, and particularly technology, started becoming the prime sector for entrepreneurial opportunities to pursue. Launching a startup in tech space was easy as it cost less and it was relatively easier to find the risk capital.

As the market and ecosystem evolved gradually, entrepreneurs started exploring newer areas of opportunities. Also, a new breed of students or young professionals started exploring entrepreneurial opportunities. They did not yet have the experience or exposure to business dynamics and needed the mentoring support from more experienced entrepreneurs.

Forums like TiE and NEN did fill in the gap, but serious entrepreneurial ambitions needed more structured and on-going handholding and mentoring. Hence, accelerators and incubators emerged and became a popular first-stop for aspiring entrepreneurs.

Why it won’t work?

Many of the accelerators and incubators tried to copy the successful models from the US, particularly the highly successful Y-Combinator model, but those who copied that model soon realised that the model won’t work when replicated in the Indian context.

Here’s why:

Due to the widespread startup culture in Silicon Valley, many aspiring entrepreneurs already had the experience of working in startups. They understand the challenges, complexity faced and efforts required to get a concept into the market. Hence, Y-Combinator can afford to identify startups, whose ideas and teams have great potential and provide them the rocket-fuel to take off. But, that is not the case in India.

First-time entrepreneurs in India have limited understanding of the dynamics of business; hence, what they need is a foundation that can first help build assistance, and then the rocket-fuel for smooth take-off. Y-Combinator can do it in three-months because most of the entrepreneurs there are business-ready. But in India, precisely for the reasons stated above, our programmes need to be designed for a longer duration – up to a year-long, so that we can help entrepreneurs and give them the time required to become business-ready.

Unfortunately, most of the early accelerators in India run their business models on a three-month basis, which they are now gradually trying to unwind from.

Mentors spend serious time with startups in Silicon Valley based accelerators because there is a large pool of serial entrepreneurs, many of them are between their ventures and have enough time to give back to the next generation. They also have the capital to back teams. But again, that is not the case in India.

We do not have a pool of mentors, who have the bandwidth to undertake a one-on-one deep-engaged mentoring for startups. As a result, our programmes have to be designed with a combination of sessions that are one-on-one and also one-to-many.

The road ahead

Access to markets, B2C as well as B2B is relatively easier now for Y-Combinator companies as it provide their companies a seal of class. In India, we have yet to create accelerator brands, whose portfolio companies are waited with eagerness by the market. It will happen someday soon, but till that happens, accelerator programmes will have to be designed to assist in market access as well.

Portfolio companies of Y-Combinator and other major Silicon Valley accelerators come under the radar of investors the moment they are accepted into the programme. While that is also the case with some of the better-known accelerators in India, most portfolio companies from Indian accelerator programmes fail to find funding. Hence in India, we need accelerator programmes that are designed to prepare companies for Series A funding.

It is good to learn from the best practices of other more successful players. But a different ecosystem needs a different approach that is most conducive for that environment.

This piece is not meant to be a criticism of Indian accelerators. In fact, these early movers are the foundation of the fast-evolving entrepreneurial wave. The intent of writing this article was to open the debate on what is most relevant for India and how can we individually and collectively move towards a stronger entrepreneurial ecosystem, where startups are getting nurtured, funded and are becoming successful, and then return to give-back to the ecosystem.

For More Details - http://www.ghvaccelerator.com/

Source : EntrepreneurIndia. 

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Green House Ventures Accelerator ties up with LetsVenture (Economic Times)

Gurgaon-based Green House Ventures (GHV) Accelerator has joined hands with deal discovery platform LetsVenture(LV) in a collaborative model to create easier access to capital for seed ventures.

"LetsVenture has access to good quality startups. With this partnership we will get access to good curated startups, and it reduces our time frame for evaluation since one level of curation will be done," said Anurag Kapoor, executive director and co-founder, GHV.

For startups listed on LetsVenture, this partnership gives them access to high value mentoring and increases chances of funding.

Vikram Upadhyaya, Chief Mentor at GHV, said: "We are going to look at all the startups in LetsVenture, who have the potential to grow 10x."

Founded in 2013, LetsVenture is an online platform that connects startups with investors to facilitate early stage funding and currently has over 2,200 startups and 760 investors from 19 countries registered on it.

GHV's selection criteria for startups will focus on - team, execution, capability, scalability, technology, and proof of concept.

"The idea is to partner with a lot of players in the ecosystem who can help these startups go to the next level. We're also helping GHV curate some of these startup companies," said Shanti Mohan, founder and CEO, LetsVenture. Once they have completed the acceleration program, GHV will bring them back to the platform for early funding.

GHV's program houses 10 startups at a time through a one-year long program. Each startup can get seed funded with up to $100,000 in exchange for equity to the tune of 20% at a maximum.

"We will only see actual results in a year, to know how effective the partnership actually is," said Mohan.Shonali.

For More Details - http://www.ghvaccelerator.com/

Source : Economic Times. 

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Govt ropes in advisor for stuck telecom projects (The Hindu Business Line)

The Government has roped in Vikram Upadhyaya, Co-Founder of the Indian Angel Network Incubator, as an advisor to projects being undertaken through the Telecom Centres of Excellence (TCOE). The primary objective of roping in Upadhyaya is to ensure that the ideas generated by TCOEs are taken from conception to commercial deployment based on sound business.

The Government had set up TCOEs in a first-of-its-kind public-private partnership in the telecom sector. There are eight Telecom Centres of Excellence across the country working on key issues like technology management, rural application, next-generation network and policy. However, after more than five years of existence, the applications have not been deployed commercially.

“I have submitted a broad framework on how to turn around the TCOEs. I have seen some very good ideas being worked on at these centres. Over the next 12 to 18 months my focus will be on taking some of these ideas to the market,” Upadhyaya told BusinessLine, adding that he has also proposed collaboration between the TCOEs and the Indian Angel Network Incubator.

Upadhyaya has been an angel investor and has orchestrated multimillion-dollar business start-ups, turnarounds and growth ventures. Having worked in Japan in the late 1990s, Upadhyaya is known for his familiarity with the country and will try to interest Japanese in TCOE. Upadhayaya sees his unpaid advisory role as a business opportunity.

Separately, he is planning to start a seed accelerator fund in India with the backing of investors from Silicon Valley. Accelerators help new start-ups companies get off the ground and find follow-on investors through mentorship and a network of potential financiers. Upadhyaya said that India needs an accelerator that brings down the time period for a start-up to get follow-on venture capital.

For More Details - http://www.ghvaccelerator.com/

Source : The Hindu Business Line. 

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