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Russian Investments in Indian Start-ups

There is an upward trend in the growth of start-ups and young entrepreneurs in India today. Bubbling with fresh and novel business ideas, the current generation view start-ups as an increasingly lucrative option as an alternative to employment in a corporate. Metros incl. NCR, Bangalore, Mumbai, Pune, Chennai, and many other cities are seeing this boost with a lot of start-ups surfacing and these numbers are growing every year.

Many young graduates nowadays seek out to running start-ups, instead of hunting for mundane 9 to 5 jobs. This phenomenon can be due to various reasons. The current generation (the Gen Zs, Millennials) are more daring and willing to take risks. They seem to be more accountable for their actions and wish to be their own boss. Moreover, running a start-up allows them to have more exposure to the outside world, our economy and business environment, and well they also get a chance to involve themselves in social entrepreneurship and building network of contacts.

The funding climate in India has turned out to be favourable for various start-ups, as the government has come up with a number of start-up schemes to facilitate development and growth of entrepreneurs in their businesses. The government has classified start-ups according to their nature and scope of business and has allocated funds for these enterprises to build and grow. Want of capital is one of the bigger causes of a startup failure.

India also has a huge amount of foreign investment into start-ups in India, providing for a conducive start-up ecosystem for entrepreneurs to work in. Countries like China, United States of America, Singapore, Hong Kong, Russia, Japan, and United Kingdom have been active investors in start-ups in India today.

Many start-ups in India have benefited and built their businesses significantly through these foreign investments, which reinforces that Indian start-ups have a promising future ahead of them. This gives foreign investors the confidence and incentives from Govt. to invest in Indian start-ups without much of a thought/concern. Investments into Indian start-ups by foreign countries will also mean that investing countries will have certain incentives provided to them, like relaxed immigration rules and discount on manufacturing components, to engage in competitive pricing in the consumer market. With a population the size as equal to China and incredible economic growth potential, it is not surprising that foreign countries love to invest in Indian start-ups as well other fast growing sectors in India.

India is facing a maturing start-up ecosystem since 2015, and the start of movements like Digital India and Startup India have certainly helped accelerate their growth pace by bringing in awareness which was an essential component in transformation of thought process. Indian start-ups have started to be more adaptive to the global business models, making it easy for foreign investors to pump money into India, channeling it to the start-up sector. The ever-increasing amount of acceleration programmes, incubators, social networking events and academic training in business management has allowed for more college students and graduates to step up and embark on a start-up journey and venture into the business world, as they are confident that these programmes will help their start-up to be on the right track to build their entity. Most start-ups have technology-based services as their core, as India is heading towards a digitalised economy/society that depends heavily on technology-based services, like E-commerce, E-healthcare, etc.

Having mentioned the source of foreign funding flowing into the pockets of startups to scale up their businesses to the next level, Russia has been playing a pivotal role in accelerating the economic growth of start-ups in India, and it stands as one the major investors in this startup space.

Russian contributions to providing investment funds to start-ups in India has been on the rise lately, and seem to be benefitting big time through investments in businesses like OLA, Housing.com, Flipkart, Snapdeal etc. Majority of Russian investments are towards technology-based start-ups that have the ability to scale and addresses a bigger pain point of the consumers here. Also the government is taking steps towards moulding India to be a massive manufacturing hub, that can further fuel the growth of startup ecosystem in the manufacturing space too, in India.

Another start-up sector that Russia invests in is the E-commerce space. A reputed Russian corporate venture Sistema, has invested in the healthcare start-up space. One of them is healthifyme. It has announced that Sistema has provided funding of over US 12 million dollars. Sistema has also channelled US 14 million dollars into the healthcare start-up Netmeds.

Sistema is also looking at investing into Indian start-ups with its US 50 million dollar Asia fund. It has said that the US 50 million dollar fund is going to be invested solely in India because it can see a lot of potential for Indian start-ups to grow. The funds are likely to be invested into technology and consumer retail centred Indian start-ups.

Russian independent investor Yuri Milner has also invested in many Indian start-ups, like OLA, Flipkart, Housing.com and Swiggy. He has pumped in a massive amount of INR 10,800 crores into these start-ups. With the increased usage of cabs, online shopping platforms, property sales and food deliveries, Yuri Milner feels that these Indian start-ups that he has invested in can bring in a great value more so because these start-ups have identified the rising trends in transport, shopping, property and food preferences in India today.

Another Russian billionaire Leonid Boguslavsky has invested into the E-commerce start-up sector in India, because he finds a very big growth potential in the e-commerce market, as it possesses the capacity to transform the usual placement of shopping malls in major cities only, and reach out to all consumers out there through the online shopping platform. This validation comes at a stage when the usage of smartphones and the internet has been increasing in India tremendously over the past few years.

This explains why Russia wants to venture into funding start-ups in India because Russian investors can see high quality and high potential growth in India due to its expansive consumer base. Thus, it will be definitely a big boost for Russia in its investment returns. The ever increasing demand and need of over a billion population, the dynamic changes in demographics, are motivating factors for Russian investments into India.

Russia is known for its anti-virus software, security and encryptions systems that are top-notch. India will experience a tremendous growth in mobile networking and application development businesses if Russia collaborates with start-ups in the field of information and technology. A majority of investments made by Russian entities are into start-ups offering software solutions/platforms that can benefit the larger masses. Technology firms in Russian can invest in Indian startups, as they can leverage each other’s strengths thereby benefiting both countries in this process.

While it is clear that India offers a tremendous opportunity for Russia for it to invest in this startup space, it is equally important to identify worthy and capable start-ups with innovative ideas. Though there are a number of incubators and accelerators in the country, that field is still undergoing transformation, as most of them are a mere ‘co-working space’ – providing space by leveraging their real estate and making a revenue model out of these startups. Very few do go beyond and provide mentoring, business support, tech support and network/connect with investors etc. Therefore, it will be a good idea for Russian investors to collaborate and form alliances/partnerships with start-up business consulting firms in India, to facilitate in identifying potential start-ups that are investment worthy and one that can add value to all the stakeholders. Indian startups are still evolving and fine tuning their business models, and with right partners Russia can certainly tap into the early stage startup ventures as they can be unicorns at some point in time. This is a great time for startup ecosystem that’s seeing great momentum in India. Time to see Russia’s investments too in this space grow with accelerated pace!

About the author:

Above article is contributed by Mr Shyam Sekar S, Chief Mentor and Strategist, at Startup Xperts Business Consulting Pvt. Ltd., a business consulting and a digital marketing firm supporting startups and small and medium business to accelerate their growth. Startup Xperts has been featured as the emerging company of the year by Silicon India, 2014. Besides, Shyam has been featured as Most promising Digital Marketing consultants in Aug 2016, and Most promising Business Consultants in Oct 2016. As ecosystem partner for CII-Startupreneurs, as a Mentor with EDII (Entrepreneurship Development and Innovation Institute) and as Judge/jury/mentor for numerous startup events including the IIT’s, Shyam is actively involved in building the startup ecosystem.

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Effective business plan for startups | Startup Xperts

In many of my conferences, when I ask the audience as to how many prepare business plan for their company, or even how many do set business goals, I do see only a few hands going up. I don’t even need my second hand to count them. Well, you are not new to this; but then let’s understand as to why this does not happen.

First it’s the uncertainty about their business outcome, market dynamics, that clouds their mind; and more often it might look scarier to prepare one.

Second, most may not know exactly how this has to be done.

Let me give some quick pointers as to how anyone of you can create an effective business plan.

  • Start with your company’s introduction
  • Problem definition
    • Highlight the challenges, shortcomings, problems that you wish to address. This could explain the reason for your entity’s existence.
  • Your solution
    • What are the solutions, services you plan to offer/have been offering
    • Products/solutions that will help solve these issues/challenges
    • How will your solution make life easier/better for your customers
  • Who will be your target customersSegment them by
    • region/geography
    • demographics
    • age groups
    • others
  • About your competition
    • Who are your competitors?
    • What are their offerings?
    • What’s their positioning?
    • SWOT analysis of your competitors

This is not a one-time activity; rather your list will keep getting modified as your business grows/progresses.

  • Revenue model
    Most often revenue model seems to draw a blank; like with many online players hinging their revenue models only on advertisements which are a risky proposition.
    • State how you wish to generate revenues?
    • What is the timeframe to achieve those numbers, and from which segment(s)?
      Your revenue forecast is a critical element in your business plan, because your cash flow depends on it. It is better to project 3 different situations;
    • Conservative estimate (sure-shot numbers)
    • Realistic estimate (reasonable visibility/probability, say 80%)
    • Optimistic estimate (aggressive plan, outreach, with riders)
  • Cost structure
    • What’s your cost structure?
    • Your fixed and variable assets
    • Operational expenses
    • Costs that are projected in line with your revenue projections (conservative, realistic, optimistic/aggressive)As highlighted before, this element is important so that you don’t run out of gas in the middle of your journey. It is better to see how long you plan to run your business as per the forecasted revenues, and look for avenues to raise money in advance to run your show. I have seen companies who do not plan their finances effectively and give up at a time when the momentum is picking up well.
  • Timelines and goals
    • Create action plans that is required to meet goals
    • o Need to have timeframe in place as anything that does not get measured, does not get done!

Risk mitigation 

Your plans can look rock solid, and you might have done a good enough groundwork. But still there may be uncertainties when the rubber hits the road. All battle plans may not follow the standard instructions just a few minutes into the battlefield. The marketplace is so dynamic that you will have to keep spotting the business risks, financial risks, operational risks, people risks, etc. and take effective steps to mitigate those risks, counter them from time to time.

The above points are just a bird’s eye view ones, and it will help you to start putting your thoughts into paper (or MS Word/Excel) right away.

This article has not covered the marketing, sales, business development angle as each one is an ocean by itself! Expect to read those in future editions…

Startup Xperts is a management consulting firm with an objective to transform companies into the next level of growth. Our mission is to help companies to steeply accelerate their growth. Be it family run business, small or medium enterprise or a boutique firm, Startup Xperts have all the right answers to step up their growth. Startup Xperts help clients in a range of service areas including business consulting, strategic consulting, sales and marketing consulting, digital marketing, HR, Operations and leadership training.

To know more about Startup Xperts, visit us at www.startupxperts.com or write to us at info@startupxperts.com

The views expressed in this article are that of the author’s and Startup Xperts is not responsible for this content. In case of any objection in content, IP violation, incorrect or inappropriate information, please inform us at ceo@startupxperts.com. We will do our best to act on it at the earliest.

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How to Grow your startup business?

Not all startups are successful. The reasons could be a combination of – business planning, revenue model, leadership team, target segments, product, and most often execution. I have seen startups that had almost all the elements needed to transition into a sustainable, high-growth business, but lacked guidance and experienced leadership team. Building a startup is difficult but converting it into a high-growth business is even more challenging, and often requires a different skill set than that was required in the early days of a startup.

So what are those ingredients for that secret sauce of building a startup, successfully?

Having right business mentors and startup consultants are critical success factors for a startup to be successful. According to the first research report of Startup Genome Project in 2011, it was found that founders who learn are more successful. Startups that have helpful mentors, track metrics effectively, and learn from startup thought leaders, raise 7x more money and have 3.5x better user growth.

Bill Joy, Founder of Sun Microsystems once said, “No matter who you are, most of the smartest people don’t work for you”. So it is best to avail professionals / mentors to support your growth mission; and in building a successful and sustainable high-growth business. You can avail mentor support across functions like marketing, sales, accounting, human resources, operational excellence, training, etc.

To ensure sustainable growth you need to have:

  Right business model that acquires customers

  Leadership with ideology, beyond just passion and vision

  Ability to seize opportunities

  Creating a high impact, marketing and sales engine

  Retention strategies

Have the right business model that aligns with customer acquisition. Do not build products / services that just excite only you and not your customers.Focus on long-term AND short-term goals and activities. Most often, companies tend to forgo short term profits thinking of reaping those profits in long term, but practically they are only digging themselves deeper.

Your ideology has to reflect upon your culture and beliefs. Like how Walmart’s ideology is focused on customers, Hewlett Packard – its employees, 3M – its innovation, Ford – its products, your activities and outcomes need to be consistent with your ideology.

Most often when you start to scale, you might stumble upon some great opportunities. Do not leave them since they are not products or services that you are currently pursuing. As long it fits the core of your ideology and purpose, do give it a try. 3M came out with Post-it product just by accident; Johnson & Johnson accidentally introduced baby powder which then climbs up drastically to have over 40% of their revenue share; Marriot Corporation got into the airport services business by accident and that became a roaring success. All these were once a small startup which later became large corporations. These successes are not attributed to great business or strategic planning, but show their abilities to seize opportunities. Explore options, pick what works for you and discard those that don’t work.

Most startups fail to scale due to lack of customers. There may be initial success but if you rest on your laurels you will get run-over. Set an effective, high impact marketing and sales engine. In my numerous meetings with CEOs and entrepreneurs, marketing and sales have been predominantly mixed up. Both are like chalk and cheese, so you need to have dedicated professionals for marketing (especially digital marketing) and sales functions.

Building revenues is paramount, a non-negotiable factor and laser focus on sales is very critical while you are scaling up. Hire ‘smart’ sales persons, and keep them on optimum heat so that they fire in the right areas. Fuel their passion and increase your revenue visibility.

Do not stop with lip service on customer satisfaction; honestly walk that extra mile to ensure that you stay on top of your customer’s mind, always. Incorporate customer feedback into your system and ensure that it is acted upon at the earliest. It is difficult to win customers, and if you lose them it takes more than 7x efforts to win another; not to mention, that their potential could be far lesser than what you had lost.

Your employees should be taught not to just please their bosses, but to ensure that their customers are taken care of. Make them treat customers like their CEO and success will look easy.

Your employees should be taught not to just please their bosses, but to ensure that their customers are taken care of. Make them treat customers like their CEO and success will look easy.

Beyond startup phase, while you are scaling up, it might be easier to afford more salaries to recruit key resources. While you might be able to attract talent, it is important that you have strong retention policies. Have small celebrations, cheer songs and team meetings to share corporate values and beliefs, from time to time.

Be tolerant for honest mistakes. We all know that while a startup is beginning to scale there are bound to be mistakes. Just make sure that the same does not crop up in future. Even large organizations do make mistakes. Allow them to experiment and bring out their best, as long as it does not become a corporate failure.

Finally, it is all about consistency; consistency in winning deals, consistency in getting customer appreciations, consistency in building robust products or solutions, consistency in delivering high quality services and consistency in collecting payments on-time that separates winners from those who also-ran!

Startup Xperts is a business growth and consulting firm with an objective to transform CEO’s vision into achievable, actionable goals that deliver results.  Our mission is to help companies to steeply accelerate their revenue growth, profitably.  Be it family run business, small or medium enterprise or a boutique firm, Startup Xperts have all the right answers to step up their growth.  Startup Xperts help clients in a range of service areas including business consulting, strategic consulting, sales and marketing consulting, digital marketing, Sales Process Outsourcing (SPO), HR, Operations and leadership training, sales training, business mentoring and executive coaching.

To know more about Startup Xperts, visit us at www.startupxperts.com or write to us at info@startupxperts.com

Author Shyam Sekar acts as a Chief Mentor and Strategist at Startup Xperts and provides business consulting and execution support to numerous startups and SMEs, helping them build their enterprises successfully.

The views expressed in this article are that of the author’s and Startup Xperts is not responsible for this content.  In case of any objection in content, IP violations, incorrect or inappropriate information, please inform us at ceo@startupxperts.com.   We will do our best to act on it at the earliest

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Need to build Startup Businesses & Startup Ecosystem

India from being the 4th largest startup in numerous the world back in 2015, did exceedingly well to become the No. 2 Startup ecosystem in the world (as reported in the Government’s Startup India website). Investors were upbeat in 2014-15 and heavily betted on numerous startups, many missing out on fundamentals of businesses. Over the next couple of years, the tremors or moderator due to those bad investment decisions. While some investors multiplied many times, those and startups lacked basics had to shut down or scale down or relook at their business model.

The shakeup has indeed made investors wiser and startups too are turning smarter. There seems to be a up swing once again, with a lot of opportunities popping up constantly. But then are we building a sustainable ecosystem in the process is a question I have been asked in numerous events and conferences either as a speaker or panelist or moderator. Thought it’s best to highlight some brutal facts which is essential to build successful Startup Businesses!

First let’s look at how a Startup ecosystem needs to be created that is scalable, sustainable and can contribute to the growth of our economy.

An ecosystem means inclusive; one that supports each other across all aspects that are required for the Startup Businesses to succeed. As we all compare how SiliconValley has been a startup success showcase, we need to pick those intrinsic attributes that’s behind the working. To a greater extent Bangalore (Bengaluru) has developed many of it, though not inexact line and scale of the true Silicon Valley attributes but it did have a lot of tick marks, which helped Bengaluru to fuel the growth of startups. Yet another interesting take is of Chennai, which has succeeded in the global scale as a SaaS city. It has over $billionvaluation across companies, and the down or majors are Zoho and Freshdesk, besides another 100 startups in different phases or scale of operations.

There has been a good initiative from the Central Government few years ago, and things many startups have registered under this umbrella and taken benefits right from collateral free loans, to certification, etc. Though the expected scale can be much larger as the potential to grow is humongous. I would say, not just the Central Govt.but even the State Government(s) too should take up necessary initiative and support the startup businesses to build a sustainable startup ecosystem.

The recent initiative Patna Ideathon 2018 from the Govt. of Bihar and Department of IT, was an event well organized and planned – be it scale and quality. The push right from the Chief Minister, Dy. Chief Minister and IT Secretary can be clearly seen as they realized that Patna has missed out in the development scale and had aglorious past; now that with this initiative they are trying to create a startup ecosystem, and I am glad to have been part of this mega event as a Jury for the shortlisted startups (about 36 in numbers, I guess).

  • There has be incubators and accelerators, and not just real estate business of co-working spaces making money without adding value to aspiring entrepreneurs and startup founders.
  • Ecosystem should be mentors spread across specialization right from business, to finance, to operations, legal, etc. who can lend their helping hand to startup businesses.
  • Investors, financial institutions, banks, to understand the specific demands, challenges, and nuances as to how startup businesses work and provide support through financing them at the right time, and at the right stage. This is easy said than done, as most find it difficult to evaluate the right startups and whether or not and how much to fund (considering their risk appetite).
  • Media should be showcasing those startups and in numerous not become a big paid media activity, to garner eyeballs. Then the fundamentals of building a and startups thwarted. Genuine startups need to be identified, highlighted as they too need the right visibility to build.
  • We also need a community that can help startups when faced with specific challenges or when they seek advice. This way, right at even an ideation stage, the aspiring entrepreneurs, startup founders need not reinvent the wheel for solutions which has either not worked, or not having the desired market opportunity.
  • Support from Government to ensure that this is awell-oiled engine, through ease of process, transparency, and regulations, and showcasing intent in building this startup ecosystem.

Jobs cannot be created by the Government (as their employees) to the extent of what’s required for billion plus population here. Neither the large corporate would be able to provide these jobs for all those seeking employment, every year. It is those micro, small, medium enterprises (MSMEs) and Startup businesses that can help solve this big challenge, and the need of the hour is to ensure that we build a sustainable ecosystem that’s built on strong fundamentals.

Look forward to your views, and happy to play a part in whatever way we can!

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Why do startups need a business mentor?

Recently, I had an opportunity to deliver a session to a large group of entrepreneurs.  At the end of my presentation I was asked by a half a dozen entrepreneurs requesting me to be their mentor.  One of them posed a question – “why will I need a mentor as I am already running a reasonable successful startup? “

“Does that mean Sachin Tendulkar and Roger Federer, don’t need a coach?  Or should the coach have far skills superior to Sachin or Federer, to be their mentor?” was my response.  It simply means that there is someone who observes you closely and provides those critical suggestions/inputs which will help these superstars perform even better at their current level or help them sustain their peak.  Improvement is required for everyone, even at the highest level, and so it is essential that startups and SMEs certainly do need a mentor in taking their business forward.

Mentor is not a consultant; rather they act as your coach.  A business mentor or a business coach comes with rich experience, are business savvy, built successful enterprises, and one who has the passion to support entrepreneurs in helping their dreams become a reality.

Business mentors / Business coaches will help you fine-tune your strategy, help you network with right contacts, suggest you as to when to take your idea to an investor and can also help you balance your work-life.  It is critical to have a mentor who would play the devil’s advocate for you, to ensure that you take the right decisions.   Business mentor should not hesitate to ask the right questions; they guide you through barricades and successfully navigate, steer your company in the right direction.

Having understood the need of a mentor, how will you be able to identify one?

  Look closely, right from your relatives to bosses to peers.  You have known them for long and they too know you well.  This helps you strike the right chord to get things started

  Next is to look at external sources, say through social networks.  LinkedIn is a useful source to look for the right type of mentors.  You may not know the individual beforehand, so the best way is to look at their ‘recommendations’ to understand if that is the kind of mentor who you would like to have for your company

  Look at online blogs, magazines, etc. and you might come across a business mentor who can complement your skills

  Networking in meetings can also help  you identify a good business coach for you

Once you have identified, it is always better to formalize their engagement.  It is good to set the expectations right at the beginning.  The best way is to have a brief conversation with the would-be business mentor or business coach, say for an hour or so.  This will help understand whether both of you share the same wavelength, same values and if they are also open to share their knowledge, experience and more importantly their time in helping you shape your idea, or build your enterprise.

Some mentors might provide the support free.  But in those cases, the commitment and involvement levels are likely to be significantly lower.  Also it is difficult to request or find the right time to take their guidance constantly as their priorities would be different and might not sync with your expectations.

While striking a commercial term with the business coach, you can have various modes to structure the payment terms.  The usual ones are a flat retainer fee for a fixed period.  In some cases they are inducted into the board and given stakes in the company.  Sometimes a combination of retainer and success fee might work best.

Once your business mentor or your business coach is on-board, you will need to have reviews, discussions in a periodic manner.  A fortnightly or monthly meeting can work best.  These reviews are important to keep the business running with razor-sharp focus and thrust.

Business coach, with their experience and wisdom should be able to give shape your idea or you’re your business to the next level.  In the event if things do not work out with the mentor as envisaged, you can politely disengage with the mentor by giving them sufficient notice.  The key is not to burn bridges with your mentor, as what goes around comes around.

Sometimes it is also advisable to have more than one mentor.  Let’s say, if you have a mentor for marketing and sales, you may look at mentors for financial strategies or organizational development or operations excellence.

The need of a mentor has become more critical than ever before.   These business coaches have practical experience backing them and have faced numerous instances before.  You might probably know as to what you need to do in your business, but your business coaches can also suggest you what not to do.  You will not only derive these significant benefits in having these business mentors in your team, but also can make their success story a part of yours too.

Startup Xperts is a business growth and consulting firm with an objective to transform CEO’s vision into achievable, actionable goals that deliver results.  Our mission is to help companies to steeply accelerate their revenue growth, profitably.  Be it family run business, small or medium enterprise or a boutique firm, Startup Xperts have all the right answers to step up their growth.  Startup Xperts help clients in a range of service areas including business consulting, strategic consulting, sales and marketing consulting, digital marketing, Sales Process Outsourcing (SPO), HR, Operations and leadership training, sales training, business mentoring and executive coaching.

To know more about Startup Xperts, visit us at www.startupxperts.com or write to us at info@startupxperts.com

Author Shyam Sekar acts as a Chief Mentor and Strategist at Startup Xperts and provides business consulting and execution support to numerous startups and SMEs, helping them build their enterprises successfully.

The views expressed in this article are that of the author’s and Startup Xperts is not responsible for this content.  In case of any objection in content, IP violations, incorrect or inappropriate information, please inform us at ceo@startupxperts.com. We will do our best to act on it at the earliest.

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