Entrepreneur Media spoke to Pankaj Jain, partner at 500 Startups, at Surge 2016. Pankaj said that he believes there is tremendous amount of opportunity for startups to solve basic problems in India and earn money. Excerpts from the interview:
Ideal start-up strategy
In general the ideal strategy for a start-up is to have a sustainable business model and try to make money. The faster you are growing the more money you are making, investors will chase you and want to invest in your company. I think some people have lost sight of that over the last couple of years and said, “Well, let’s grow on based on what investors are throwing at us.” That works at times, but sometimes it may not work. So if you are solely relying on that you are not building sustainablebusiness models. Thus think of sustainable business models. It’s easier to do when you are doing B2B than you are doing B2C, still just think of a business model that is sustainable. If you grow that, it should be.
Lessons from Indian start-ups
There is a difference between entrepreneurship in Silicon Valley and entrepreneurship in northern land. So somebody opens up a restaurant, he is still an entrepreneur. Some people (in India) becoming entrepreneurs are purely in need, they have no choice. To survive, they have to do business. There is a certainamount of intuitive understanding about business that they have when they do that, I think that is tremendous amount of learning people can learn from them. The way some of these businesses in India work, it’s amazing! They sit there and in their hands do all those number calculations, and it’s like how did you do that? You are absolutely right but I need to pull up my excel sheet to figure these numbers out, but you just did it in your hands like that. So those are the things that entrepreneurs globally should be learning from people here.
Learnings from Silicon Valley
I think professionalism is something Indian entrepreneurs can learn from Silicon Valley. In a lot of ways a serial entrepreneur is somebody who is dabbling in businesses that they don’t necessarily have a strong
background in. Take Elon Musk for example, PayPal to SpaceX, where is the connection there? So, it’s not necessary that you have to keep doing business in a thing that you understand. You are building that way of a thinking as a real entrepreneur.
Occurrence of evolution pace
The pace at which evolution is occurring in India, is far faster thanit was in Silicon Valley. Where we are in 10 years, Silicon Valley was not in 10 years. So in 50 years where we are going to be, is going to be very different from where Silicon Valley is today. So short answer is, there needs to be success, there needs to wealth creation, there needs to be wealth distribution, before people are willing to take on more risks.
Understand the psyche of an investor and entrepreneur
Confidence will come from success, the money will come from success. I am confident and I have the capital, I am obviously going to be freer to take more risks either as an entrepreneur or as an investor. So don’t blame the entrepreneur, investor, help them find success. Once they find success, they will automatically look for edge case scenarios and say, “Hey, let’s go try something absolutely crazy that no one else is going to do. Today I am scared of putting food on my table, let me solve that problem first. Once I have enough food to feed my family for ten generations, then I will worry about something like, “Hey, let’s send somebody to Mars.”
Solve basic problems first
Everything like traffic situation, to water situation, to unused real estate, potholes, there are a million things you can find solutions for and make money. Instead if you continue to say, “I am going to make a loyalty program to help people earn points,” like really? That’s not a real problem.
This article first appeared in the Indian edition of Entrepreneur magazine (April 2016 Issue).