Mohit Bhatnagar, Managing Director with Sequoia Capital India, serves on the board of companies like Prizm Payments, Comviva, Ujjivan Microfinance, IMImobile, Ideacts, Micromax Mobile & One Assist. Speaking at the Tech in Asia Conference in Bengaluru this week, Mohit spoke about product innovation and the importance of user engagement in products.
When asked about the advice he gives to his portfolio of startups on product innovation, Mohit said that if someone is looking to build a B2C company in the early stages, almost 70%-80% percent of the decisions at Sequoia would be on how good that product is. On the other hand, in the case of a B2B company the decision to invest or not would be based on how innovative and differentiated is your go-to-market.
Mohit said that he would limit his comments to the B2C side which is more product centric in why it's going to win or not.
“We at Sequoia look very, very closely at companies that are genuinely solving problems. And you’ve heard this before, it is not uncommon for us to find entrepreneurs who step into the door and say, I built this to solve my own issue...,” Mohit said.
Mohit gave examples of how companies like True Caller and Zomato garnered consumer footprint by solving a “genuine problem.”
“We are looking for users and usage in the early stage of investing which tells us if the product is actually working... For us it’s really, if people are willing to play they will come and pay,” he added.
Importance of engagement metrics
Talking about what made the firm bet on user experience before monetization, Mohit said that the real thing that gives them conviction to go and invest in these companies is engagement metrics; there is no shortcut to that.
“For us it’s not about the absolute amount at all. For us it’s a lot more about the momentum in the users. Are the first 100 customers helping you get the next 100 customers by the word of mouth? Is the engagement level of the first 100 that you had started off two months back higher today than it was then? These are the indicators that actually tell us that the product works,” According to Mohit, these are some factors that helps the firm take investment decisions in some of the early stage companies.