Coverage by Bhat Dittakavi of Variance.AI on “Hard Things about Hard Things” moderated by Vani Kola of Kalaari Capital on 9th December at TiE Global Summit 2020
Vani Kola) A successful startup inspires many and is looked up to with awe and a tinge of envy. Successful founders are like rock stars. While success gets discussed a lot, the gut-wrenching situations, the low points of despair, the difficult conundrums are rarely discussed. But behind every success is hard work and hard choices. This session focuses on choices and learnings that were pivotal for success.
Kabeer) Nothing worth doing has ever been easy. Every great story has lots of pain out there. When I learn harder examples from others, I feel better.
Vani) Karthik, How has been your journey with the founders? Do you face doubt and question? If so what is your mantra? What is your advice and guidance on founders in the moments of doubt?
Karthik) We built a great brand and great journey. There is more sense of responsibility of LP’s money is overwhelming burden on your shoulders. We have to balance the commitment to the LP and what we do with the founders. We pattern match and we learn best practices that founders do. Through the history of VC journey, only few succeed. There are lessons both in successes and failures. We translate those lessons for the novice founder who get funded. They manage to pull off you is a small check. Be pro-active to foresee, not in the industry, capital needs but also at yourself. How these people would be when company goes from 1 to 5, 5 to 10 and there the journey might end. That’s Ok if the startup doesn’t become a unicorn.
We are in the verge of seeing better things in India. next decade is the key.
Vani) Whenever I see, Kabir is unstoppable. In difficult moments, what do you do? Are you like a Zen? Whom do you call?
Kabeer) About two years back, I started working out to handle (running and cycling) when I have difficult moment. I will talk one on one with the other person. I would like to structure the conversation. I don’t pass the anxiety. I do 2000 KM an year.
Vani) Running is an activity. Whom do you call for advice?
Kabeer) Google is our one of the biggest investors. Blume too. We have a few others. I reach out to right person specific problem statement. Automated warehouses in a 2000 sq.ft. space. it is a cube space we get and then it is entirely automated. I talk to this investor from California. Google is fantastic for us to bounce idea for products. We are supply-driven business and we need to be consumer-centered. I take the anxiety, distill it and come up with the problem statement first. I take right problem to the right folks.
Vani) There is a fear and perception on can I trust my board? Founder might feel that. We know it isn’t the case. Kabeer builds deep relationship with each of the board members. How should founder speed dial when and whom?
Karthik) Boards are manifestation of two things. Founder personality and firm’s culture. Smart founders actually build 1-on-1 relationships of trust. It starts with DD after the term sheet. Phase of the company depends on that relation. Board wants to be vested with the decisions founders make. One can’t handle complexity in a group. There is a lot of board management one-on-one basis in zoom world.
While the smart founder manages each investor relation, he has to be transparent and give the same piece of information. It is not just Kabeer who gives information but the top management is responsible and answerable when they present to the board. Smart founders balance out with financial heads who can come and earn respect from the board.
Building that relation with investor makes the conversation easier for tough situations. Whatsapp opened a different channel than few years ago.
Vani) Funding is one of the hard things about starting up. What is your advice on funding?
Kabeer) I am not good at giving advice. I can share my own experience. You start something because you want to get something out of the system, not to raise money. If it is true, starting any business is about making the users happy without raising much capital by building something that users care about. Get some real customers. Karthik started as a smaller seed fund. Karthik heard from the users that the were thrilled about our product. That’s why he and associate chose to meet me. Fundraising is never easy.
Vani) What to do when the relationship is not transitionally valuable?
Kabeer) A No is a No. We are adults. We have to take it up.
Vani) When everything goes right way, we are fine. What advice do you give when everything is story book?
Audience) What is your learning from a founder who is probably right and you misunderstood?
Karthik) This goes both ways. Founders need time to work from the ground whereas we give advice from the 30,000 feet. Founders are right more often than not. If you are investor with strong view, watch closely. VC’s job is to increase the probability of success.
Audience) Why Dunzo?
Kabeer) I took long break between my fist startup and this one. I wet around asking people about whether they are interested in getting things done. It is about making the life of users convenient to get things done.
Vani) Great companies are built on simple insights and seemingly simple problems. Thank every one including TiE. Thank Kabeer and Karthik for being part of this pay forward.