January 30, 2023

Travails of returns - Part 2

Last week, I started writing on building businesses in India. We covered the fundamental choice of financial model to begin with. This week, we cover what we did next. The first execution step.

In our case, we had four basic ways in which we could have started execution. Obviously, all had to be done together but the question was what would be indexed more.

1. Detailing out the idea further – Like everyone else, the idea was skeletal and conceptual to begin with for us. Detailing it into execution steps, flow charts, power points, SOPs was one option (many established corporates do it) but we never chose it. We reasoned out that a lot of it will anyways change and will be defined by early team members, so doing the detailing maybe putting the cart before the horse. I remember we losing a lot of conversations with prospective team members and capital providers due to not being detailed enough but we treated it as self-screening.

2. Raising funds – A lot of start-ups first build a team of 2-3 co-founders and then go out to raise. It makes them de-risk to an extent (the capital is not theirs) and also they find the other execution steps getting easier with capital. Again, something we did not choose. Our reasoning was that good capital will follow great teams or great ideas or ones that are generating numbers at that early a stage, meaning money will chase excellence and not the other way around. So, we are better off demonstrating some form of excellence.

3. Getting proof of concept – Very many of us go to first get the real business going to demonstrate that their idea works, or they are fit for executing the said idea. In our opinion then, it was important but could not have been heavily indexed on. Because we believed, then, that the intensity, pace and width of execution will depend on variables like capital, team, and when we will get them, so better to seek that clarity first.

4. Getting the team together – This is what we first indexed heavily upon. Largely because of the above reasons, but it also played to our strengths. Most of us were people’s guys to begin with. I remember we having a team of 30 before our seed round was completed, some joined and some serving their notice.

The team had some senior founding team members. They were ones who shared some common values like being commercial, hands-on and believed in brotherhood. But at the same time, had at least one distinguished skill (either hard or soft) that made them stand out. All sold on vision and the seniors that were there before them. The team also had some relatively junior guys. The way we chose them is that they just blindly followed the seniors. It seemed like the best thing to do then.

In hindsight, I will be the first one to admit that almost all that we did not index highly upon seemed the right thing to do later. But when we have started anything @OfBusiness and @Oxyzo, to this day, we first get the team together.