‘Entrepreneurs are emotionally attached to their companies’

In many ways, K Ganesh and his wife Meena, founders of growthstory.in, can be called as the first family of the Indian start-up space. They have successfully incubated companies, nurtured them and sold them at mouth-watering valuations. In an interview with BusinessLine , they share their insights about the start-up world and how to navigate through the highs and lows.

Can you share with us the reason behind launching growthstory.in, your entrepreneurship platform?

Both of us have been serial entrepreneurs launching one business after the other till Tutorvista happened. Once we sold the company to the Pearson Group, we launched an entrepreneurship platform called growthstory.in.

We did this because we wanted to promote greenfield ventures and carry out parallel entrepreneurship. We realised that there are huge untapped opportunities in India. There are problems waiting to be solved and through which we can create disproportionate values. If you look at the UK and the US, they are evolved countries where most or all the problems have been solved. In fact, in San Francisco or New York there are apps that can help you locate private toilets as public toilets are not well maintained. This is, in fact, a good example of shared economy. In India, there are lot of things that are broken which basically translates into good opportunities.

Through this platform, we launched bigbasket.com, which sells groceries online, and then we launched bluestone.com, an online jewellery store, and the latest, portea.com which provides healthcare- related services.

Being a serial entrepreneur, can you tell us what goes behind launching a start-up?

We first look at the next 5-10 years horizon and what are the large spaces where ventures can be built. We also look at sectors where there are no category leaders. The winners are already established. It is like starting a software services company where an Infosys already exists. We also look at how large the market is which also means that we should avoid niche markets. For example, starting an online show for jewellery for pets. Now, how many people will buy such jewellery? This is a high-end market but at the same time, a niche market. We currently have five in the project mode with 20 people.

About three or four will eventually see the light of the day. During this phase, we will validate the idea, get feedback from the market and customers and also put up a core team. It may come to a go or a no go. If it is a go, we launch. After launching it, we raise institutional venture capital.

What is the downside to such a scenario?

It is unlikely we will have another WhatsApp or a Snapchat that we can sell at $4 billion. These are high tech, quirky little things. There is actual delivery which is happening. It is a difficult business and it takes a lot out of you. With 20 people, you can’t create a billion-dollar valuation. What we are doing is parallel entrepreneurship that has probably never done before. It requires us to span across multiple sectors and business models. We will never start unless we have co-founders who are of high quality because those who fund the venture look at their background carefully.

One finds at least in India, promoters of several start-ups are looking to exit much before they consolidate and grow their companies or scaling up to a level of a WhatsApp…

I think Indian entrepreneurs are more resistant to sell because they can get emotionally attached to their companies. True answer to your question is whether there are enough exit opportunities. There are a few exit opportunities here. They might make a mistake of not selling when they should sell.

When do you think is the right time for a founder to exit?

For Tutorvista, it was a $230-million question. When you get an offer, you can’t refuse. There are multiple ways to look at it. There is no one right way. One has to do with our own DNA. There are people who run orchards and then there are people who run nurseries, plant the seed and sell it. We are more in the nursery model. Practically, like any product and product life-cycle, businesses also go through lifecycles like early-stage etc. So, at every stage, you have different demands on the owners and the management team and different skill sets are required at different points of time.

You may want to exit if you have taken it from point A to point B. I genuinely feel that every business is like a fruit and it goes from raw to ripe. After that it does not get better but worse. Lot of times we have wondered whether we have sold early. For example, MarketX data analytics company was a profitable business when we decided to sell it. We invested about $50,000 and sold it for $63.5 million. This happened in 2008 when there were hardly any exits. If you ask me now, a big data business is now worth 10 times. At that time, nobody talked about big data. So, you never know. If we had continued, that particular company might not have done well.

Which do you think are the sectors that an entrepreneur should look at for launching a start-up?

I think the areas, which are low hanging fruits, are the easiest. We very strongly feel that roti , kapada , makaan , healthcare and education will be evergreen. Two, think mobile first. Otherwise, you will be competing with Reliance Retail. Use technology, apps to do things differently.

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