”Focus on your 3Cs: Credibility, Cash Flow and Crew”– Rajeev Mecheri of Mecheri Smart Capital

Lessons from the Startup to Scale-up to Successful Sale of iMetrex Technologies, a building technologies and security venture catering to the Indian enterprise market - The Venture Intelligence Team



Rajeev Mecheri, Managing Director, Mecheri Smart Capital (Bio & LinkedIn)
Interview by Hari Krishnan of Venture Intelligence, followed by interaction with students at the Department of Management Studies IIT-Madras on November 9, 2011.

Highlights:



Please click on the links below to view corresponding video snippets:

• Importance of Customer Touch Point


• “What works for the company, works for you (the founder)”


• Founders should separate their lifestyle needs from that of the business


• Invest Appropriately - in infrastructure, etc.


• Decision to exit and the "strength of a brand"

• Decision to integrate vertically (getting into manufacturing)


• Following the Customers


• Innovative holding structure for acquiring a product company

Click Here to Download the Audio of the Interview - mp3 format - 52 mins; 24 MBUse Right Click & Save As to download to your desktop
Click Here to Download the Audio of the Q&A session - 21 mins; 10 MBUse Right Click & Save As to download to your desktop

"VC is a time bomb"

David Heinemeier Hansson, Partner, 37 Signals (Bio)

A super episode from Stanford’s Entrepreneurship Corner series. Highlights of the talk:

It's a myth that entrepreneurs need to be workaholics- In knowledge businesses, where ideas matter more, it's key to have a well rested mind to be productive in the 5-10% of your time that matters the most. Overwork introduces mistakes and, in any case, you cannot outwork a Microsoft or a Google. (Episode Minute: 22.00)

"VC is a time bomb" (Minute: 16:30)

- Unless you are building a semiconductor plant (or some other similar capital intensive businesses), accepting VC money upfront is harmful.

- It generally takes longer to build good businesses than VCs' exit time frames. Rocketship startups - which go from scratch-to-IPOs in 4-5 years - are most often the exceptions.

- While an average entrepreneur would be very happy with $1-M a year payout (especially if it goes straight into his bank), the VC business is hits driven. "For a VC, small is inconsequential". By targeting a small but very profitable business, the entrepreneur increases his odds in terms of depending on his skills (versus needing to timing the market right).

- As much as possible, invest your own money - which will ensure that you have a sense of urgency to get profitable, you will hire more carefully, etc. and focus on "profit share" in the market versus "revenue share".

- Some entrepreneurs tend to get "addicted" to VC fund raising and hence don't want to piss of "their dealer".

PR "buzz" is not for companies that are doing great
- in terms of profits, trying to increase their margins, etc. (Minute 56:00)

"Startups Don't Need to Fear Big Cos" (Minute: 40:00)

- The kind of products you develop as a large company that will throw a 30 member team at a project for 2 years with unlimited resources, is very different from a 3 member team with limited resources and need to break-even ASAP

- There's no correlation between structure and scalability. There is no need to add more people every time your revenues are up by $500-K or $5-M. In fact, the venture is scalable if you DON'T need to add people, every time your sales goes up. (Minute: 35:00)

"Do not disconnect decision makers from doers" (Minute: 51:00)

- Avoid "Manager Managers". Everyone must "do stuff". Else they will fill out eight hours each day by creating bullshit policies.

"All Planning (at a startup) is just harmful guessing" (Minute: 10:40)

"All decisions (in a startup) are temporary" - Hence taking any decision is better than not taking any (Minute:10:40)

Why its good to start up during a recession
- During a recession, customers need to desperately lower costs and will give startup companies (that offer a drastically lower cost structure) a chance (vs large, "safer" companies). (Minute: 53:00)

For Wannabe Entrepreneurs among MBA Students
- Conciseness of Communication (Unlike Professors, customers don't appreciate 20 pages)

- Work for someone else before you start your own company. You can be a good boss, if you have not lived in the shoes of an employee.

Listen to the audio from here (mp3) - 59:39 Minutes, 27.3 MB
(Use Right Click > Save As to download to your desktop)

The Video

UK Entrepreneur & PE Investor Luke Johnson

LSE has a podcast of an interesting lecture and interaction with Luke Johnson, Founder & Chairman of UK-based private equity firm Risk Capital Partners and a highly successful entrepreneur (with a special focus on the restaurant business)



For six years until 2010 he served as Chairman of Channel 4 Television, a major British broadcaster. He is Chairman/part owner of the restaurant business Giraffe with 40 branches, and Chairman/owner of Patisserie Valerie, Druckers and Baker & Spice, three chains of over 70 retail patisseries. He recently took control of Bread Ltd, Britain's largest artisan baker, including the retail bakery Gail's. As Chairman and majority shareholder of Signature Restaurants he built up the Strada 75 branch restaurant chain and owned various classic London restaurants including The Ivy, Le Caprice and J Sheekey. Previously he was Chairman of PizzaExpress PLC. During his involvement the share price rose from 40p to over 800p. In the 1980s he worked as a stockbroking analyst for Kleinworts. He co-founded the largest UK chain of dental surgeries, Integrated Dental Holdings, which was sold for over £100m after ten years of ownership.

The audio can be listened to from here
(Use Right Click & Save As to download to your desktop)

The Video:

Eric Ries of The Lean Startup

This Week in Startups show has a super informative & super entertaining interview with Eric Ries, entrepreneur and author of The Lean Startup.


Eric Ries

From Wikipedia:

"Lean startup" is a term coined by Eric Ries, his method advocates the creation of rapid prototypes designed to test market assumptions, and uses customer feedback to evolve them much faster than via more traditional product development practices, such as the Waterfall model. It is not uncommon to see Lean Startups release new code to production multiple times a day, often using a practice known as Continuous Deployment. According to the New York Times, "The term 'lean start-up' was coined by Mr. Ries, 31, an engineer, entrepreneur and blogger. His inspiration, he says, was the lean manufacturing process, fine-tuned in Japanese factories decades ago and focused on eliminating any work or investment that doesn’t produce value for customers."

Lean startup is sometimes described as Lean Thinking applied to the entrepreneurial process. A central tenet of Lean Thinking is to reduce waste. Lean startup processes reduce waste by increasing the frequency of contact with real customers, therefore testing and avoiding incorrect market assumptions as early as possible[5]. This approach attempts to improve on historical entrepreneurial tactics by reducing the work required to assess assumptions about the market, and to decrease the time it takes a business to find market traction. This is referred to as Minimum Viable Product.

In The Entrepreneur's Guide to Customer Development, Brant Cooper and Patrick Vlaskovits add a fourth element, and that is the use of powerful, low-cost and easy-to-use analytics. While some characteristics of lean startups have been practiced for years, the confluence of these trends is a recent phenomenon that increases the speed of iteration or "number of learning cycles per dollar", as a business hones in on a product-market fit.

Click here for the audio version of this episode.
(Use Right Click & Save As to download to your desktop)