Tag Archives: Ecosystem

Dear Accelerators

2 years back I wrote that India has a premature incubation model. Things have changed now – Accelerators / Incubators is the new trend here. Simply too many and too much buzz around it, its all smoke without fire. I had a unfortunate encounter with one of organizers of an accelerator who claimed that its program is more beneficial for startups than YC or 500 Startups. That incident still makes me laugh, wrote about it last year.

This post are suggestions to Accelerators and is based on my personal interactions with many startup entrepreneurs, investors and enablers in ecosystem.

1. Stop looking for startups with traction. 

Accelerators start by looking for startups with traction. Its puzzling, because startups with traction are looking for investors, not accelerators. Wouldn’t it be simply awesome if accelerators start saying – ‘Join us and we will ‘help’ you gain / build traction!’.

Unfortunately, since there are too many startups, the competition and market dynamics will not make this real. But seriously, can some accelerator stand up and say – ‘Join us and we will ‘help’ you gain / build traction!’. Entrepreneurs will have more faith & trust in you.

2. Be a little transparent.

Your metric for success is simple – success of the startups that have graduated from accelerator. Tell us that story, maybe you could learn a bit from TechStars that lists detailed performance of its portfolio companies.

No matter how flashy personal brand you manage to build for yourself, all that any entrepreneur really cares about is his / her own startup. So let startups that are applying to your program judge you ‘only’ by performance of your earlier startups.

And if your startup performance report is bad, here is some ‘free’ advice for you – pivot!


3. Prove your worth before asking too much.

With exception of few top accelerators, most startups end up applying at other accelerators after they have failed to raise investment from angels or failed to get through the top accelerators (yup, I am being practical – this is the reality!).

The top accelerators take between 5% to 8% stake in a startup for $20K to $50K. You be the judge how much equity should a startup give you, in my opinion it should definitely not be more than 5%. Don’t act too pricey, you will have to prove your worth before you ask for anything more. There are also bootcamps and acceleration programs that offer similar benefits for startups at no investments / no equity.

Also from perspective of founders, 8% to 15% dilution at accelerator (some startups go through 2 accelerators), 15% to 25% dilution at seed / angel-round, 20% dilution at Series A. By this time with a 10% ESOP pool, entrepreneurs are just left with their skin-in-the-game.

PS: And if you are adding clauses like permanent non-dilution; offering your (little) cash in tranches or after several ‘gentle reminders’ from founders – there is a special place reserved for you in hell.

4. Startups are not one night stands.

No matter how much accelerators would like to think they can change the fate of startups in matter of few weeks – they are wrong. Startups take years to grow, they are not overnight successes as many people perceive them to be and most of the growth comes once they face the real world (which is after the demo day). It takes time to find the product-market fit and it comes with multiple iterations on product.

Your so called focus on batch after batch, this sounds like one-night stand with startups. Founders have trusted you, please get into a long term relationships with the startups. Be there when they need you (and even when they don’t).

5. Your partnerships with Investors means nothing to startups.

Many accelerators ‘flaunt’ their partnerships with venture capital firms to startups and also occasionally drop names of influential angel investors. First time entrepreneurs are often misled by such talks and tend to think it as an assurance that they might be funded on graduation day / demo day or their chance of getting funded is higher through a accelerator.

Honestly – these partnerships mean nothing. Venture Capital firms are always on a lookout for their deal-flow; the word ‘deal flow’ explains almost everything in this industry. Any partnership that any VC has with any accelerator is only for the purpose of deal flow, they do not want to miss out on any hot startup but this partnership is definitely not a investment commitment (unless it is on lines of YC – $80K on convertible notes).

6. Be more transparent on utilization of time (and funds).

Not many accelerators (and also many entrepreneurs) realize that the biggest resource startups should be worried about is not money, its time. Time runs out fast, for everyone.

While there are programs and activities that directly add value in building product, any time that is gone outside of that (relocation, attending events, visiting places and so on) means staying away from building product which decelerates the start-up. Make founders aware of that well in advance – so that they can make their plans accordingly or alternate plans like one of the founder stays back and manages day-to-day tasks.

Same with funds, if there are any programs, costs (legal, travel, etc) that will require startups to pay the accelerators – please be transparent about them and mention that to founders well before they join the program.

7. Mentoring the Startups

The kind of startups entrepreneurs are building today did not even exist few years back. The skills startups required today are – design, data, distribution, product and technology. Unfortunately, we do not have great talent for these verticals in India.

So accelerators are getting investors to mentor startups, this is where the model starts falling apart. 99% of time the investor will be advising / mentoring the startup without using their product or experiencing its service! I don’t mean to offend anyone here, but the fact is – Investors should be investing, not mentoring! (unless they have skin in the game).

Take a break, read this post – Great Entrepreneurs will listen to you but will follow their own instincts.

Read 2: In 30 Days My Startup Will be Dead

Be valuable to the startups in your accelerator and get mentors who can really help them grow. Get Entrepreneurs or Senior Executives (who are entrepreneurial or proven achievers) and have skill sets that startup needs to mentor them. Alternative suggestion – get founders or executives from known Silicon Valley startups to mentor!

Mark Suster said few days back at PreMoney conference – ‘Networks of entrepreneurs helping each other are significantly better than board meetings for learning.’

8. Your over-extensive focus on demo day kills few of your startups.

If I were a part of any accelerator, I would have opted out of the demo day. Simply too much focus on demo day! Of the 12 week acceleration program, 3-4 weeks (effectively 33% of time) goes in its preparation, that is not all since you get in to meetings, introductions and so on, the chances are you will spend next 4 weeks on those follow-up meetings.

Mark Suster says it best – Demo days are showcase of who is best at on-stage presentations ~ coached and polished. They produce too much hype and too little value. Also in another post (more from a VC perspective), Mark explains the importance of proprietary deal flow for investors.

If you are observing this space – you would realize that even the startups graduating out of top accelerators are struggling to raise investments. Not all of them are getting funded or are able to close their investments quickly. Probable reason – too many startups? too much hype? could be anything else.

Elad Gill wrote a brilliant post on VC Signaling last year. I believe similar sort of signaling happens with startups in any accelerator too. In a batch of 20 – 40 startups, investors are bound to choose the best – the top 20%, or the best 4-6 startups that stand out on demo day, rest 80% startups will not find it easy to raise investment.

Worst is negative signaling effect, if any of the startups from that batch are unable to close investment in next 4-12 weeks post the demo day, it will be bit tough for them to close it going forward unless they get some significant traction.

So instead of flashy demo days, accelerators should focus on getting one-on-one interaction between startups and investors. Although it is apparent that from every batch there will be few standout startups., as an accelerator you need to give a fair and equal chance to every startup in your batch. For raising funds demo day works for few startups, but makes it difficult for many startups and unknowingly kills few.

Treat demo days as a demo day – show what product you have built! Not just to investors, but also to influential early adopters and potential partners.

9. Help startups with distribution. Not pitches.

Because of these demo day pitches, there is a certain glorification of startups – even before they are worth glorifying. Companies need to be glorified by their traction, revenue, customers etc not because of a nice punchline and a great deck. Demo days are setting a wrong precedent in the very first place. Pitching has its own importance but most founders today believe that’s the only thing to do.

I have said this multiple times – the easiest thing a startup can do is to build a product or pitch to investors. Toughest thing is – finding product market fit & distribution. Unfortunately, most accelerators are trying to help startups with easier tasks, not the critical ones. Startups don’t fail because of lack of money, they fail because of lack of product adoption.

If it is a consumer startup – accelerator should help it achieve its first 25K-50K users. If it is a enterprise startup – accelerators should make introductions to potential clients and help them get their first 25-50 paying customers. When a startup succeeds on this – they will not require to pitch any investor at all!

Concluding Notes:

Most accelerators ask startups on what they are innovating on, while they are trying to replicate the success of YC. The intention of this post is not to criticize accelerators, but a feedback for them on how they can start being more valuable to their customers – the startups!

Credits: Thanks to Kulin Shah (Co-founder at Wishberg) & Avlesh Singh (Co-founder at WebEngage) for reading the draft and their suggestions on this post.

#FoundersMeet 3 – Collective learning of 20 Early Stage Startups

Background – I was fortunate to be invited for the #FoundersMeet 2; informal get-together of 7 startup founders last year. This time around Anirudh, Sid, Nischal, Deven and I suggested to move it beyond our circle and extend it to 20 startups to come together and share our small success stories, failures and challenges. We also wanted to create a strong connect for ‘Mumbai-Pune Start-up Ecosystem’ which sort of never existed.

The 3rd #FoundersMeet happened in Mumbai on Wednesday 23rd Jan 2013 (a working day)., was expected to go on for about 7 hours, the interaction continued for 13.5 hours (yes!) with some amazing insights discussed and shared. I’m sharing this post on behalf of all the startups (& their founders) who participated.

Selling a SaaS Product:

  • International Customers are more inclined towards using self-service products. Indian counterparts expect hand holding and need assurance of customer service at arm’s length even when not required. 
  • Customers in India will insist even on customizing a standard SaaS product. This tends to be service-model trap, best avoided. 
  • As long as the user-proposition communicated during sales pitch or on the product is fulfilled, International customers are satisfied. They will switch the product fast if they find another product delivering more value. On other hand, Indian customers take time to switch product if a good relationship is established. 
  • If a competitor is offering a product for free, users will not like to pay you for that product.
  • Sell the product to the poster-boys of the industry, rest will follow by themselves. 

Product Pricing:

  • There is a disproportionate value in the word ‘Free’. Use it whenever you can. 
  • Over 90% of users will sign-up on the Free plan. When they move to the premium plan, they are most likely to use the plan that has the lowest value. Ensure that this low value plan has a disproportionate value for its price. That makes customers love you instantly.
  • When someone is making money because of your product, make sure you are making money out of it too.
  • Positioning your product / business is important. It can either be in Income side or Expense side. Always pitch / present your product on income side – “we help you generate money / your earnings will increase / your savings will multiply.”

Up-selling Product:

  • Acquire with freemium plans. Ensure enough hooks are in place that leads the customer to purchase the product post the free period or upgrade to the next paid plan.

Identifying Product Drivers:

  • A SaaS based product will not be driven by technical people, its driven by functional people. Build a product that can be installed by techies in less than 5 minutes, and can be driven by functional people without interference of tech people.
  • Sell the product to decision makers. Never pitch any product to a tech person. The tech person will always think that he can build it by himself.

User Acquisition Hacks:

  • For B2C products: Sell traction of existing users to new users. Create a feel that – Yes, there are people here, you’re not alone. That gives new users confidence about the product.
    Example – In Mumbai when you see 3 Vadapav stalls on a street, unknowingly you will go towards one that has maximum people eating and buy from there. 
  • For B2C products: Show activity. Existing activities drive more activities.
    Example – IRCTC, startup folks and early adopters think the platform sucks and fails whiles booking; common people think of IRCTC to be a big corporation that there is always high demand. That leads to perception of credibility for IRCTC.
  • Use Associations for Endorsements – IRCTC mentions – ‘A Government of India Enterprise’. This is a big endorsement for IRCTC and brings credibility to it.
  • Bounce Rate Reduction – A transactional consumer site was featured in leading newspapers. When they mentioned ‘As seen on Newspaper A, B and C’ on their homepage – it boosted its credibility and reduced the bounce rate.
  • Social Proof for User Acquisition – The Facebook widget that displays people who have liked the brand also builds credibility.
  • Real People – A SaaS based startup focusing on product for Chartered Accountant features a local/prominent CA on its homepage. That quickly build credibility for itself in eyes other CAs. It was easy to acquire more customers.
  • Investor Hack – For SaaS startups, whenever any VC reaches out to you, get them to introduce to its portfolio companies. Its quickest way to demonstrate more traction and more importantly to add new customers.
  • Physical World – Example., Printed Coupons redeemed at Restaurants are social proofs in real world. Makes other users curious on how did a customer get discount / where did he get the redemption coupon from. 

Ecommerce:

  • Thoughts on heavy discounting in current Ecommerce business in India, its like ‘Selling a Rs.100 note for Rs. 90’.
  • Potential in disrupting offline business is huge. All online businesses are not even 1% of the offline businesses.
  • Offline products are indeed cheaper than online. Consumers researching online and transacting offline is big. This market is ripe for disruption.
  • Ecommerce players are now less focused on doing marketing campaigns, but more focused on increasing conversion ratios of existing traffic.

User Experience:

  • UI is ‘relative’. Focus on User Experience.
  • Cleartrip is loved by all of us; but its clearly MakeMyTrip / Yatra that works with masses.
  • Make the product work 100% of time for what you promise.

Entrepreneurship:

  • Don’t fall in love with your product. Fall in love with being successful.
  • Things that work in west don’t work in India. Specially with funding and investments. Currency for investment in India is not traction, its revenue.
  • Be a salesman. Never miss a opportunity to make noise about your product.
  • Don’t focus on a niche market, there are very high chances of failure. Instead focus on a large market opportunity, its more likely to find success here.
  • Notice early signs if things are not going your way. Pivot fast.

Product Distribution:

  • SaaS products: Explore opportunities to integrate with large platform players – Domain Cpanels, or ecosystem creators like Shopify, BigCommerce, etc.
  • SaaS products: Label your widgets – ‘Powered by You’. They are most valuable for Inbound leads.

Product Scaling:

  • Don’t just design products for scale / growth; also ensure you design the business model for scale.

Essential Traits of Consumer Product:

  • Curiosity. Rely on Curiosity – (Example LinkedIn – 2 people have seen your profile today).
  • Build the – Theory of Reciprocation into your product.
  • Gamify some features, let users do free marketing for you before unlocking information. (Example – Tweet about something to show details).
  • Understand show-off value in your product. People love to show off on Twitter & Facebook. Capture such points to your product.

Social Media Marketing:

  • Twitter links have a CTR of 0.5% to 0.8%. Customer acquisition here happens in scale. Spend energy wisely.
  • Don’t spend time on talking to random folks on Twitter based on their conversations. Extremely time consuming and most unlikely to convert.
  • Facebook advertising does not lead to conversion. Its best suited for brand building.
  • Facebook Contests that involve sharing real pictures of users online brings lot of credibility to brand.

Competition:

  • Once a user has signed up for the product; make sure it works it. Don’t bother about competition. He has taken pain to signup to your product, make the promise work.
  • You’re the only one who know about your competitors; not your customers.
  • Many SaaS verticals are getting crowded to an extent that price remains only factor to decide. Only the ones that are able to innovate will survive.

Visibility:

  • Founders should be visible on Social Media. Talk about the product and should be able to convince their followers about their passion. Only passion attracts initial traction.

Market Penetration:

  • If you are doing something innovative (either B2C or B2B) – you will need to spend good amount of time on educating your users / customers. Its easy to get frustrated in this loop.

Content Focus:

  • Don’t get carried away by ‘Content Marketing’ or ‘Content Sharing’.
  • Building products that have content plays is difficult – content creators are few and content sharers are in plenty (Usually 1% to 99%)
  • Look for plays that involves sharing of content already created.

Building Relationships:

  • B2B: Build great relationships with your marquee customers. Keep them educated on new initiatives, new market dynamics and help them monetize better.
  • B2C: Continuously stay connected with your early adopters and take feedback from them. Keep them informed of new updates, they’ll love you. Whenever any suggestion is considered, incorporated into the product – communicate to users.

Driving Engagement:

  • Build features that would enable discovery of relevant / contextual information – that leads to higher engagement on the product.
  • Keep users involved… the trick is dashboard views. They create the “I’m in control” feeling for users.

Search Engine Optimization:

  • Figure out what you are optimizing for & the competition on that. Example., if you are trying to optimize now for ‘Apple iPhone’ – you would be the millionth website trying to do that. Get your own niche, it works best.

Mobile Apps:

  • Discovery of mobile apps is biggest challenge for them. Notice that many apps are trying a generic name for better discovery while users are searching for any other app.
  • Integrate app with key functions of phone. For example, on Android – phone book integration, and so on.
  • There are many hurdles in mobile app development cycle, best to understand from multiple startups who have built mobile apps earlier.
  • App Ratings matters, a big consideration factor for user to download the app. Get the initial ratings by distributing the app between family & friends.

PR:

  • A press release in India goes not get you much traffic. Its great channel for visibility, but don’t depend too much on this channel.
  • International Blogs & Coverage had a higher conversion ratio for products. International users give a try to product, sign-up, explore and use it.

Mobile Advertising:

  • Despite all the hype, Mobile Advertising is still considered as experimental budget.
  • Mobile Industry – one cannot be stuck in a region or one product for more than 18 months. Fast innovation required.

Venture Capital:

  • Stop chasing VCs or attending events that have VC meets or Demo Days. Hardly any investments happens that way.
  • A VC is most likely to invest in your startup when he is chasing you.
  • Indian VCs are yet to understand product driven consumer web-plays despite traction. Skip them and move to the west, it also brings lot of traction.

Biggest Learning of #FoundersMeet: Keep Plumbing. (Those who were present would understand this!)

Note: Some of these thoughts/hacks listed above may sound very generic since we have decided not to mention the context / startup involved. Providing too much information in public domain would not be right for startups who participated. You can connect with any of them directly, the founders would be glad to help you.

#FoundersMeet 3 Participating founders: Anirudh, Deven, Nishcal, Siddharth, Kunal, Sahil, Pravin, Kulin, Sameer, Talvinder, Gargi, Garima, Shekhar, Avlesh, Rohan, Sushrut, Sarang, Raxit, Noel, Soum, Nitin, Ronak, Pranay, Annkur, Divyanshu

Many thanks to all startups who participated in the #FoundersMeet 3. Thanks to Nischal, Deven, Anirudh and Sid for reading/editing the draft of this post. Special Thanks to the wonderful folks at The Playce (a great co-working place for startups), Mumbai for hosting us.

Stay tuned for the next #FoundersMeet 4!

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Lets Blame It on Rio (and not the Ecosystem!)

Having read so much on blogs, forums, one on one interactions with entrepreneurs, VCs – I conclude that “Blame It on Ecosystem” is the favorite game for people in Indian startup space (both included – entrepreneurs & the investors). And the blame game continues – Entrepreneur complaining that this VC just “does not get it” when their pitch does not make it; Investors complaining that they are “yet to find a Bn dollar company” from India.

There is a lot of rant already over this topic without much reasoning. Unlike my other posts on this blog – I will not try to express any personal opinion about a business domain here; but just highlight why the Indian Startup scene is about 10 years behind Silicon Valley.

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Indian VCs don’t take risks –
Entrepreneurs have higher appetite for risk than investors. Every investment in any investor portfolio is a risk. There is a calculated risk that every VC takes, be it Indian or US investor. Indian VCs don’t take risk is a incorrect statement, the right way to put this is – risk appetite of Indian VCs is more inclined towards proven business models of west. After all a entrepreneur takes a risk with belief in his idea, VC with his money in entrepreneur’s belief to execute.

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Only Validated Business Ideas get VC invested –
OTAs, Daily Coupon Sites, eCommerce, Finance Lead Generation & similar., these are proven business models with metrics that are well defined.
– X visits result on Y transactions at average value of Z
– X spends result in Y leads and Z conversions from it

This is a low risk appetite investment, where it is not a rocket science to determine how to scale up the business and predict profitability & revenue projections. Knowing these metrics and a good team – the VC is more comfortable & confident with such investments in India.

Compare the same for an Facebook, Foursquare, Quora, Twitter, Dropbox or Evernote. If such businesses are pitched at early stage to VCs here, most of them would have no clue on what metrics to use for basis of their investment. All such platforms raised a angel round or small VC round before the metrics were clear.

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Lack of 2nd/3rd Generation Entrepreneurs –
Now why did I mention initially in this post that India is ten years behind Silicon Valley? – because Silicon Valley today has entrepreneurs & investors who have done 2X/3X exits. Living up a 2X or 3X full company life cycle till exit gives an incomparable experience, the next company they build is ‘better product & platform’ than the earlier and so on.

In India, with notables of Naukri, MakeMyTrip and few others we have started seeing first generation exits now, both Sanjeev Bikhchandani & Deep Kalra are doing the right things with spotting new investments for the next mile. To have more entrepreneurs going 1X, 2X or 3X exits, is anywhere between a 5-10 year game plan.

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Pre-Revenue Investments –
There is a big misconception that in Silicon Valley companies get funded in pre-revenue stage. Yes, they do – but not all; not the ones without strong user engagement, not the ones without a solid team behind the product or platform. And for B2B products, not the ones who have initial set of customers who swear by the product!

This might not be false for India as well. If Sanjeev or Deep Kalra want to start their next entrepreneurial journey – who will not invest?

Pre-Revenue Startups like Facebook, Foursquare and many others did not raise large investments or achieve high valuations in their first round. These companies themselves raised either an angel investment or a very low value Series A investment to start, validate their product, get users/customers and then went for a big round of investment/valuation.

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There are no Early Adopters –
Unless an entrepreneur agrees that his product is bad or not a market-fit or has not tried enough, in my opinion this is the biggest excuse. How can one justify the same in a country of 1 Billion people. In a country which easily figures among the top 10 countries by users for any successful web product in valley – from Orkut, Facebook, LinkedIn, Twitter, Foursquare, Quora and many others!

For B2C products – you have not tried enough!
For B2B or Enterprise SaaS products – did you guys not hear of Wingify or Fusion Charts or InMobi. This is digitally connected world – no one has bounded a company by geographical limits. These are proven models of product driven startups from India.

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Disconnect with Valley –
The kind of companies that are funded in India today are the ones that were funded in US about ten years back. I have no disrespect for the Indian companies – infact they are building the base for the next wave of Internet boom – exactly the same that happened with US.

With a whole lot of first generation entrepreneurs in India – we expect at least the VCs to bring an perspective on whats happening in US & other parts of the world, not the obvious answers that everyone knows. The learning from valley does not come or has not reached to many investors in India.

My point of disconnect with valley here is that many in investment community today are still unaware of Quora, Spotify, Dropbox, Evernote, Airbnb, Rovio, and so many others. In one of my meetings I had to tell a investment analyst about 500startups, Angellist and in another one that Ashton Kutcher is also a technology investor! And in one more, someone explained if a American company like Lenovo can be big in China, others too can (? – OK)! And that people in investor circles are still unaware of Yuri Milner & DST.

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No Product Focus –
There is a buzz within investor circles that the next Google, Facebook, Amazon of the world will come from India. With comfortable investment decisions in validated business models like eCommerce – post my above experiences I sincerely doubt if Indian investors will be able to spot such opportunities when it knocks your doors?

The current series of investments about eCommerce in India are a hunt to find the next Amazon. But, Amazon itself has ceased being an eCommerce company long time back, it is a product/ a platform and much more beyond all that – view Amazon’s Hidden Empire .

In US, investors invest in products & platforms; in India – they invest in companies. Huge Difference! When did you last hear of an eCommerce (leaving aside daily deals and private shopping, though a format of eCommerce itself) or Online Travel company getting funded in Silicon Valley?. If you are building a B2B or B2C product/platform company in India, all investors will be to help you with money & connections, but only handful of investors in India will be help you with product or platform – choose wisely!

Disclosure: Experience – I reached out to two venture capitalists at some point of time for role as investment analyst with experience in diverse products & platforms – was rejected outright for lack of ‘relevant experience’. No sour grapes, but I could have saved some millions for them :-)

I am of a strong opinion that there is a huge need of in-house product & platform management advisory in many Indian venture capitalists. All ecosystem changes are driven by improvement & innovations in products & platforms, not by revenues. Lastly, it is only the consumer products that will scale up and be a billion dollar company!

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Everyone wants to invest Early Stage / Series A
Everyone wants to invest at early stage, but no one wants to take risk. So investments will happen early – but validated business models only. Some good examples for early stage investments in India are redBus, InMobi – while some good early stage misses are Infibeam (which has grown significantly larger without any outside investment).

Angels and Seed stage funds are well positioned to spot early opportunities than institutional investors.

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Premature Incubation Model
Going for a incubation model – make sure you choose the right one among the ones you are joining. Reason to say this – incubation models in US have mentors who have great experience in building products & platforms at scale. Y Combinator – has Paul Buchheit (creator of Gmail & Google Adsense), 500startups has Dave McClure (PayPal, FBfund, Simply Hired and more) and mentors from hottest companies and startups in valley; and so many others.

I have simple belief – Internet & Mobile startups are as good or as bad as the products you build. If you are choosing a incubation model – make sure it compliments your actual requirements. Last reason an entrepreneur should choose a incubation mode is money!

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The Know-It-All Attitude
This goes to Entrepreneurs – if you have, please shed away this attitude and get in a mode to learn, to take advice and asking right questions. Relationship status between an Entrepreneur and Investor is complicated – you can’t live with them or you can’t live without them, so you might as well accept them the way they are.

While closing your meetings / pitch with prospective investors – take feedback on the product, business model and the pitch. They will advice you based on their best strengths and experience, but only if you ask! In my personal experience – I managed to get some key improvements & suggestions on the product I am building.

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Please learn to say No
Entrepreneurs learn to say no to investors who do not see and agree with the vision you hold for the product.
Investors learn to say no, and fast. Entrepreneur’s time is equally important as yours! If the product does not match your investment interest – communicate it as fast as possible. Saying no immediately may not so bad; but keep a hope alive may be frustrating for the entrepreneur.

PS: Please respond faster to emails! I exchanged few notes with some of ‘the investors’ in Silicon Valley – always found a reply within 12 hours in all cases, some of them in less than 30 minutes.

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Quality of Press Releases & Coverage
The state of ecosystem is also reflected by the type of news coverage & press releases one reads on Indian Blogs. People movements – in most cases of those names who we have never heard of before, New sales office in Middle East, Forward looking statements on revenues & projections, Surveys that say the obvious in press releases, Claims & unacceptable figures, and so much more! Damn – we would like to know more about your products & platforms, everything else is just crap!

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Concluding Remarks –

Startup ecosystem is built with entrepreneurs, their companies, their early customers and then the investors. You control 75% of the ecosystem already, investors will follow. In the same context I remember one of Sameer Guglani’s tweet – “Founders r creators / accelerators, angels, VCs r service providers. our business runs because founders start companies & not other way arnd.”

The point I am trying to convey here is that if you think or perceive that ecosystem is not evolved in Indian start up scenario, stop complaining and don’t be an entrepreneur. There is no point in waiting for a right time to build your startup, the time to start is now. Get started!

Ecosystem or no Ecosystem – it did not stop a redBus, Naukri, MakeMyTrip, Flipkart, InMobi or SlideShare* to be what they are from India. Why should it stop you!

The term ecosystem means lot of other components as well. Feel free to add more to the comments based on your experiences.