From Father to Son: An Open Letter.

I guess this is as much an open letter to my youngest son, as it is a case of me wanting to write.

There is a time for spoken word (there has been a bit of that), and then sometimes the written word is better (thus far that’s been restricted to WhatsApp). So this open letter or blog post comes at an opportune time.

My youngest is now a college student. His chosen academic, and in all probability career pursuit, Electronics and Telecommunications. But won’t that all depend on how the world around us morphs, transforms or as they are putting it these days, get disruptive, over the next five years?

That’s the duration of his MBATech program, involving three years of Technology and two years of Management, at the end of which he will receive a Bachelor of Technology Degree and a Masters in Business Administration. Something we hope will stand him in good stead to earn a reasonably good livelihood, and enable him to live a life he chooses to lead.

I on the other hand, despite the best counsel, didn’t pursue my Masters, something that didn’t set me back really, but created a handicap of sorts, such that I had to work my ass off to overcome. Therefore, I’ve always been at pains to draw the kids attention to this with a fervent hope that they don’t choose the harder path, the school of hard knocks. Kind, however, will be just that, kids. The oldest boy, a photo journalist, in the middle a daughter pursuing her Masters in Phycology, and then the youngest.

See, he’s a really intelligent kid, and has a high IQ and EQ, but as most kids today, has not leveraged these natural talents to his best advantage. He’s barely studied the way I expected, yet, with some hard work, with good advise and with a degree of luck, has managed to secure admission into a really prestigious school, and within that a good program. Now that he’s in, we trust that he will make the most of this fantastic opportunity.

As I write this, I can’t help recall the great experience of the interaction with the school, both for him and myself, and as is my nature, when I come away with lingering and sometimes even fleeting thoughts, I write.

So our experience with NMIMS, the educational institution, now a deemed University, and the Mukesh Patel School of Technology Management and Engineering at Sirpur is something that has thus far, amply demonstrated that with some dedication, some planning and attention to detail, coupled with a desire to excel, even Indian educational institutions can raise the bar and be counted amongst world leaders.

The entire process of enrolling for NPAT or the National Placement Admission Test, the administration of the test, the declaration of the results, the merit based admission process, the counselling provided to both parents and students, the payment of fees, the process of allocation of the campus, the student and parent orientation, are all something to boast about. Each step and the entire process were run like clockwork.

One of the trustees, whom we consulted before we decided upon taking up the merit based admission, passionately urged us to consider, taking up the placement at the Sirpur Campus, as the boy missed placement at the Bombay Campus by a few marks. Honestly, I didn’t really take the urging as seriously as I should have, and perhaps this was for the best! Why? Simply because, when we did show up at the Sirpur Campus for the enrolment this past weekend, I was simply delighted by what we saw!

Sirpur then is approximately 380 km from Bombay, and so my elder son, the younger boy and I set off by road on this six-hour journey (well Google said six+ hours) early Saturday morning. We made the trip in approximately five and a half hours, thanks to some skilful (fast but cautious), driving by the older boy, and timing it such that we missed traffic heading out of the City.

As I was telling friends, the University Campus is literally just down the road, in the sense that, once we hit the freeway (15 minutes from our home), we didn’t have to take a singly turn, save the exit ramp that leads into the Campus parking lot and into the driveway.

As is to be expected, the week was spent, by and anxious mother and grandmother, ensuring that he’s all packed, carrying stuff for every possibly eventuality, and almost preparing him for a sting overseas! Mothers! What would we do without them?

As my older son joked when we were unloading the luggage awaiting the student’s room allocation at the hostel, his little brother had the largest suitcase from amongst all the students. The rejoinder from the younger was the he may have had the biggest suitcase, but some boys had four suitcases as opposed to his one! Moot point that.

The final stretch before one hits the exit ramp, is on a bridge over the Tapi River, and lo and behold! The sprawling Campus situated on the banks of the river come into view, small at first, but growing in size as you come closer to the exit.

Not so much as an exit, as a dirt road, crossing some fields, before we enter the parking lot, stop at the barricaded gate, register and get onto the driveway. The sight of the spic and span elegant buildings, the perfectly manicured lawns, the beautiful flora and fauna greet the eyes, and we ask our way to the hostel to report the student’s arrival.

The demeanour of the security staff, the ushers along the way, the coordinators, and the staff doing the registration was exemplary, as was the well-managed process of issuing tokens on a first come first come basis to join the ranks of the other reporting students.

The wait wasn’t too long, and formalities such as room allocation, issue of the student ID, and explanation of the way things will work were so well-managed, that I came away so impressed. Registration with the on campus laundry service, familiarization with the facilities, and the meal tokens for the day (for the accompanying parents/guardians), was a pleasant surprise!


We make our way up to his room, and walk into a sprawling room with four beds (not cramped), huge floor to ceiling sliding windows, a study table for each boy, a wardrobe, and plenty of storage. You want to know more, they even have help to change their bed sheets and pillow covers each week. gimme a break, he’s there to fend for himself, or have we just sent him to some luxury resort? While I’m complaining about the lap of luxury he’s landed up in, may as well lay it all out…..they even have people to collect and deliver their laundry? Unbelievable!

We arrived at around 10.15 am and were all sorted by 12 noon, and being lunchtime made our way to the mess for a lovely meal. The mess itself, immaculately maintained, clean, and well laid out.

Post lunch we figured our way to the Gym and ventured into a sprawling facility with all the state of the art equipment once could imagine! Did I not mention the tennis courts, basketball courts, volleyball courts, football grounds, table tennis tables, and every possible sports facility one could dream of?

Here are the grandparents and the poor mother thinking that their poor little boy, first time living away from home, will have to fend for himself, and what do we find? Nothing short of facilities putting a luxury resort to shame! I hope they don’t read this, but for all you know the boy isn’t going to come home too often!

The rules of engagement then. Quite strict, compulsory attendance, allocated times for sports, gym, laundry service, regulated home visits, the works. Even uniform T Shirts, and blazers compulsory on certain days.

Let’s flip this over now. The young fells is living in the lap of luxury, and his brother and I are put up in this dive (if you can even call it that), dump of a place in the nearby town of Sirpur.


We depart in the afternoon, leaving him to explore and come back late evening, eat a meal together and then leave him to stay at the hostel that night. We did ask him if he’s staying with us, but he chose (wisely) to stay back and get into the groove of things.


Spend an uncomfortable night at the dump, called Hotel Sudarshan. Hotel? What frigging Hotel? It’s a dive for cryin’ out loud! Anyway, its been pre paid and not much we can do about that now, so we suck it up.

We go back the next morning, latish, and this fella is up all early, showered, eaten breakfast, and we hang with him for a bit, and seeking that he’s gearing up to play some basketball, we leave him to his own devices, and we decide to go drive to the nearby Wildlife Reserve at Yawal. We have left too late and it’s almost dark, so we turn back, mission not accomplished, save for the lovely drive deep into the countryside, stopping for some “chai” and freshly fried banana chips.

Head back to the “resort”, hook up with the kid, get dinner and head back to our own “resort” for the night. The next day, Monday, is the orientation, and this we are back, the plan being to attend the orientation and head back to Bombay immediately after.

In the main building we discover yet another dining facility where you can order up some cool stuff. The kids attended the orientation in the plush auditorium, and the parents/guardians watched a life feed in the main building lobby on a giant screen. Again, run like clockwork, short and sweet, and once that was done, got him his text books, took lunch and we had to leave.

I’m an emotional guy, but can pretty much keep it under control, but as I hugged him and kissed him, could not hold back the tears. As much as he aggravates my on occasion, I’m really going to miss the kid. My voice chokes as I tell him to do his best and make the most of this fantastic opportunity, and not wanting him to get emotional, turn away. I walk a few steps, and I and the older brother both turn around once more to wave goodbye, and he’s doing the same as well.

So, the kid is at school, a new phase of his life, away from home, away from all things familiar, away from family, away from friends, new friends to be made, a life ahead of him. A life for him to shape the way he wants it.

As parents we have done all that we can, it’s now up to him. As a friend, I’ve done all I can, and it’s now his time. All I can do is, hope, pray and advise him, via this open letter or blog.

I miss you son, you have all my blessings and all my support. The sky is your limit. Make me proud, make me hold my head up high. I am your father, yes, but above all else, I am your friend. Good luck kid, god bless! May The Sweet Lord Nrsimha guide you and protect you always.

Now for the upside. 380 km, carpet roads, amazing climbs, fantastic long downhill stretches for miles, I am going to be on my bicycle soon, headed your way one of these weekends. Cool dad or am I a cool dad!

GriffinWorx – TIE – eBay Foundation: Round 2. 

Round two. Out of the many who had participated in the Round One eliminations, only 26 made the cut, and eventually there will be just three winners. So the process of elimination continues and that’s what we did all day June 28 & 29….Round Two eliminations.

Shaun had expressed a desire on the conclusion of Round One, that I stay associated with the program until its logical conclusion, as a Mentor & Judge. Why would I object to this, rather welcomed it as a great opportunity to network and interact with the investment community and a myriad of startups. As they say, learn something new everyday, right?

I’d like to think I’m a pretty busy guy, so rather than labor a recap about what the whole program is all about, I thought I’d provide a link. So do click here.

The instructions then, for Round Two were to judge the twenty-six who made it through the elims out of the two hundred fifty odd who had initially applied. Not only were we to judge but also mentor and that’s a bit of a trick. Only twelve will make the grade this time, and move on to Round Three.

TIE of course provides impeccable facilitation and it wasn’t any different this time around. As it was during Round One, I was in the august company of some pretty serious industry titans, and when this happens, one always comes out richer from the experience. 

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Even better than the experience of rubbing shoulders with other mentors and judges, was experiencing the presentations made by the entrepreneurs.

In case you’ve read the earlier blog, you will recall that apart from the usual entrepreneurs were a goodly number from the “underserved” category. “Underserved” alluding to entrepreneurs who would normally never get a shot at any kind of VC funding, leave alone an opportunity of being mentored, or for that matter, would find it difficult to get money from the usual avenues.

I was simply delighted to find that almost all entrepreneurs, in particular from the underserved category, had come to Round Two in a state of transformation. Gone was the awkwardness, the shyness, the lack of confidence, or the lack of ability to make a pitch. They now came across as authorities on their subject and in general of their business and appeared in charge. This was evinced from the quality of the pitches, the manner of presentation and the way the most difficult questions /concerns were addressed.

Quite clearly, advise from the mentors gained during the previous interaction, had been heeded, they found value in the advice and had implemented several suggestions and approaches. We saw much progress in terms of business sourced, progress on removing bottlenecks, progress in refining their business model, adding revenue streams and effective use of “bootstrapping” as a means to acquire needed resources.

I came away impressed with a few startups. Almost on top of the list was the one that deals with acquiring, distribution and sale of organic produce directly from the farm to the city, bypassing middlemen, this leaving more money in the hands of the farmer.

The other one was the couple who are imparting skills to women with the single-minded focus of enabling hundreds of women from villages to earn a viable livelihood. They have put around two thousand women through their courses with a success rate of sixty percent! Meaning that they have empowered twelve hundred women to earn a living.

All are worth honorable mention, the for profit social enterprise run by three young girls, the payment ring guy, the flexible storage solution, the seventeen year old guy who has come up with a rather novel fire fighting solution and so on, but the ones I mentioned ahead of the rest are both from the underserved category, therefore the special mention.

At the same time, we did find some of the participants, unable to demonstrate any real progress, who stayed stuck to their way of doing things, and closed to feedback. It is a no brainer then, that as the evaluation progress becomes more stringent, these startups will fall off the shortlist. Perhaps they will find what they are looking for elsewhere, but clearly they are not going to make the cut here.

With twenty-five startups evaluated over two intense days, new connections, newfound knowledge, new friends and plenty to look forward to, as we go into Round 3. Before round three, the twelve startups will receive coaching and mentoring as part of the process, which will help them be more competitive, fine hone their propositions, and gear them up to make it through to the final list of three winners. Plenty more to happen July through to August.

I’m sure the twenty five participants are waiting with bated breath for the announcement of the results, expected to be announced on Junly 4.


Startups: #6 – Final, Anatomy of Failure.

We pick this up where we left off in Part #5….why do startups fail? You will notice (I trust) that the very questions raised, propositions made, provide the answers as well. Perhaps I should have said some thing to this effect, “Startups: Part #6, Anatomy of Failure and Suggested Remedies”. I didn’t, deliberately. Anyway, semantics…so moving right along….

Amol and I were with a leading captain of industry, and an authority on the Startup ecosystem, just this past Monday, and the discussion centred around the rather vexatious subject. We discussed Scale challenges, operational challenges, skill challenges. We also discussed specifics about how certain well-known Private Equity, Venture Capital firms were struggling, and were facing serious challenges in finding viable exits or the ability to cash out. 

The stats (75%+ failure rate as alluded to in earlier articles) are so appalling, that it kinda forces one to wonder why the Startup ecosystem attracts the kind of money it does, locally, regionally and globally.

It also makes one wonder that with the kind of money thrown into Startups, there would be effective checks, balances, systems and processes in place to ensure judicious investments, effective monitoring and efficient exit strategies. Perhaps I’m wrong, however the failure rate certainly doesn’t lend any credence to the popular belief that checks and balances are in place. Perhaps check and balances are in place, but they aren’t followed stringently?

Chatter on the net paints a fairly sordid picture, and what we are hearing isn’t looking pretty.

Discussions and/or debates on this subject tend to be pretty long-winded, even heated and acrimonious. There are a million opinions and then some, so I will present the topic the only way I know how. Go to the brass tacks, and not dwell on the esoteric valuation methodologies, techniques and such. Heaven knows how the 10x, 20x and 30x valuations even come into the picture, and that too shortly after the first round of funding. Smell an exit rat? These are financial specialists we are taking about, and they known their numbers, nay… they live, breathe and sleep the numbers game.

So then why?

Power of Two

There are only two types of money… from my pocket and money from someone elses pocket.

There are two types of entrepreneurs, those that are looking at staying invested, growing the company organically, creating wealth and value, and eventually letting the successful business model, based on good ‘ole business principles, of unit costs and unit profits drive the valuations, and eventually the exit.

Then there are others who are looking to exit at a valuation that is x times y, and not really focus on organic principles. The ones looking to exit are the Promoters and the Investors alike, so on several accounts, they are collaborators, insofar as it comes to exists at unrealistic levels.

Both models do work, but the risk of failure is far higher in the case of those ventures that are merely looking to ride the valuation wave to make a killing.

Anatomy of Failure

What emerges then is that businesses fail because of several reasons, and as you read on, be warned, the list isn’t brief.

Startup Failure Bar Chart
Infographic Credit:

Failure to Scale

We hear that failure to scale seems to be a rampant and serious issue. More often than not, initial predictions of growth numbers in terms of value and scale, remain just that, predictions, and when the rubber hits the road, the actual doesn’t even come close to the projections. Possible reasons? 

  • Overly optimistic projections on the part of Promoters, when formulating their financial models, as they are far too subjective about their pet ideas. I mean, owning the space and passion are all good things, but not to the extent that you fall by the wayside on account of this obsessiveness.
  • Overly aggressive projections, as Promoters are almost compelled to conjure up big numbers to attract any serious interest from the Investing community.
  • Lack of adequately skilled resources.
  • Absence of appropriate processes.
  • These are but examples, more on this later.

Financial Indicipline

Behaviour – Cash Tends to Burn Faster Post Funding

Sure Startup funding is based on the fact that cash burn will take place, however, the velocity of the burn seems to accelerate once funding has come in.

Perhaps this happens due to the fact that in the early or pre-funding stage startups use bootstrapping as a fundamental basis of startup operations and practice acute cost containment. Post funding that mostly gives way to the loosening of purse strings. We aren’t playing with our own cash now, are we? I daresay this is not in the nature of blowing up cash, but rather is using Business Development as the basis of expenditure.

It’s easy to burn substantial amounts of cash, and quickly at that, on air travel, star hotels, entertainment, all falling nicely within the head of expense called Business Development Cost, which is something that is difficult to monitor closely, and indeed curtail, as this is how the numbers will come in.

The honeymoon period is probably when it begins to go awry, for this is when both the Investor and the promoter are inclined to consummate the relationship.

Investors assume, incorrectly at times, that promoters are specialists and know their markets and products, and as time passes, there is discovery that this may indeed not the case. I’ve seen so many businesses, products and services built up in silos, and not aligned to market need. In far too many instances, entrepreneurs have had a certain experience when they have had jobs, and tend to build their Startup business model based on just this one experience. Realisation comes a tad too late and quicker than you can say “Jack Rabbit”, money has been burned and not much to show in terms of reciprocation. By the time Investors realise that something is awry, it’s usually far too late. Cash has burned, results aren’t as predicted, there is a cash crunch, and the mad scramble to get cash at any means begins.

Cash needs or cash burn are so often underestimated, and in reality the level of funding initially taken up, falls far short of the actual genuine cash requirements. By the time Series A funding comes up, Promoters are so starved for cash, that they are almost prepared to agree any terms put forth by Investors.

Now I’ve put together realistic financial plans for a few startups, and in several cases the advisors look askance and almost demand that the numbers are inflated 2x or even 3x. The reasons are not far to seek. The effort and costs to assess, appraise, invest and monitor smaller ventures and bigger ventures is similar, therefore, the VC’s naturally tend to focus on those Ventures that talk big numbers. Effectively the larger and smaller Startups are fishing for cash in the same pond.

This drives a certain behaviour, both,  from Investors and Promoters. The Promoter wanting a toe in the VC door and the Investor passing over the smaller tickets. Therein lies the recipe for disaster?

The bigger the ticket the bigger the fee for the intermediaries, and for the Investors the lesser the number of Portfolio companies to monitor. Typically the thumb rule is that for VC/PE’s to look at a proposition, it should be in the region of USD 8-10 million, give or take. To make the cut, Startups requiring smaller financial backing, will inflate the numbers to be considered as viable propositions.

Governance, Governance, Governance.

To say that Governance is the primary key to success would be the understatement of the century.

Board of Directors & Board Meetings

Mere decoration or namesakes in terms of appointment of luminaries on the Board of Directors is usually what transpires. The BoD is where the cold hard questions are asked, or are they? In plenty of cases they aren’t! Why? Simply because what ends up happening is that the Board ends up being constituted by Promoters, their well wishers and Investors and/or their nominees. When push comes to shove, there is usually a polarization between the Promoters and well wishers on the one hand, and the Investors and their nominees on the other hand.

Recording of dissent is as important as recording of decisions taken in the Minutes of Board Meetings. I’ve seen meetings being completed in a record fifteen minutes! Agreement, debate and dissent are equally important, yet what happens oftentimes is that minds are not spoken, voices aren’t voiced, and a concerted effort is made to keep the proceedings “amenable”. This is probably the worst possible thing that can happen, and is at cross purposes to the very idea of constitution of a suitable Board.

Business & Operational Challenges

Sales Exert Undue Pressure – Compromises Galore

Startups are always under pressure to bring in sales, and more often than not, Product is rolled out with known gaps, and the cost of implementation as initially budgeted, blows into astronomical time and cost overruns.

Product & Service Compromises

Well laid Roadmaps fall by the wayside, and features are prioritized based on preferences of the potential new orders. Result? Compromised product design, temporary solutions, and the very Product that was to come out, does come out, but in a form that is often unrecognisable from the initial designs.

The level of design and build compromise is further compounded when combined with the compromises made during the sales cycles. Sales teams in any case promise the earth, moon and stars, even in mature organisations, so imagine the promises made when selling products and services on behalf of a startup that just has to bring in the numbers for their very survival?

People: Talent, Skills, Teamwork, Performance, Retention.

That Startups struggle with hiring top talent and end up with second and even third string players is known, so to expect peak performance is fallacy itself.

A glaring lack of skills within the Promoter organisations. Most Promoters tend to be technocrats, therefore certain skills tend to scarce within the organization. The gaps will almost certainly be within Business Development, Operations, Finance, Legal and People teams.

To my mind one of the biggest reasons why Startups fail is because they fail to build well oiled teams, and there are glaring imbalances. The top teams, mostly at a Promoter level tend to be focussed, driven and competent, but that doesn’t cascade down the ranks.

When managements throw money at key resources, far in excess of their worth, they end up creating disparities and discord amongst the team. Not only that, titles and designations are thrown around as part of retention strategy, and we end up calling less than capable resources by fancy titles.

Effectively, we are creating a double whammy. Not only are we setting up people to fail as leaders, we are also rendering them unemployable elsewhere, thus compelling them to remain in the system via any means possible. This only leads to inefficiencies.

The mad race to succeed creates a huge work-life imbalance and more often than not leads to burnout. For some reason or the other, what should have been fleet-footed and nimble becomes rigid and inflexible.

Conventional means of sourcing may not work. With heavy hitters reluctant to leave lucrative and secure jobs, managements tend to fall back on past relationships to resource and to sell. The actual depth of the issues faced tend to be withheld from potential hires, or a rosy picture is painted on spreadsheets, as inducement to come on board. The result then, when things go awry?  Ill will, diminishing morale, sullied relationships and finally resource and customer attrition.

Resource turnover is a drain even on the most efficient organisations, and for Startups this is disaster.

Weak Processes (Lack of Transparency): People, Operations, Sales, Finance

Lean and Mean, Do More with Less, Stretch Targets, Fly by the Seat of the Pants. These are great principles to abide by when running a company, but all too often, these very principles tend to do companies in. 

From an Indian standpoint, the very nature of tech resources being immature, and closed-minded, means that technical knowledge is concentrated in the hands of a few, and if handover are in question, then what you’re going to end up with is glaring gaps in technical knowledge amongst the incumbents.

Combined with the lack of processes, even simple and obvious processes as handing over when people leave, then this is almost a death knell.

Lack of investment in automation, is a big contributor, and when basic development and delivery processes, such as QC and Testing are compromised, what you’re going to end up with is shoddy quality.

When this happens, the product that hits the market, one that smelled of roses at the drawing board stage, starts emanating a stink during implementation and rollout. Cash flows are adversely impacted and everything is now urgent, and there is no longer a distinction between urgent and important, tactical and strategic.

Startups tend to live in a constant state of crisis, since they aren’t meticulously planned, inadequately funded, lack appropriate resources, and seldom heed to sound advise.


Promoter Behaviour & Competency

Entrepreneurs can be an arrogant bunch, brimming with overconfidence, and seem to carry this “I know best” attitude, and are not amenable to counsel, when counsel is the very thing needed during the early days. Promoters can be so rigid that this rigidity becomes the bane of the success of the venture. Lack of delegation or too much delegation. If the Promoters have done a startup after a long stint at a lucrative and steady job, they usually struggle in the transition to working in a Startup environment.

I’ve spoken to so many IB’s and what they tell me is that, Investors are effectively funding an individual or a small group thereof married to a business idea that seems viable. I’m not saying that all Promoters are like that, but I would propose that given the high failures, is it possible the Promoters are putting on a “game face”, which seems to kinda come off as the game progresses?

Much too much time is spent on creating a “story” that can be sold to the Investor, and far too little time in really fine honing the business model.

Investor Behaviour – Back to the Power of Two

There are two types of Investors.

One is just in it for the returns, and doesn’t really care about the execution. The other is truly a partner is every aspect, be it sales, mentoring, advise, networking and so on.

Investors can be really rigid on the subject of exit, and at the time of bringing in subsequent series of funding, and tend to make unrealistic demands in terms of exist valuations, dilution of Promoter stake, etc.

Perhaps Investors have far too much money at their disposal, perhaps they don’t take the time and trouble to do as in depth a due diligence as they should.

Conducting the technical and legal due diligence is something that is easier to validate than the estimation of revenue prospects, of the Sales pipeline. Perhaps this is where Investors need to focus the most.

Final Impact

The impact of failure is felt across the board. It hurts Investors, Promoters and most of all it adversely hurts people who go out on a limb and opt to work for Startups.

It has much wider ramifications on the economy, as it is nothing but the inefficient use of billions of Dollars of Risk Capital, and by extension, throwing away billions of Dollars that could have been put to better use, and backed ventures that would contribute to the global economy, rather than drain it.

There is a huge social impact as well, as people’s livelihoods are affected and plans thwarted.

I’ve said this before and I say it yet again, there an impact on Clients who buy products and services from companies doomed to fail, as the IRR on their investments just doesn’t compute when Startups they supported fall by the wayside. If it is a software investment, their purposes aren’t served, operationally they suffer on account of the automation strategy failing.

Call to Arms

Given that there is a serious problem within this huge eco system, is it a time for a call to arms? Is it time to come up with a support structure that will assist in reducing the rate of failure, of controlling waste, in stemming the rot within the system? Is there a need to come up with a service that assists in turning such companies around, to intervene and to resurrect?

These have been the foremost questions on my mind, based on my own experiences, my own mistakes, mistakes I have seen others make, and in some very real cases, seem people play the gaps in the system to their advantage, with little fear of recourse?

I have spoken to so may people who matter about this by now, and nobody I’ve spoken to is really surprised, everybody who is somebody already knows this. I’ve been advised to turn things around on their head, and come up with solutions, and that’s music to my ears. It’s also only fair…. it’s never a good idea to identify problems, and leave them hanging….it’s preferable to come up with solutions.

By no stretch of the imagination can I suggest that I have covered it all, but I daresay, I’ve seen and expereinced a lot. No doubt, this juurney is not anywhere near completion, and I can only look forward to learnings and come up with possible solutions.

Guru Means Heavy….hmmm

So today my friend Kimberly said something about people calling themselves Guru, and the number of people she’s come across recently, who call themselves “Guru”. She went on to opine that something wasn’t quite right about that. People calling themselves, Guru.

Kimberly then, is this Gori Chori, interpreted as “fair skinned foreigner). American India. Not to be mistaken with Red Indian. She just chooses to live, learn and teach in India. Kimmy is a teacher in her own right, so when she says something isn’t quite right with people calling themselves Guru, then we take notice.

So her post or rather comment on said topic, resulted in a flurry of comments, suggestions, opinions from the cognoscenti (self excluded from cognoscenti), about what Guru means. Self is included in one of the people responding to said comment from Kimmy. Being a response on FB, I had to keep it brief, though I had been set off! To summarise, someone said, Guru is within you, and someone else said, self-styled Gurus are just that, self-styled, or even worse, self-appointed, blah blah….

There are some things that just set me off, one of them is misinterpretation of age-old Indian traditions, culture and doctrine handed down through generations from Father to Son, from Guru to Disciple, from Mother to Daughter. So when people start banding the institution of Guru, I get set off.

One other thing makes me even more ballistic is the modern-day interpretations and indeed practice of “Yoga”. Just because they teach you to say the Gayatri Mantra at Yoga class, don’t mean you are learning Yoga! Yoga for weight loss? It will work, but if all we are learning is a form of exercise, and some really limited breathing exercises, then should be really say we are learning Yoga?

Let’s save my rant on misinterpretation of Yoga and all the malpractices surrounding it for another occasion, and in its stead PLEASE let me rant about misuse, misinterpretation and abuse of the word “Guru”.

I did say PLEASE, didn’t I?

For the ignorant….yes, this is a strong word (but then I do intend it to sting), Guru is limited to “teacher”, or let’s just say that this is the basic level of understanding most will have. I really don’t accept this, as Teacher is Acharya. Guru is so much more!

It’s really quite simple, learn from an authority before you seek to teach. And who exactly authorizes one to teach? Do we authorize ourselves? Does someone who exists at a higher plane authorize one to spread the good word? Clearly this is common sense! So what gives and where do people sum up the courage and gumption to appoint themselves as Gurus?

Guru is “Eternal Father”, and finding a Guru is the single most significant event in life. 

Sacinandana Das aka Sumir Nagar – Receiving Dhiksha

Finding your Guru, begging to be taken on as student and disciple, serving your Guru, the process of observation and learning, and this whole thing of the Guru and Disciple accepting each other is a process in itself. Both, the Guru and Disciple test each other and it is only then, that a formal association takes place.

So apart from being set off, and in addition to this rant, let me humbly submit that we be careful when us use the word Guru, and when we accept people to be Gurus.

Whereas Indian tradition describes this in great detail, if I were to allow some degree of latitude, then I would say that at the very least, let us agree to accept that the process of transmission of knowledge HAS TO BE from an authority on a particular subject, to a student, at the very least, worthy and capable of absorbing that body of knowledge and practice, let alone transmitting lessons learnt down the line.

Not meaning to get too technical, and in the interest of keeping this brief and (not necessairly light), I will merely touch upon the origins of Guru as per Indian thought and culture.

There are four Sampradayas or orders qualified and authorized to disseminate Sanatana Dharma, not to be confused with Hinduism. Sanatana is “a way of life”, based on higher principles of existence, Hindu is merely a geographical derivation to describe people south of the Hindukush mountains.

It is possible to have more than one teacher or Guru, but it is possible to have just one Spiritual Master or Guru in the truest sense of the word. Lot’s more to be said on subject, but I would relegate that to your desire to know more, and leave you with a simple way of looking at it….

First Time Out – Jumping Out of an Airplane – Solo Effort?

Take Skydiving….serious business this….do we just jump out of an airplane at the very first instance? Do we not do tandem jumps first? Don’t we investigate that the chappie inducing us to jump out of an airplane from a considerable height….that exhilarating first jump, is properly qualified and indeed certified? Don’t we take driving lessons, get a drivers licence and only then go on to teach our kids? Get the ratio?

Self styled Gurus, modern-day Gurus, just set me off! The relationship with Guru in the parampara or tradition of Guru-Shishya is deep and profound, and having experienced this,
it’s just difficult to let people off the hook when they go around concocting their own agendas and meanings.

End of Guru rant, you can wait for the next rant, till someone sets me off again 🙂


Startups: Part 5 – Down & Dirty of the Money Game.

From the attention the Startup series has been getting I’m a’thinkin’ that is topic is one of interest to say the least. Why would it not be the case? With successes that can be stacked in the “wildly successful”, “mind-boggling”, “beyond wildest dreams”, categories, everyone who is anyone is part of the Startup ecosystem. And the side we see, or rather what is talked about is the successes, not the glaring failures. These failures, one has stated before, affect the entire ecosystem, from promoter, to investor, to employee, to the client, to the regulator. Take heed then people, for when we say successes, we usually mean, how much money the Startup has attracted by way of funding.

Is it time then to talk about the down and dirty of Startups? Methinks it is, and therefore we shall. So should we be calling this Startup 101? That’s more appropriate, so the nomenclature sticks. Startup 101 it is.

I used to do this rather popular checklist (gleaned from various sources) for traders back in the day called “19 Rules for Traders”. Since this article, blog or “piece” as the cognoscenti are calling it these days, is not about my days as a prolific trader, you only get a glimpse of said rules, and that too with the intent of giving you an idea of how this “piece” is going to develop. You may choose, basis this glimpse, to check out any time you like.

So then the “rules”. Follow The Trend – The Trend is Your Friend, Let your Profits Run, Cut your Losses, Never Average a Losing Position, and so on. I’m sure some of the bright lot reading this “piece” will see the proverbial lights coming on and say, these rules for traders can be extended to apply to investments in Startups. True dat my friend, absolutely.

Startup 101

Rule # 1 – Startup success is not measured in the money attracted by way of funding.

I can see several in the audience going, really? Well I’ll be blowed, didn’t so and so startup get an obscene amount of money just recently? Didn’t so and so, well-known PE/VC/Investor pump in millions into so and so startup? Yes, money did move from one place to another. Somebody, usually the promoter/s got rich quick, because a certain other someone, took a “punt” on the future success of said business.

Rule # 2 – The “Punt” isn’t the Measure of Success – Profits Are.

Really? Success has two parts init? Success for the Promoter is getting in new cash, in exchange of a high valuation of the Promoters initial investment. Success for the Investor, that poor sod/s, who took the “punt”, depends on profitability.

Again, really? Well, this time I have to say I’m rather confused, therefore I am compelled to give a “well maybe” answer. The grounds for my defence on this, the measure of success, comes from my education, from my experience, and from prudent business practices. Prudent business practice says, Profitability is the only real measure of success of a business venture.

So then, should we boldly be examining the success of the investment in terms of the profits the business generates, or should we declare success of the investment based on the “exit” or “divestment” to some other investor, who is induced to come in at an even higher “premium” to the initial set of investors, despite the fact that the business is not yet making any real profits?

Logic dictates a resounding NO in response, but we have thrown all investment logic out the window by now have we not? Heck, we are Investment Gurus, we are acting in a fiduciary capacity insofar as we are taking substantial monies from a group of investors, and making all these substantial investments in ventures that have not turned a profit, and are not expected to turn a profit in the foreseeable future. This is the good old “Cash Burn” game where we are perfectly comfortable in “burning” investor cash (not mine, someone elses cash), all in the hope that something will change, and miraculously profits will flow, just like manna from the heavens.

Ah, not liking this are we? Profound arguments and justification will emerge at this stage, stating “Sumir, you’re so clueless”…. cash burn is essential for marketing expenses, for development expenses, and so on. Well yes, but what percentage of our money (oops I forgot, not ours) are we burning and when will this burn stop? Yet other arguments will emerge and they will say, this is not really about unit profitability, but look at the bigger picture, we are getting points of presence, we are getting substantial data, we are understanding customer behaviour.

My dear friend, yes, yes, yes, to all arguments, but lets not forget whose money are we playing with. Oops, we kinda forgot that tiny detail, didn’t we?

Let’s deal with data then, damming data. Just how many of big-ticket investments are in the money? Is Ola making money? Is Flipkart making money? Is Uber making money?

What do we do when we have a competitor? We buy them out, we merge, we increase market share, we buy out competition? What happened to Myntra? Didn’t they merge with Flipkart? Is the merged entity making any money? Why did they merge? To compete against Amazon. Is Amazon making money? Read this, Amazon India has doubled its India losses.  We are told that Amazon globally has increased its losses four fold. Now read this rather interesting fact. Losses of Flipkart, Amazon and Snapdeal would have allowed ISRO to go to Mars 24 times.

So who has been investing in these companies? In some way, shape or form its an investor. Arguably these are HNI investors and have invested in a fund of sorts. Is the fund making money on these investments? Not meaning to pick on a man I have tremendous respect for, let’s look at Ratan Tata’s investments as a VC/PE investor.

Loss-making Enterprises

RNT Losses

Valuation Game


Valuations are Rising Despite Accumulated Losses?

So if we are to believe what we read in the papers, we are told that each time RNT takes a “punt” valuations jump. Jolly good this, but what basis? Why this spike? Defies the principle of prudent business practice.

I’m of the opinion that, the virtual world, or virtual economics has left the good old brick and mortar economics way behind. It is no longer about unit based profitability, its purely notional. The trick then is to agree a valuation between the Promoter and Investor. I know my math, I’m actually pretty good at it, but I daresay valuation math escapes me completely.

Glaring Examples

Ola and Uber have made my commute that much easier, in so much as I don’t have to “request” a “Kali- Peeli” (Yellow and Black) to go from point A to point B. I just pull up the app, book, get a fare estimate, complete ride, pay. Now let’s take a look at the business model, if you’re not in violent opposition to it.

The model is rather simple: Rate/Km is established, Rate/Km is paid x times the Km covered. Fare is then shared between aggregator and driver/owner. Incentives are paid (I’m hearing incentives are going or gone). Drivers/Owners who were on to a good thing, are now thinking, hey it’s not as appealing as it was portrayed, or when this started off. Owners/Drivers have taken loans, have EMI’s + maintenance + fuel costs + driver wages to pay. The initial math isn’t quite adding up, so there is this growing discontent. The “Kali=Peelis” have lost out to the Ola and Uber wave, so they are reeling too. So money isn’t being made as envisaged, not by the Owners/Drivers, nor by Ola nor by Uber. Question then. Who exactly is making money at the present time? Seems to me, nobody, or not nearly as much as projected. Yet, Ola has received funding of around USD 1.5 Billion and the current valuation is running at USD 5 Billion give or take? Is there money to be made, on an investment of USD 5 Billion? I’ll be damned if I can predict, though I have really serious doubts, much like Macbeth when he fights his doubts about the witches words, as Great Birnam Wood seems to move to High Dunsinane Hill.

The whole point to my mind is simply this, who is going to be left with the baby? Isn’t that what happened and continues to happen when markets are overheated, and stock prices are sky-high? The Smart Money sells, and the ones holding the short straw are the lay investors. My feeble and rather unsharp mind seems to want to draw parallels here. Sky high valuations, huge monies invested at sky-high valuations, where is the exit, and if and when there is an exit, who will be left with a broken business model, who will be licking the wounds, what will happen to the thousands of stakeholders (investors and cab owners alike). Ever heard of “caveat emptor? Will this lead to some sort of bailout? Will the government have to step in at that point? If it is the government, who bears the brunt? Isn’t it the taxpayer?

Yes, I paint nothing short of a doomsday scenario, but simply because I can’t get my mind around to understanding how monies will be made, at least in the traditional sense of the money game.

Call me slow, call me dimwitted, call me anything but stop for a few moments, if not more and think rationally. It’s not looking good.

Don’t get me wrong, the Private Equity and Venture Capitalists are a great source of Risk Capital, and do work and make available funding for projects, in most cases, where the business model does not allow for funding through traditional models. At some point there needs to be a soul-searching, a pragmatic assessment of where all this money is going and what will become of these humongous sums, and perhaps some degree of regulation around the valuations, the eligibility and so on?

Where does VC cash flow to?

The maximum VC cash goes to technology, healthcare and media. This seems rather skewed does it not?

3 of 4 Startups Fail

By now it is well established fact that 3 out of 4 startups fail, the data coming out establishes this fact. If that is indeed the case, shouldn’t we then be questioning certain well established appraising techniques? How are startups appraised? Is it on the basis some hot technology? Is it on the basis of the degree of sincerity and capability of the Promoter? It is market potential? More often than not, the assessment swings basis the quality and pedigree of the Promoter. Yet startups are failing all around.

I can’t say I’m a Capitalist, I can’t say I’m a Socialist, I guess I’m somewhere in between, but I can say this, I am a firm believer is the older and perhaps dated models of doing business, from assessment and appraisals, to how we run businesses. I would only urge that, we are judicious in defining what success constitutes.

Next up: Why do Startups Fail?

If you’ve been reading the series, you will find that I’ve been associated with Startups in some way, shape or form like forever. Instead of merely using Google to pull out reasons why Startups fail, what I’m going to do instead is reflect on my own startups and those I’ve been closely associated with, and try to analyse the reasons for their failure, and perhaps suggest ways and means, such disasters can be averted. It’s a rather ambitious and maybe audacious attempt, so let’s see how this pans out.


Don’t Be Me

It’s just so shameful that westerners in India have to go through this.


Are you happy living there?  The magic question I am asked all the time.  I was happy living here.  I was very happy living here and then I started opening myself up to people and allowing people to get to know Me.  Then I became unhappy living here.  I suppose you can say I am happy here as long as I follow these guidelines which so many people have been kind enough to share with me. This is not just one or two people, this is a weekly, almost daily thing from people I encounter, randomly meet and grow to know.  I was happy here until too many people started telling me not to be me.

Apparently I am too emotional because I express and talk about how I feel.  Being direct and telling people how you feel so there is no confusion is wrong here.  I am not to…

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Startups: Not for Everyone – Part 4, Last Straw?

Up until this time I had always worked for myself, had always been my own boss, and the transition to going and working for someone wasn’t as difficult as it was a mindset thing. Also it was one thing to have worked all my life in financial services, and quite another thing to change my profession from financial wheeler-dealer, influencer, financial guru and what have you.

The necessity to go get a job came about with the startup phases of my life not being as wildly successful as I would have hoped or indeed imagined.

Be that as it may, my predicament was as follows: Straddled with rather large debt, no regular source of income, the financial markets having tanked, the fag-end of the initial tech boom, jobs quite scarce. To top that off, no formal higher qualification. The only saving grace was the fact that I had completed my college (or school as we call it in the US), I barely scraped through getting a B. Com or Bachelors Degree in Commerce, from India’s top commerce college, The Sydenham College of Commerce and Economics. I didn’t even know if that was going to help. Heck, I didn’t even have a CV at that point.

Now I’m certainly not one to cringe, nor get all depressed, and I’m quite the fighter and then some. But, how the heck do you go and actually get a job almost 8-10 years after you have passed out from college? Quite the deterrent in itself.

See here is the thing about Sydenham, it had as its students, kids who were all determined to make it to the top, had great family pedigree, either being the sons and daughters of some business tycoon, or then some corporate big boss. If I said they were born with silver, if not gold spoons in their mouth, I would get away with it. Those who weren’t so endowed, were made of serious stuff, and had the grey matter, not to say, of course, that the ones so anointed by lineage, didn’t have the grey stuff. Not to say either, that I’m not a go getter, just in a very different way.

These are the circs under which I fell back on a college buddy, who had risen to the top at the erstwhile Arthur Andersen, and rather embarrassed, I called on my college friend. He was all welcoming, and at his office, I spilled the beans about what had transpired in my life. So job is the need of the hour, or rather cash is the need of the hour, and the job is merely a means to and end. See, job getting means having a little document called a CV, and me? I had never written a CV in my life. God bless his soul, what Bobby did is just talk to me and literally “extract” from me in my own words, what I had set out to do since I left college, and what I have chalked up in terms of experience.

Bhavna, that great mother of my kids, would keep saying, what are you doing? Go get a job….I just didn’t know how. After remaining in a state, for a longish time, similar to that of a deer frozen in the headlights, I finally called Bobby. And so it came to pass that, encouraged by Bobby, I sat and penned my set of experiences, and if I’m not wrong, he even helped me to craft my narrative of experience, into what would pass off as a CV.

Armed with the said CV, I scoured the papers, responded to zillion job postings, got in touch with so many head hunters, recruiters, placement agencies, even went and met some who condescended to give me the time of the day. Hell, I may as well have started a recruitment service of my own!

One kindred soul was Dr R L Bhatia, who at the time ran something called, Center for Change Management. He’d posted and advert in a leading publication, from amongst the ones I scoured daily, and spotted said Center f\or Change Management, which sounded promising. The meeting at his office in Juhu was quite brief, and almost instantaneously, he said he may have something for me. His client, Vikram Doshi of Atco Weighing Scales (famous market leader at the time) was looking for a CFO, and despite the fact that I was not a Chartered Accountant, nor had a MBA degree, or a formal higher education, he agreed to put me in touch with the CEO of said weighing scale company.

Appointment fixed for the morrow, suited and booted, I show up at the office of the CEO, and we just chat very briefly, or perhaps it was an interview? Regardless of the nomenclature, it was brief, and in five minutes, give or take, I summed up what I had set out to do, and what I had under my belt, in terms of experience. In five minutes he told me he needed a market savvy finance guy, and that was pretty much it. No JD, more of the “we can figure it out together” sorta job. I don’t know what it is with me and jobs, they have all been of the “we will figure it out” variety.

There was this “I done good” feeling and in that “spirits lifted” frame of mind, I called Dr. Bhatia, who was meeting the CEO the next day. This being the position, I settled into that state called, “the waiting with bated breath”, and therefore it came as no small surprise, when the afternoon came a’knocking at the door, announcing the arrival of a courier in the person of the CEO’s chauffeur. I wasn’t home when the knocking happened, I came home to fund a sealed envelope. That sealed envelope, that twist in my fortunes, came in the form of an offer. Delight, wonder, amazement, what words must I muster up to describe that feeling, I don’t quite know.

The telling of this tale is many years post those historic events, but despite the years gone by, as I write this narrative, I relive that experience as if it is in the present, or in the recent past. I was delighted with the financial package, and that was simply accentuated by the fact that I had been cooling my heels for the longest time, and there was no cash flowing into the kitty at all. My wife Bhavna was supporting me. Not a good feeling, not good for one’s self esteem, not good emotionally, not good financially, not good spiritually. Plain not good. Well, I did call and try to negotiate a better deal, but the CEO was adamant. No negotiation on package, take it or leave it. I took it.

I needed to attend to some legal issues from my time in Goa, and so was able to negotiate a week to join. The great believer that I am, in fate, in destiny, in karma, in the general goodness in people, and that despite my reversals, I didn’t really probe too much into the company or for that matter about the promoter. I decided that I will put in a lot of hard work, and let my maker decide the rest. That is something I believe in to this day, albeit, I’m a bit more realistic and do factor in what can go wrong, so I can mitigate against the twists and turns in life. And so I show up at work, am given the room earmarked for the CFO, that I have joined as, meet the team, and go through the on boarding motions. The next few days are spent in understanding the business plan, the vision and closeted in so many meetings that one’s mind was reeling. The vision of the CEO, that I just alluded to, was driven by nothing short of a visionary in the person of Vikram Doshi, MD and CEO of atcom technologies limited. I may have mentioned elsewhere in one of my blogs, that the assignment was that of transitioning from a brick and mortar business to a click and mortar business, both B2B and B2C. Did I know enough about the B2B and B2C business models? Clearly I didn’t, but as I’ve said before, I’m a lightning fast learner, and have the uncanny ability to assimilate knowledge, and use this new-found learning, rather quickly to extrapolate into thoughts and thence to action. So this was what I went about doing. I daresay that we are forgetting that this was my first job in a corporate, my first experience of having a boss, my first experience in working with peers, and in general learning something that a fresher from B’School will learn at his/her first job. Therefore I am at pains to remind my readers.

We are talking about startups, are we not? So let’s come to that aspect of this series of articles. The venture or the business plan and indeed the business model, was everything what a startup was all about. New business model, untried and untested, a greenfield seeking funding, seeking first customers for the new business models, plenty of doubting Thomas all around including within the family of the promoters. The family that owned the brick and mortar business interests, were not exactly supportive nor convinced about the success of the new way of doing business, and therefore one key element of my role, was to oversee a demerger, ie: a divorce of atcom technologies limited from Atco Weighing Scales Limited. This demerger, meant that I had to rapidly come up to speed with the legal aspects of a demerger, including understanding the petition that would be filed before the High Court, the financial aspects, the operational aspects, and ensure that there was no disruption of the BAU state. A big ask. So in terms of experience, new, new, new.

Seeing that we didn’t really have an efficient army, despite the best efforts of the CEO hiring the best of the best, and throwing money at them, we were faced with the prospect of pulling the big ask off, with one hand and one leg tied behind our backs. Vikram, quickly saw that I had the wherewithal to step up, and quickly at that, therefore more and more got thrown at me. Finance, even business development. Heck, I was the one who brought the first realy business opportunity to the table, that too with an oil major, Castrol. I also handled Admin and Infra, the creation of a spanking new state of the art facility, including a data center, and all its trimmings of servers, layered switches and such. I just loved it, I was working long hours, plenty of them spent studying. 

So it’s now 8-9 months into the job, and we have just moved into our beautiful new office building, and the proverbial goop hits the fan. It had to didn’t it? My life has been such, and I’m told numerology has something to do with it. My number is 8 or when laid on its side, it signifies infinity. The infinite loop when attributed to a person as per numerology, denotes struggle in career and finance, but also signifies spiritual advancement. The company is straddled with bills to pay, business has not come in, the brick and mortar businesses are not going to carry the burden of this startup, and we, especially me, are faced with irate vendors, irate employees, the works. I’m sure you get my drift.

As much as I would have liked to continue, I was compelled to leave atcom, simply because one really irate vendor had approached a certain infamous member of the underworld (dreaded until this day) to recover their monies. Being very much the party man, and as all good party men are expected to do, I came to the aid of the party. I filed police complaints, and through my rather influential network, and through some friends who had access to people of notoriety, brought pressure to bear on said irate vendor to cease and desist. After quite a few petitions before the seniors in the police administration, and after several meetings with said underworld bosses, I was gently told by friends (in the establishment and some well wishers in the underworld), that they would hold off on any proceedings against the company, till such time that I was in the role. In the same breath I was gently urged to step down, as my life was at some considerable risk, and that I could not be protected 24*7, nor could anyone reasonably guaranty the safety of my family.

Therefore, with heavy heart I tendered my resignation, and was back in the ranks of the unemployed.

All said and done, dust settled and so on, I came away licking my wounds, and made a conscious decision to dwell instead, on the learning’s from this assignment, which lasted all of 11 months. 

At some point I asked Vikram on what basis he decided to give me the job, and his reply was, the five minute summation you gave me about yourself, was exactly what I was looking for. That said, Vikram was a man far ahead of his time, a visionary in all respects. Great pity then, that this grand vision didn’t see the light of day. 

That ends the narrative of this startup story and at the time I am thinking, I’m so done with startups. That was not to be, and instead, despite my considerable stints with considerable and financially sound national and international corporations, in senior roles, both in India and four continents, I would still continue to deal with businesses, with roles and assignments, that all had in some way, shape or form, “startup” as the central pivots of the roles that I played. At ICICI as Head of Product Strategy of Treasury and Risk Management Products, I did beta products…from conceptualization, to product, to beta sale, to deployment. At HSBC I took over dysfunctional teams, condemned teams, set up new transnational teams, new business practices and models across the globe. Post HSBC, I finally ended up with Agile Financial Technologies, a startup not just in concept, but in every sense of the term.

To know more, read more……The startup journey isn’t over yet, not by a long shot.

Startups: Not for Everyone – Part 3, More Lessons

When I last left you, I was telling you about my second venture, and my first big startup failure, and at the end of that narrative I remember promising that I will be back with the telling of how I put that behind me and moved ahead. I didn’t say the moving ahead was successful commercially, but every failure yields important lessons, so in that respect, from the perspective of being a learning experience I was successful. Some degree of rationalization, yes. A large dose of reality, yes. Plenty of learning, totally.

A lot of the stock market greed had subsided, what with the markets having tanked, people committing suicide, people going bust, the big names from the markets landing in jail. Harshad Mehta being at the front of the rogue pack. It seemed that sanity was coming back. None too soon either.

As I did mention in the previous piece, Part 2due to the grapevine and our fans within the FI community, passing positive comments about our capabilities, our professionalism, some corporates approaching us, and this was how Integra Funds Management Limited came into being. So Integra had not yet vanished completely, as there were still those who believed that we had value to offer.

One such opportunity, came knocking when IDBI, the great Developmental Financial Institution of India, put a leading business family from Goa on to me. The corporate is one of India’s largest Iron Ore mining outfits, and also has interests in the hospitality business. They had taken loans from IDBI, and as part of the deal, there were stock devolvements in favor of the FI’s. They came to us, so we could structure the stock buyback from the institutions. We had never handled such a transaction before, and therefore we were all a-twitter, really excited. Long story short, we successfully structured and executed the buyback deals at a handsome fee.

The testing of our capabilities and the quality service we provided, led to an invitation to visit their Group HQ in Goa, to explore the possibility of an expansion of our business association. They opened the kimono, so to speak, and we narrowed down on three distinct business opportunities: placement of their excess seasonal cash surpluses in Inter-Corporate Deposits, fund-raising for their hospitality business and a USD 60 million syndication.

60 million? Back in the day, and I’m talking some 17-20 years ago, that was a lot of money, and all I could think of is the fee based income that would follow suit. Would it? How? Well 1.5% as a Syndication Fee was a tidy bit of pocket-money.

One thing led to another, and we came across multiple opportunities….The Rotary Club of Panjim in Goa wanted us to come talk to their members about market investments, another owner of a hospitality company wanted to offer his property to us for conceptualization, development and management, I’m now thinking, this is an act of God! One door closes, and others open. I guess when you’re reeling from an acute reversal in fortune, you pretty much are willing to clutch at straws, and I guess this is exactly what I ended up doing.

Without much thought, without weighing the pros and cons, without putting down a detailed business plan, or for that matter, working out the financials, I took the plunge, and set up shop in Goa. Office on rent, car on hire, recruited two young MBA fresher from the Management Institute at Goa University, and we were up and running.

Set up wasn’t really much of a problem, but what about cash for the recurring expenses? Where would that cash come from? Surely from providing stock broker and investment management services to the underserved HNI community in Goa, from the Pub/Restaurant we were going to open. But this was still small change, barely enough to take care of overheads.

The big bucks were coming from the Syndication Fee was it not? Hindsight tells me this was really lame, because USD 60 million? Really? USD 60 million? Its not like I was not capable of raising that kind of cash, I absolutely was, and I proved it by getting term sheets from IDBI, from Asian Development Bank, from FMO in the Netherlands, even the IMF had expressed keen interest! So much so that they deputed two appraising officers and one subject matter specialist to come to Goa and look at the business model and the numbers. I think that the promoters never believed that we would be able to pull this off, simply because a leading financial services company back then had not been able to do much for them, and to top it off, we were but kids. Kids? So frigging what? We had the balls, we had the brain and we certainly had the connections and the gift of the gab.

The big bucks never came in, despite the fact that I singlehandedly brought the foremost FI’s to the table, with commitments to fund the USD 60 million, with one small simple proviso. That the promoters of the 60 mill venture would put in a meagre 5% of the cost. That is when the cookie crumbled, and as far as cookies go, not the tasty kind. Left a really sour taste in the palate, and a gaping hole in the pocket!

What was this project all about? A greenfield venture, never been done in the world….setting up an artificial port built on a floating concrete structure (called a Caisson – French), 8 nautical miles at sea! I can only assure you we weren’t the only ones excited…this had the attention of the international community of financiers, of master builders of ports and harbours, of builders of dry cargo handling systems, of the global dry bulk shipping companies, of the Iron Ore and Coal mining community worldwide! The names I can throw at you, in terms of the people I was hobnobbing with on a daily basis would astound anyone. Ever heard of George Soros? Well, the master designer of handling systems I alluded to was non other than Paul Soros, George’s elder brother, the one responsible for helping George skipping the Iron Curtain, and coming to the US! Oh yes, I was moving up in the world, my sphere of influence was ever-increasing, and people who mattered across several points across the globe were taking notice.

The project never took off, simply because, the promoters didn’t or couldn’t rustle up the promoters contribution, and we ended up getting paid a meagre INR 100,000/- as a startup fee, plus expenses at actual.

So preoccupied, nay possessed, I was that I left all other revenue streams at the hands of the others in my employ, and the businesses that could have flourished, simply languished. The restaurant never took off either, so out of the three identified revenue streams, not even one paid out any cash.

Chalk one up for experience, absolutely. Put another notch in the list of failures, yes. Yet I had this feeling deep inside that all these reversals, were merely prepping me for greater things. They were, and as time panned out I was able to bring that body of experience to bear on my future roles.

If I have one regret out of all this, it is this. That I rubbed some people the wrong way, I think it is an ex-employee from Goa, who till this day slanders me in a manner most foul, not pausing to think for a minute, that there were circumstances that were totally above and beyond my control, and that is why we fell by the wayside.

With this latest set of developments, Integra was finished, the toll was taken, a toll much to much to bear. I have a fair idea who this gentleman is, as he keeps commenting on my public blogs, I have the IP addresses. They originate from the US, and if I ever find this person, I will make sure he goes behind bars for slander, for defamation, and for being a total coward, hiding behind assumed names, hiding behind the names of other loyal employees and well wishers. I suspect that this person believes that I was be damaged, my image will be tarnished, but little does this idiot know, that the goodwill I have generated over my entire career in business, in my profession, and personally is so strong, that people actually laugh when they read his rantings.

With this I conclude the narrative of the series of reversals, and that brings me rather nicely to how I got my first job. I had to take up a job despite the fact that I had never worked for anyone before. Now that job was also with a startup, albeit promoted by a well-known brick and mortar company, and that experience is another fascinating tale. Coming up next.


Startups: Not for Everyone – Part 2, Failure #1

I’ve failed on occassion, and miserably at that. Some stupid mistakes, some bad luck, quite a few ideas ahead of their time, some due to lack of adequate funding at my disposal, some due to bad planning, some bad execution, some due to plain ego and being a bullhead. You get the drift, yeah? Need I really say more, and firmly establish beyond all reasonable doubt, that this is one dumbass?

Well, I’ve been brilliant too and met with astounding successes, but that was after all of the above. I’m a quick learner, and have the ability to self correct and change track rather quick.

If there is one thing I have learned about myself, it’s this. That I am a lot more wary and careful when playing with corporate cash and budgets, than when I’m throwing my own cash behind my ideas. I think, I’m a good kingmaker, but not really destined to be king. Perhaps something to do with being descended from the lineage of Chanakya Pandit, that master strategist, master politician, who almost single-handedly established Chandragupt Maurya as King of the Maurya Dynasty, which is ancient history of India.

Little wonder them that I’ve been given the mantle of “consigliere”, “mentor”, “confidant”, “well-wisher and friend”.

Let’s dwell on the failures…not my preference, but this is all about the down and dirty of why startups fail, right? Having seen failure myself, and having seen others around me fail, its given me a deep perspective on what not to do, how not to do it, and when not to do it. Such that its become second nature, almost instinctive, something I rely on when I’m piled with posers.

Experiencing failures is an intrinsic part of understanding what not to do. As the wise say, don’t repeat your mistakes – learn from them. We are creatures of habit, and in general aren’t disciplined enough to avoid past mistakes. Some mistakes are really just misdemeanours having little or no real impact in the larger scheme of things, others are grave and generally set you back a bit, and there are yet others that are fatal.

I say this after careful deliberation, when I say that I’ve committed misdemeanours, made grave mistakes, and perhaps I can even say that I have made fatal errors personally and professionally.

So Part 2 of this series on Startups is about mistakes, mis-starts, failures. I’ve mentioned these in passing elsewhere in my archives, but this is the low down, the actual dirt.

Failure # 1: Near Fatal – The Stock Market Debacle

If there is something I can do very well is predict market movements very accurately, been there done that. From the Part 1 of this series, you may recall that my Stock Brokerage business has commenced. From a trickle the clients grew to a flood, from small tickets I’ve moved to bigger mandates, and finally from retail clients, I’m made the HNI preferred list, and finally from there I’ve added the Institutions to my list of clients. I’ve even moved from execution to advisory.

Cut to around 25 years ago…the Indian markets, open outcry ring trading, manual execution…dark ages….computers just coming in, and I’ve lived my formative years in the US as an exchange student, seen markets in the west, and the professionalism.

So being enamoured with this exposure to the West, what does a young lad do when he comes back to India? It would be pretty much a no-brainer to say that he wants to introduce these concepts to the new business he’s set up. And so he does just that. He does professional, slick, glossy news letters, replete with fundamental and technical analysis, based on deep study and a smattering of privy information via the informed grapevine. And thus the outcome is professional, well presented investment data to retail and institutional clients alike.

The traditional broker community, thought this all quite un-necessary, as they were raking in the moolah regardless, and couldn’t be bothered with all this malarkey. Back then, it was near impossible to get a ticket to become a stock broker. It was a vicious coterie, an elite club, a merciless and unscrupulous mafia. Gaining their trust and respect, leave along admittance was all but impossible.

So the strategy adopted was to sell these rather new-fangled methods to the institutions, simply because they were THE PLAYERS, and moved the maximum money around, still do. However, back in the day, they were still new at the stock market game, and simply had to rely on brokers. Back then, even the institutions weren’t allowed into the exchange, so the brokers ruled the roost, and then some. But since the FI’s had the cash from bank deposits, and the collective investment schemes that were just appearing, they had a say in swinging markets, except back then they didn’t have the market smarts. They were career bankers, and mostly dealt in institutional finance and lending.

When we appeared on the horizon with our approach, this was manna from heaven, and slowly we became the consultants, the advisors, albeit unofficially because at the time, they were not permitted to pay for our services directly.

How did we make money then? I think I was the first in proposing a trailblazing model. I submitted and gained approval that IF the institutions bought into my point of view on the markets and individual stocks, the market mandate to buy or sell would be mine. We organized the industry visits, made them meet the managements, and hand-held the decisioning process. Now I didn’t have a ticket on the exchange either, but routed the institutional mandates through various brokers, and took a slice of the brokerage earned. The brokerage margins then, were not wafer thin as they are today, and to top that off, the market spreads were huge, leaving a lot of money to share.

Up until now everything was according to a well crafted plan, but what happened next, was nothing short of windfall and quite unexpected.

The Corporate world heard through the grapevine, that there were these young blokes who had the ear of the institutions, and had the ability to swing markets, therefore we were approached to move markets in their favor, to source funds, to intercede when companies were in trouble, when they had upcoming IPO’s and needed the institutions not to sell stock. Short of assisting in manipulating the markets, we pretty much did it all.

This was the genesis of Integra Funds Management Ltd, a company I promoted, to formalise our business model, to seek funding, to accumulate funds from the HNI community, and become a mini institution in our own right. The route we adopted was to issue NCD’s or Non Convertible Debt to Investors, and that was the maiden launch of our pseudo-fund. We went to Mauritius, set up an Investment Trust, to secure Non Resident funds, to be invested in India, to take advantage of the double tax avoidance treaty between India and Mauritius. It was a very hard sell to the Mauritius regulators, but we got our permissions and licences, and that in itself is a tale. Another blog perhaps?

The markets were grossly overheated, abject greed had set in, people were in a tizzy and it was a one-sided, BUY, BUY, BUY scenario. The stock markets had gained widespread adoption deep into the heart of India, and everybody wanted on the bandwagon! It was as if everyone had a fever in the brain, and everybody who was nobody became a stock market guru.

It was then that I had opened subscriptions to my NCD Issue, and in the backdrop were some ugly names from the markets, driving markets crazy.

I had always known that something was really amiss, and being true to my role as advisor, I cautioned, begged, pleaded my investors that we should all get out, while we still could. Nobody and I mean nobody was willing to listen, and because I was labeled as not savvy (literally overnight), customers went to what they thought would be greener pastures…they went to other advisors, other brokers, those who would not insist on them selling.

Before this crazy bull run got started, I had been quietly accumulating for the FI’s, for my clients this one particular stock. We rode it from INR 8/- all the way to INR 1,200/- per share, and I opined that enough was enough, we should bail now and walk away with oodles of cash. Reputed clients, so-called loyal clients, grudgingly agreed, and so at 2 am IST I called a leading fund house in the US, and got then to take this mega block of shares off our hands, as they were still very bullish. The deal was sealed on the phone, and when it was time to send the contracts across, I did.

I made one fatal error, I didn’t for a moment stop to think that my esteemed clients would back away from their word, and I simply relied on trust and DID NOT secure sale contracts from the Investors. Effectively, I was short, I had sold inventory that was non existent.

What followed is not hard to guess, but let me lay it out for you. I had to make good my sale contracts to the fund house in the US and some in India, I didn’t have backing stock, and I was forced to cover the shortfall from the open markets. Guess what, the bull run was in full swing, the markets got to know I was short, and I ended up covering the stock at prices as high as 50% over what I had sold at. Of course I didn’t have that kind of cash, and so I borrowed big time, just to ensure that my reputation wouldn’t be tarnished.

I did say somewhere that hindsight is a good thing, so in hindsight, I did the right thing, I kept my word, but the price I paid for that set me back several years. I was deep in debt, at alarming rates of interest, desperate, unable to pay, and that was the fatality.

Fatal error in judging people, fatal error in not following prudent operational processes, fatal error in borrowing way beyond my ability to repay.

That was the end of Sentinel Securities, of Integra Funds Management Limited, of Sumir Nagar the market guru.

Lessor learned? Yes. Price paid? Yes. Anecdote for people to learn from? Yes. A fantastic business model, a profitable business down the tubes, because of a fatal error, something as brain dead as following processes.

What next? I had not thrown in the towel quite yet. To find out what I did next, read Part 3 of this series.

Startups: Not for Everyone – Part 1, My First.

Startups. We see then all around, we read about the most fantastic and oftentimes unbelievable rags to riches stories, and thus the Startup is one glorified place to go work.

Statistics Tell a Horrid, BUT Truthful Tale

Statistically, the failure rate of Startups far exceeds the rate of success. Pity then that not much is really said of startups that fail, why they fail, how they fail. In their failure, complicit are the ones promoting the startups, the ones who fund them, the ones who value them, the ones who deal with them and the ones who run them. Perhaps that’s reason enough to write about this. Perhaps I will be serving some greater purpose, by sharing my experiences with startups. Some my own ventures, some ventures I know about, and some ventures I have worked with, either directly or indirectly. Let it serve as a heads up to people looking to work for startups, people who want to deal with startups that hold much promise (arguably). More on this in subsequent supplements of this series.

So Startups and one other topic has been foremost in my mind as topics to write about and the time has now come to write about it.

Hindsight is Great

Isn’t hindsight a great thing? So this is me reflecting and reminiscing from the time I first went to work for my father, launched my first startup, then graduated to the big corporates in India and internationally, and finally found that I was back into yet another startup, this time promoted by an ex-colleague and friend.

My latest experiences are in the Not for Profit and Social Enterprise space, but, those are things I will write about when the time is right. This is not that time.

Startups are my DNA

In some way shape or form I’ve been doing startups all my life, way before the word became common parlance, and more or less got beaten to death. Everybody seems to be doing a startup these days, either setting up one or working for one. And in case you haven’t noticed, plenty of them are falling by the wayside, leaving in their train wonton damage, chaos and mayhem. How many of them are actually raking in the cash? How many are at operating profit? How many are at post tax profit, or for that matter pre-tax profit? And even though I don’t quote statistic after statistic, believe me they are at proportions that are alarming. It’s like they are businesses that are ab initio doomed to fail, yet the kind of money they attract is quite disproportionate to the kind of money sound businesses seem to attract.

Some of the Biggest Names aren’t Profitable

Some of the biggest names, way past the startup stage by now, are not actually making money, but rather surviving on flawed business models, models surviving on perception, valuation, smoke and mirrors, rather than fundamentally sound business models. They are also surviving because good money is being thrown after bad money in the hope that things will even out. In several cases, where business models are initially sound, there is this morphing away from fundamentals, to models that play the game, paving the road to unrealistic valuations. In the end, someone is left holding the short straw, and more often than not, it is the investor, the employee, the client, the regulators, the tax authorities, and so on.

I would urge that this is not viewed from a point of view of negativity, but rather from a position of taking caution.


I am not an Investment Banker, nor am I a VC, nor have I worked for a VC or a known investment bank, yet here I am speaking from the pulpit. That confessed, what gives me the right or the authority to provide my opinion? Its more than a couple of decades of experience on the front line.

My Introduction to the World of Business

I had just returned from the USA after having completed my time as a Rotary Exchange Student in a small town called New Philadelphia, Ohio. The original plan was for me to stay on after my 12th grade and continue my studies at Duke. Then came the letter (no emails back then people) from my mother, saying that my father needed a son by his side. Didn’t know what I would contribute, since I was green behind the gills, but still a son was needed by his fathers’ side and therefore there was no question, no discussion. I made a choice of returning back home, a decision that I will never regret. Would I have been better off staying back and maybe settling in the US? Maybe. But had I not chosen, as I did, I would not have been exposed to realities of life, the good, the bad, and the ugly.

I came back to adversity, discovering that my father had been badly duped by seemingly trusted business associates and banks, and therefore in more ways than one, it was a baptism by fire.

To continue with my studies, I attended The Sydenham College of Commerce and Economics, and at the same time I was my dad’s chauffeur, and errand boy. I would drive him to his office downtown, then attend college, and then head back to dad’s office to take up my duties there. It was here that I learned the ropes of business, manufacturing, trading, imports and exports, paperwork, book-keeping. Skills that I find useful to the present day. My fathers manufacturing and trading business itself was small-scale in nature, but that meant that I got to learn so much, getting involved in every aspect of the business.

Fundamentals – Hands on Experience

See, in those days there was this brilliant Chartered Accountant who my dad appointed, and he was one tough task master. I learnt to write the books….Sales, Purchase and Stock Registers, Cash and Bank Books. No cellular, no internet, no computers back then. So you get the drift? Learning the ropes via the manual route, the school of very hard knocks, long hours, tedious and often repetitive work. Another invaluable experience set was that of dealing with the rigid and more often than not, the inflexible, unreasonable and extremely corrupt regulatory framework and practices. No school, no degree can ever teach you what I learned the hard way.

For some reason or the other, the damn trial balance would refuse to tally, and my CA mentor, would say, “Trial Balance MUST tally”. Well yes, I understood the concept perfectly, but getting the TB to tally was a whole different story. The leeway he gave me, and the personal training was to sit with me and help me trace the errors, all sort of errors… compensating errors, etc. For those from the Accounts field, I’m sure you know the pain. But still, that was such good learning of fundamentals, laying a rock solid foundation that would only serve me well in later years. Now I benchmark good ole’ manual work, brick and mortar business models to what we have today…..the digitization and often the virtual. All too often the brick and mortar is completely relegated to the unimportant, whereas without a fundamentally strong underlying brick and mortar model, all digital and virtual models will surely fail. This is something I realised a long time ago, and therefore I would always scratch my head, when the PE valuations and the rate of cash burn, ie: the underpinnings were grossly overstated, at the time of investment appraisal. Back in the day startup businesses were actually urged to overstate the cash burn to be eligible for investor interest. I never did get it, and I still don’t get it.

This then lays the foundations of the actual topic I’m blabbing on about. I’m pretty sure that there will be a degree of unpopularity, and even some quarters staring askance at my comments, observations, opinions. No matter, I stand by my convictions, my opinions simply because, I have been trained and inculcated under old school methods.

My First Startup

At some point in time, I became disillusioned with the business of my father, and decided to do something different. With the active encouragement of my dear father and through his introductions, I entered into the Stock Market Brokerage business. My dad has his office in Downtown Bombay, in a rather prestigious heritage building, which was at one point owned by Harold MacMillan, the British Prime Minister. See, before he became the PM, he ran MacMillan Publishing Company, and the office building was owned by the British PM’s Publishing Company. History of Dad’s Office Building

41 MacMillan Building With Green Roof And Standard Chartered Grindlay Bank On D N Road Mumbai

Being a Heritage Building, it was made of stone, had high ceilings, and we were running out of space. Not being able to afford buying another office, or for that matter, renting one, I hit upon a rather ingenious way to create space. Simple. Create a mezzanine floor (on account of the high ceiling), and lift and shift my dads setup to the mezzanine, and use the newly created space below, for my fledging stock market business.

So how was this going to be funded? Funding came from a financial services company founded by a Chartered Accountant, a friend of a dear friend, who literally gave me the money with nary a business plan, nor an agreement, nor any post dated checks. Purely relying on my cred, my word (and that of my friend), and my sincerity of purpose,  we completed the paperwork only when the monies had been spent on the renovations.

We inaugurated the old-new office with a little do, and we were all set to do business. Really? What about the photo-copiers, what about the EPABX, binding machines, etc? Those were funded by loans from relatives, mainly my aunt and a couple of friends? Now business would take time to establish, so how do I finance payroll, interest on the loans, the EMI on the finance raised for renovation? The solution was to rent out office space, much like the co-working spaces available today (that’s not what they were called back then, back then they were called “business-centers”), and over a period of time claw back the rented space for own use. The model worked perfectly, to the extent that my dad (now semi-retired from business) rents out that space, and uses the mezzanine level for his own purposes. I even remember creating a photo-copying business, by taking copy jobs from people who didn’t own copy machines. Heck, I even remember manning the copiers myself, when there was too much work, and working all night to deliver jobs the next morning! So when I say I have learnt from the school of hard knocks, I say it with great authority and pride.

This was the startup that succeeded, but let’s talk about failure as well to put things in perspective. Read more in Part 2.

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