Showing posts with label Promotions. Show all posts
Showing posts with label Promotions. Show all posts

Nov 19, 2022

Business fundamentals sidelined by the startup ecosystem

We are regularly updating our knowledge on various aspects of our business, its facts, and figures. Since we are professionals and working in business environments so there we have to be equipped with the current affairs of our ecosystem. 

💥I am working in a Kirana startup ecosystem and also heading a startup in B2B grocery retail so there my daily routine is to keep myself updated with the latest developments and maintain the information flows. Like me, there are many professionals who are closely following the stream. Things are related to startups, investors, and the ecosystem. No doubt things were moving in the retail ecosystems since 2014 onwards in the right direction and a big buzz is there in terms of investment and turning startups into unicorns. Startup definition in layman's language, Startups are those who do execution with speed, and how fast they were able to achieve the status of a unicorn or smart valuation was the basis of success. Huge money was pumped by the VC funds, angel investors, family offices, and HNIs which helped more than 75 startups turn unicorns in the last three years time. I am fully convinced of the things that were brought in by the innovators. But, We are bound to certain fundamentals and basic Laws, so the same is applied to businesses where things are very much driven by few fundamentals. The fundamental law of business is to earn profit from business activities through whatsoever practices. Let's jump to the preamble of this article " Ignorance of Fundamentals by the Startups and how they sidelined it" 

👉Startups and investors both started working on some easy conversion approach which led towards meanless directions somewhere. I am going to let you understand the fundamental approach in layman's style. This will surely match with the ongoing practice of the ecosystem stakeholders. A few things remain constant which we called by fundamentals so the same is applicable to Startups and investors both.

Inside of Investors and how they forget to apply fundamentals of investment: 

Investing is simply the process of acquiring assets that you hope will grow in value. Investments can include owning a home, owning a business, owning real estate, or having money in savings accounts and CDs at a bank or credit union. Investors in the startup ecosystem have some different theses. Investors do have many theses to work on but again they are concluding their decision that out of 10 investments they will succeed to get a handsome exit in 2 or 3. This means 7 or 8 investments will go in vain and will be a failed decision. Here somehow they are breaching the fundamentals of investing and driving them in the direction of such thoughts. Here my question is why out of 10 investments, 2 are getting successful and some many cases even this is also not. And if such things are there then what is the use of evaluating the startup, asking for an Investment Deck, and carrying strict Due diligence? 💥and

If the startup business model is so convincing, disruptive, and scalable then how things go negative in near future? 

This shows that the fundamentals were not analyzed before shortlisting the startup and evaluating them or what about the business model of the startup they believe it will run and will do best in near future. Why am I stressing about this? Every business has certain set rules which have to be followed religiously, these rules are the basic principles of that business stream. I am not talking about completely IT-driven business models or ideas that can operate certain businesses on the cloud with nothing physically running on it. 

But, again if there is the physical movement of goods and services in the business model like it is in grocery eB2B retail then one cannot ignore the fact. An investor needs to differentiate those things while finalizing startups for further-stage investment proposals. If any real business is growing on the ground then it will take time to reach a level i.e. to reach a scale or become profitable. There are no shortcuts to making them successful overnight or say in two, three, or five years. awesome? How can a VC expect 100X returns or 20X, or 10X? Just think about the cost of that money investing in a startup for a given period of time and calculate the return. The shortcuts are good if they help to save time and money but business fundamental works on certain laws.

The calculation of interest over market risk and its return is the soul of investment. A 5x return is logical if the primary work is done thoroughly by the investors before investing in a startup. If you being an investor don't believe in the idea or you are thinking that 80% of the investment will be completely devastated and you will make your money from the rest of the investment in Multi X returns then don't invest.

Investment is not gambling and investors should not be gamblers  

My above thoughts would give a contrary impression of the present scenario. But, let us not forget that the current landscape of investment in the startup ecosystem is mount formation. Currently, the law of 👀FOMO is operating in the ecosystem and no one wants to be left out of the race. This show of changing caps is in the stream. Early-stage investors want to hand over the hat to the big one and this goes on till the startup either succeeds or fails. One needs to think deeply. The same is going with startups. 

Fundamental of business that startups are not following. 

Startups too have some shortcomings or failures on the ground of applying basic fundamentals in their business model. There are startups that are really working on some problems at large and through their innovative ideas, something good has been built. We can talk about #Zarodha #Groww #cardekho #Shopify #Swiggy #Zomato. They definitely brought disruption in their area of exploration. In a true sense bringing disruption in the segment is a kind of outcome by the Startups. If we analyze deeply the inside story of successful startups, we will find that they are totally IT-driven businesses and without their stack or involvement business processes can't take place. I would categorize them as Startups working on the cloud. However, in the case of Swiggy, Zomato, Dunzo, etc and other delivery startups will have profitability challenges but they are creating adoption and consumers take them as granted. Again fundamental of these businesses has to be taken care of.  

Business fundamentals are logical and have the compulsion to fit them in the business stream before ideation, implementation, and execution. 

If your startup is involved in the physical movement of goods whether it belongs to grocery retail or other retail formats, you have to inbuild them on your own to tune with some set of market conditions that are prevailing in the market and no one can bypass them. The cost of changing existing conditions is very high. Let's understand this equation through a real-time example.  Startup ABC is working in grocery retail. They got the idea of building an online marketplace for grocery retail, Built a high-stack IT solution for the stack holder. It is a seller marketplace model. The model is called eB2B online marketplace, onboarded thousands of Kirana Retailers on their IT platform, and started reaching them through Mobile App. This is a kind of Direct to Retail Model. Why they thought of bringing this kind of change into the ecosystem as a new idea and how it helped them to raise money? Definitely, Startup ABC found some gaps in the market, Problem was large so they started working on a solution. Filling up the gap and finding solutions. In their pitch, the startup is working to empower Retailers by way of providing them with one umbrella solution as a Supply Chain Aggregator. DTR model removed the middle distribution channel resulting increase in margin. This is how a new idea takes place and the same is with other eB2B startups or even B2C or D2C or Agri startups. In these kinds of startups, there is the physical movement of goods involved at each stage.

Now, what happened wrong to this business model? I don't want to mention the name of startups working in this segment. You know them, but the question, again and again, is why they are not making profit despite raising huge money, even burning the entire amount, and also scaling to other territories like crazy. They tried to convince investors that their business model is scalable and profitable. 

Here is the answer, they failed to incorporate the fundamental of such businesses that they tried to disrupt through the innovative business model and intervention of costly IT tools. What are those fundamentals: 

  1. Lack of Business Mindset
  2. Half of knowledge is dangerous 
  3. Trying to change the traditional miniature practices of market 
  4. Managers are driving the low-margin business in high profile style
  5. Burning money on adoption.
  6. IT-driven business is for unfriendly IT users like Retailers seldom use.
  7. Founders are highly paid without bringing profit to the organization  

A lack of a Business mindset is the first fundamental requirement for a business. The founders should have a business-mindedness or else they will become puppets in the hands of the investors or their KMPs. Mere finding a problem in a certain area and working on it through KMPs will lead to a possible failure. A business mindset founder protects the business by predicting near-future trends based on his inherent capabilities. This helps them to align their business strategies on time. In the current startup ecosystem, founders are not of that mindset or I would say most of the founders are technocrats. They firmly believe that an IT-driven business model will scale and will be the valuation driver. The business cannot be projected the way IT can run it. It has to go through the market conditions and accordingly needs to be coordinated with the business owners.

Half knowledge is dangerous: Skill-driven founders are willing to disrupt retail based on some logical business verticals, but for physical business, they must have a deep understanding of market conditions and business terms in the first place. The skill set is more likely to be the first choice of professional investors as they have the ability to grow a loss-making business and increase valuation and even turn it into a unicorn. Half the knowledge of market practices by the founders is dangerous and ultimately the ground-level work does not synch with the projected one, resulting failed venture. 

 Trying to change traditional business practices: Let's talk about grocery business or FMCG business in India. Both streams are being carried by a series of middlemen. The margin spread is there to feed all of them in their stage of execution but that is too much narrow. In the FMCG business- Brands distribute their products to retailers through CFA, SS, distributors, and then retailers. Retailers further sell to final consumers. In the staples stream, this is done through local mandis, traders, and wholesalers/ Semi Wholesalers.

What is the harm in it if one is trying to bring solutions for the retailers and provide them with one umbrella solution? This question will come to the readers. But, a major point here is that the basic principles of traditional practices were violated. Generating margins is a big deal in grocery retail but an existing traditional channel of distribution is making money from this low-margin spread by keeping its shows on a low profile. “Remember – the cost of running a business through managers is always a costly affair but running it through existing owners is always cost savvy and effective”. Distributors, SS & retailers are owners of their businesses. They are working in a very low profile and master of earning profit from its thin margin basket.

Another main reason for not making a profit is: Squeezed margin - Brands are not giving preference to such startups as they do not want to disturb their existing channels, however on the same way, they do not want to lose the opportunities that these startups are bringing, however here they are not sacrificing on the margin side. In some cases, they did so but again had to roll back their decisions amid strong opposition from existing channel partners as channel conflicts broke out.

I am giving stress on this point because this is one of the major aspects and practices where startups are hammering. As an eB2B startup, you have asset-heavy operations in terms of heavy opex, cost of setting up systems, and processes. based on analyzing the financials of existing eB2B players. How they will earn from a thin layer of margin is again subjective but if someone is there who is bringing operation excellence and capabilities will definitely earn profit and make their startup a real business.  

Managers are driving the low-margin business in a high-profile style:  The managers are managing the show of the low-margin business of various startups as they are not working with the existing middle distribution channel where the owners are working. Getting work done through managers is always expensive, whether the traditional distributors are working at a low cost and earning profit and matching ROI. Setting up systems and processes always attracts a good number of cost components. Metro Cash & Carry, Walmart, and other heavy Capex and Opex run models are examples.

Burning money on adoption. India is not a country where we think of bringing change in all spheres as we are living in different walks of life where there are different demographic changes in our religious thoughts, food habits, tastes, customs, and even in society. The business model of a startup is based on certain principles of optimization. It refers to the process of changing the product in which it is made, to meet the needs of customers in a market other than that in which it is made. This means changing products to bring about customization in the long run and that brand has to spend heavily for free sampling or up to a level where demand can start spontaneously. But, India is a country of diversity, and spending to bring about adoption is a costly affair. No one can change the behavior of Indian consumers. A startup always failed to meet the hyperlocal requirements or they are not able to align with the diverse requirements.

IT-driven business is for unfriendly IT users like Retailers seldom use. Startups are getting funded based on their IT stack as VCs are investing in startups where IT is the product and the main driver of the business. But, one-third of India's population is still struggling to meet their daily needs. As per the current data, only 43.5% of mobile users are using smartphones. 40% of grocery retailers are using basic phones or they are using basic features of smartphones. This means that people are still unfriendly towards smartphones. Startups are trying to bring use cases where their end consumers can start using their smartphones to order goods. This adoption happens when we talk about B2C marketplace but it is not the case in B2B. What if you are working on a solution that the end user is not using. According to a market survey, only 30 out of 100 retailers are using B2B startup App to order merchandise, with the rest relying on the foot-on-street manpower of those startups.

Founders are highly paid without bringing profit to the organization:  The fundamental crunch is once again seen in this, & and the founding team and KMPs take home a large amount in terms of salaries. The basic rule of business is that promoters should take cash from the business for their personal use only when the business is making a profit or can take a minimum amount to run their family's daily bread and butter but in most cases, startup founders are using to build their personal wealth. Most of them are enjoying a hefty amount of salary, accommodation etc. This is a layman's argument about how a loss-making startup is letting its money go out of its cash flow. Startups are struggling to get funds but founders are investing in other startups as angel investors. Startups like Paytm, where investors' money evaporated within a year of their IPO launch, but individual founders are running their own personal wealth funds and investing in startups. 

There are many other points to elaborate but a question always will be raised by professionals why is the ecosystem not following the basic fundamentals of business? Investors and startups need to think about the basic rules and fundamentals. Disruption is not what comes with success rather it disturbs the existing ecosystem at large if certain basic principles of business are not followed. And the cost of disorganizing the existing system is huge which eventually leaves ashes of burning money behind with a tag of failure.

Ignorance of fundamentals is tantamount to ignorance of the law which will not bail you out on the basis of ignorance of the law. The same logic applies in the business where the ultimate objective is to make a profit. And making a profit from the business is always an art and some fundamental principles have to be followed.

We are operating in the Food & FMCG grocery retail ecosystem in India. As an emerging organization, we carry the business fundamentals and startup mindset of innovation in our business model. Our focus is on building a technology-enabled platform for brands, distributors, wholesalers, and retailers. Taking the grocery retail ecosystem with us at every step for their empowerment so that we can contribute to building a $ 5 trillion ecosystem in the coming years.

A Layman write-up is written by Balwant Singh Rana, the Kirana Retail professional

written on: 18.11.2022, Jaipur, Rajasthan (India)


Sep 14, 2022

eB2B startups & their challenges

The last three years were very much dynamics because of the fortified events of developments going on in the retail sector in India. Startups were getting huge funding and at the same time, Investors were enjoying the curry. Investors' big love remain with the tech startups and were ready to burn the money like crazy. 

But now the scenario is changed. There is a list of eB2B players who raised billions of dollars during the last 3 years. Most of them become unicorns. Expanded to other cities like crazy. Some of them infused millions of dollars in setting up distribution centers, employing a big army of manpower, burning millions on marketing, and building up losses.  Retailers were in the middle of every eB2B startup. 

In this movement, more than a hundred startups are working in bits & pieces in their territories but few of them could succeed to play at the national level.  If I count on fingers only three or four startups are working very closely in Grocery retail.  Some of them are working in 28 locations i.e. states including 200 cities and more than 10000 pin codes, and some are working in one or two states but all have the same set of problems that they are encountering in their daily operations. 

I will not mention the names of those startups working closely in eB2B grocery retail but yes you will understand who will be all about.  First of all, I will try to explain the need for eB2B players in this ecosystem of grocery retail and will discuss why they are not able to provide the so-called solutions.

The emergence of Technology:  Till 2012 speed of the internet was paced mildly by the broadband connections and had limitations of reach to many tiers 2 and tiers 3 cities.   We can't say that e-commerce was not there at that time.  Most of the B2B players were using web applications so they were sticking to their seats only and thus could not find it more aggressive.  Startups like Indiamart, TradeInida, and many other e-commerce players were the pioneer of their time.  Still, Indiamart is doing good. It is all about the vision of Promoters. Transactions started taking place with the availability of Chinese smartphones in the Indian market. Retailers and consumers started using the best features of these phones. Marketplace models like Amazon and Flipkart started onboarding sellers on their platforms. end Consumers started ordering merchandise through Mobile Applications.  This has given a big momentum to the B2B players and they started focusing on technology.  A fever of investment cartels started coming to India from Silicon Valley from 2013 onwards. VC i.e. Venture Capital funds cartel employing IIM Alumni as their fund manager and they started collaborating with Technocrats. A kind of lobby was built, however, it is not that true as the founders of Oyo, and Paytm were not from that background but yes 70-80% of startups and investors are from top B-schools.  Last week I met a former founder of  Payment QR fintech. He said that if you are not from IIT or IIM or from Oxford or a top funding company you will not get funding. It is sure that 99% of the chance is that you will not be entertained by investors. This is a big cartel of like-minded people. and like-minded is all about being from the same community. But, my mindset was not to take it with me so why should it happen. I am a businessman carrying a business mindset and I know how to run a profitable business so I know about it. How fresher who came from IIT or IIM  know about business sense. But, I can't discuss this here as it is a different matter and thought.  

Startups started working on Ideas and started disrupting the existing markets. There was only one feature that was working at that time - Technology led startup or Tech Driven founded by the IIT-ians or technocrats.  The focus was given to the Retail sector keeping in mind the size of the market and opportunities.  The thought behind eB2B commerce was to disrupt the market through direct reach to the retailers and that had happened only by way of eliminating the middlemen. But, what made them start these business models in India.  Let's work on this. 

Why eB2B players entering Grocery Retail

Indian retail market is huge in size.  GDP of the entire African countries included with many European countries is equal to the Indian Retail market size. A market of USD 800 billion itself a huge amount to count and out of which 60 % market is grocery retail. As per the market sources, this size will be more than USD1.3 trillion by 2030 or more.  More than 14 million retailers represent the market. Indian retail mainly in FMCG is channelized by a robust distribution system.  More than 35000 distributors are working in FMCG & Grocery sector carrying brands of more than 5000+ manufacturers. The traditional system of distribution was carrying the middlemen like CFA, Super stockiest, Distributors, and wholesalers. The retailers were their customers. Indian traditional distribution system is robust and it got these wings after years of hard work and innovations.  FMCG companies like HUL, P&G, Dabur, Nestle, and many more have robust distribution systems. 

Now, startups started working on this segment by way of creating efficiencies.  What were those efficiencies? 
  • Reaching Direct to Retailers
  • Eliminating middle man
  • Technology-driven - Mobile Application in the hand of retailers & their FOS.
  • Data Analytics
They found that retailers are facing various issues like dealing with multiple distributors, uncompetitiveness, price discovery, ease of reordering, not getting the benefit of bulk buying, and Not getting proper credit in managing vendor Payments, expiry, and space almost they find that retailers need to be empowered in a way of giving them centralized supply solutions.  This is the problem they are facing in a big way. Providing Centralise Supply to Retailers is the solution and giving Sellers/ Brands a one-stop distribution solution that they don't need to go behind traditional distributors. This way brands can save money, time, and energy working.  As such, there is no issue in the business model. Technology is giving wings to it and everyone can manage their stuff.  This way their target customer is Retailers.

Year 2017 onward we have seen many big names in eB2B, some of them started working as marketplace models, some started as standalone direct-to-retail models, and others started on hybrid models. Few of them were category masters. At the time of their investment pitch, they said their technology-driven business model always remains Asset light. But, later on, eB2B players started working on Asset heavy model i.e. setting up distribution centers in metro cities.  I have seen that few have a DC capacity of 3 lakh sq feet in one location, they started employing thousands of salespersons to drive their DTR sales to retailers.  Huge infrastructures were built in the name of the Asset Light model. I would say that investors have no idea about the business they just bet on the business model and they do believe in technology-driven models and burning.  I am taking readers to the actual scenario which is the backbone of any company working for a profit. following calculations will give some light on the factual status of business these eb2b players are doing.  

We can understand this through an example: This study was done taking one eB2B model in the center of my study. I was closely watching the whole operations of an eB2B marketplace startup.  They started their business in 2017 and later on after receiving huge funding they moved to other cities very aggressively.  An average 50000 sq feet distribution center facility is built up in one city and today they have more than 40 cities where they have physical warehouses/ DC.  Setting up their own DC has a different cost and taking them with 3PL has another cost as some go fixed and others go variables. 

Let's have tentative figures:   I will try to explain them through the below-mentioned table. 

(Capex taken higher side, which includes verticals shelves, Pallet Trucks, etc) 

The above calculation will give a visual clarification that why eB2B players are not making money. This calculation I have worked out for one location i.e. One city like Delhi or Indore or Jaipur. 

If you talk to them you will find that they are working on 11% -15% opex cost/revenue and in return generating GP 3% to 6%  if we take benefit of business growth.  

Now, Let's bring some light on critical things which are hampering their growth as well as profitability. 

The problem faced by eB2B Players

eB2B startups have huge coverage, they have thousands of retailers on-boarded on their Applications, also thousand of Feet on the Street ( FOS) visit retailers daily. They have competitive pricing, availability, and convenience in providing timely deliveries but still, they are not making money. Why? 

Every eB2B startups claim to have millions of Retailers on their Application, having a presence across 10000+pincode, and for attracting investors, they are dividing States into Cities so that they can show their milestone in a larger prospect.  But again what is wrong with their financials.  Few challenges are there which is choking their bottom line irrespective of having million-dollar top-line numbers.  Let's put a light there: 
  • High Operating Cost
  • Product Mix Issue
  • Restrictive Behaviour of FMCG companies
  • No Credit Facility to Retailer. 
High Operating Cost:   eB2B startups or any startups who want to scale their business, need to go with the system and process. And when any organization goes with the system and process there is always a cost associated with it.  Proper functional departments must be in place which in turn stamps with a heavy cost. However, operating cost is a business element and business has to leverage it but due to the improper projections, they are employing manpower in a big way and paying them high salaries. cost of retaining every employee is high as has to give other benefits too and also infra cost is too high. Most of the infra is managed by 3PL but is not able to use full capacity. Only 40-50% capacity is being used but fixed cost is there to make it high operating too.  The cost of delivery is too high as MOQ is not adhered to by the retailers. In the above calculation, I have taken 50/- per order selling & distribution cost which is too low but again they are not getting sales to the MOQ. 

Product mix issue: No doubt they have sitting on a very high operating cost.  However, it can be covered if revenue to the tune is generated but again improper product mix is melting the bottom line.  If you can analyze the product category mix you will find that retailers are using them only for main staples like Oil, Ghee, Sugar, Pulses, etc which is again a convenient buying to retailers because they are getting everything under one roof.  Staples is only contributing to the top line so having up to 80% contribution in their revenue, but if you go by the gross margin level you will find that staples in bulk or in a popular demanded brand are very thin. like Oil and Ghee for a popular brand, no one can earn more than 2%  except for market volatility. The same is with Sugar and Pulses. Majorly traded in bulk packaging.  If one has 70-80% contribution of Oil & Sugar in their revenue then you can imagine the bottom line. Apart from this 2% is the RTV cost including the in-transit damage to the merchandise. 

Restrictive behavior of FMCG companies:  Since FMCG companies have a robust traditional channel in place so their FMCG brands do not want to disturb the GT market for these players, however, they want to sell on eB2B but they never compromise on pricing. In one incident, Parle company fought a case with one B2B startup and denied giving them their products. It is their helplessness to buy at their Price and then through a discount from their end, they sell on their platform. demanded product is the requirement of these startups because there is something needed that shows engagement with retailers otherwise, retailers will not entertain or will use its limits. They need FMCG national-level brands so that Retailers give space to salesman to stay at their counter and can cross-sell other merchandise. How they will sell new brands having high margins or can build a healthy category mix. You can see the contribution of such products.  

Credit to Retailers:  Since startups are working on systems and processes and they are more dependent on technology-driven stuff so they have limitations somewhere. May be from the business model side as they got funding on it and they can't let open the credit in the market. All are selling their stuff against COD or through some fintech arrangement like channel funding. But, it is true that Retailers will not buy any products except demanding one against cash. Even FMCG distributors are providing credits to retailers. Local Mandies especially for staples are providing 5-15 days of credit to retailers. Retailers are buying stuff from eB2B players. This is one big factor that they will not be able to generate more revenue from retailers without giving open credit. Open credit means based on trust. Like local distributor and mandi traders has for them. 

Above are the pinch of problems I tried to figure out.  But, I have a concern that without disturbing the existing distribution system startups from eB2B will not scale their business but they will not make money.  For making money they have to work on a different scenario. Still, they will remain eB2B but few things will be aligned otherwise they will never make money.  

Last year remain investor dry weather in India. They understood the fact that burning will not bring earnings even in the long run.  Retail will only use these eB2B platforms for their best selfishness but never contribute to scale.  Disturbing the existing ecosystem is a costly affair for them and if they don't take them with their journey, they will be finished mid-way. 

eB2B startups have to adapt a few things which will help them to sustain themselves. My best advice for them is to pivot the business model in the right direction and don't think to disturb the existing channels. If possible think about how you can associate with them and take them on your journey. 

I am working on this, creating a scalable and profitable business model.  

Regards/ Baalwant Rana

Sep 4, 2022

My Books - A Soul Friend


How we treat friends and who are our friends.  This is not a difficult question to ask.  We all have friends. Love for animals in Europe and US is mostly seen for Cats, for them, cats are their best friend but for a few of them not all. for many, they treat dogs as their best friend.  This goes with living creations but there are some amazing things about non-living things like cars, Phones, TV, bikes, houses, etc.  

Yesterday, I was watching a famous TV serial " Tarak Mehta ka Ulta Chasma".  You must know about the Poppet Lal. He is in the character of a journalist. He always carries an Umbrella with him. He is treating his umbrella as his best freind. In one episode, Poppet organizes a birthday party for celebrating the tenth birthday of his umbrella. At this event, Poppet was mocked by his guest as it was suspense kept by him and guests were of at no clue whom birthday Poppet is celebrating, but when a member of Gokuldham society came to know that this birthday party is organized by Poppet for his Umbrella they laugh at him saying how an umbrella can be a friend of someone. Strange for those who take it as a kind of psychological imbalance.  but for normal people it is fact. Friends are friends, we can't compare them with their shape, and size. We like their sentiments and belongingness. The same is with our mindset. 

In the same reference, we must have heard many times that Books are our best friends.  I can say that they were right.  Books are best friends because it helps us to learn new things about life and life behavior. We learn academics from these books, learn spirituality and read stories of our past, and history. Books help us make our future the best we want. 

There are a few books which I like the most : 
  1. Think and Grow Rich
  2. Rich Dad Poor Dad
  3. As a Man Thinketh
  4. The Power of Your Subconscious mind
Here is a little library of my choice. 

During covid time  I bought many books and in fact, I got time to read them all.  I never read books 5 years back but when I first read the Book " The Power of your subconscious mind, I learn and understand the importance of books in my life.  When you sit in your chair and take a book soulfully, you will see the magic. You will feel that someone like a teacher is sitting in front of you, guiding you on the subject and you are following his instruction.  This way Books are the silent Guru, the mentor.  
I am managing my books in my way in the following tabular form. Stating the name of the book, its author, MRP , Nos of Pages, and  Number on the book. I put numbers on each book so that I could know if any books is not on the shelf.  This is my way of keeping.  Maybe your way is more systematic and IT-driven. 

The purpose of demonstrating the books here is to show how important they are to me and how I used to keep them on my reading table. 

Every day read 10 pages of your favorite book and share your views on Linkedin, blog, and Facebook. Send your story to me on my email "  or send me Whatsapp on my phone: +91-9968313005. I would love to hear from you and write back to you. 

Jun 12, 2022

Business Mindset taken over by the Skill Set


I have seen many start-ups growing from their initial stage to the stage of recognitions and status, however these stories were not written in the study room but executed on the ground, thus witnessing many ups and downs by many startup founders. Despite all this, we can say that those who got good traction they became unicorns like gems of luck.

The Indian startup ecosystem produced 100+ unicorns across different segments which shows strong traction in terms of getting funding, making the enterprise scalable and creating valuations.  All is happening because there is a bond between founders and investors which shows trust that both will be benefited if the venture scales the business.

More than 85 unicorn built a large sphere in the following sector and many more are in the line to touch the unicorn status by end of September, 2022.

Sector wise: Broad Level 

1.       Enterprises Tech
2.       Health Tech
3.       Educational Tech
4.       Financial Tech including Equity market
5.       Retail Tech more onto b2b side
6.       Consumer Tech – E-commerce
7.       HR Tech
8.       Tour & Travel
9.       Real Estate Tech
10.   Media & Entertainment
11.   Advertisement & Marketing
12.   SCM & Logistics (Transport Tech)
13.   Other sectors
14.   Biotechnology

 Sector wise – Micro Level


Just to refresh the current knowledge   there are three sectors which has produced more Unicorn in India and those are in Enterprises Tech, Financial Tech and Retail Tech including E-commerce, about 62% of total startup in India comes from the said sectors. 

 Let’s figure out the sectors where they got a good status and further more they will be profitable apart from scalable point of view.  They are purely basis on adoption where startup has to burn money to bring the adoption in long run so that they will have more top line and bottom line to make themselves sustainable.  I will put such startups in Business skill category where each entrepreneur is committed to bring sustainability in the company and accordingly working on it by taking ample risks.  Business skill always comes through experience, and it teach us to handle the situations in wiser and it helps us to understand it in more responsible way.  Sometime we assume that business sense will come with the experience, yes it is true but more likely it is inherently god gifted within us that cannot be replaced easily by any management trainee or technocrat.  To some extent it is true but we can’t ignore the modern way of management lessons which is being taught by the renowned institutes and those are aligned with the modern techniques of technologies.

 You can figure out that 99% of unicorn startups were built by the Technocrates or masters of management from top management institutes. So, the fact of business skill is taken over by the Skill set is true that Skill set is stronger. 

Facts of Skill set is technology that is helping them to think beyond periphery.  80% startups are working on IT driven solutions so they are from skill set i.e. technocrats.  They are most trusted by the investors because they are master of management where they have analysis and gut feeling that skill set will take over the Business skill.

In support of the above fact, let’s take example of Flipkart, BYJUS, PayTM, Swiggy, Polygon, OYO Rooms, Dream11, RazorPay, Ola Cabs, CRED, Postman, PharmEasy, PhonePe, Zomato, Icertis, Ola Electric, Pine Labs,

Dailyhunt, OfBusiness, Meesho, ShareChat, Lenskart.  

Above mentioned startups have created great valuations and are in the club of over $5 billion valuation. If you take a look on their founders and co-founders, you will understand why they built an empire in a few years. They were not from a business background, so I would say that most of their business mindset was not in line with the original and not naturally formed, but they built unicorns.

 And more than 15 tech based startups are in line to become unicorns in the coming months. The founders of these unicorns are either masters of management administration or they are technocrats. The same is with investors. VC funds are owned by the network management administrators of LPs, PE funds or angel investors. Overall they are driving by the skill set in the industry they are in. But one aspect is more relevant which I will mention in the following way, and that is the business mindset. Business mindset is very much needed in business where the movement of goods is directly managed by the founders of the startup. Here more emphasis will be with the fundamental side and the market conditions.

 Why Business mindset is important?

 Entrepreneurs are more refined word when we talk about building an organisation by a person because he uses skill set wisely with business mindset.  He is the man who find certain problem in the business ecosystem and through great ideation they build an organisation. Certain parameters of industries have to be complied while working on the solution side.  Now a days we are giving these organisation new name “ Startup”.

 Two years ago the co-founder of a B2B marketplace came to my Jaipur office. When I asked him about business thesis and fundamentals. He said with confidence that I really do not know the business and about its mindset. We are technocrats so we know our technology better that it will do business. I was astounded to hear the answer that responded so quickly how could anyone say "I don't know business". The said founder was from a large funded eB2B Seller platform. With due respect I said, you are doing good in B2B retail. In this reference would like to say about Ofbusiness, a startup. OFB is a tech-enabled platform that facilitates raw material procurement and credit for SMEs with focus in the manufacturing and infrastructure sectors. Founders of OFB comes in the skillset group but the way they gave directions to their business, I must say that they are using business mindset somewhere to align the executions. When physical movement of goods directly comes into business then one must go with business mindset approach. That's how I'm trying to understand.

 Again, I met some investors in LPS from Sequoia, Accel, Tiger Global and several VC funds and I asked the same question. Is the business mindset worth them or are they part of a cartel of skillset? I asked them why they are investing in such and such sectors and what cartel they are part of?  They said, we don’t know the business what startup is doing, we are only concern about the solution they are providing, is it scalable a technology driven. They are concern with the returns and risk they are expecting. I am highly inspired by Mr. Sanjeev Bikhchandani, founder of Info Edge, a successful VC fund in the ecosystem because he is a successful businessman who build and many other ventures. He is full of business mindset. Investor should learn from him that how to find a business mindset founders and when to invest.

 I am sure that founders of startup & LPs of investor fraternity will oppose my thoughts on business mindset or skill mindset because most of them is using skillset to drive their business.  As per them they are building a business empire so they are business people, True, those are running businesses are business people.   A layman will have this thought and agreement.  But, I am taking about business mindset that is something different which has many dimensions.  We cannot expect that a fresh graduate of age 20 or 30 will have those thoughts and mindset.  Just check the following and then compare it with your skillset.

 Entrepreneurial mindset is only important factor that will make or break a venture’s success

     ·    Understand the market trend & forecast

  • Know himself and market as a domain expertise – Business side

           ·      Dare to face failure – Risk Appetite - Resilience 

    • Believe in Networking   

 ·         Positive Thinker |   Goal Oriented |    Creativity |    Accountability |   Decisiveness |  Passionate  |   Patience |   

 It is imperative to say that business owner should have business mindset first and skill set he /she can get through taking higher /professional education or can have it through experience.  Few characteristics are making difference in the above statements.  Business mindset has some inherent tools in his/her mind that he/she use while making decisions. It should be like that.

Two #equation = purpose is same , what is best suited for entrepreneurs.

Startup with Business mindset + Skill set = Entrepreneurs =Enterprises = Profitability =Sustainable business (Medium Term, ration of Success is 85%)

Startup with Skill Set = Scalable = Negative EBITDA (if+ Business mindset join) = Entrepreneurs=Enterprises =Profitability =Sustainable business ( Long term, ration of success is 15%)
#business #startup #mindset #entrepreneurs #sustainable #success
#retail #retailers #businessanalysis #skillset #grocery #kirana 

 So never let skillset to hijack your business mindset, rather develop it, learn it

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