[Special Edition] The Outline By Inc42 Plus: The Yodas Of Startup Ecosystem

The Outline is an Inc42 Plus member exclusive newsletter, but in the spirit of Teachers’ Day, we are sharing this week’s edition with all of our readers. In this edition, we spoke to over a dozen startup founders about the good and bad of startup mentorship in India. Come, join us in celebrating these knowledge leaders and their invaluable contributions.

Meanwhile, as a Teachers’ Day special, gift yourself the power of knowledge with an Inc42 Plus membership! Claim your 50% OFF here!

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Dear Padawan, 

This teachers’ day, going to tell you about other yodas in the startup ecosystem, am I. Stories as old as time itself, these are. Herh herh herh…

Much like the profound Jedi master, India’s startup mentors have played yoda to countless padawans (roughly put, prodigies). These mentors, who are intimately familiar with the process of building up a business in India, can also sense the early signs of impending battles and the return of dark forces to guide their disciples to the promised land.

The life of a startup founder is full of tough decisions and crunch situations which can decide the fate of the company and its course for years to come. It’s in times like these that mentors become an invaluable asset for an entrepreneur. 

YULU cofounder Amit Gupta, who also cofounded adtech unicorn InMobi, says his mentors have helped shape his startup journey. “They helped validate the strategic direction, dealing with challenging matters, and taught me to keep my own spirits high when times are tough,” he said. Gupta counts fellow entrepreneurs, VCs, successful business leaders, school friends, and his wife as his mentors.

“For 800 years have I trained Jedi,” ― Yoda to Luke Skywalker

While startup mentors come from various walks of life, experienced entrepreneurs are most commonly seen among the prominent mentors in India. That is also the profile most preferred by founders since it comes with experience to deal with tricky situations. And rightly so, only the people who have walked the path themselves can stand up to the pressures of being a mentor.

“The fact that they are also entrepreneurs themselves makes a lot of conversations easier and relatable. Be it simple operational items like rental conversations to more strategic conversations around products and pivots, their wealth of experience has been a great source to tap into,” said Hari Ganpathy of travel startup PickYourTrail. 

Retail tech startup GoFrugal founder Kumar Vembu, who is an investor, has been instrumental in shaping Ganpath’s thoughts on team building and culture, the PickYourTrail founder told Inc42. 

For healthtech startup BeatO, its 2017 business model pivot was only possible through the guidance of mentors who have been down the path. In January 2017, BeatO had a completely different business model from today and needed to pivot to make the product more scalable and increase user stickiness. 

“This is where one of our angel investors, Vishal Sampat, worked night and day with us, almost like a cofounder to help us. In fact, I bunked over at his home in Mumbai for several days, and during one of our long walks along Marine Drive, we chalked out the course for BeatO for the next three years,” Gautam Chopra, CEO of Blume-backed BeatO, recalled.

Sampat is currently the chief digital officer at Reliance Jio and had founded a search engine marketing firm Convonix Inc which was acquired by Publicis Groupe in 2013.

Similarly, Vinay Singhal, CEO of a regional-language focussed OTT platform STAGE (formerly Wittyfeed), has also relied on the company’s angel investors and advisors within and outside the startup ecosystem for mentorship. 

“Harsh Mani Tripathi, a college senior, fellow founder and angel investor with us, taught me how to think. In a way he is our own personal Paul Graham! Everything that we have built at STAGE today we owe most of it to him,” Singhal added.

Singhal also notes Innov8 founder Ritesh Malik and POSist CEO and founder Ashish Tulsian as the connections that have provided value to the company over the years. 

Beyond business-related problems, mentors also play a crucial role in pulling entrepreneurs out of emotional and professional dilemmas. “As founders, we fall in love with our ideas and tend to think emotionally rather than thinking rationally. At times like these it’s important to seek external help from people who have been there, to get an unbiased perspective,” said Prateek Shukla, CEO of Unitus Ventures-backed Masai School. 

Can Anyone Be A Yoda?

According to a 2017 study by Entrepreneur Futures Network, across 800 different university and non-university programs on entrepreneurship, the most represented group of mentors were experienced entrepreneurs (many of whom were informal or angel investors). 

But that’s not to say that all mentors have to be experienced entrepreneurs. Like in the case of Ankur Warikoo, cofounder of hyperlocal ecommerce startup Nearbuy, who counts fellow entrepreneurs and friends — Akhilesh Bali, (founder of LimeTray) and Ankur Singla (founder of Tapzo) — as mentors. 

Bali and Singla started their entrepreneurial journey at around the same time as Warikoo, so the dynamic is totally different. “We have grown together — challenging each other’s beliefs and calling our bullshit out. I do not think anyone else (not even family) would understand the journey of an entrepreneur as well as a fellow founder can,” said Warikoo, who has presumably used these learnings in his role as a motivational speaker.

Similarly, youth media platform Yuvaa cofounder Nikhil Taneja found support from fellow entrepreneurs in the digital content space such as The Glitch cofounders Varun Duggirala and Pooja Jauhari, Gurpreet Singh, founder of One Digital, and noted actor Roshan Abbas. 

“The best part of having cofounders is that you always have someone to share the bad times as much as the good ones, and in that, my partners have been a huge support system,” he added about Yuvaa cofounders Amritpal Singh Bindra and Anand Tiwari. 

While many founders have found mentors in entrepreneurs in the same domain, MoneyTap founder and CEO Bala Parthasarathy says he has found mentors in completely different domains and even in people who are not related to the startup world. 

“I don’t look for business advice, as I’ve personally been through enough crises and have a sense of how to handle the business end of things. What I find to be far more useful are how people handle an emotional crisis on their own, what kind of value systems they have and how they did the right thing despite being tempted to cut corners,” Parthasarathy added.

Similarly, Suresh Sambandam, CEO of SaaS startup Kissflow found a mentor in his former boss Ayee Goundan, who introduced him to Peter Senge’s 5th Discipline book, which has served as the cornerstone for Kissflow’s office culture and beliefs.

The Dark Forces Of Mentorship

While the support system for Indian startups from mentors and business leaders is growing as the ecosystem matures, it’s hard to ignore the pitfalls of the search for a mentor, especially in places where there’s no tradition of mentoring. 

Most mentorship opportunities tend to be limited to metro cities either because of connectivity or an already overbooked mentor’s time. Dr Ajit Nigam, the associate dean — incubation at the University of Petroleum and Energy Studies (UPES) told Inc42 that mentors visit Uttarakhand without any regularity, comparing them to parachute visits. 

Similarly, Indore-based STAGE founder Singhal noted that it often becomes difficult for entrepreneurs based in Tier 2 cities to find angel investors and mentors, and so these founders may at times become victims of scams in the name of mentorship. 

West Bengal is also plagued with similar stories of scams in a mentor-mentee relationship. Abhishek Rungta, President of TiE Kolkata noted that the city has some mentors who take equity or mentorship fees from startups but do not really deliver any value. Anyone mentoring a startup must have a solid background of building business himself. 

Palak Kapoor, cofounder of beverage D2C brand LQI, corroborated Rungta’s claims and said certain startups at very early stages allocate advisory equity to mentors on the basis of their work background and the exponential growth they could potentially bring in, but end up getting no subsequent help at all. Backing these assertions, fintech company Instamojo cofounder Akash Gehani added that even though these “so-called” mentors do not provide any real value, they make sure to grab every chance of taking credit for the company’s successes. 

This has even forced some startups to continue running bootstrapped instead of raising funds from angels, which is what happened with fintech startup Finology, CEO Pranjal Kamra said. Bootstrapped startups are commonly seen in Tier 2 cities, where access to both mentorship and capital is usually a challenge. According to Inc42 Plus analysis, only 20% of the total startups in India are based out of Tier 2 and Tier 3 cities, which highlights the extent of the issue in these parts of the country.  

MoneyTap’s Parthasarathy shared a personal experience to highlight how such practices end up hurting companies that are otherwise sound. While evaluating a startup for acquisition, MoneyTap found that a well-regarded angel investor had bought a humongous stake in the company, but had only put in a fraction of the promised funds. “Being in awe of this mentor’s profile, this company’s founder had already issued equity and is now stuck with a share structure that is toxic for any buyer, despite having done other things right,” Parthasarathy recalled.  

Adding to this, short video commerce app Bolo Indya CEO Varun Saxena said that he also knows of cases where mentors have pushed founders to take debts and loans in the name of angel investment, where the founder becomes personally liable. “There is still a need for the ecosystem to be more educated and aware; to stay away from these mentors,” he added.

Offering equity for mentorship is a relatively common trend among startups. In Inc42’s survey of 535 startup enthusiasts, over 54% said that they have given at least 0.5% or higher stake in exchange for mentorship. But as relayed to us by many founders and investors, such deals come with considerable risk. 

Matrix-backed Pesto Tech cofounder Ayush Jaiswal thinks that the selfless nature of a mentor-mentee relationship is what makes it special. “I fundamentally believe that no mentor can ever take any equity in exchange for knowledge. I mentor some other early-stage folks where I can and I do it because someone else did it for me,” said Jaiswal.

However, cofounder of an early stage investment group Eagle10 Ventures Prashant Pansare, believes that making mentorship a paid arrangement brings seriousness and commitment to the exchange. He added that people do not value advice that’s given for free.

But how does one assign monetary value to mentorship? Is it even possible to repay a mentor or teacher’s debt? What factors would you consider —-  will it be the integrity of a mentor, their network, the emotional connection or the shared bond? Moreover, how does one quantify payment for their invaluable advice that may not even have come in the context of a mentor-mentee relationship? 

Write back to us with your thoughts on this and tell us who your mentor is. We would love to hear from you. 🙂 

Startup Empire

Mentorship usually follows a pay-it-forward kind of approach — those who came before become mentors to the new and then these Luke Skywalkers go on to become the Jedi masters of the future.

Speaking of Jedi masters, this week Inc42 Plus deep dived into the story of one of the oldest foodtech company in India — Zomato. Starting as a discovery and reviews platform Foodiebay in 2008, the Zomato we know today is a global foodtech empire despite the high-profile exit of cofounder Pankaj Chaddah.

Unlike Swiggy’s acquisitions concentrated on penetrating deeper into India, Zomato expanded and took its presence to across 10,000+ cities around the world at one point.  Zomato has so far acquired 13 startups around the world, and with its many subsidiaries, it has presence in every continent, except Antarctica.

Despite being in the game for so long, and being valued at $3.5 Bn, Zomato today is not in the same position in the Indian foodtech space as enjoyed by Flipkart and BYJU’s in ecommerce and edtech respectively. Could this be because of the company’s focus on expanding overseas rapidly? 

The Clone Wars

While the Clone Wars in the Star Wars universe focused on preventing the formation of separatists, in the context of Indian startup ecosystem these wars are literally a war of the clones. India’s ban on PUBG Mobile will potentially open up the floodgates for ‘Made in India’ clones of the popular battle royale action game. The first clone has already arrived and is interestingly named FAU-G — the app is backed by GOQii founder Vishal Gondal and actor Akshay Kumar. 

And just like the TikTok ban, the recent ban on PUBG and 117 other Chinese apps was also announced in the interest of “sovereignty and integrity of India, defence of India, security of state and public order”. While the order does not explicitly mention China, all of the apps and games banned are either from China or Hong Kong.  

Following the ban announcement, Google Play Store and Apple’s App store took down PUBG Mobile and PUBG Mobile Lite app, which had a direct impact on PUBG Mobile developer and publisher Tencent. Tencent shares fell more than 2% as it lost $14 Bn in intraday trade in what is the second biggest intraday fall for the company. 

In response to the ban, China reiterated that India had violated World Trade Organization (WTO) rules and the ban hurts Indian consumers as well as Chinese businesses, benefitting no one. 

Meanwhile, the list of potential suitors for TikTok India saw a new name this week. SoftBank Group is said to be assembling a group of bidders for TikTok’s India assets and is actively looking for local partners.

The New Stormtroopers 

Luke Skywalker might be the last Jedi in the Star Wars universe but in the startup ecosystem, there’s always a new Jedi in the making. As with every month, in August too, we scouted the ecosystem for 30 early stage startups that should be on everyone’s watchlist. As these younglings enter the startup ecosystem, we are sure there will be plenty of Yodas who will pay forward the learnings of their mentors. 

As India celebrates the influence of thousands of teachers and mentors, we hope you also take some time to appreciate the guiding lights in your life. 

Much more to learn, you have, my old padawan. Just the beginning, this is. 

Happy Teachers’ Day,

Yatti Soni & Team Inc42