Aditi Shrivastava & Shashwati Shankar

Mumbai: Travis Kalanick the CEOof Uber, likened entrepreneurshipto a game of chess where foundersand investors square up on oppositeends for a battle of wits.

Speaking to a crowd of over 3,000 atthe Indian Institute of Technology-Bombay, Kalanick, 39, exhorted fo-unders to stay “five or six moves ahe-ad of your investor”.

Uber, now valued at an estimated$61 billion, has raised over $ 8billionin 13 rounds from 52 investors. Thosebacking the startup include China’sBaidu and investment firms Fideli-ty Investments. “Being an entrepre-

“Don’t have six cofounders. Youwill basically have six-hour mee-tings about the colour of yourpen,” he said. “If you do it alone it’sgoing to be incredibly lonely, two isideal.” Kalanick teamed up withGarrett Camp to set up Uber in 2009.

Burning large amounts of cash toacquire market share is a part ofthe game, Kalanick said, buteventually companies existto make profit and they mustnot forget that.

He credited the Chinesewith coming up with the tacticof swamping a market with cashin order to win customers. “Subsi-dies and large burning of cash is aChinese invention and it’s a prettyinteresting innovation,” he said.

Cheered on by the crowd at the al-ma mater of his main India rivalOla’s cofounder Bhavish Aggarwal,Kalanick had tips and tricks to shareon how to manage the often fractiousrelationship with investors.

“When you are not doing well, thetrick is to not answer your investorright away; sit on it (email) for 2-3 da-ys,” he told the assembled crowd.“The worst thing you can do is in-stantly reply and explain your chessgame.” Uber, which counts India asone of its most important marketsafter the US and China, is vying forleadership with SoftBank-backedOla. Kalanick, who once spent timecoding for a startup in the southerncity of Thiruvanathapuram, saidtwo is company when starting up.

neur is like playing three dimensio-nal chess; you play chess 80 hours aweek,” said Kalanick during anopen-house discussion moderatedby Ronnie Screwvala, the founder ofUnilazer Ventures.

LEARNING CURVE

Competition benefits bothriders and drivers. At theend of the day, we learnfrom them (Ola) and theylearn from usTRAVIS KALANICK CEO, Uber

6 �THE ECONOMIC TIMES | MUMBAI | WEDNESDAY | 20 JANUARY 2016Disruption: Startups & Tech

Venture capital (VC) firms are used to

thinking they’re smart, brilliant and

desirable because entrepreneurs tell

them that, because they just want the

money, says Naval Ravikant, one of the

foremost influencers of Silicon Valley

and founder of AngelList. In an inter-

view with ET’s Krithika Krishna-murthy, Ravikant talks about the

changing startup scene in the Valley

and how Indian players will do well to

learn from their global peers. Excerpts:

What do you think of Indian VCs?

Indian VCs are like VCs in the US 10-20

years ago. They’re not used to building

peer relationships. What will happen is

someone will come along and disrupt

them. VC firms that don’t have a brand

are going to struggle. Because there is a

lot of money out there, you need to

have a point of view, a brand, to really

add value. You can’t just talk about it,

and say well, we are smart people.

So, what is happening in the US?

Right now, VCs are used to thinking

they are smart, brilliant, desirable and

funny, because the entrepreneurs tell

them that, because they just want the

money. But eventually, somebody will

separate the control, the advice and the

money because VC is a bundle of all

three and entrepreneurs really want to

unbundle: they want money from the

cheapest source, advice from the best

source, and they don’t want to give

away the control. So, that is starting to

happen in the US, and the trend is well

underway. I think it will happen in India

also, because the market has to mature.

Are startup success rates going up?

Success rates are definitely coming

down but that is because the cost of

running a startup experiment is coming

down…so more experiments are being

run. In the old days, we would have one

company spend a million dollars to

figure out if it has a market. Today,

maybe that same company could do it

under $1-2 million. The capital, as a

whole, may make the same or better

returns, but yeah, if the failures don’t

cost a half of what they used to, you are

actually saving money, it is a more

efficient market.

What do you think of competitors

such as LetsVenture?

I have seen them from afar. Obviously

they are trying to copy what we are

doing. I say, good luck. It is a very

difficult business, it is more of a passion

project than a business. They’re better

off starting a company with a much

After the first wave of establish-ment of new industrial enter-prises in the private sector, soonafter independence, and the em-ergence of service economy inthe 90s, we’re now at the thres-hold of what might be termed asIndian Entrepreneurship 3.0.

This third wave has to be broa-der in terms of the industrialsectors it touches and deeper interms of geographical reach.Such a sweep would also extendthe benefits of entrepreneurs-hip to a larger section of our po-pulation. The role of academicinstitutions in creating win-ning startups has to be viewedin this backdrop.

The part that academic insti-tutions can play as providers ofcrucial infrastructure for rese-arch, development and prototy-ping, and as a knowledge basefor development of new pro-ducts, has been established byleading universities across thewestern hemisphere and morerecently in the Far East.

A less appreciated fact is therole that academic institutionshave played in the diffusion oftechnologies and go-to marketstrategies. For example, wayback in the seventies, DigitalEquipment Corporation clever-ly leveraged student communi-ties to create their future users.Similarly, Facebook validatedits value proposition among thestudents at Harvard. In general,academic institutions can gene-rate a larger number of success-ful startups by increasing therate of startup activity.

The approach of academic in-stitutions in India has so far be-en guided by the idea of a Tech-nology Business Incubator setup under the auspices of the De-partment of Science and Tech-nology, or variants thereof un-der other departments. The ti-me has come to re-examine therole of academic institutions in

building successful startups.Here are some pointers.

First, academic institutionscan spread the appeal of entre-preneurship as a socially accep-table activity among their stu-dents beyond the larger cities.

Second, entrepreneurial ven-tures are more likely to succeedif they speak to local needs forwhich there is a ready-mademarket. Such ventures wouldbenefit from a closer product-market fit. Academic institu-tions can create local innova-tion bootcamps. Third, these in-stitutions can catalyse part-nerships between local indu-stries and their students fordeveloping solutions aroundwhich startups can emerge. Ona related path, academic insti-tutions can encourage their stu-dents to study issues or pro-blems that affect the life or live-lihoods of local communitiesand develop innovative socialsolutions. This could lead to acadre of “barefoot” innovators,similar to the decades-old idea

of barefoot doctors who solveextremely local problems.

Fourth, and finally, academicinstitutions should draw uponeach other to share mentoringand pedagogic resources. At thesame time they need to be cogni-zant of the fact that entreprene-urship is a substantially localactivity and that each academicinstitution should develop astrategy that is relevant to itssocial and economic geography.

As we settle down to imple-ment the new startup vision itwould be useful to extend thediscourse beyond current focusof just information and mobiletech and online commerce.

(The author is a professor atIIM Bangalore and is the Chair-person of NS Raghavan Centrefor Entrepreneurial Learning)

Re: Catching ’emWhen they areEager and Young

Increase the rate ofstartup activity

By Invite

Madhav.Chanchani@timesgroup.com

Bengaluru: Mukul Singhal and Rohit Jain, twoprincipals at SAIF Partners, are striking out toset up an early-stage fund, a rare breakout in In-dia from a leading venture capital firm.

The duo, who were leading seed investments atthe venture capital firm that has $2 billion (about.̀ 13,500 crore) under management, will adopt a si-milar strategy at their new fund — investing abo-ut $500,000 each in 15-20 startups in a year.

Singhal and Jain are expected to leave SAIF bythe end of this month. They are currently trans-itioning their board seats at SAIF to other execu-tives at the firm, in an amicable exit.

Their decision to start their own fund underli-nes the increasing depth of India’s investmentmarket, an early signal that more experienced aswell as young venture capitalists could be see-king to establish their own funds.

Singhal said the idea was to set up a micro-ven-ture capital fund, the size and name of which hasnot been decided yet. The duo have got soft fun-ding commitments of about $5 million from afew entrepreneurs, and will start formally rai-sing money from institutions next month. Mi-cro-venture capital funds typically are in the sizeof $20-50 million, and help companies grow theirideas into viable business models.

In the past decade, venture capital firms were

stage and sector-agnostic. But as the technologyand internet market became big, they sharpenedtheir market focus over the past 3-4 years. “Nowthere is a need for further specialisation. The ne-ed and capability required at pre-series A stage(before the first major institutional funding) aredifferent from a larger fund,” said Singhal. SAIFPartners has also seen some early success interms of exits in its seed portfolio.

Singhal and Jain worked on over a dozen seed-stage deals in the last two years, and majority ofthese startups have been able to raise follow-onfunding. Biggest among these was UrbanClap,which after raising seed capital from SAIF andAccel in early 2015 is now valued at over $100 mil-lion. Repeating this track record is what bothSinghal and Jain will be betting on. Their newfirm will compete with other micro-venture ca-pital firms like Blume Ventures, Kae Capital,Orios Venture Partners and India Quotient.

MUKUL SINGHALPrincipal, SAIF Partners

Now there is a need for further spe-cialisation. The need and capabilityrequired at pre-series A stage aredifferent from a larger fund

Two Men & a Venture

The duo plan to adopt similar strategy as SAIF’s at their new fund

They’re expected to leave SAIF by the end of this month

Idea is to set up a micro-venture capital fund

Size and name of the co is not decided yet

Mukul Singhal (left) and Rohit Jain were leading seed investments at SAIF Partners

$500,000Amount each of them are investing

15-20 Startups they plan to invest in, in a year

$5 million Soft funding commitments they have now

Two Angels Fly Out of the SAIF Nest

G SABARINATHAN

BEHIND THE TIMES

Indian VCs are like VCs inthe US 10-20 years ago.They’re not used to buil-ding peer relationships

larger market. The problem is, syndica-

te is a very small market, venture is not

a big industry. For us, just serving the

market in the US and the UK, we can

barely make the math work on an

interesting business. My sense is that

our clones and copycats are very

manual. If they make it work, then

congratulations to them!

Is startup-VC dynamic changing?

When the venture industry started, it

was enough to just have money and

then it was enough to sort of have this

big fuzzy brand. But now startups are

getting a lot smarter. We are seeing a lot

of cases where the startups are writing

the term sheet, dictating the terms,

selling common stock instead of prefer-

red stock, where they don’t give the

investor veto rights or board seat or

privileges, and they are really asking

the investor — why should I take your

money when there is other money

available. Of course this is only the

top-tier startups, but a big chunk of the

top tier accounts for a lot of the returns.

Look at listing non-tech startups?

Probably not. It is hard enough to do

tech startups. It is very specific. It is

hard to imagine our infra

being adapted to

non-tech startups.

For better or for

worse, we

probably will

just stick on to

just one thing.

Our syndicate

leads may need to

non-tech. Right

now, vast majori-

ty will

always be

tech.

AngelList’s Ravikant says you need to have a point of view, a brand, to really add value to the co

ROLE OF ACADEMIC

Time has come to re-examine role of aca-demic institutions inspawning or buildingsuccessful startups

LONDON A new

advisor to Putin

focusing on the

internet runs a piracy web-

site. Herman Klimenko is

the owner of Torrnadu.ru,

that lists copyrighted mate-

rial. He owns Mediametric,

which is connected to ECO

PC Complex Solutions -

which owns Torrnado. — BI

Putin’s NewAdvisor Ownsa Piracy Site!

Globe Trotter A roundup of top tech news

from the startup world

NEW YORK Former

Twitter CEO Dick Costo-

lo is talking about

launching a new startup. In an

announcement on Twitter, Costolo

said he and cofounder Bryan Oki

are “building a software platform

that reimagines the path to per-

sonal fitness”. Oki is the founder of

Fitify, a company offering world-

class fitness services to compa-

nies' employees. — BI

Ex-Twitter CEO to Launch a Startup

NEW YORK Microsoft

said that it’s acquired

MinecraftEdu, a version

of the game “Minecraft” that’s spe-

cially built for teachers and stu-

dents. With this, MS plans to bring

“Minecraft” to more classrooms as

early as Sept, in time for the next

school season. MinecraftEdu is

built “by teachers for teachers” — it

offers many additions to the origi-

nal game “that make it more useful

and appropriate in a school set-

ting,” the company says. — BI

MS Plans Minecraft for Classrooms

THE BRIDGE TO SUCCESS

The Aqueduct and Lock by Paul Cezanne

For comprehensive and insightful stories about all things startups and technology, log on to www.ettech.com

Quick Byte ANIRBAN BORA

Internesia is a combina-tion of the words inter-net and amnesia. It de-fines a condition which suggests that a person does not remember where he/she found a particular piece of infor-mation on the internet.

Internesia

Jargon Buster

84 %Expected rise in drone sales for commercial use this year, according to Juniper Research

A commercial air-craft measures 450,000 parameters & generates 1 TB of data PER flight! Air-bus at #DLD16 via Felix Salmon

Founder of Technology Incubator Idealab on big data

BILL GROSS @Bill_Gross

Tweet OF THE DAY

Microsoft is bringing Word Flow, the keyboard that comes on Windows devices, to the iPhone, according to a report from The Verge. Word Flow won a Guinness World Record in 2014 for being the fastest soft-ware keyboard to type on in the world, breaking the record for writing a text message by half a second, with a time of 18.43 seconds. (The record was then broken by Fleksy.) — BI

Meet World’s Fastest Soft Keyboard !

Motorola has begun teasing the launch of Moto X Force on social media. The smart-phones comes with a 5.4-inch AMOLED “Shat-terShiled” that is sup-posed to survive any fall or drops. The device runs on Android Lolli-pop 5.1 and has a 21-mp rear camera.

Shatterproof Moto Coming to India Soon

Tech Buzz

54%

49%

39%

36%

34%

23%

23%

22%

22%

21%

High-quality products

Rewards (e.g. discounts, free gifts, etc)

When I’ve reached great

customer service

Relevant to my own interests

Having insider knowledge

Access to exclusive content

Being involved

Source: Global Web Index; Base: Twitter Activer Users aged 16-64

1-on-1 ties witha brand

When something is relevant to friends

Love for the brand

Turning Twitter Users into Brand ChampsTOP-10 REASONS FOR BRAND ADVOCACY AMONG TWITTER USERS

% who says the following would motivate them to promote a brand online

Q&AEXCLUSIVE

NAVAL RAVIKANTFOUNDER, ANGELLIST

Rebranding

The Worst You Can Do is to Give Your Game Away to InvestorsUber’s Kalanick says 2 is company when starting up, if you do it alone it’s going to be incredibly lonely