 "Being the best in India is not adequate: Ross Fubini")
Ross Fubini joined venture fund Canaan Partners' Silicon Valley-based office around a year ago as venture partner, after a successful stint as an entrepreneur and angel investor. Currently, he serves as an advisor to Kapor Capital, Palantir Technology, Facebook Causes, and several other early-stage technology companies. On his first visit to India for a grounds-up view of the early-stage start-up ecosystem, he tells Sudipto Dey why it is not good enough for Indian start-ups to be the best in India. Edited excerpts:
One of the briefs given to you when you joined last year was to identify the global leaders among start-ups in the consumer, enterprise and healthcare information technology (IT) segments. What attributes do you look for in any start-up venture?
There are two fundamental pieces: First, the need for a truly huge market. Without that, it is so hard to build a big business. Second, a clever team.
Let me illustrate with an example. Earlier this year, I made an investment in Wibi Data, which is into developing big data applications for e-commerce companies. That is a huge market up for grabs. So, when the team makes a pitch to an e-tailer, it tells them how they can help them be like Amazon by making better use of customer data. That is clever articulation of what they can do for customers who aspire to be like Amazon. As an investor, my job is to make the teams successful for the long term-help them be the chief executive of a $10-million company, or a $100-million company, or a $1-billion company. So, you start off with a clever product, tap into a huge market and then, help them grow to what they can become.
A common belief among the investor community is eight out of 10 start-ups die. So, how do you point to the winners?
You bet on changes in the market. It is not a perfect system. The best companies have three parts to them: First, you make the statement - "This is going to happen". You identify the macro trends. For instance, one such obvious trend is the mobile would affect the way we work; it has a lot of attributes about the ability to capture data, change user experience, etc. The second part is about a company's approach, in terms of how well-positioned the team is to succeed. The third bit is 'execute like mad'.
What are the most striking differences in the start-up ecosystems in the Silicon Valley and in India?
To build a large venture-backed business, it is important to focus on the one thing the company is really good at. We want companies to grow fast and figure early if they are able to solve the problem or not. So, it is all about focus and fast execution.
But in newer entrepreneurial ecosystems, there are fewer examples of how to do it and that makes it harder. In Silicon Valley, successful start-ups focus on solving one problem to the best of their ability. When you step out of Silicon Valley into other start-up ecosystem, you find many companies are trying to solve a set of problems. As a result, these companies grow slower.
What is your key message to young Indian start-ups?
First, focus on a product (or solution) that solves a clear problem. Second, as this is a new market, Indian entrepreneurs need to learn faster from each other about how to go to the market. You need to pay a lot of attention to where people are reaching their users. For instance, earlier, IT products and solutions were first pitched and sold to IT teams in companies. But now, these are being marketed to business users.
The most successful Indian companies have to sell their products and solutions to markets in the US, the UK and India, all at the same time. They need to solve that one problem for the same person across the globe. Don't focus only on the Indian market.
From the point of view of a large fund out to create world-changing companies, eBay for India, or Amazon for India are not interesting companies, as a new product idea for the whole world. To make those companies, Indian entrepreneurs should have enough focus and decide what they are not going to do everyday. I don't find enough companies doing that. India has the opportunity to learn fast and create companies that make products that are globally applicable from day one. The weakness I see in firms outside Silicon Valley is, they do not pay enough attention to the whole landscape. Indian firms should not (aspire to) be the best Indian company, but the best in the world. Being the best in India is no longer adequate.
One of the briefs given to you when you joined last year was to identify the global leaders among start-ups in the consumer, enterprise and healthcare information technology (IT) segments. What attributes do you look for in any start-up venture?
There are two fundamental pieces: First, the need for a truly huge market. Without that, it is so hard to build a big business. Second, a clever team.
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A common belief among the investor community is eight out of 10 start-ups die. So, how do you point to the winners?
You bet on changes in the market. It is not a perfect system. The best companies have three parts to them: First, you make the statement - "This is going to happen". You identify the macro trends. For instance, one such obvious trend is the mobile would affect the way we work; it has a lot of attributes about the ability to capture data, change user experience, etc. The second part is about a company's approach, in terms of how well-positioned the team is to succeed. The third bit is 'execute like mad'.
What are the most striking differences in the start-up ecosystems in the Silicon Valley and in India?
To build a large venture-backed business, it is important to focus on the one thing the company is really good at. We want companies to grow fast and figure early if they are able to solve the problem or not. So, it is all about focus and fast execution.
But in newer entrepreneurial ecosystems, there are fewer examples of how to do it and that makes it harder. In Silicon Valley, successful start-ups focus on solving one problem to the best of their ability. When you step out of Silicon Valley into other start-up ecosystem, you find many companies are trying to solve a set of problems. As a result, these companies grow slower.
What is your key message to young Indian start-ups?
First, focus on a product (or solution) that solves a clear problem. Second, as this is a new market, Indian entrepreneurs need to learn faster from each other about how to go to the market. You need to pay a lot of attention to where people are reaching their users. For instance, earlier, IT products and solutions were first pitched and sold to IT teams in companies. But now, these are being marketed to business users.
The most successful Indian companies have to sell their products and solutions to markets in the US, the UK and India, all at the same time. They need to solve that one problem for the same person across the globe. Don't focus only on the Indian market.
From the point of view of a large fund out to create world-changing companies, eBay for India, or Amazon for India are not interesting companies, as a new product idea for the whole world. To make those companies, Indian entrepreneurs should have enough focus and decide what they are not going to do everyday. I don't find enough companies doing that. India has the opportunity to learn fast and create companies that make products that are globally applicable from day one. The weakness I see in firms outside Silicon Valley is, they do not pay enough attention to the whole landscape. Indian firms should not (aspire to) be the best Indian company, but the best in the world. Being the best in India is no longer adequate.