Archive for the ‘Venture Capital’ Category

Instagram + Pinterest = Pinstagram

Here is something very interesting that I came across last night. When two friends decided to mash Piterest and Instagram (which was recently acquired by Facebook in a hard-to-believe $1 billion deal) into a hybrid, it just started as a joke. A weekend later Pinstagram was born.

The two friends- Pek Pongpaet and Brandon Leonardo were discussing how entrepreneurs pitch their ideas to VCs- say our website is X for Y for example our website is ‘Facebook for part time bloggers’. They stumbled upon the idea to create ‘Pinterest for Instagram’.

A couple of days of coding led the idea convert into Pinstagram- Pinterest for Instagram which shows your Instagram photographs in the Pinterest layout. It seems people like the new layout of Pinstagram.

Why do people like it? The biggest reason for people liking the new layout is that it suites the web page spread. Pinstagram fills an important void because Instagram never focused on the desktop experience. That is the precise USP which the site markets itself- The best way to view Instagram on web.

I searched on Google, there are many other platforms available which can be used to display the Instagram pics on web but Pinstagram seems the best of the lot.

I am not sure if they are infringing on some copyrights of Pinterest or Instagram, but the ‘cocktail of the best’ two start ups in recent years has definitely created something very interesting.

For more details and first hand experience visit the site here.

Pause and Rethink- Pivot your startup.

Groupon, the most popular deals site, was launched in November 2008. Starting with a $1 million seed funding, it quickly reached a billion dollar valuation. But, the company did not start as we see it today. It started as a campaign website called “The Point” ( The Point lets one start a campaign asking people to give money or do something together, but only once a “tipping point” is achieved. Soon, the founders realized that they were not going anywhere with this venture. The idea itself was very vague and did not have a specific market segment or set of customers in mind. But, the founder- Andrew Mason realized, that one of the features of The Point was that it gave ‘bargaining power’ to the group of people. This clicked the idea for his next venture- The Groupon. The site started by providing coupons for deals on different products and services. To get the vendors agree to the discounts, the Mason team used the ‘tipping point’ feature of The Point. The founders slowed down on The Point and launched Groupon- and in the process scripting the billion dollar success story.

This is not a one off instance where the original idea did not work as it was expected to. While launching a venture, majority of the times the things do not go as expected. Even if the entrepreneur has a detailed business plan, there are still many factors that he would have missed. There are chances that by the time the venture is launched, the economic conditions change, there are better and cheaper technologies in the market place or the customer demands have changed drastically. With all these factors working against it, the going might get tough for the venture. When the going gets tough, work on course correction or what is called “Pivoting” in the world of start-ups.

Course correction or pivoting is very important not only for the success of the venture but in many cases for the survival as well. Pivoting might in the form of a small change in the price of the product to a change in the features of the product or even to the extent of change the product altogether. In the extreme case, the founders might want to cut the losses, shut shop and go back to the drawing board again and redraw the plans.

If the venture is not working as you expected it to, you might want to pause and have a re-look. Most start-ups have limited amount of money for operations. There are four major ways in which one can try to pivot the startup.

Zoom-In Pivot: Many a times what was earlier considered a single feature of the product can actually become a whole new product in itself. Thus, what was actually a small part of the whole offering takes the center stage and changes the whole dynamics around the offering. This was the case with Flickr. The photo sharing application was a small feature of the massive multi player online game, Game Neverending, which the team was developing. The photo sharing feature appealed so much that it was developed into a whole new offering- Flickr. The online game was dropped mid way.

Zoom-Out Pivot: Sometimes the product does not sell because there are no supporting services or products around the offering. This situation calls for zooming out and providing the whole package with some other products or services complementing the original offering. Thus what was originally the whole product might become a small part of the bigger offering.

Customer Focus Pivot: The product offered by the venture might be attracting customers but the customer segment might be different from the original vision of the venture. This means, the offering is solving a real problem but the customer segment is different. Thus the offering has to be tweaked/ optimized for the new segment to shift the focus to the new customer segment.

At other times, the customer segment might remain the same, but the needs of the customers change. The product then needs to be changed according to the changed needs of the customers.

Technology Driven Pivot: Sometimes the startup discovers a new way to achieve the same solution by using a completely different technology. This type of pivot is of advantage when the new technology can provide price and/or performance advantage over the existing process.

It is not mandatory for a startup to pivot to become successful. But, if one is facing challenges in the venture, he might think of stopping, pivoting and starting again. Pivoting should not be mistaken for failure of the startup, its reinventing the venture by part or all over again. Even the startups that do not need to pivot must always keep scrutinizing their operations to check what is working and what is not and why something is working while the other is not. Pivoting works best when done in the early stages of the startup and done fast. The older the business gets the harder and costlier it is to pivot. The whole idea is to enhance the effects of what is working and minimize the effects of what is not. The accelerator aggregator

January 15, 2012 Leave a comment

The Unified Seed Accelerator Application Form, or just the  is a platform for startups to apply to various accelerator programs and track the status of the application at a single place. The platform is funded by the Kauffman Foundation and powered by TechStars.

The startups can fill a single unified form to apply to various accelerator programs. If there are some custom questions to be answered for  a particular program, they can be answered separately.

Various startup accelerator programs across geographies and sectors have signed up for the platform. Accelerators can register for the application platform by mailing them at

MuSigma- The wonder kid of Analytics, raises $108 million.

December 30, 2011 Leave a comment

In one of the biggest Private Equity deals for a startup in India, Mu Sigma closed a $108 million investment round lead by General Atlantic.  Earlier in April 2011, Sequoia Capital had invested $25 million, now has $50 million invested in Mu Sigma.

The pattern in which General Atlantic invests in companies (generally it picks up 15-20%), the investment puts the total valuation of the Mu Sigma at about $500 million.

Mu Sigma, started by Dhiraj Rajaram in the year 2004, is in the business of Analytics and Decision Support. The company is touted as the wonder kid of the emerging market of business analytics and research and helps organizations solve high-impact business problems/decisions.  It provides business intelligence, econometric tools and predictive modelling services to help clients such as Microsoft and Dell take major business decisions ranging from new product launches to decoding customer reaction.

Mu Sigma employs 1,500 in Bangalore, Chicago (where it is based) and a few other cities in the US.  The company has grown rapidly since its founding in 2004, in fact, its 2008-2010 revenue growth of 886 percent earned Mu Sigma a spot in the Inc. 500 list of America’s fastest-growing private companies.

The best part here is that Mu Sigma is already profitable and will use the capital to expand its operations and reach in the sunrise market of business analytics.

Company website:

Its raining investments for e-commerce start-ups!

December 26, 2011 1 comment

According to a recent report, there will be 237 million internet users in India by 2015. With the increased penetration of internet and increasingly busy lifestyles, companies are betting heavily on e-commerce. Recent years have seen scores of e-commerce portals mushroom in India. Not withstanding the expected hyper-competition in the e-commerce space, investors are still interested in funding such ventures. Here is the list of some recent investments done in the e-commerce space:

Pepperfry: Norwest Venture Partners have invested $5 million in yet-to-be-launched PepperFry. PepperFry is proposed to be a portal for pocket friendly deals on lifestyle products such as clothing, furniture & home decor, precious & fashion jewellery, lifestyle accessories and personal care. Mumbai based has secured a $5 million funding from Seedfund. Fetise is an e-commerce portal for men and deals in apparels, shoes and fashion accessories from leading international labels.

Freecultr: Sequoia Capital has invested $4Mn in apparel and accessories e-commerce startup FreeCultr. FreeCultr provides lifestyle apparel and accessories featuring casual T-shirts, polos, tunics, sweaters, cardigans, denims, pants and footwears. Deep Kalra (founder of MakeMyTrip) invested $5.5 million in, another online apparel retail portal. FashionAndYou raised $40Mn in it’s third round of funding led by Norwest Venture Partners and Intel Capital. In a related exercise,,’s sisteer concern and founded by Harish Bahl raised $17Mn Mayfield Fund and Norwest Venture Partners.

Valyoo Technologies: IDG Ventures has invested $4Mn in Valyoo Technologies Pvt Ltd, which runs e-commerce businesses for eyewear (, watches ( and bags ( The firm is looking at raising another $20Mn in it’s next round of funding by February or March next year. IDG Ventures has invested $3Mn in online fashion retailer – Pvt Ltd for a minority stake. Presently, Chennai based eShakti exports custom made desinger clothes to the US and is in the process of launching the firm’s Indian brand Zapelle. The company will add accessories including belts, bags and jewellery to it’s product line in the next six months.

Some of the recent recipients of investments have been online portals selling baby care products. Recently has secured investment from Helion Venture Parnters. also raised $2.5 million from Accel Partners and Tiger Global. raised $4 million from SAIF Partners this April.

*The data has been sourced from Deal Curry.

Start-Up Review: My Grahak

December 23, 2011 5 comments


Of late, there has been a slew of e-commerce sites in India. I came across this unique site- which allows one to shop for groceries online and get them delivered to the customer’s doorstep.

What is the core idea?

The core idea of this venture is to let the consumer shop from the comfort of his home for groceries and get it delivered at his doorstep. This will save the customer running from one shop to another to find all that he needs. The additional advantage is that the customer gets a minimum of 4% discount on the MRP of FMCG products.

What is the current progress?

MyGrahak started its operations in December 2010 in Delhi/NCR region and has firmly established its operations in the region. Currently the team processes about 5000 transactions per month and the number is growing at 30% month on month for the last few months. Currently the site has listed 10,000 SKUs and the list keeps increasing on the customer’s requests The customers can also talk/chat with the call and chat agents of MyGrahak. The site also provides offers and combos which help the customers save even more on their grocery purchases.

By this year end MyGrahak expects to clock a turnover of Rs 1 Cr.

Revenue model?

MyGrahak collaborates directly with the manufacturer and the whole seller for buying majority of its products. Thus, creating a margin buffer. The buffer is used to pass some discount to the customer and the rest flows to profit margins.

What are the future plans?

MyGrahak plans to expand to other metros in near future and cover Mumbai, Bangalore, and Chennai by 2015 and plans to raise 200 Cr by 2014 for the expansion.

My Take?

This is a novel idea in the cluttered space of e-commerce in India targeting a niche space. The major point in favor of MyGharak is that one can save time in purchasing monthly groceries sitting at home and also avail the discount. The customer also enjoys a lot of choice of products. But, the delivery happens in 48hours means that the customers will use MyGrahak for the monthly groceries and not ad-hoc purchases. This also works in favor of MyGrahak as they can optimize the delivery costs.

Over all, this is a wonderful idea and with the ever growing number of internet users has a huge potential of growth in India.


Killing the Wave- What entrepreneurs can learn from it?

November 23, 2011 Leave a comment

A couple of months back Google decided to start what was labelled ‘Spring Cleaning’ in the business circles. They killed several of the Google products which had been moving very sluggish.  Continuing the ‘clean-up’ Google has decided to kill a few more of their products.

One of the most important products to be killed is Google Wave. Remember about two years ago when the ‘Wave’ was launched? It was hailed as one of the best products in communication till date- the product that promised to dramatically change the way we communicate to each other on the internet. The Google Wave membership was through invitation and I still remember how people were scrambling to get one. Today, it is being buried.

I can imagine how meticulously the Google Wave team would have worked on the plan. How each of the components of the initiative would have been closely scrutinized by one of the best minds in the industry.  How multiple iterations would have taken place to incorporate the feedback to improve the product. All these efforts to create a product which the customers did not like!

I will not call it a failure. Infact, I would call the killing of Google Wave a right step. Sometimes the entrepreneur is so obsessed with his idea, he does not feel the requirement of any change. Even if the idea is not succeeding, the entrepreneur will keep doing the same old things and expect a different result.  The obsession with the idea combined with the guilt of abandoning ‘my baby’ keeps the entrepreneur running a loss making venture and  ultimately bleeding to death.

I do not say that one should abandon the project as soon as you start making losses. Give a tough fight, explore all the options. Who knows what might work? Take the example of Groupon. It started as “The Point”. But the ideas was so vague that it did not achieve much success. The founders had burnt all the money received in funding and were bleeding to death when they took the decision to pull the plug and ‘killed their own baby’. The founders realized that one of the important features of the ‘The Point’- The Tipping Point, worked very well and could be used to create another business idea that would in future become -Groupon.

There is nothing wrong in killing the initiative that you started. Sometimes its better to step back and live for another day’s fight than bleed to death. In the same breath, it is very important to learn lessons from the failure and move on.

Start-Up Review: HostelSearch

November 22, 2011 1 comment

A couple of days ago I came across an interesting start-up: HostelSearch.

The venture is some-what similar to the property rent/sale websites but only for hostels in different cities across India.

Core Idea:
HostelSearch is a hostel listing, finding, reviewing and booking service, which also provides information about paying guest accommodations, rooms, service apartment etc. It lists residential accommodations and gives details about these places.

Progress till now:
Starting in Bhopal, this venture has now spread out to 46 other cities in India. Having launched in July 2010, HostelSearch has a team of 15 people with a physical presence in seven cities in India and they are now planning to expand across India by hiring people on a full-time basis.

Revenue Model:
HostelSearch has a straight-forward revenue model wherein they earn from their normal listing, which starts from Rs 5000 per annum, premium listing and advertisements.


  • Ease of use and convenience to the customers searching for hostel accommodation.
  • Do not have any worthwhile competition till now. will be the biggest competitor.


  • Unlike in hotels, people tend to stay for longer periods in a hostel. The hostel might not want to list on the website because of no/low vacancy.
  • Most of the searches for hostels are done on It will be difficult to replace Sulekha.
  • If any one of the major names properties buy/sell/rent decides to enter the hostel search space, will be a big challenge to Hostel Search
  • Low entry barriers. It will be difficult for Hostel Search to create a niche.


Start-up Incubators and Accelerators in India

November 14, 2011 1 comment

I have a firm belief (which has been confirmed by startup genome project findings) that startups which have access to mentors have a better chance of success than those which do not have access to mentors.

There are a lot of startups coming from Asia in general and India in particular. But, the mentorship framework is not that robust here.  The starups generally find themselves at sea when faced with the need to have an experienced practitioner mentoring them.

I have tried to create a short list of Accelerators and Mentors in India which have start up mentoring programs in India.

Mentor and Incubator list:

1. IAN Incubator

2. Launchpad

3. Morpheus Startup accelerator program

4. Seedfund incubators

5. Start Up!

6. IncuCapital

7. iAccelerator

How to Balance Stake Dilution and Investment

September 19, 2011 Leave a comment

{This article originally appeared in Wall Street Journal’s online edition and can be accessed at: }

Let’s face it, raising money for a startup in its early stages is time consuming and challenging. The entrepreneur’s venture needs funding in order to survive and expand, but it is risky for investors to put money into a business that is only in its early stages. The whole process can get pretty frustrating.

Before searching for funding, entrepreneurs need to know, or at least have an idea, of how much money their venture needs. The entrepreneur may know the amount of money needed to keep the show running, but there might not be enough matrices–such as customer figures and sales forecasts–in the early stages to justify the figure. There is no single answer or fixed formula to calculate the required amount. To further complicate things, most entrepreneurs overvalue their ventures and hence feel that the investor is pressing for a hard bargain, or leaving them shortchanged.

Here are a couple of important factors that entrepreneurs should keep in mind when raising investment:

Quantifying the required investment: The funding that a startup receives comes in waves [or rounds or series], which are dependent on the milestones set up for moving the business from one stage to another. Milestones in the early stages could include designing and preparing a prototype, setting up a production and service location, having customers who have used the product and can vouch for it, and breaking even. The amount of investment should be enough to take the venture from one milestone to the next. Remember, investors become stakeholders, and they want to see how their money is being used.

To provide a clear picture to investors, calculate all the expenses and investments to be incurred during a specified period. Try to break up the costs into as granular level as possible—such as the amount of money required to set up a prototype, investment required to procure office space, the first manufacturing facility or a service center–so that it’s easier to defend your decisions with the investor. To be on the safe side, and to meet any eventuality, build a margin of safety, or a buffer amount, in the calculation. On a broad level, the investment required should be money needed to take the venture from one milestone to the next, plus the buffer amount.

For each of the line items in the break up, have a justification and the value that the cost will bring to the venture. The justification of these costs will help in proving the claim of the entrepreneur on the return on investment.

Stake dilution: Once the entrepreneur has an investment amount in mind and has identified the source of funding, the actual process for investment starts. But the money doesn’t come free. While the entrepreneur sees the value in the business, the investor also sees the risk attached to it. Investing in a startup is a big risk, so investors will look for a big reward as well. The investor will ask for a stake in the venture.

The next question for the entrepreneur is: How much stake should be diluted? Again there is no fixed formula for calculating this. The textbooks say the stake diluted should be in accordance with the valuation of the venture. The amount of money invested on the valuation gives the percentage stake to be diluted. But the reality might be different.

A key rule of investing in new ventures is: The one who holds the gold, makes the rules. If the venture is started by a serial entrepreneur with proven credentials in his earlier ventures, more money can be raised with smaller stake dilution. On the other hand, a venture capitalist who, along with the required investment, is able to bring in mentors and much needed access to contacts and customers, can demand a bigger stake for smaller investment.

A word of caution: Although entrepreneurs are desperate to have investment in the early stages, they should be very careful about the amount of money they raise. This is because the cost of investment in early stages is very high. One has to dilute a substantial chunk of stake in return for the investment. Even if the investor is willing to give out more money than required, don’t fall for it. My advice to the entrepreneurs is to take the money required only for moving from one stage to the next. If the next milestone is achieved, the cost of investment will be lower. Then you can raise bigger amounts for less stake dilution.