Product

A brick-by-brick path to a winning product — Founding lessons from Shekhar Kirani

Starting from scratch, the tech exec-turned-VC shares a tactical guide on how to think about founding, product, and funding

1. Why do we start up? What is the end goal?

To solve a pain point. A problem that you have spotted and can relate to, which no one has solved for, or at least solved well for.

“If market conditions and unit economics are good, you can win even if you’re an okay entrepreneur. If you are a great entrepreneur but in a niche market with enough fish in the pond, no matter how efficient you are, you will exhaust the market.”

He reminds founders that starting up is a long-haul journey. Typically, it means putting in one decade of work, says Shekhar. “By the time you hit 35, all your prime years will have gone towards solving this problem. So pick a problem that is worth spending 10 years solving.”

2. How do you cultivate the entrepreneur mindset?

Once an entrepreneur decides to start up, it is hard to continue working for somebody else. Shekhar’s advice is: Don’t try to start up part-time and make it a success.

“Because almost all fail even while doing it full time, so part time is impossible,” he quips. “Do the work, collect the data, meet people and talk, and once you have enough data, commit to it long term.”

Entrepreneurs who belong to families with very high regard for ownership-driven ventures benefit from already having that mindset. “If you come from traditional business families, there is the advantage of understanding unit economics — how do I buy, how do I sell, will I make money? If it does not pass the family sniff test or the dhanda test, you know it is not a good idea.”

“We are not trained to make decisions but are suddenly exposed to it as entrepreneurs. So you have to learn the art and science of that.”

Understand people. Without that, you can’t run a big team and earn big revenue. Extend that learnability to other subjects too.

Your learnability index has to be high, according to Shekhar, and that only happens from meeting up, having discussions, and — importantly — reading books. “All the entrepreneurs who are successful read a lot.”

3. How to prepare yourself for a life as an entrepreneur?

Clarity of thinking and focus will help with every action that is involved in entrepreneurship.

4. How do you know whether enough people are affected by your particular pain point?

Identify whether what you have is a push idea or a pull idea.

5. Is it possible to win with a push market idea?

Shekhar shares the example of Zenoti, a company he has backed for a long time. It makes cloud software for spas and salons. When the founders started out, they did not think that would be a very big market, they did not know if the idea was great but it was good enough. To evangelize, they started by doing demos.

6. How to take no for an answer?

This is a tough one. You were probably finishing at the top of your class, always performing better than your friends, and accustomed to getting praised for your work. You have a specific picture of yourself and that can make any rejection feel more brutal. But that is all a part and parcel of starting up. “You will hear a lot of ‘nos’ before you hear any ‘yesses’,” says Shekhar.

7. What makes a good co-founder?

Most founders tend to go with their roommate, batchmate, hostel mate, colleague — someone they know. But making a decision based on familiarity alone can backfire.

8. What sort of equity should you offer a co-founder?

This is a question of make-or-break significance. The way you structure ownership guides many considerations including how VCs view you. By default, people go with a 50–50 split. By the time they realize their mistake, it is too late. It is important to see who your co-founder is and what value they are bringing. “If I see that a company is diluted too much, I don’t invest. The company is dead on arrival if it is split between five co-founders,” Shekhar notes.

9. How to think about approaching investors?

Convincing an investor has everything to do with your own conviction. Typically you want conviction in your mind first, which you should be able to clearly articulate. “Your ability to convince me based on your data helps me convince those in my network,” Shekhar shares.

“If you have all these things — unit economics, right market conditions, good ideas, and a dedicated team — VCs will approach you before you approach them,” the investor concludes.

About the author

Avinash Raghava

Founding Volunteer & CEO, SaaSBoomi
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