What I look for in a Startup - Vineeta & Rannvijay
"Unless we sign up for things we are unprepared for, there'll be no growth and no innovation."
We hosted the Techtonic Shift event where we had the pleasure of bringing together - Vineeta Singh (Founder & CEO of SUGAR Cosmetics, and one of the sharks in the popular show Shark Tank India) and Rannvijay Singha (an Indian actor, television personality, VJ, and a massive social influencer).
After the recent success of Shark Tank India, we decided to base the discussion around- “What do investors look for in a start-up?”
Rannvijay asked some pertinent questions about the Indian start-up scene and how young entrepreneurs should go about their business and- Boy! We got some insights.
Vineeta once rejected a 1 Cr job offer in investment banking to pursue her entrepreneurial dreams. She’s now the Co-founder of SUGAR Cosmetics, a beauty and wellness brand with a current market valuation of INR 750 Cr. And we thought there was no one better to educate youngsters on how to build a successful startup.
So, without further ado, let’s get started with excerpts from the highly insightful interaction-
Why did you skip the 1 Cr job offer post MBA?
It was a 1 Cr job offer in investment banking which was the best paying job in B-Schools at the time.
However, I always knew that I wanted to be an entrepreneur and that was the reason I went to IIM Ahmedabad as it had the best course in entrepreneurship at the time.
During college, I along with 3 of my batchmates decided to start a business together.
Being 23 at the time, I thought that was the best phase to start my entrepreneurial journey. I had been pursuing a typical textbook career till then and I wanted to take big risks. I didn't want to miss this opportunity and live a life of regret later on. That's why we left our offers and started a business.
What learnings did you acquire from your professional experience before starting SUGAR?
The most important learning I got was that- "Reputation matters in the market".
If you keep your integrity intact, even though you may end up failing a lot of times but eventually you'll end up at the right place, you’ll find success.
There were many situations where I had a choice- to do either the right thing or the profitable thing, and I have always chosen the right thing.
Those who care about reputation, commitment, and their word always go the longer distance in their careers.
Besides, I also learned how people with different skills can come together and build things of value as a team.
What is the one gospel for every start-up?
The Why- Every start-up founder should have a clear conviction on why they want to build it. Every entrepreneur has their own reason, their own vision, purpose, and problem statement that they’re trying to solve.
There will be dark days and tough times in every business out there. One needs to have that reason, that drive to get out of bed and start with a smile in front of the team. Nothing is going to take that ‘why’ away from them, whether it’s a pandemic or any other barrier.
What are the challenges that come along with raising money? What path should today’s start-up founders follow?
Right, this is one thing I wanted to shed light upon. Today's entrepreneurs run after investments thinking that would solve their problems, but the truth is far from reality.
There’s little or no ‘Peace of Mind’ after you raise money. One needs to remember that when you raise money, it is someone else’s money, and it’s been given to you to grow the business and give a sizeable return to the investor. Therefore you need to be really careful about how you spend the funds.
In my case, I raised money a little too soon due to which I have lesser equity in my own venture.
As a bootstrapped entrepreneur, you have that luxury of trying different things, reiterating to customers and going through that recursive loop that actually helps you shape the business model better. All of that goes away once you raise that first round.
That’s why my advice to young entrepreneurs would be - Don’t raise funding until you feel like there is a perfect product-market fit.
What should a perfect business pitch tell you?
- A business pitch should have a clear understanding of what the problem statement is and why are you the right person to solve the problem.
- It should be addressed to considerable market size (TAM- Total Addressable Market). Investors are not going to spend time listening to your pitch unless your idea has the potential to solve problems on a large scale. In my personal experience, I could love certain ideas or businesses but I wouldn’t invest in them if they’re catering to a smaller market size i.e. if they’re not scalable.
- Every business’ success depends on execution- If you already have proof of good execution or you’ve assembled a great team together, that assures the investors about your start-up’s future trajectory.
What do you see as a red flag while investing in a business?
I look at how the business is handling inter-party transactions, whether they’re complying with the tax laws and other govt regulations or not. For me, as I mentioned earlier, upholding business ethics and integrity is as crucial as the idea itself.
I’d rather be a part of a small business rather than partner with a business that is doing it by dirty means.
What is the conditional and societal change needed to have more women in the Indian workforce?
Before we start, let’s consider these alarming facts-
- Less than 2% of overall funding goes to women founders.
- Women only have a 20% participation in the Indian workforce.
Now, these are depressing numbers. Who should we blame?
The first step is for companies, organizations, and educational institutions to recognize this problem.
There should be changes at both the structural and the policy levels.
However, the biggest change is needed at home- While we are raising daughters to be more ambitious, the truth is even the most educated women have to deal with 6 times more chores on average than men.
If your better half is not supporting you, you wouldn't have the bandwidth to pursue your ambition.
At one point, it felt like remote work would be great for women, but a lot of them have told me that coming to the office helps them put in those undistracted hours that they can’t at home.
Case in point, if both husband and wife are on a work call and an emergency comes up, most people in the house would think 20 times before disturbing the husband, as household responsibilities fall on women by default in our society.
Also, most times it’s the women who have to relocate because of their husbands and not the other way around.
So, this ground mentality needs to change if we’re to advance towards becoming a progressive nation.
What are some important habits to become successful?
- Take more risks - I feel that as a country we are very risk-averse but that shouldn’t be the case. Unless we sign up for things we are unprepared for, there'll be no growth and no innovation. What's the worst that could happen? - we’ll fail. Youngsters need to understand that failure is a part of the process.
I love Prateek's story. I was running FAB BAG and he was running Grabhouse. It was easier for him to raise capital for Masai because of the efforts he’d put into Grabhouse. So, your efforts do yield results in one way or another.
- Show up - We worry too much about the uncontrollable. We feel that luck is a factor. But if we just keep showing up to different things regularly and repeating our efforts, we can find ourselves in the right place at the right time.
Did you ever think that being a part of Shark Tank could go wrong for SUGAR?
Honestly, I hesitated before making that decision. I spoke to a lot of friends and investors. You become vulnerable if you put yourself out there in front of a million eyeballs. The blunders you might make will be in the public light and it can hugely affect your brand image as well.
But my husband Kaushik (Co-founder, SUGAR Cosmetics) backed me to do Shark Tank and I’m thankful for the opportunity.
If I would have said no to the offer, probably I would be dealing with the biggest regret of my life.
In a session that lasted an hour, we gained a ton of valuable insights from Vineeta’s industry and start-up experience.
However, one thing that stood out was when Vineeta emphasized the importance of 'Showing Up'. A lot of times we feel we're not ready and we decide to skip things altogether. By doing that we miss the opportunity to learn and grow. And, miracles happen when we show up.
In the words of the famous research professor and author Brene` Brown~
“There is nothing more vulnerable than creativity. It's not about winning, it's not about losing, it's about showing up and being seen.”