STARTUP SPECIAL A GUIDING HAND
First-time entrepreneurs are increasingly borrowing knowledge and
experience from advisers to accelerate growth and grab a prominent spot for
their ventures.
Ritesh Agarwal was 19 when he launched an online mar ketplace for
budget hotels branded as OyoRooms.
From his vantage point, Agarwal was certain that only
professionals from the hospitality industry could help him make a success of
his venture.
So he bounced the idea off Vinod Sood, the company's adviser. “I
initially thought industry people would be smarter, execute better, but he
(Sood) said it doesn't mean anything. If you get smart talented, people even
if not from the industry it's good as their learning curve will be sharp and
without any burden,“ says Agarwal, now 21.
Struck by that perspective offered by Sood, the managing director
and founding member of US-based Hughes Systique which provides software R&D
services, Agarwal went on to hire senior managers from sectors as diverse as
consulting and technology.
The Oyo Rooms founder is one of several entrepreneurs who are
beginning to see value in advisery boards peopled with experts who have not
just experience but also knowledge of diverse sectors. In June, Flipkart
announced the formation of a four-member advisery board to help manage and
direct growth at the sevenyear-old company's ecommerce platform.It roped in
Unilever executive Sudhir Sitapati as the first member of this board, followed
by its Chief Technology Officer Amod Malviya, who was moved to an advisery role
in the company.
These advisers bring diverse, radical, on-the-ground thinking and
act as thinktanks or trouble-shooters for entrepreneurs. Typically, advisers or
advisery boards comprise people with diverse backgrounds and no commercial
interest or financial stakes in the company they advise.
“Advisery board members that have no vested interest in the
company can speak their minds,“ said Ganesh Rengaswamy, managing director at
Accion's Frontier, mentor to startups and former venture adviser at Unitus Seed
Fund. “Founders can also let their guard down and confide in them with regard
to challenges and finding the right solution.“
This indeed was the first qualifier for Vishal Bali, cofounder and
chairman of Medwell Ventures, when the specialized home health care services
company formed its six-member advisery board at inception in March last year.
“Only then you become rational and practical and be net-neutral with advice all
the time,“ said Bali.
Despite having a high-profile board of directors from the medical
and healthcare fraternity as well as founders of the same pedigree, Bali and
team were sure they needed an outside-in perspective while creating the
business.
“Typically with enterprises that are created by individuals who've
spent a long time in the industry, you get narrowed down in thinking,“ said
Bali.
He shared an instance of what he called “new blue sky thinking“ by
advisers.When the founders were still debating whether Medwell should be a specialized
or a generic company, K Jayshankar, who is on the startup's advisery board,
correlated the evolution of the pharmaceutical and nutraceutical world when
specialty generics came up, suggesting that the industry was headed towards
specialization.
“Some of us wanted to look at the bigger piece, but he said stay
focused, though it may take more time, and helped crystallize our thought
process,“ said Bali.
Jayshankar is the managing director of Empowered Learning Systems,
which focuses on consulting, coaching, training and organisation processes.
Similarly, Sahil Dharia, managing director of Soothe Healthcare,
the makers of affordable sanitary napkin brand Paree, was of the assumption
that he needed to spend heavily on advertising to amplify the company's
presence. A few sessions in front of a whiteboard with the company's adviser
Anil Gupta challenged his thinking, and Paree increased its retail reach by
another 1,000 stores quickly without much additional spending.
“It's an essential consumer product.Why do you need to always have
adver tisements to be present?“ Dharia recalls Gupta questioning him and
offering suggestions on an asset-light deployment model to improve sales
velocity.Today, Paree is sold in 3,000 stores in Maharashtra and Kerala, and the
threeyear-old company is preparing to enter another region shortly.
“That's the beauty of having a guy who thinks laterally,“ said
Dharia, who in June brought Gupta, former president and head of Reliance
Infrastructure, on board as an adviser to tap his expertise and network to
achieve his larger goal of being present in four million stores and becoming a
$100-million company in five years. “We are a David versus Goliath story two
multinational corporations dominate the space and we need big guns to get this
scale, fast and quickly,“ said Dharia, aiming to capture a significant share of
India's Rs 4,000-crore sanitary napkin market.
Advisers, therefore, by virtue of their engagement are counsellors
or life coaches as well, conditioning entrepreneurs with long-term thinking
while simultaneously working them back to the present-day situations and
challenges.
“In a startup everyone gets high on a startup drink. If you have
one or two ideas you're in love with, you forget that there could be other
options,“ said Jayshankar.
Synergising a company's board with an advisery board is crucial.
For this, experts say, the maturity of individuals sitting on both sides of the
table is important in order to run two parallel tracks to optimise intellectual
capabilities.
It is also crucial to evolve the advisery board as the company
grows. “At preinflection and post-inflection points, you need different people
as advisers,“ said Rengaswamy.
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Shonali Advani
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ET24JUL15
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