As per a recent article,“About 60% of companies that reach pre-series A funding fail to make it to Series A, so the success rate is only 30%-40%.”

Infact if you check on Crunchbase, in India you’ll find 4300+ startups at Pre-seed or Seed-stage, but only 600+ out of them have managed to reach Series-A, which bring the success rate to even lower at just 15%.

Apart from this, even in the entire Indian startup ecosystem, there are so many Product Managers, Ex-founders, and many more, who either have an idea around a Problem-statement, but don’t know how to proceed or there are students in college, who are amazed by the startup ecosystem, and want to take their early step, but afraid on how to take the next step.

In order to solve this we have with us our guest of this episode, Rajiv Srivatsa & Nitin Sharma, Antler India.

Antler unlike most VC firms bets on the startup ideas at Pre-seed stage with their Antler India Residency or in some cases even earlier with college students via Antler India Fellowship.

During the episode, catch Rajiv & Nitin sharing their First Principles approach and what infrastructure they are building at Antler India to make the founders succeed considering the time constraints at Pre-seed stage and much more.

 

Notes –

03:50 – Intro

04:44 – Why did they choose to build Antler India?

09:35 – How did Antler happen?

12:02 – Why kind of institutional mindset do they bring in?

16:18 – How do they balance the equation of a Founder’s optimism & a VC’s pessimism between them?

18:22 – Background around Antler’s India Portfolio over the last 18+ months

22:08 – Zoho Sponsored – Prashant Ganti on Where do founders struggle with Payroll and how can they fix it?

23:47 – What’s their approach and what’s the general cheque size?

29:48 – Learnings from the Ups & Downs in Urban Ladder Journey

33:28 – Focusing on building around core foundational use-cases during times of crisis

38:18 – Keeping founders from falling in love with the product and not the actual problem-story

42:12 – Examples of building PeakPerformer & Bookee with Antler

46:47 – How & when do founders get distracted after funding?

50:08 – When do founders have the best chances of succeeding at Seed-stage?

 

Read the full transcript here:

Rajiv 0:00

I think three, four things that were very clear for me from the Urban Ladder journey for me personally, one is the importance of customer satisfaction and NPS, There is nothing to replace, I think throughout Urban Ladder, the way the brand was built and the way the positivity and the word of mouth, I think the whole NPS as a metric, which is important for anything, which is customer, I think, was something that’s phenomenal. Second is, I think a lot of the technological innovation that happened both on online products as well as the way we integrated data back from even online to the retail stores launched at Urban ladder. One of the things is we call it omni channel retail, but a lot of people use that. But omni channel retail, on the positive side of using data from online to offline and making that whole story was phenomenal.

 

Third is just an integrated experience, Because customer service, to even get a very high NPS, is a lot about everything from product to supply chain to availability to a lot of different things that have to go right. And the extent of data required is humongous. On the flip side, of course, me and Ashish we’ve gone through so many ups and downs in terms of layoffs, in terms of personal challenges, in terms of just the, like you said, you’re the poster boy on one day, and you’re doing a massive layoff the other day, the number of ups and downs just in the last three years, was so high that I think the emotional resilience as well as the personal resilience that as a founder you go through, take nothing for granted. Assume that people, you have to build careers, you’re gonna lose some people, I think that had a lot of just foundational 101 for me personally to also share some of those learnings with Antler, and some of the things that we do at Antler is to go far deeper into how do you define a customer satisfaction score? How do you define this initial culture of an organization? I will add it to speak to 1200 People like you said, and across a variety of streams, everything from retail folks, to shop floor folks, to design folks to marketing folks.

 

So how do you define a culture for an organization? How do you set the vision and values? How, as a founder, we run this thing called Alliance in Antler, which is a network of founders from our own network, Nithin’s network, with first principles as well as Antler founders. And there we don’t even participate. It’s the founders helping each other. Because of mental health issues, all the ups and downs, today you’re the king and tomorrow you’re just completely out with nothing. It’s just a reality. And so I think we share a lot of that in terms of founders that are coming in. And not just that, we’ve been very lucky that the entire team at Antler, it’s a very strong team of 16+4, 20 people. A lot of them have been founders who have gone through journeys, like mine. Who’ve gone through the ups and downs of being a founder, having raised venture capital, having to shut down their startups, having to move out of their startups, co-founder problems.

 

So we’ve been able to share a lot of those personalized learnings as templates to founders and founders appreciate that a lot. We’re not just theoretically saying stuff. We’re not just secondary research saying stuff. We are actually saying stuff that we have gone through, and a lot of those conduct the assessment stage.

 

Nansi 3:18

Hi, everyone. Before we begin, I would like to share that this podcast is brought to you by Prime Venture Partners. An early stage VC fund led by Amit Somani, Shripati Acharya and Sanjay Swami. Prime is often the first institutional investor in category defining tech startups in FinTech, SAS, healthcare and education, such as Mygate, Quizizz, PlanetSpark, Bolt and Glip. To know more about Prime, visit https://primevp.in/

 

Siddhartha 3:50

This is Sidhartha Welcome to 100x Entrepreneur Podcast. Today I have with me founders of a pre seed fund who are building the pre seed ecosystem in India. Welcome Rajiv Srivatsa and Nitin Sharma. Rajiv previously served as co-founder and chief product and technology officer for Urban Ladder. He also built a team of 1000+ employees and raised 100 million from top global VCs, including Sequoia and Ratan Tata. Nitin is a Series A early stage investor having invested in 60 Plus startups in multiple geographies. Previously, Nitin was a founding team principal at Lightbox ventures one of India’s leading consumer focused VCs, where he helped build the first two funds since the very inception. Also NItin was previously part of New Enterprise associates, one of the best mobile funds. Welcome, Rajiv and Nitin.

 

Rajiv 4:41

Thanks siddhartha. Thanks for having us.

 

Siddhartha 4:44

So, I’ll just set the context for our listeners. This is a podcast which is going to dive into first time founders before they’ve built an idea and in such time when people are usually shying away from investing in a startup at a very early stage without any proven traction, you guys are going in with first time founders at pre seed, means that there is no proof of concept yet established. There are founders with a vision, and there is intention to build a long term institution. So my first question to you both is, and Rajiv if you want to go at first, why did you choose to build Antler India, with your background?

 

Rajiv 5:32

I think both Nitin and I have a massive founder mindset at a level because it’s, I would say a lot easier, theoretically, at least to invest after you get so much more data. Of course, you invest far more pools of capital. But for Nitin and me, I think that joy of creation, that joy of working with super ambitious people who are creating stuff, and at the end of the day, Antler the global institutions mission and why Antler started four, five years back, was to actually help create a variety of companies with very smart, ambitious people, and to really ignite them from the time and they were not even yet a founder. And if you see, even in the Urban Ladder journey, while Urban Ladder went through the 0 to 1, 1 to 10, 10 to 200. Personally, if you were to look at my own interest in my own areas, where I enjoyed the most, as well as contributed the most, I would say they were in the 0 to 1, 1 to 10 part of the journey.

 

And if you look at Nitin’s background too, he’s actually gone from a 10 to 100 to a 1 to 10 to a 0 to 1, and now what we call a minus one to zero, which is, I think, where there’s far more action, far more ambiguity, far more need for an institution like Antler to really help founders because the later you go, there’s just a lot more capital, a lot more VCs. And when we did this analysis, around two years back, it was very clear that in the last decade India had a lot of institutions in that 1 to 10 and beyond, and really the 0 to 1 and the -1 to 0. While there were a lot of individuals and angels. And today, of course, it’s a massive ecosystem, we just did not feel that there was institutional help that founders really deserve, is there. And for us, for our next 10 year, vision of what we wanted to build, we felt we had to build that institution, that platform, that real machinery, to help founders at scale, just to get started, and to create those institutions.

 

And so, I mean, what better way than building one unicorn, but building actually an institution that can power many unicorns and give impact and employment and what not across the sectors that you choose? So, and that was sort of the, slightly more elaborate version of how we got started with what we want you to do. And really doing this minus one to zero, just before someone becomes a founder, is where we feel the foundational impact of what this could be, is very, very strong. Nitin please add.

 

Nitin 7:55

I think you covered it well, I think both of us are more interested in the venture part of venture capital. And in our separate journeys, I felt that as we came to sort of help other startups, company creation is more interesting than deal flow. A lot of people can play that capital game, but pre-seed is a different mindset, and really requires you to be, get into the heads of the founders, and really understand the journey of becoming a founder. For me personally, as Rajiv alluded to it, from 10 to 100 phase in the USC, to Lightbox, which is more 1 to 10 too, I personally was also building my own portfolio and that was called First principles. And I was doing work around web three, etc, some of the first work in India and what I really felt was, one, that the joy of betting on someone when it’s a concept was what attracted me the most. And when I started spending time with Rajiv, that was very consistent. Two, as Rajiv said, the difference that an institutional platform can bring was missing.

 

And three, this whole notion of logging Indian founders into a global network, very early in their journey, was becoming more relevant. So, I think we’re doing this and we’ll talk more about these aspects, I’m sure. But I think we’re doing this, primarily out of that love for that first part of the founder journey. But hopefully as a side effect, it also has some very interesting alpha in terms of the investments that we make.

 

Siddhartha 9:34

And Nitin, now you first and then I’ll come to Rajiv on this. How did Antler happen? Is it that they had a few people in mind of which you and Rajiv were the top two, or it was just that they co build it with you.

 

Nitin 9:56

I hope we were the top two. So for those less familiar, Antler is probably the fastest growing early stage platform in the world. We are not the oldest or largest. But in five years, we are now in 20 countries. And it was started by Magnus Grimeland who was a classmate of Mark Zuckerberg and had seen sort of those kinds of journeys and built a large company called Zalora in Southeast Asia. And the group that started Antler really had this vision of a federated network of funds in different countries. So enable this kind of a platform where different countries can have slight differences. And each of these operations is built from the ground up. But then they’re connected with a powerful network that enables people, capital, brand and technology.

 

And so that was both of us separately, as we started to come to this conclusion as to what we wanted to do. We’re also spending time with Antler and realize that the values are very consistent. And this notion especially that global building in India, for the world fit very well with each Angel, each Syndicate, we obviously respect so many people in the ecosystem, we’ve worked with them and done deals together. And they all have Fantastic strengths but there is obviously a certain limitation in terms of what any one angel or smaller fund can do. And what we felt is that Antler was already building this platform approach to venture capital to take companies global, that we felt was perfectly a fit for our ethos as well.

 

So it just happened initially with Rajiv. I mean, both of us were talking but Rajiv started in 2020, I was running my portfolio. So there was a period of transition, we launched full operations in the beginning of last year. So we’ve been about 18 months into this journey, in a full fledged way.

 

Siddhartha 12:02

And when you say that pre seed is a mindset, what kind of institutional muscles that you bring in pre seed, and why does it need that? Why not just two founders, starting with each other reaching out to potential customers? And then taking off the funding journey?

 

Nitin 12:25

You wanna go first Rajiv?

 

Rajiv 12:29

I think for us the way we saw it, in terms of specifically for the next set of businesses, I think, one, today there’s a lot a lot more competition just overall, because the number of founders starting up is also way higher, and there is no reason for, but two, on the other side, there’s a lot of maturity and there’s a lot of access to global markets, specifically not just in areas like SaaS, but even in web three and climate in a variety of areas. So to offer a platform that you can use to go global, and not just go global, but also to get your first client, your first fight clients from a database or a pool of 400, 500 different companies, we felt was a very clear differentiator. Because a lot of companies in that minus zero to one never go to the next stage. Your mortality at that stage is so high because you’re not able to get the the product market fit, or you just don’t get your first client and or you undervalue your business because as a SaaS business or web three business, there is no reason in this current world, that you can’t start with the first global client and immediately boost your confidence as well as your value immediately shoots up.

 

A platform approach to that is far more meaningful, pragmatic. And that’s something that a platform like Antler and very few platforms, at least in this country offered a founder. So for us, instead of just being two individuals. And there’s nothing wrong, between Rajiv and Nitin as a fund could have also started given our experience and our network. But really, for us to sort of really partner with and clear on this was a very clear differentiator because one, we love talking to these people across the globe, and the intelligence quotient as well as the operational quotient of this network was so strong, that we felt a clear advantage for founders in India to sort of leapfrog to the next level. So the platform approach really helps.

 

Second, where a platform approach really helps is the, this is also about scale. This is also about not just one on one helping and Nitin had that experience, when he was building First principles that if you’re a solo capitalist, if you’re not an institution, you have a cap at around 30-40-50 companies that you can really materially impact, Of course, nothing is right or wrong about having a bigger portfolio which today some of the, others have, but that becomes a bottleneck if you as a GP or you as a partner become the bottleneck if you don’t have an institutional approach.

 

So for Nitin and me, because we wanted to start up, we wanted to build an institution. It was not about just making decisions as individuals. So today we have a team of 20 people just in Antler India, including interns. And globally, there’s a team of 250 people, if everyone’s vision and mission is aligned towards helping founders, that kind of a support is unparalleled, in terms of if so many people are helping. So I think it goes back to our own ambitions of building an institution that lasts beyond us, it goes back to what the combination of the three could clearly provide as value. But most importantly, it just goes back to what today’s founders need, because there is a humongous amount of capital in this market today. There’s been so much liquidity, that capital, at least, left the last three, four months when the market has dropped, but there’s been a lot of capital.

 

And so capital is no longer the differentiator. You bring X amount of capital, someone else is going to bring 2X amount of capital. Really, the value that you as an institution or a platform can provide to founders is that help to get the first client towards a product market fit, or to help them maybe connect to the other investors, or to be able to do all of this in a way that things can scale up, and you build a community of other founders who are at a similar stage. And that’s the biggest reason why we felt institutionally what we had to build, to be able to help founders at the scale at which we wanted to do.

 

Siddhartha 16:18

And Nitin from both your personalities, at least from the previous data, you seem to be more of a VC who has operated on the growth stage, that means you are used to seeing more No than Yes. Whereas Rajiv has been a founder himself for 10 years, seems to be more optimistic. How do you balance this equation between the both of you?

 

Rajiv 16:41

If you become a founder long enough, you become more pessimistic at later stages, especially the ups and downs that you’ve gone through as a founder. So I am actually more the pessimist and Nitin is the optimist, I would say.

 

Nitin 16:53

I actually think that, so I started way back in technology, mergers and acquisitions in the US in San Francisco. And that’s sort of the actual sort of realistic, pessimistic side, my mentor at NEA, someone who’s a legendary investor, unfortunately, passed away, he had said it very early to me in the journey that a lot of people can think that they’re smart VCs, because it’s easy to say no, it’s very easy to find 500 things that can go wrong in a business. But truly great VCs are actually people who can see what can go right in a business. And the only thing that matters is, what does the world look like if something goes right. And is this a founder who will walk through walls to make that happen, and frankly, that’s all early stage venture capital is. And unfortunately, it’s become a lot more about capital. And so sometimes that venture part gets lost, which is what hopefully, we are trying to, live every day.

 

So I think I have operated at a growth stage, but the vast majority of my time in venture has actually been going earlier and earlier. And in fact, the companies or founders that I’ve been very lucky to work with the most successful examples have actually been betting on a pure concept. So that for me personally had already happened. And if you’re not optimistic in this business, you will get miserable. Because it’s a long game. The feedback cycles are very long. And it’s very, very, you’re very lucky. Anyone who does venture is in a very lucky place. So you might as well be optimistic.

 

Siddhartha 18:42

And can you share more data around what has happened in the last 18 months? The companies that you have bagged, who have raised their next set of rounds, and the programmes that you have at Antler right now?

 

Nitin 18:57

Sure, so we launched early last year. And I would say we’ve all actually been pleasantly surprised by how much volume and the sort of reach we have built. And I think the credit for that largely goes to the team we’ve built. And also, it’s a reflection of the opportunity in India, and especially last year, how many people jumped into entrepreneurship and we actually think that people jumping into entrepreneurship in the next year or two are going to be the real fantastic founders. So could not be a better time. We have become probably one of the largest funnels, we’ve crossed something like 20,000 founders or would be founders who have applied, we have run a few cohort based approaches.

 

So the main offering we have right now on that front is, so we think of ourselves as the institutional pre seed platform that wants to be your first believer. You can come in two flavors. You may be someone who is ready to be a founder or really almost there, but you don’t have a co-founder or a team. Or you are someone who’s already got a team and you are raring to go. In the first case, we have the Antler India residency, which is currently running. And we’ve been very, very humbled and blown away by how good this response has been by the kind of people that have joined it, we had about 2500 founders who applied and we did about 500 or so interviews and 73 of them have left whatever they were doing, and are building their startups with us. We will see how many startups get created and some subset of that we will find.

 

In that case, there is a standard package that we offer in terms of the funding amounts and valuations etc. So that is truly proprietary in the sense that we are helping people start companies, these companies may not exist, unless this programme helps them get started or find co founders. So that is a huge focus for us, about half of our portfolio will be composed of new companies that are started. That’s why they mentioned earlier wanting to be closer to the company creation business. We also have something called Antler India Fellowship, which is specifically targeted for college students. Now they are obviously even one step earlier in terms of experience, we got a tremendous reception to the first cohort where 2500 college students applied from 700 colleges in 375 cities, so much more broader than the typical IIT and its kind of student network. And we selected eight out of those 2500. And Rajiv can go into more detail on how we’re seeing their progress right now.

 

And then finally, on the other part of the funnel, where people already have a team, we are preceded by investors that don’t spray and pray. We will stick to a few areas where we have a prepared mind, either because of our prior experiences, and especially in areas where the global network of handlers can make a difference. Because we really want to stand for that proposition. And we make decisions fairly quickly in about two weeks or so. But we don’t do the kind of, one call and take my money if you went to IIT kind of investing, that’s not our cup of tea. We’ve done 20 about 20 investments that we have committed to so far in that funnel.

 

Siddhartha 22:32

Dear listeners. Before we dive further into the podcast, I would like to welcome Prashant Kunti, Head of Product Management at Zoho payroll and Zoho book. Prashant, what makes payroll different from its competitors.

 

Prashant 22:47

Thanks to that. So first off, payroll, from the ground up, has been designed so that it can address the payroll complexities, as well as larger enterprises. So once you have signed up, started using Zoho payroll, you’re never going to outgrow it. Secondly, it’s very easy for you to onboard your employees, your payroll department can easily get the hang of Zoho payroll, very easy, does not come with complexity, we have abstracted all the complexity, we take all the it’s everything, everything is handled under the hood. Thirdly, Zoho payroll plays very nicely to the Zoho ecosystem. So once you have signed up and started using Zoho payroll, and once you have expanded your Zoho footprint, you will see the benefits of integration and data movement, thereby improving decision making across your organization. And finally, Zoho payroll is not just a product, it’s going to be a platform as well.

 

Siddhartha 23:53

Thank you, Prashant. Dear listeners, you will find more about Zoho Payroll in the show notes. Now, let’s further continue with the podcast. And right now what’s the process? Like when you’re betting on the first time founders? What are you looking for in a founder’s DNA or an idea that excites you to fund them? And what is your typical check size? Rajiv?

 

Rajiv 24:19

I think, again, we take two different approaches. One is ,what Nitin was talking about, which is the residency and the fellowship, which is very early if you’re betting on a college founder, you look for, really, there’s very little signal they have never worked in the past. So you just look at what they have built and why they’re building what they’re building right now. which is a very specific founder, what you know, in the VC parlance is called founder market fit, and do they display the qualities of building the team and sort of compensating for the real life world experience? Things that we assess, we do help have certain interventions on getting them the right kind of co-founder and or the right kind of team based on what they usually miss, and because we have enough data on that.

 

So that’s what obviously a small set of founders that we go get from college, on the residency, because these are people who typically have a good chunk of them, maybe first time founders, there’s a bunch who have been failed founders who join back work, but a lot of them have some kind of startup experience and a good company experience. So there, what we look for on the business side of people is a very strong obsession about specific business problems, and or spaces and or strong ideas around a differential insight to solve a particular customer problem. That whole burning thing around solving something is very strong. On the tech side of things, these folks, usually some of them have a strong urge to solve a very deep tech problem. But in many cases, they are a bit more flexible, and they align with founders that they really like. so they aligned with the business founders that they are able to sync with. So there and at the very broad level, we look for ambition, we look for obsession, we look for resilience, these are all horizontal characteristics we look for in any founder, that’s pitching to us.

 

So that’s what we look for in individuals. Because at this stage, there is no idea there is no product. These are people who we strongly believe are the combination of the two, individually, they’re very capable. And the combination of the two, when we assess them are very strong founders, we do go deeper into the market, the moment we know which product they are going after we do do our own due diligence on the market, the problem statement, sitting spending time with a customer and potential customers, whether that’s in customers, or b2b customers. In the other funnel, which is where the team is already formed, we stress a lot more on the differential product thinking to solve a very specific deep customer problem right there. Because we have more data on why these folks are doing it, we do again, sort of evaluate for founder market fit. But more importantly, we also go deeper into the market and product. In all of these cases, these founders would have typically displayed some very strong foundational build skills, in terms of having built something on the side, or have displayed a very strong ability to attract and work with people. Because they are all typically going to be building big teams that at least had obviously it has far more of this.

 

Nitin 27:25

No, I think, at the end of the day, what we look for is the same, they just start at different phases, some are ready to go, some are three months away from it, looking for a co-founder, some are maybe six months away from it. And so the vision is really when you’ve already started a company and have a product and have data, a lot of people you could talk to, and it becomes largely a capital game. And of course, there are big names established. We want to be the platform that people think of when they are beginning to think about that company in their head. So do the work of going very, very early and enable that transition to happen. The qualities are always the same Uncommon, irrational obsession. They have that kind of perseverance and grit that you either see in the residency or the trajectory that they show us while they’re going through a process or diligence, or past evidence of having overcome all kinds of odds to achieve some goals.

 

So it’s a lot of psychology. It’s really about really understanding what drives that founder deep down in their mind and their heart. And matching that with sort of our view of the biggest changes that are happening in the world. And we’d rather be too early than too late. Because we go one step earlier, we owe it to ourselves and to the founders that we take bolder bets in areas that may not even have been covered much in the press, for example. Or they may be things which are taking off in other markets. So one of the other things, which is interesting in terms of the network that we were talking about earlier, and how it helps founders is big, just like larger institutions like Tiger soft Bank and others large funds have benefited from looking at what has gone right in one market and what will work together.

 

We don’t apply any cookie cutter answers to that at the early stage. But there is a rich amount of learning, because we are seeing what our colleagues in 20 Other countries and geographies are doing, and what kind of startups are coming up there. And it also creates a really interesting network and community for these founders because you could start a mental health startup in India. And if you’re working as part of the handler network, you’re already connected to maybe 10 or 15 other mental health startups in the world and you can exchange Data learnings, benchmarks, all of that. So we are really trying to build that neural learning in a very networked way. But at the end of the day, it’s just about that, that founder and their passion really most of all.

 

Siddharrtha 30:14

Rajiv, can you share more examples from Urban Ladder journey, because at one point of time you were the poster boys in how India shops online for furniture? How were the ups and downs and how was that emotional resilience that you built from that journey? You’re applying it. Right now. In Antler,

 

Rajiv 30:34

I think three, four things that were very clear for me from the Urban Ladder journey for me personally, one is the importance of customer satisfaction and NPS, There is nothing to replace, I think throughout Urban Ladder, the way the brand was built and the way the positivity and the word of mouth, I think the whole NPS as a metric, which is important for anything, which is customer, I think, was something that’s phenomenal. Second is, I think a lot of the technological innovation that happened both on online products as well as the way we integrated data back from even online to the retail stores launched at Urban ladder. One of the things is we call it omni channel retail, but a lot of people use that. But omni channel retail, on the positive side of using data from online to offline and making that whole story was phenomenal.

 

Third is just an integrated experience, Because customer service, to even get a very high NPS, is a lot about everything from product to supply chain to availability to a lot of different things that have to go right. And the extent of data required is humongous. On the flip side, of course, me and Ashish we’ve gone through so many ups and downs in terms of layoffs, in terms of personal challenges, in terms of just the, like you said, you’re the poster boy on one day, and you’re doing a massive layoff the other day, the number of ups and downs just in the last three years, was so high that I think the emotional resilience as well as the personal resilience that as a founder you go through, take nothing for granted. Assume that people, you have to build careers, you’re gonna lose some people, I think that had a lot of just foundational 101 for me personally to also share some of those learnings with Antler, and some of the things that we do at Antler is to go far deeper into how do you define a customer satisfaction score? How do you define this initial culture of an organization? I will add it to speak to 1200 People like you said, and across a variety of streams, everything from retail folks, to shop floor folks, to design folks to marketing folks.

 

So how do you define a culture for an organization? How do you set the vision and values? How, as a founder, we run this thing called Alliance in Antler, which is a network of founders from our own network, Nithin’s network, with first principles as well as Antler founders. And there we don’t even participate. It’s the founders helping each other. Because of mental health issues, all the ups and downs, today you’re the king and tomorrow you’re just completely out with nothing. It’s just a reality. And so I think we share a lot of that in terms of founders that are coming in. And not just that, we’ve been very lucky that the entire team at Antler, it’s a very strong team of 16+4, 20 people. A lot of them have been founders who have gone through journeys, like mine. Who’ve gone through the ups and downs of being a founder, having raised venture capital, having to shut down their startups, having to move out of their startups, co-founder problems.

 

So we’ve been able to share a lot of those personalized learnings as templates to founders and founders appreciate that a lot. We’re not just theoretically saying stuff. We’re not just secondary research saying stuff. We are actually saying stuff that we have gone through, and a lot of those conduct the assessment stage.

 

Siddhartha 33:21

And currently we are in July 2022. It’s a tough time for founders out there. Because even not only from an investment point of view, but customers are shying away from trying something new. Customers are also cutting budgets. How do you ensure that, from both of your journeys, that founders are building real painkillers and not with Amazon, building something that customers would really, really want? Rajiv, you want to take a stab at it first?

 

Rajiv 34:53

I think we go back to the very foundations of why we do this, which is whether we take a far deeper view to specific themes. Nitin anchors this property called theory of next, then we go deep into mental health as an area or climate as an area. Go deep and understand what customers are saying, what founders are saying, have our own thesis which any good investor does but the additional thing that we do is we put out real problem statements where we feel the foundational customer impact what you said which is vitamin versus mineral or vitamin vs painkiller. I’ve seen two, three people say different things here. So I’m like, Okay, which one should I use as a proxy, but something foundationally important versus something which is playing at a peripheral level, we go back to why we are doing this, which is we want to create a foundational impact.

 

And if the customer need for something is not strong enough, and that could be SaaS, that could be web three, there could be mental health climate, if we don’t feel or believe, based on our data, that that’s a strong enough need. Founders can prove something wrong. Absolutely. It’s not like we know everything, Founders come and completely trash our views. We love such founders, founders come and paint a story and a picture, which we don’t even understand. But if we do not believe at that point in time, there is a very core foundational lead, we don’t have to invest. And that’s something that we go deep into, whether we take a very strong view to our residency founders, we have this very strong conversation with our college founders. And we do this extreme due diligence, even with our usual pre seed founders, that we do have a strong view on this aspect. Nitin please add.

 

Nitin 35:35

I think it just starts with and of course, time will tell how good of a job we’ve done on this front, but it starts with the kind of people you invest in. And that starts from what your engagement with them has been. So that’s the best evidence of how much founders are caring about this painkiller, or how obsessed they are, with these, with their user understanding, and that customer journey, we see proof of that, for example, in the time they spend with us. There is a big spectrum, there are people who will do the minimum, and there are others who will just go out of their way to really understand and talk to as many different types of customers and really, really keep honing in on the motivations. And it kind of goes back to their psychology.

 

So all of this is to say that I think we are trying very hard to invest in those kinds of founders. So that’s just natural to them, you cannot teach this behavior. This is something which some founders are born with. And since you asked about learnings from before, when I look back at companies like Kutumb, or Mudrex, OnJuno, Vyapar, Gramophone, these kinds of startups that I’ve invested in very, very early, I think one of the common things was their ability to cut the noise. And really go to the next level, in the amount of time and the amount of information they collected from the users. The Kutumb founders had probably spoken to 2000 customers before they even started to build. So I think that’s one extreme case, but I think that is how we look, both Rajiv and I, those are the kinds of people we are trying to work with.

 

And then on top of it, our job is to just keep helping them find that middle set that center again and again, because yes, they also do get affected by the environment and the media and other fundraisers and all of that. And our job is to keep reminding them, what does your customer data say eventually that will matter.

 

Siddhartha 37:42

And how do you avoid founders falling into love with their product and not the problem?

 

Rajiv 38:27

Again, it kind of wants to reiterate what we were just discussing. Typically I found that happens if you do not spend enough time with the founder before you invest, that is most likely a chance that you bought into the story. And then the founder gets addicted to that story. And so they’ll interpret information and data to continue that naret. But if you have invested in something because you spent the time and you understood that they really, really care about that customer, that obsession, then they will not fall in love with their product or solution or anything in their team or current brand, they’ll keep going back to making sure that they’re talking to the founder as they go from minus one to zero to zero to one, because one of the things that happens very commonly, I think, is when founders go from that nucleus of one or two people to 10 and 100, I’ve seen even with the best intentions, they stopped talking to users, because they rely on two or three other layers. And no one can kind of match that customer orientation that the founder starts with. So I think it’s just, we try hard to kind of invest in those kinds of founders and then just keep bringing them back to those first principles.

 

Nitin 39:08

The language that these founders speak is quite different. It’s not about they woke up and got this idea versus this is what customer data is and this is what customers are saying. You will get it from that language actually.

 

Siddhartha 39:

How frequently and for how long a period of time you used to speak with customers at Urban ladder.

 

Rajiv 40:08

I was just going to give that as an example till the last day. I think Ashish and I used to spend every month at least go on deliveries or on the retail floor, or on customer service calls, even more so before a sale period. But even on a regular month, for example, before I ever did the retail store, which was part of just initializing, we spent so much time with customers just understanding what they want from retail, and not just making it one more shot. So there was no way that Urban Ladder could have been built the way it was, from everything from product, we were there, we were always talking to customers, and there was no substitute for it.

 

Siddhartha 40:06

Nitin you were adding something to that point.

 

Nitin 40:08

So I was just saying that it also reflects, it all kind of goes back to why you’re doing what you’re doing. And one of the things that we do with all founders is this vision and values workshop that Rajiv starts with. And we have these concentric circles where the center of it is, the why. And so, just those things, which, maybe founders, at one point start with, but then their vision gets muddled with other information, Just going back to that, Northstar, whatever you want to call it, that compass, Why did you start this, and that really is, if you just keep going back to it, usually it has to do with some origin story that they have.

 

So, we’ve invested in a very, very interesting venture called ApniBus, which is actually, in stealth mode more or less. This is a founder who’s sitting in Jhunjhunu right now. And for the last several months, quietly building something, because he has understood that even with all of the money spent on the digital economy, even with better phones, that customers in small towns have data, etc. They’re still traveling, and spending a significant part of their life, traveling between small towns in a very suboptimal crappy experience in local buses. And while people in metros and other routes have gotten used to online experiences OTAs that there are three crore people who travel in these buses every day, and their experience has not changed. And he was a conductor. At one point, he actually ran a bus fleet at one point, he has grown up with this. So every part of his life, there is a story about why he’s doing it. And so I think that usually is a good place to start to just focus on why someone is doing what they’re doing.

 

Siddhartha 42:11

And Rajiv, would you like to share examples of peak performers in Buki? Like their success would allude to some why, Why were the founders doing it?

 

Rajiv 42:22

Yeah. I could start with a peak performer and Nitin could call a bukie. I think these were, again, both personal problems of founders. For example, for Aishwarya, when she was a manager at

PhonePe, she just did not get the kind of help that managers should get to own a massive target. Nothing about the particular company, just that the ecosystem doesn’t have the maturity, we had this challenge, even at Urban Ladder when we were grooming first time managers. So a lot of the startups at least in the last three, four or five years, suddenly have these managers owning massive leadership problem statements without the necessary help or coaching. So she decided that she would get a coach and a professional coach.

 

Now how the coach interacts, and how that has to be something that the leadership team needs to know, is something she desired to spend the next few years of her life and really bring a massive network of very highly qualified coaches, as well as automate and productize. A lot of those learnings make coaching far more consistent, and far more outcome oriented. And that’s the job of peak performer as a product centric performer, of course, got funded by surge in the last cohort, after four or five months of working with us, and really the idea for her is to sort of get this product to leadership across the country as well as globally to be able to make coaching almost like breathing for leaders. And that’s what it should be for high performance companies.

 

It came out of a very personal passion. It came out of a very personal lead, and it’s a complete whitespace in terms of, there aren’t while there are coach marketplaces or supply, demand matching products, no one has actually figured out as to how to make coaching and hinder and part of your work life to actually impact in a way that you take on bigger and bigger challenges and that’s what peak performance wanted to do. Nitin you want to cover bookee?

 

Nitin 44:18

Maybe I’ll give a couple of snippets to bookie one or two more quickly. Bookee vistar started as a finance person. But he has a very personal story about how being bullied at one point and becoming more conscious of his need to spend time in the gym really changed his life. And so he went through that journey of really understanding that fitness business because he loved spending time in the gyms and fitness centers. And then he combined it with his skill set to say, okay, you have this massive growth both in India but really abroad, especially this fitness, wellness, yoga, massive industry, that has not had a proper SaaS upgrade. And so what if you build a wonderful vertical SaaS business out of India? So it’s a very rational SaaS business, but the beginning of it was an irrational personal story.

 

We have Parul who started as Gladful. This is very interesting, she ran large marketing budgets for Cadbury and Mondelez. And her brother had health issues growing up, and they both understood that protein deficiency is such a huge problem, even in the richest neighborhoods of India, given our culture, our diets, and these are important neuro nutritional deficiencies, which later on cannot be corrected. So they’re very passionate about bringing new protein brands focused on moms and kids.

 

Or Neha who runs India p2p. She spent several years building the largest cookstoves business with a $35 million revenue line that is the one of the largest selling cookstoves, company called Greenway. And so for a decade or so she’s been spending time with these, lowest income borrowers are people who are benefiting from microfinance. And she asked herself, all of the FinTech we see in India is really focused on improving credit access for the top 30-40 million people three, four crores. And we know that’s been talked about so much in the press now that so much of FinTech is really only benefiting those. So her mission in life is for all these not three crores but the 30-40 crores, how do you solve the credit value chain? How do you make their cost of capital lower? So that’s what India p2p is based on.

 

Siddhartha 46:44

Rajiv and Nitin, where do founders mostly get distracted after a good start? Let’s say they have after you they have raised the seed. Why do you see this as a distraction? And how do founders’ become self aware of it?

 

Rajiv 47:03

Nitin will know this, he has seen enough of his companies raise a seed and A and a B.

 

Nitin 47:05

I think, not to sound like a broken record. But I go back to the why I think even the best of founders can get affected by losing sight of the why, and getting too caught up in the what and how and who. And there is a lot of noise, scaling, venture capital puts a lot of pressure, VC expectations put a lot of pressure on that to artificially grow sometimes faster than the business or the customer need can be solved. And so I think it’s not just the founders fault, frankly, it’s investors who play a big role in distorting that vision for the founder. And again, at some level, you have other stakeholders, and you get caught up in games of media, PR and vanity metrics and comparing yourself to others.

 

And so I think there are great founders who are able to keep coming back to that true north. And I think there are other founders who are great in many ways, but get distracted. And of course, the last part I would say is just how the funding cycles play into it, where there are times where you just have too much money thrown at the problems. And there are times where you have real crunches.

 

Siddhartha 48:17

And these are some of the areas where the founders get distracted and lose track of it. But let’s take some examples where even sometimes the market doesn’t support it. So are you looking at those ideas also, where you have a market production, kind of like intensive, very capital intensive businesses, you want to protect investing in them?

 

Rajiv 49:51

We don’t actually, so there are only a few areas where more out of the fact that downstream capital is not available, for example, hardware we actually believe that is some very interesting hardware innovation to be done in India. But unfortunately, if the downstream capital doesn’t exist, it makes life really tough. So we are very bullish on space tech, one of our team members is very deep into it. And we are actually publishing something on it soon. But of course, we are trying to play, for example, in the software or the application or data side of Spacetech rather than actual propulsion engines and rockets and stuff like that.

 

So, as much as we wish in certain capital intensive areas, if the downstream capital is the constraint, then we will stay away. But other than that, I think the way we look at it is, our job is to help the founders get started, and help them to the very first signals of PMF. We believe there is lots of capital in this country. And in this connection that we are in now, there will still be an amazing amount of capital available for new ideas. And it’s sometimes too early to tell how capital intensive something is at pre seed. So we don’t shy away from things purely because it looks too capital intensive on day one, except for some cases where the ecosystem is not ready.

 

Siddhartha 50:03

And if I just have to summarize the learnings from this interaction with you. The best chances of company succeeding at pre stage is a founder or a group of founders obsessed about a problem, spending hours, months, or even a year of customer research, digging deep into customers, or example, a founder of ApniBus, sitting with the customer, even playing the role of a bus conductor, being there to just fully absorb. And not be in a quick hurry to build out and raise funding for it. During the founders that have the best chances to succeed in the long haul.

 

Rajiv 52:02

Yeah, and also iterate fast, Get a builder, partner with a strong builder, iterate fast, we would rather, and there is mortality at the precede stage. But you would rather go test this product out faster. Do two, three iterations fail. Absolutely fair, fine. Move on to the next idea or go do something else. So I think the speed of iteration there’s a lot of merit in that. But of course, if you’re building a b2c product, there’s only a particular level at which you can, Gladful for example, she had to take her time for both customer research and putting a product. But in four or five months, the first version of the product was out, and it was the tastiest protein snack that kids in this country could have.

 

So with that level of depth of customer research and obsession on the product, the right experience, even physical products you can do at a time, which is “MVP”, iterated for that category. I think we always encourage ambition married with speed of iteration. And because if it takes too long, then there’s someone else who also is going to have that smart idea. So I think somewhere there. Yeah, obsession, speed of iteration, coupled with ambition, there is a lot of capital help from us from the entire team, I think that sort of is the right platform to sort of take up to the next level.

 

Nitin 53:15

I think the only one other thing I would add from our perspective is, we invest in all great types of founders, we will specifically be a great fit for founders who are thinking global on day one. And that is where, when we began the conversation with what we are trying to enable for founders in terms of Antler’s global network, etc. And this is a change that we’ve seen in the last few years, it’s a matter of the typical founder profile is changing, you have a lot of Gen Z founders coming, you have a lot of founders who’ve been grown up digitally native, you have founders who’ve gone through COVID, and their behavior is different. And so one of the things that they’re asking themselves is, why would we not think global on day one? Why would we only be limited?

 

So that goes into some interesting TAM discussions. How do you determine TAM sometimes, where somebody is trying to take a global view from India on day one, and we’ve seen this in, we obviously have seen this in the past with SaaS and vertical SaaS and fintech and UPI types of innovations in India going global. We are now dev tools, postman kind of examples, but what we are very excited about is new areas like web three, climate, vertical SaaS, where we would just love to keep partnering with more founders building that infrastructure in India. And having that part now makes that customer understanding even more rich or different or difficult because now you have to think about the global customer.

 

So, if anything that customer obsession actually becomes even more important, because you can’t just slap on something that works for one type of customer onto another geography. So, yeah, I think global ambition is something we are very, very excited about right now. And we’re seeing a lot of it.

 

Siddhartha 53:58

Thank you so much, Rajiv and Nitin. I would like to continue for hours and hours discussing with you. But what you have shared is very nuanced, very first principles. I would like to say, what makes it succeed, and what is the infrastructure that you are also building to make sure the founders succeed or fail in the shortest amount of time. The founder’s time is the most valued commodity today.

 

Nitin 54:23

Yes, time is always more important than money in life.

 

Rajiv 54:24

More so in this current environment. Thanks. Thanks for having us.

 

Nitin 55:28

Thank you for having us. Awesome talking to you.

 

 

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