Building a cockroach startup - Aloke Bajpai @ UnPluggd
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This document provides advice on how to build a successful startup during an economic downturn based on lessons from the past year and the story of ixigo.com. It recommends focusing on product-market fit, hiring great people, setting ambitious goals, spending little on marketing until organic growth takes off, prioritizing unit economics and profitability over revenue and growth, using downturns to innovate and raise funds opportunistically, right-sizing operations, and building a strong culture. India is highlighted as still having significant long-term growth potential despite current market conditions.
Building a cockroach startup - Aloke Bajpai @ UnPluggd
- 1. Building a Cockroach How to survive and thrive in 2016
- 2. Recap of last 12 months Public markets killed some Private market valuations (thank you Box, Square, Twitter, Linkedin, Alibaba) Series B, C, D valuations affected Series A bar much higher (fewer deals) Flurry of angel and seed deals More copy-cats than innovations raised money
- 3. Is it all Gloom & Doom ?
- 4. Current Environment Valuation correction and markdowns in larger companies Round-size shrinkage $100 Mn rounds in Series A / B stage will be history for a bit Pre-Series A & Series B extension rounds Strategics more active Many Angel / Seed funded businesses will get acq-hired Cash-flow and profitability Unit-Economics & Sustainable Growth
- 5. Enter the cockroach Lasted the dinosaur extinction millions of years ago Can live for six weeks without food Not choosy about what they eat Move fast and can hide during storms Adapt to environment / surroundings Lack glamour and do not look for limelight Can Fly when needed
- 6. The ixigo story Started in 2006, Bootstrapped, Launched 2007. All Indian investors say No despite 100k+ non-paid visitors in 6 months Lost a co-founder in late 2007 Seed round in Feb 2008 from Singapore-based fund Series A deal fell through weeks before Lehmann Brothers did Survived the downturn with teams, landlords & investors support Continued innovating & growing through difficult times Raised Series A in 2011, Series B in 2015 90% users non-paid, growing user-base 2x YoY and revenue 3x YoY
- 7. Lessons from every downturn
- 8. Money buys a company time but not the ability to execute growth but not product-market fit revenue but not viable business model traction but not real customer love techies but not innovation VPs & AVPs but not passion schwag but not culture
- 9. Focus on the core value to users
- 10. Hire Great People Set Lofty Targets Get Out of the Way
- 11. Spend very little on marketing till organic growth & monetization take off (Do not fake growth)
- 12. Unit-level economics matter (Dont discount more than what you earn)
- 13. Growth Hacking (mix of art & science, intuition & data) Creative engineers not Marketers Story tellers not content writers FB videos not TV SEO not SEM Killer Product & Content = #1 Growth Hack Word of Mouth = #1 Marketing Channel
- 14. Learn to use PR & Media (but dont waste time reading competitons PR only track why people use their product)
- 15. Raise money whenever you can (Dont overdilute for your stage though)
- 16. Right-size sooner rather than later
- 17. Revenue is Vanity Profit is Sanity Cash is Reality
- 18. Build a great culture (it lasts the test of times)
- 19. Macro : India still rocks ! In the next 15 years, India will see more people come online than any other country in the world Smartphone penetration is still at 20% Only 40 Mn transacting users on e-commerce => 10x upside in next 10 years
- 20. The very best companies get built in a down market Facebook, AirBnB, Uber, Tesla
- 21. ceo@ixigo.com