What is a startup

What is a Startup?VIJAY ANAND, THE STARTUP CENTRE

Small Business (or)Startup

Thakkali Sediya? Aala Marama?(Tomato plant) (Banyan Tree)

Business Fundamentals

Revenue – Cost = Profit. Expanded form: Revenue – (CAC + PDC + CSC) = Profit The Business Model, makes all the difference.

5 Things

Repeatable Sales Model Scale Brand (potential) Category Leader (one of top 3 in 3-5 years) Healthy Margins (defensibility)

In the Startup World, Everyone talks in US Dollars.You might wonder why.Ans: Most of the money coming in is coming from abroad in dollars. Nobody cares if “in india things are slow”. The dollar demands the same return as it would in the valley or any other high growth ecosystem.

Does it matter if you are a small business, a traditional (organic business) or a startup?

Yes. But the only place it matters is for knowing what kind of capital to deploy for your company.

Stages of Venture Funding

Own Money / Grant / Scheme – 0 - 5Lakhs Friends and Family – 5 – 25 Lakhs Angels / Angel Networks – 20 Lakhs – 1 Cr Small Funds – 50 Lakhs – 3 Cr Early Stage Fund – 2 Cr – 25 Cr Growth Fund – 5 Cr – 50 Cr Late Stage – 50 Cr – 200 Cr.

If you want to take Venture Capital, 4 things matter.

• Exit (200mn USD) - ~ 1200 Cr• Team• Market• Business Model

To get 200mn$ Exit

Margins (65% for Google) 100mn Revenue (eCom) 40mn Revenue (Non-subscription / feet on street business) Massive usage Deep IT / Tech + defensible Patents 20mn revenue (SaaS) with Good Margins with 30% YoY

Team 2 Co Founders vs 1 Street Credibility Operational Background Strong Go-to-market Strategy Domain Expertise Deep Product Expertise Passionate and commitment Experimenters and decision makers

Market Size – TAM / SAM & Others

64B+ Total Market

8B – Addressable Market

800mn – Target Market

15B+ Total Market

3B – Addressable Market

300mn – Target Market

JewelleryTransport

Rapid Scale

Rapid Scale - AirBNB

1.7 Crore Bookings in one year.

Rapid Scale - Instagram

15 Crore Users (2013)40 Crore Users (2016)Revenue – 1.46Bn (2016 Estd) bought for 1Bn.

5 Things

Repeatable Sales Model (10% growth per week - Expected) Scale (Global. Atleast Pan India) Brand (potential) Category Leader (one of top 3 in 3-5 years) Healthy Margins (defensibility)

Startups are risky (also).

Startups are risky (also).Startups to me are neither tomato plants (small businesses) nor banyan trees (lifestyle businesses). They are like the Chinese bamboo tree. Plant a seed and it takes a little while to sprout, but once it does, it can grow upto six feet in a week and can create a forest around it.

Vijay Anandvijay@thestartupcentre.com