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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 [email protected]