less humans, more robots

It was early 2007 - I was thinking about becoming an angel investor in one of my friends venture.

Based on my market assessment / or just looking at the Indian market I believe there’s a compelling need for an early-stage India focused fund with the following characteristics:

• Provide access to small amounts of capital ($100K-200K, in 1-2 rounds); syndicate with other angels/funds, if more capital is required
• Mentor founders to utilize capital & relationships to the fullest; do so for a period of 12-24 months to take companies to the next level
• Bring in a strong network to help companies sell, develop markets, execute on technology & delivery, etc., both locally and internationally; help hire key management talent, as required
• Bring in networks to larger VCs/strategic investors for future investments, or position companies for suitable M&A

Based on that data and discussing it with my mentors, the plan was to rise / dedicate around USD 1 million, execute in 5-6 companies, and exit from 2 or 3 companies early to validate the model.

My mentors told me; if you see yourself as a venture capitalist in 2-3 years time, validate yourself risking your own money. ‘People will look at you with lot more respect’ - they said.

‘Deal flow is important’, he said. “Luxury of choice – every time you sign in to your mailbox, there should be 20 deals waiting for you, everyday!”
‘You need to have an investment philosophy; entrepreneurs and the ecosystem should recognize you with your philosophy. Don’t just say, shoot me the plan I’ll look t it, then get into a mess. ‘

Always remember the first rule of angel investing - It’s a small community — if you screw one entrepreneur, you’ll be out of the angel business because entrepreneurs talk

So, I stated meeting a lot of entrepreneurs and doing my basic research. Finally I drafted my investment philosophy.

Fund companies that have most of the following:

• Founders with some track record (e.g., 6-12 months of operations) and business validation for products/services through some customer traction.
• Sweet spot would be differentiated services (e.g., some Technology or Knowledge that makes service delivery more efficient/less replicable), since they can get higher multipliers, require relatively less capital and we have the right backgrounds to build such companies out.
• No specific “sector” bias, as market seems too small for deal flows.
• Good chemistry / working relationship with the Founders.
• Domains where my friends or me can add value, outside of funding.
• India based sales model (at least for sustenance revenues/cash flows).
• Join a startup as a mentor / advisor, understand the whole equation, then invest

Entrepreneurship is too complex for a single person to manage. We need strong leaders to execute the idea, a wonderful team, investor who believes in the idea and the team and strong outside advisory network. Most of the professionally managed venture funds have a vibrant advisory network. (Gurus of Ojas is one of them)

Engage the Advisory Board with shared responsibilities:

Active participation from the Advisory Board would provide significant value. Advisory board expectations include:

• Funded Company Mentoring
• Advisory & BOD positions for funded companies
• Increase deal flow into the fund
• Help with company Due-diligence through expertise in certain markets / technologies, business models, etc.
• Bringing personal networks to help funded companies attract talent & sell; create awareness about the fund & its mission, acquire future funding for companies, etc.
If you are interested in working with us in a venture advisor role, write to us at kris at opdrage dot com.

After a year and half in this ecosystem, I’m re-learning some of the basics. This month onwards we are planning a new way of doing things.

My close associate Dipankar drafted a future plan for Opdrage.

We discussed it last week (interesting long discussion - from 10PM - 2AM) and are creating six focus areas:

Opdrage Green: Making the earth greener and cleaner ‘opdrage’ style (Funded 3 ventures, 1 more in pipe)
Opdrage Web: Focusing on mass-market consumer Internet applications (current mentoring portfolio: 8, funded two firms)
Opdrage Social: for-profit Social Ventures (ladies & gentlemen please welcome Manu Mayank to the Opdrage gang) (mentoring 4, funding one)
Opdrage Innovest: Patented technology ideas, help them in commercializing (funded one)
Opdrage Labs:The vision behind Opdrage Lab is to create a ‘mysterious new’ Idea Machine.You know when a bunch of casually dressed, caffeine powered, shiny-eyed young people sit back and discuss everything under the sun (when our NASA buddy is back, we talk about things above the sun as well) that its going to be a start of something ‘really damn cool!’ (currently mentoring 2, funding both in this quarter)
Opdrage Capital Advisors: Sell / buy side advisory for startups and SMEs

What do you think about our plan? Please write to me or comment here

You got to know when to hold ‘em, know when to fold ‘em,
Know when to walk away and know when to run.
You never count your money when youre sitting at the table.
Therell be time enough for countin when the dealin’s done.

On a warm summers evening on a train bound for nowhere,
I met up with the gambler; we were both too tired to sleep.
So we took turns a starin out the window at the darkness
til boredom overcame us, and he began to speak.

He said, son, I’ve made a life out of reading peoples faces,
And knowin what their cards were by the way they held their eyes.
So if you dont mind my saying, I can see youre out of aces.
And if you’re gonna play the game, boy, you’ve got to learn to play it right.

Now every gambler knows that the secret to surviving
Is knowin what to throw away and knowing what to keep.
cause evry hands a winner and evry hands a loser,
And the best that you can hope for is to die in your sleep.

So when hed finished speakin, he turned back towards the window,
Crushed out his cigarette and faded off to sleep.
And somewhere in the darkness the gambler, he broke even.
But in his final words I found an ace that I could keep.

You got to know when to hold them, know when to fold ‘em,
Know when to walk away and know when to run.

First time, (not-so-educated-by-vc-blogs), entrepreneur may think that the transaction to be completed between the company and investor is a simple exchange of money for some number of shares of stock in the company.

A venture investment is really an exchange of many things; where values come first. Some of you spend some time in investment banking knows ‘buy side ’ and ‘sell side’. Basic English. Now, What the entrepreneur is “selling” and what the investor is “buying” are actually quite different. The inverse is true as well. What the entrepreneur is “buying” is not the same as what the investor is “selling.”

The Entrepreneurs Mind:
The first-time entrepreneur often has an emotional bond to his business (cliche’ lines?) that is impossible to translate into dollars and cents. It’s almost like putting a value on his first-born child. While he knows that he needs capital to grow his business, he is reluctant to put his “baby” in those terms.

All I need is to raise some money to grow my business. That’s it! All those value added things don’t apply here at this point of time. For me it’s all bullshit, extra baggage! What the investor and his firm going to do? Sit and sniff over my shoulders?

Oh common’ - Why I quit my last job is because I was fed up with my boss

My bank said, no, coz my business is too early for them. I ‘know’ that my business is worth a lot. My friends said check those Venture Capitalists. I’ve read about them. Sounds like they are ‘Vulture Capitalists’!

And I’m not going to let them take advantage of me. - Give me your money and get out of my way. Down the road, you’ll be very happy that I allowed you to invest in my venture.”

They say “Dude, I put my whole heart into it, I invested my life savings, I’ve taken all abuses from my parents and friends, including my girlfriend, I never cared. Now I got a business, which is on the cusp of being an amazing success. And that VC guy is sitting in front of me and talking how much ‘MY COMPANY’ he wants for cash! Stupid, they are comparing my hard work to some silly cash? That’s an insult!”

“And hey he’s talking about financial projections? How much money I’m going to make in 3 years time? Breaking down into per quarter plans? These freaking MBAs! I have spent an extraordinary time on my business plan and I’m convinced that it’s rocking. I know there are going to be surprises when we move forward, but I’ve adequate contingency plans to cope with anything that comes our way. “

“We’ve been so conservative in assumptions, that I am sure that we will out-perform the plan. And those people blackmailing me saying this is the first time I’m doing it! Bullcrap! I’ve been part of many startups, I attended many seminars - I’m absolutely ready!

Team? We have all Rock stars available, ust look at our founding team! Perfect!

The mind:
1. As an investor, I believe in Schwartz’ Law. Schwartz said, ‘Murphy is an optimist.’
2. When the day is done, I’m looking to make investments that return a lot of money
3. I do early stage investments, like any other professional, I’m an expert in it.
4. Deal flow will NEVER end, so if I don’t do this particular deal, another one will be coming tomorrow.
5. Shit happened. Happens!

[This is a fun article, not an educational piece. get inspired :) It’s Friday!]

In most of the hiring interviews, i hear smart candidates asking the same smartest questions to understand more about the firm, the opportunity and the role.

The most common questions are:

What resources do I control to accomplish my tasks?
What measures will be used to evaluate my performance?
Who do I need to interact with and influence to achieve my goals?
How much can I expect when I reach out to others to help?

I’m sure you all asked almost the same set of questions to your hiring manager in one point of time. I’ve asked the above and more when I was looking for a change in early stages of my career. The funny side is most of the hiring managers go blank in most of the questions. The problem with them probably is lack of communication or time or effort to design jobs or simply most of the company leaders are not even aware what they expect from their associates.

If you are an entrepreneur CEO (like most of your peers), you’ll look for the smartest individuals to work towards your idea, your vision. True Rockstars!

The above questions correspond to four basic spans of a job;
1. Control - related to access of resources
2. Accountability - measures that allow trade-offs
3. Influence - interactions with firm/market data, customers, business units and staff
4. Support - from peers / associates

When your company is so big (much like Walmart, Intel, Oracle) it’s relatively tough to design these jobs with a perfect tuning or balance! The good thing is you are not that big! :)

You all know: Improving the performance of key people is often as simple - as profound - as changing the resources they control and the results for which they are accountable.

Yes, we all learned that in Harvard, Wharton and other ivy rechristened red brick buildings - sweet. Implementation?
Well, we all hire ROCKSTARS - the same bunch, like seen it all done it all type. When you and that person sat down first on the near by coffeebar discussing ‘his/her interest in joining’ the idea, its all fun, you expected sun, he promised a galaxy!

We all want entrepreneurial people to work with us, not just ‘employees’ right?
We choose members for their skills, we emphasize the individual, we focus on the ideas, we work together intensively, we work towards adressing the sophisticated customer.

When you are just a 3 member firm, it’s wonderful, easy to communicate, fight, discuss and take a common path. How about your next hire? Dude, rockstars are not so-common! or we don’t really need all-rockstars! Imagine an Army full of Generals! Oh bad!

You all know there’s a concept called “The level 5 hierarchy’
Level 5 (Executive)
Level 4 (Effective Leader)
Level 3 (Competent Manager)
Level 2 (Contributing team member)
Level 1 (Highly capable individual)

When you plan next level of your organization, the problem / fun starts - about the above four spans : control, accountability, influence and support.

Do it carefully, make a flow chart, connect it well, tune it periodically - You are creating a high performance organization!

[I’m not an expert in HR strategies. These are learning’s from my short entrepreneurial exp and basic problems faced by our portfolio firms. Please drop your feedback. Lets discuss]

Shai Agassi discusses his entrepreneurial journey from the enterprise software industry to his current work in clean energy. In the process, he describes the “physics of startups”, drawing parallels between principles of business and the laws of physics. He emphasizes the importance of acting on an idea before it’s adopted by the mainstream and navigating the inevitable uncertainties that can result in success or failure.

Stanford Entrepreneurial Thought Leaders Lecture [Video]

Thesedays’ I’m watching HBO Original Entourage, and addicted to it. You’ve gotta have friends, you’ll see them all, here in Entourage, and guess what I found 9 rules applicable to all the startups as well :) End of the day, every startup is an entourage; is n’t it?

1. Always keep your conscience in check
2. Healthy body = healthy mind
3. Appearance is more important than reality
4. Keep your client review-proof
5. Destroy all enemies before they rise to power
6. Treat your client like a lover
7. Always manage the client’s expectations
8. Unhappiness is the price that winner’s pay
9. Bad news is not news

Rules, Nine rules, live it. And all those Ari Gold types Founders, easy, calm down, don’t fire people that freequently :)



Neewbees, here’s the teaser!

Ari Gold: [to his wife] You can have it if you want to live in Agora fucking hills and go to group therapy, but if you want a Beverly Hills mansion, a country club membership, and nine weeks a year in a Tuscan villa, then I’m gonna need to take a call when it comes in at noon on a motherfucking Wednesday!

Kris Nair is a Managing Partner at Opdrage Venture Partners, a New Delhi based Mentor Capitalist practice comprised of progressive minded investors, business service providers, marketing gurus, and seasoned business executives. Opdrage works with early stage ventures and corporate spin offs to build the plans, find the people and line up the capital necessary for achieving rapid growth.

He’s an Advisor to the Indian Venture Capital & Private Equity Association, umbrella organization for the venture capital & private equity funds/firms in India. He’s also a business mentor at National Entrepreneurship Network, working to inspire, educate and support the next generation of high-growth entrepreneurs in India.

He’s an angel investor and assists or serves on the boards of a number of early stage companies including DP, A2W, VenOS Inc., Innoz, Highlander, Pictualize, Cubicleone Inc. and Green Venture Camp.

Before conceptualizing Opdrage, Mr. Nair was heading the Corporate Strategy and Development at Satellier Inc. where he helped ENR Top 500 Engineering Companies in engineering work share advisory and transition strategy. He was the part of & worked with the founding team and the investors in creating and executing firm strategy and managing a P&L more than USD 10 million. He Co-founded more than 11 strategic business units in Satellier and managed the Building information Modeling and Engineering Design verticals. Passionate about sales and marketing, he worked with the leadership team in expanding the business beyond United States; to Europe, Middle East and Australia. He was instrumental in Satellier’s business development strategy and global market entry & pricing strategy. He drafted firm’s India strategy to focus on taping India’s construction market. He worked on diversified programs including market innovation, program management, product management, sales and M&A. Satellier is an Indian Angel Network and Sequoia Capital portfolio.

Earlier, he spend many years as a market analyst and management consultant and counseled CEOs and Boards of leading global companies in outsourcing, software, and technology sectors on broad-ranging business issues including corporate strategy, mergers and acquisitions, corporate restructuring, and business turnaround.

Previously, Kris Nair Co-Founded two companies, Navigator Media Intelligence and IMI Consulting. He exited both the companies in 3 years time with 150X returns. As an active researcher of Fundamental Leadership, he spends 7 years in voluntarily military training and was one of the Tops 1% cadets of the National Cadet Corps, India.

Kris Nair earned his BS Applied Physics from University of Kerala, Executive Masters in Management from Durham Business School and attended Management Program from Wharton School, University of Pennsylvania. He learned the advanced lessons of leadership from Indian Military Academy.

The main goal, he says, is to help institutionalize how-to knowledge of entrepreneurialism that he and others have accumulated the hard way.

In his free time, Kris jump into philosophy of randomness and reads anything non-fiction. He’s been trying hard to learn more about Complexity Economics and its relationship with Theoretical Physics. The main goal, he says, is to help institutionalize how-to knowledge of entrepreneurialism that he and others have accumulated the hard way.