Learnings from our startups

At Malpani Ventures, we are grateful to work with a bunch of smart founders and management teams. Through this piece, sharing some of our key learnings which we hope will help other early-stage founders as well:

Attack a limited white space rather than a larger, more competitive market:

• At the early stage, a larger TAM (Total Addressable Market) attracts founders. Most founders estimate that they have a better process, technology, or people to take on industry heavy-weights. While this may well be the case for a few, most early-stage companies are better off seeking an untapped/ non-catered market rather than a competitive one

Sridhar Vembu of Zoho puts it well that founders should go after OPAM rather than TAM - Organically, profitably addressable markets

• Companies building in funding blind spots can develop their business at a relatively slower scale and build more sound businesses

Startups that solve hard things plant deeper roots

• Several of our startups faced existential crises when Covid struck in 2020 – a few of them veered dangerously closed to bankruptcy. 
• However, one pattern we saw emerging was that companies that provided value to their customer by solving their problems rather than simply providing tech-based solutions were supported by the ecosystem:  Investors funded them, customers and creditors were more accommodative and these businesses emerged stronger after the crisis

GTM Channels/ Distribution matter:

• Companies need to create/ develop a channel that gives them a disproportionate chance to convert their clients profitably vis a vis their competitors
• A portfolio company that struggled to attract customers opted for the B2B2C route and has now earned more revenue through this route within 12 months vs the combined revenue through B2C over the last 36 months

MIS should be designed to make you see reality:

• An inside joke among VC circles is that an investor only receives updates when things are going well or when the company needs cash in the foreseeable future. 
• Clichés aside, a well-designed MIS helps the founder to assess both the operational and financial health of a company. In our experience, founders who diligently track 4-5 key variables in their operations tend to build more robust businesses 

Do you have any learnings to share ? Write to us at pitch@malpaniventures.com with takeaways from your building journey!