‘Funds Have Put India On The Map’

<p><strong>Vijay Shekhar Sharma</strong> built Paytm in 2010. Five years on, he has invested in more than 32 startups. He talks to <em>BW Businessworld’s <strong>Vishal Krishn</strong>a</em> about the opportunity in consumer-based businesses. Excerpts:<br><br><strong>Q. How is your role as an investor shaping up?</strong><br>I invest anything from Rs 25 lakhs to Rs 60 lakh in a venture. A decade ago, I made the mistake of giving more than 40 per cent of my company, for some seed money. I had a bitter experience when I bought the investor out. I don’t want startups to face that problem. I also mentor them on building a sustainable business. A decade ago, people like me did not know what valuations meant. But things have changed. Startups are living in very interesting times. With a lot of support from the ecosystem in the future, we will see great companies being built out of India.<br><br><strong>Q. What should startups focus on, given the hype about the smartphone market and the Internet?</strong><br>I do not follow research reports when it comes to looking at consumption on the mobile Internet. I look at what is happening to my target audience. I look at family, my old neighbourhood in Aligarh, and how they are consuming technology. The numbers will grow. I only focus on my target consumers and check if they are using technology. Only then do I know if consumption is happening through smartphones.<br><br>It is inevitable that people in India will go mobile. In my hometown, a lot of them have mobile Internet. How does it matter if there are 125 million people or 150 million people using mobile Internet today? It is a target. India will have 500 million consumers of mobile Internet in five years. Can we build a much better product in that time period? The market is moving fast. It’s a race against time when you work in India. Such mobile Internet growth is a once-in-a-lifetime experience, and we have to be the technology company that makes it happen.<br><br><strong>Q. Many startups in India are B2B. Why do people seem more hesitant to get into consumer businesses?</strong><br>Payment solutions from the consumer side need a lot of innovation. The problem is that tech companies in India fear that consumer business is extremely difficult. We have remained tech producers, and not become consumers of tech. We have built very few consumer technology companies.<br><br>Consumption will grow with local languages. All startups in the consumer industry must have local-language services if they have to grow in India. &nbsp;<br><br><strong>Q. Are funds controlling the fate of startups in India? Any advice regarding this?</strong><br>There’s no doubt that funds have smart people, and they will tell startups to follow a particular vision. The funds have put India on the map. They will inevitably control some decisions. But what stops an entrepreneur from disagreeing with investors? The entrepreneur is supposed to be confident enough to run his company, because he knows what works and what doesn’t. The fund is a guide. It is like in life: you listen to many people, and in the end, you have to make the decision that is right for you.&nbsp; &nbsp;<br><br>(This story was published in BW | Businessworld Issue Dated 02-11-2015)</p>