Scale & Megatrend Are Two Principles To Create Unicorns: Sanjeev Aggarwal

As India became home to several startups and began its own journey of creating home grown Unicorns, the next step is knowing what can convert more of the young guns into successful ventures.The Founder and Senior Managing Director of Helion Ventures, Sanjeev Aggarwal tackles this question, highlighting the opportunities in the country for budding entrepreneurs, and sharing his learnings and principles while being a part of ‘one to ten’ staged companies.

For a company to be at ‘zero to one’ stage means that they have got their basic product-market fit and it is working with a small set of consumers. And ‘one to ten’ stage is converting that into a billion-dollar company.

Aggarwal said, “India became one trillion dollar economy in 2007, and in the next seven years, it crossed the two trillion-dollar mark. India is not an opportunity constraint rather it is all about rational excellence and there are opportunities for all in building interesting companies in every segment of the market.”

He reminded though that while India is very good at the zero to one’ stage, which is about innovating and pioneering,the wheels turn up when the company moves to the one to ten stages.

Being a part of billion-dollar companies, Aggarwal shared his learnings of getting a company at ‘one to ten’ stage. Pointing out two major principles, he said, “One basic principal, who wants to become unicorn, is if they are in mega-trend. If you start a company which is in the middle of mega-trend, then you will benefit from that mega-trend like a Tsunami. So, when you are building from one to ten, have a quick sanity check that are you a part of mega-trend or something peripheral or counter mega-trend.”

The second important element, according to him,is to be part of large market.“Our thumb role is that if you become a leader in a ten billion dollar market then you can potentially create unicorn. And the principle is that if you are in a large market then your revenue will be in millions and get typically value at two times,” he added.

Giving the example of Swiggy, he explained, “You should be a single-product company before you start to diversify. As each line of business consumes too much management and energy. And you would want singular markets that are very large wherewith one offering, you can create a lot of revenue and market capital.”

While speaking at the BW Businessworld and BW Disrupt TechTors 2020,he concluded his address by asserting that there are three elements of building a unicorn known as, market, people and execution.