Roundtable Recap: July 12 – Laser Sharp Competitive Positioning is Compulsory in Crowded Markets

During this week’s roundtable, we had as our guest Devdutt Yellurkar, General Partner at CRV, who discussed his investment principles. It was an excellent discussion!

Elastic Storage Solutions
As for entrepreneur pitches, we started with Udo Neustadter from Ottawa, Canada, pitching Elastic Storage Solutions, a company addressing the ballooning storage needs of the digital universe. I asked for a thorough competitive positioning exercise, including input from storage buyers on how they’re evaluating solutions.

Velox Networks
Next, Martin Nygate from Singapore pitched Velox Networks, an Asian competitor to RingCentral-like hosted PBX vendors. The company is executing well and is already in revenue.

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1Mby1M Virtual Accelerator Investor Forum: With Rajeev Madhavan of Clear Ventures (Part 4)

Sramana Mitra: Reversing the question now, if you look at 2017, what have you seen? What trends have you seen in your deal flow? How many companies do you see in a year for example and how many do you invest in? What has been the 2017 deal flow nuggets of trends?

Rajeev Madhavan: In 2017, my average was eight companies a week. That’s 400 companies a year. Out of 400, we invest in six. It’s almost like one in hundred. One of the things that I believe very much in is giving them the feedback even if we’re not the investor. I have some empathy with them as I have gone through what they’re going through.

Sramana Mitra: What are the trends in there? >>>

1Mby1M Virtual Accelerator Investor Forum: With Brij Bhasin of Rebright Partners (Part 6)

Sramana Mitra: But the monetization is what builds businesses, right? Usage doesn’t build businesses.

Brij Bhasin: How many years did Facebook build its business before it started monetizing?

Sramana Mitra: Facebook actually monetized from the beginning. There is an article that I wrote about how Mark Zuckerberg preserved so much equity in the company. Since you bring up Facebook, Facebook’s India revenue with 240 million users is $50 million annual, which is miniscule and very disappointing for the company. The Economist article is not based on government data. >>>

1Mby1M Virtual Accelerator Investor Forum: With Rajeev Madhavan of Clear Ventures (Part 3)

Sramana Mitra: What is your perspective on enterprise companies? In a lot of sectors, the mid-market is underserved and enterprise is over-served.

Rajeev Madhavan: One of the mid-market companies we’re serving in that space is a company called Reflektion. Most of the retail vendors are mid-market. They’re now scaling to the higher end but they started out with mid-market.

The real delta is in the mid-market, the number of players that are there to support your software is almost zero. You really need to make your software completely deployable with the least amount of human beings required. It’s got to get completely >>>

1Mby1M Virtual Accelerator Investor Forum: With Brij Bhasin of Rebright Partners (Part 5)

Sramana Mitra: If you look at the later-stage SaaS market, there are tons of companies that have scaled nicely. There are a lot of $150 million to $200 million SaaS companies that are looking to grow. They may have grown on top of one product line.

To be successful in the public market, they cannot be one-trick ponies. They’re going to need five other product lines to be able to generate fast-paced growth. This is a market opportunity into which India should play really hard. How do you parse the unicorn mania?

Brij Bhasin: There was a rush to help companies scale as quickly as possible to get them into the unicorn club. A lot of money >>>

1Mby1M Virtual Accelerator Investor Forum: With Rajeev Madhavan of Clear Ventures (Part 2)

Sramana Mitra: An aspect of running a company that’s not pleasurable at all.

Coming back to Clear Ventures journey, let’s double-click down a little bit on what stage are you looking for. When you say you are willing to put in very early stage, what are you looking for in terms of validation? Are you looking for just concept or revenue? What is comfortable for you?

Rajeev Madhavan: We have done all the way where the concept was not fully baked. We have had people who just sit here with us. We take them to some of the customers and refine the generic idea. We’ve done investments at that stage. >>>

1Mby1M Virtual Accelerator Investor Forum: With Brij Bhasin of Rebright Partners (Part 4)

Brij Bhasin: When it comes to Series A and B and further, the bar tends to be set up really high. We’re starting to see that in 2017. We’re seeing more of that in 2018 and 2019. As these new domestic funds start to deploy and their portfolio companies start to hit the Series A wall, we will see more cleaning up or consolidation of the early-stage startups.

There is a lot of money available at A or B. It’s just that VCs at that stage are also being very selective, having burnt their hands a little bit during the boom years of 2015 and 2016. A lot of those companies didn’t take off. Now those are being consolidated in the market.

Sramana Mitra: This is true both in India as well as in the US. There’s going to be two different categories of 

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1Mby1M Virtual Accelerator Investor Forum: With Rajeev Madhavan of Clear Ventures (Part 1)

Responding to a popular request, we are now sharing transcripts of our investor podcast interviews in this new series. The following interview with Rajeev Madhavan of Clear Ventures was recorded in January 2018. 

Rajeev Madhavan, Founder and General Partner at Clear Ventures, was first a highly successful serial entrepreneur, and brings to the VC game an entrepreneur’s view of the world. Rajeev highlighted the Series A gap in a big way.

Sramana Mitra: Tell us about Clear Ventures. How big is it? What is the investing focus? What sized investments are you making? >>>