Jeffery: Welcome to the supporters fund, ask an angel. I’m your host, Jeffery Potvin. Let’s welcome our investor for today , Devesh Chawla. amazing to have you here today sir. Thank you for joining us. We like to start with a little bit of insight into your background, where you’ve come from. I know you have some amazing stories so I’m hoping we can get right into those because those are pretty exciting but maybe we’ll hold off those stories. Just share a little bit more about your background, kind of where you’re at today and then one thing about you that nobody will know and then we’re going to dive into some of those stories.
Devesh: perfect. I have done my engineering in computers, then I’ve done my MBA in finance after which I’ve picked up a job in a company called client associates where I used to manage ultra HNI money so I used to invest for people in debt-equity in India and the overseas market and manage their complete finances. I did that for five and a half years before I decided I would start something on my own which was in the year 2014 when I decided to start something.
It’s been six and a half years since that journey. It’s been very interesting. I have worked with over 1050 plus startups. I have been investing in quite a few in the last few years. I am excited about some of them. I have got around 8x multiple of an exit. in one of them, it’s a shutdown. so there have been ups and downs in the investments that have been happening but yeah that’s been my journey with the startup ecosystem. So that’s about me. back multiple accolades in the startup ecosystem not only in India but overseas as well. Yes, so that’s about me, what I’ve been doing and one thing that no one would know about me so that no one would know about me. It’s a little different from my side where I love to recite a lot of poems which are Hindi poems. It’s called shayari in Hindi. so, when I’m sitting with friends over a drink or just having a great evening time, those Hindi poems called shari’s start coming out. So, very few people know about that.
Jeffery: amazing and I’m going to look this up. It’s called s-h-a-y-a-r-i. I’m going to look this up. That’s amazing. It’s kind of like reciting old movie lines or telling jokes. You have your little way of connecting with people and you do that through the poems. That’s brilliant. I love it. Well, we’re going to keep that context for a second. we’re going to do a couple more. I’ve been building new segments into how we explore the investors so we’re going to jump into some rapid-fire personal questions and then we’re going to jump stories. So here we go: first question, book, or a movie?
Jeffery: pizza or ice cream bar?
Jeffery: five minutes with basils or Oprah?
Devesh: aren’t the Yankees or the Blue jays? Bike or rollerblades? big mac or chicken McNuggets? Big Mac trophy or money?
Jeffery: All right, I love it. I’m going to keep modifying these questions and try to bring more humor into them but I like it. That’s all great answers. so, we’re going to go a little bit back into your past and I think that there are some really great stories that I’ve read and heard through the world of the internet but to start, maybe give us a little bit of an understanding of when you first finished up school. you had a bit of a drive you wanted to do something how did that story work out and maybe that will that’s where we’ll start to jump into that.
Devesh: please surely so while i finished my MBA finance, i had an idea that was quite similar to what uber has been doing today. so, when I wanted to start this off I thought about how to begin. So I needed some stepping stones. So actually, I went and met a few guys who were in the business of tours and travels. They had more than 400 plus fleets of cabs under them which they were operating. so i thought I should go and discuss the idea with them and take some insights. That’s how I kick started this. so, when I went to them, they said that you know what, you should stay out of this only because it does not look as simple and as easy as it is. so, uber was not a concept that was understood by anyone in India. so, my concept was not similar. it was the same as uber but similar to uber of course. There were a few changes that had to be done to make it more sustainable for which I needed some guidance. So I reached out to them. so, they said it’s not fit for you because currently the way things are getting operated in India. you need a lot of political connections. You need to have the right set of people you’re working with because what may happen is tomorrow when you start your business there are a lot of cabs of cabs in the country and if they come to know that you started something on your own they might start vandalizing your cars harming you as well. so this is not a business that is done by people of your kind. Some people have a lot of muscle power to pull this off. so I thought maybe he does not want to guide me. so i moved to somebody else. So I went to his office to seek advice from him again. Whenever I’m meeting these guys it was through some reference to which I was meeting them of course hence they were entertaining and having a dialogue with me so the second office that I went to that person too had a fleet of say 300 plus cabs under him and that day his office was broken. There were glasses shattered on the floor so while we were discussing you know he told me that you know, Devesh, the idea is good but you know you can’t pull this off. I’ll tell you why when you look at my office today you see there are glasses shattered and broken. it’s just because one of my drivers had a spat with a local political party in mumbai and these guys came and they broke my office and he’s pretty cool with it. It happens daily in our business. It will take two days for me to set this up and running and this is how we run our business so we are pretty okay. my boys go and break their offices too. so you know it’s something we can manage but a person like you who comes from a decent family who has a well added background, you may not be able to pull all of this so stay out. so i said fair. So now two people had discouraged me, whom I thought could be my source of inspiration and could actually help me to take this up but then I went to another couple of people and everyone was discouraging. so i thought that’s not. I don’t think it’s fit for me. Maybe I should pick up a nice cushy job and be happy. so i picked up a wealth management profile where i was one of the youngest private bankers of the country managing ultra hni money, advising them on their investments, telling them where to invest and how to do that was giving me a great high because the kind of people that come to advise are taking advice from me and my company on how to grow their money. so i was pretty happy. I was drawing a very handsome salary. I was happy that I was enjoying my work role. I couldn’t ask for anything better. The life was all set like a dream job, dream pay. Everything is going very well. but in the year 2013-14, a similar company got set up in India and got recognized as a company which has a valuation of one thousand which is close to saying 0.2 to 0.3 billion dollars which at that point of time was quite a decent amount of money and i am like the person who started this business. he is of similar age group similar background similar concept and if he can enter into a 1000 crore club at the 1000 crore valuation why couldn’t i. So I kept thinking about it and I realized that there is a huge gap in the ecosystem where there are not enough entrepreneurs mentors and investors on the same platform. At that point in time it struck me that I should do something like this because I didn’t get support while I wanted to start something on my own. could i create a support system for the entrepreneurs of our country then? it was like once within twice. I didn’t have the guts to quit my job and start something on my own. so at that point of time, i reached out to my cousin who was then the CEO of d labs which is the incubator of is Hyderabad. so i see Hyderabad is one of the top 50 b schools of the world. so when he was the CEO there i reached out to him. I asked him, “Is this what I’m thinking? What do you feel? Should I pursue this? so he’s like you know what they wish there are a lot of people who are doing this in bits and pieces. but what you are thinking is quite holistic. so maybe you should give it a shot and see how it turns out. so for me that moral support was more than enough. So while I was working in my company, I should spend my evenings trying to help entrepreneurs with either investors or mentors and try to see if I could build this ecosystem. Eventually I thought I was getting success in it. In the year 2015, I put down my papers and started, “chaturd ideas” which is the name of my firm. I have worked with over 1050 startups as of date and have more than 1500 plus investors from India and u.s put together. I have invested into multiple companies on my own over the last so many years and that’s how the journey started and that’s where we are today.
Jeffery: I love it and what I’m looking to explore today is all about this because we do a lot of interviews and talks and one of the things that we don’t normally dive into is what does it take to be an entrepreneur and what do you have. what are the things that you go through and as you’re sharing that story so many stories in my head are traveling around about all of the things that i had gone through in my journey as an entrepreneur and an investor and it’s very similar to yourself, where you have this great idea you start to build it or you get in front of people and they come and they backlash against you and now today after all of these different types of experiences, what i learned was that everybody’s first reaction is to give you the most negative impact and at that point it talks us all out of what we were looking to solve and i think the biggest thing here was actually as entrepreneurs we are trying to solve a problem. The difference is that we have what it takes to solve those problems and if you go back to when this problem originated in your mind and you went and talked to those people. Can you walk us through the first thought that said I need to go talk to them? Why am I validating this and why did I go to them to validate it? and now take it forward to where you are today. What would you have told yourself 10 years ago when you were doing that? What would you have changed differently?
Devesh: So, there is a scene in Hindi which is in India which says that it’s Doha. so, it says that guru now let me translate this for you in English. so, it says that when you have God and your teacher both in front of you, you would first bow down to your teacher who gave you the root to reach god. now even if i would move back 10 years in time, i think my mindset would not change to have a mentor want to guide me on my next step because i feel how much ever i understand things how much ever I’ve been mentoring so many entrepreneurs not only in India but globally now, i feel every person even a mentor needs a mentor or a teacher to guide them. There’s been a study that says that if you have a mentor in your entrepreneurial business or your any business, your success increases threefold. so i feel that i would have still gone back but maybe this time to the right set of mentors or maybe this time i would have persevered more. I think I reached out to say around five-six mentors and I gave up pretty soon. maybe I would have reached out to 25 – 50 people unless and until i would have got the right person who is ready to back me and then i would have taken but I’m sure i would need one mentor whom you know I could look up to at least as a sounding board and not only in my times of difficulties but also in my times of prosperity but as a sounding vote. so yeah even 10 years back, i would need a mentor which i think is uh valuable and i love this saying that you guys uh have used because I agree 100 that um you’re always looking for a great teacher and a great mentor but there’s also a starting point where you have to overcome your anxieties your shortcomings because you’re going to do something that you don’t know a lot about which is entrepreneurship or challenging somebody. so if I was to analyze you today versus you then because I would be analyzing myself in the same picture of course for the things that i tried and walked away from is that what I would have told myself today that i didn’t tell myself then was why are you stopping this because people are telling you don’t belong. that’s the reason you belong because they’re trying to create walls and they’re trying to create barriers around their good thing and what I’ve learned over time is that when you’re onto something good nobody wants to tell you you’re doing the right thing because that means you’re impeding and encroaching on somebody else’s space or there’s a misalignment of understanding. So I tell myself what would I do today that’s going to change how I would have done that tomorrow because my brain is always going. I need to challenge the status quo. It is not correct. What makes sense in my head and what’s going on today is not right. so i need to figure out how to fix that. so we’re always fixing and building.
Jeffery: what i loved about your story was that even though you took a different path we probably all think oh that was terrible you lost a huge opportunity and all of this is gone but i think that the path you took was the correct one and maybe it wasn’t the right business for you to get into who knows that we could all argue that one forever but what I think you got out of it was the desire to work inside of financial banking. you made connections. you probably met a ton of people. you made some dollars that allowed you to support yourself going forward as an entrepreneur and you learned the process. you learned how to work in big business. how to work with big business and all of that experience now brings you into a space where you are today. So maybe you can share a little about this great stuff that you learned because I think what you did in business shaped you today and has allowed you to be even better of a coach and mentor to the people that you work with. So maybe there’s a couple of things, those five things, that stood out from your learning. maybe you can share some of those.
Devesh: Surely so before I go to the five things that I learned, I would like to narrate an incident. So I was invited to one of the premium colleges of India called Bits Pilani. I was invited there as a speaker and since uh it was supposed to be such a long flight and this was supposed to happen the following day. I reached it a day prior. I was surprised to hear from the organizing committee there that they hosted me in a guest house where they have hosted only seven people till day and one of them was the president of our country. They said the reason why we are hosting a new year where we hosted a president of our country in this guest house is that he has created an impact and a positive impact on the country and so have you. so they said that you know we also are aware of your story of how you started off and they said that if you would have been into the cab business maybe you would have made those thousand crores by now. but by being into chatter ideas you have impacted thousands of or maybe lacks entrepreneurs in the country and they are like the goodwill that you have got is much more expensive than what you would have made money by being into a business like that which also gave me an insight. I am so happy that you know I am doing what I am doing today because this has created more goodwill, has impacted more lives, has created more employment, has created more money for the country which I wouldn’t have been able to do if I had been trying the cab healing app. i’ve just made money for myself so i think what you mentioned i could just relate an incident and it really uh fits in there. So maybe I learned a few things. So while I was on my entrepreneurial journey I realized what it takes to be on the other side of the table. So while I used to be managing the clients, now I understand why I started my own business. I’m not only my first boss but I’m also my first employee . I need to do everything right from scratch to the top level so when I started I thought everything was right from managing the basics which were taken care of in my company to an operations team. I had a legal team at an hr team. I had everything taken care of. I was a part of the assembly and hence the output was there. i had to be the entire machine right from the scratch. so that is something that framed me or shaped me into being a better person because the hurdles that i went through makes me really happy. In fact when I started off with chatham ideas, my aim was in the next five years to work with only 250 startups but I have already worked with over 1050 in the last six and a half years. So I have more than four and a half times crossed the milestones. I’ve checked a step for myself because I realize once you have the momentum you start to keep doing things. so the other thing that i realized that the harder the you work the better is the output and in fact if the smarter you work the much better is the output so initially my first one and a half year was a lot of hard work whereas to devote close to say 17 to 18 hours every day only on the business, only on the startup. For me, I should think about nothing. you should dream only about what’s happening, what’s going to happen tomorrow. Every day, I am very happy, very excited and today I see that I’ve moved on to a lot of smarter things which helps me to make things much faster. the smarter thing like for example earlier what we did when we started off was the hard work i used to reach out to people and keep building the blocks. The smarter thing I did was after a year and a half into existence and acquired a company which is called “nurture talent academy.” It was the first institute for entrepreneurs in India which has trained around 34 000 entrepreneurs in 125 plus cities across 450 institutes. I thought if I acquired this company my reach to entrepreneurship would become much faster and much wider and this would also help me achieve my goal where I wish to take India to the top five on the global innovation index. Currently, we’re standing at the 47th number despite being the third-largest startup hub in the world. so without a smart move acquiring a company so that you use that as a stepping stone and you move faster. So that’s another thing that I learned. Another point if I want to add that I learned was when I started I never thought of a revenue channel. I was intending to help people, help them grow because I thought there was a personal problem that I experienced. there is a scope where there is money in it. but never thought how to make money out of it. I just thought of helping people and just achieving my mission. it was more of passion without a monetary angle attached to it. so what i learned over some time is that maybe i should have thought of my revenue model much in advance and not after seeing that blowing up the money but not seeing any money coming in. So it was a little late that I realized that I should create a revenue channel which came later into existence. Another thing I realized was when you work with what you’re passionate about, the outcome is immense. rather than people working first thinking of a solution and then creating and then thinking of what the problem can be. That’s what you see most of the entrepreneurs are doing today because entrepreneurship has become a new fad. it’s become more glamorous so people just want to first create a solution and then look for a problem. But I’ve seen that wherever entrepreneurs have found out a problem, which they’ve personally experienced and have gone to solve, the output has been immensely powerful. for example, Uber. We are aware of how Travis Kalanick was waiting for a cab to come in and then he thought of the idea and how it scaled up. you pick up any successful startup. i think 90 percent of startups, the entrepreneurs have experienced a problem that they have faced and they’ve seen an opportunity and they’ve worked on it. So I feel another thing that I’ve learned over here is you should work for a problem that you have experienced to find a solution. The cab problem that I was trying to solve wasn’t a very hard pressing problem for me but I think there was a problem for finding a solution. But chattering ideas was a problem that I experienced myself and I thought that if I work towards that, I can create a better future not only for India but globally as well. so, these are some of the learnings I can go on for another two hours but I think I should give myself a stop now.
Jeffery: oh, that’s awesome. I wholeheartedly feel the whole side of what you’ve put together because at opn, we were doing this all as a way to give back. We wanted to find a way to help entrepreneurs succeed and it was a passion and it’s been something that we’ve been doing for 20 – 25 years. I’ve been working with startups and it’s interesting because the same approach you went into was, ‘i don’t have a revenue model but i’m going to do everything i can to give back and help entrepreneurs grow and build value’ and then you start to go back and think well maybe i should figure out how i can balance this because this isn’t really working and oddly enough your goal was to help businesses. and what i loved about the points that you brought up is that a lot of those are self-motivating. they’re pushing yourself to go a little bit harder. I like the acquisition model, building up brand and building up everything a little bit quicker and faster but always sticking to the passion into the goal which was to help entrepreneurs and to help for the success of these businesses. and then the underlying solution is you created jobs and you built this in a country that needed it. and it just keeps growing and expanding which I think is brilliant. such an amazing experience. But what I want to go a little bit to is what is this entrepreneur journey like because I think a lot of people kind of miss the understanding of solving a problem and miss the understanding of the passion that gets put in behind a project and what allows for these entrepreneurs to be successful. so like the person you talked about that sold or built this billion-dollar company. They had a passion. they had a desire to make the change so how do you determine what you are as a person. if you are an employee or you are an entrepreneur, has it just come with time? Does it come with experiences? What defines that? And are there any signs that you can share with all the people that you’ve worked with within the past say 10-15 years in the startup world? Is there something that stands out that makes you understand what an entrepreneur is like from your perspective but also from the people you work with?
Devesh: I feel entrepreneurship is something that comes from within that cannot be forced upon. So you know the mindset that’s needed to be an entrepreneur is far different from the mindset of a person who wants to just pick up a job and have a steady income coming in. So let me share what all I went through. so when I started off from my college days itself, i always knew that i had that entrepreneurial bug in me but didn’t know how to give that a shape. Hence, from the college days that I used to be a part of multiple events, keep organizing new things, trying to create something new and lead that and I also would see myself being successful in that. but again there was always a support system when you are with a group of people. but when you’re starting on your own you’re completely alone. you need to put in your own money. you have to put in your efforts. you have to build in the systems. you have to ensure that you hustle like a startup but at the same time maintain the timelines of a corporation. so it’s a combination of a lot of things that come into making an entrepreneur and creating a successful startup. So while I started, there were a lot of hurdles. hurdle number one was people wouldn’t take me seriously because i was pretty young. If you look at most of the VCs in India, of course, things have changed now, but all of them were above the age of 50 – 55. There weren’t any young vc’s. they weren’t any young people in the startup ecosystem who were leading. so people didn’t take me that seriously for helping them build their business. so getting my first 100 customers was the biggest task that i had to face. But I need to keep pushing myself. I am trying to keep motivating myself. I need to get up everyday, dress up and show up. “Boss, this is going to be an awesome day. let’s do it” and every day i did. I just told myself that, ‘Davis, if you get a rejection, you are learning something. and every slap that you get on your face is going to help you bounce back harder.’ so just do that and every recognition that i gave, i patented myself that if someone of this age and this background in the ecosystem can build it, it’s great you’re doing good for yourself. so I kept motivating and inspiring myself, reading self-help books and just being charged up daily and it took a lot of training in my mind than anything else. so you know it was 70 percent of the psychology that made me reach where i am today and thirty percent the efforts that i put in. So a lot of mindful training, like a lot of inspiration and motivation to yourself, are very important for an entrepreneur because the first three years are the toughest. If an entrepreneur can survive the first three years, he has a long way to go because if you see most of the startups usually shut down in the first three years and anyone who has survived more than three years the chances of success increase dramatically. so i feel that’s a thumb rule that most of the startups usually should keep at the back of their hand that if they can survive the first three years, which is the teething period or the toughest period of their entrepreneurial journey, I think then the growth and the inflection point sets in and then the scale-up happens. Everyone knows how to run the business so that’s my two cents on what you asked.
Jeffery: I love it and you’re right. so much of an entrepreneur’s journey is mental. I love to give the example of the entrepreneurial journey. it’s like climbing a mountain and when you go climbing this mountain, there’s a lot of paths that you’ll take on the base because you’re going through the woods. you’re working your way up to the mountain base and through that, you’re going to get distractions. you’re going to go through problems, let’s say that that’s the first three years of figuring out what kind of business you’re going to have, the direction you’re going to go to get to that base. and then as you decide to start to climb, you only have two actual paths to go to the top. It’s very rare that you have lots of directions to go up and you have to pick the right one and hope you don’t get distracted. That’s how you’re going to make your journey forward and I think that there’s so many mental places that we get stopped in that we forget that we still gotta hustle. We still have to be able to do all these other components that are gonna get you moving forward and when you talk about getting coaches and helping with that, I think that’s where those coaches can come in. If the game is 70% mental, then you need somebody there to help push you, help coach you. I love the fact that you said that you won’t know if your business lasts three years. and the reason why i love this is because before i started my first real business, i had gone to a wedding and one of the patrons there was talking. He owned a company and he told me you won’t know you’re a business until you’ve been in business for five years. and i will tell you that that’s stuck in my head forever. year four, I couldn’t even tell people. I was the CEO of a company in year four. i was like, ‘oh my god! it’s almost year five. I’m nervous. am i a company?’ and then at year five, it’s like everything opened up. I decided to tell everybody I was a CEO. so it’s in your mind. you can play tricks on yourself. but I love the fact that it’s three years. Let’s shorten that time frame down. survive three years, you can be a company, you can be a business. It takes mental savvy and effort but it takes a lot of people to help move that boat forward. so you talk about mentors, you talk about how to get these exciting components to move forward. How do you look for a mentor? like if you started before, you started your potential cap company. you went to people to get advice and maybe those were the wrong people to go to get advice because they were naysayers or negative. but what came out of it was a lot of learning. so those people are good to talk to because you got their perspective which means you could build on that. But who are the people that you need to go after that are going to be your coach or your cheerleaders that are going to help push you forward? How do you find those people and where do you recommend to look for surely? So I think getting the right mentor is like getting the right life partner. it’s like first, you spend some time in your courtship, in your dating period. Once you’re sure that she is the right girl, you then propose to her and then you get married. and then you spend your life happily with her now. The point here is, I understand why the smile came in, but yes, so with the mentor too. i think you need to click with your mentor and once you’ve decided that he or she is the right mentor then you get into an engagement and then take a hit. but how do you figure out who’s the right person? How do you know the right person that I should make the first move towards?
Devesh: so there are multiple ways that one can do that. one best way is to first understand where you’re lacking. So if you think that you’re lacking in the domain, you figure it out today. LinkedIn has become a good source of getting the right set of people online. you go on LinkedIn, you put in the right keywords and figure out who the people are. Maybe write an email to them or message them and ask them if this is what you’re doing. Would they want to catch up with you for a coffee? if they are interested, they’re happy to meet, you go and meet up with them. have a conversation. see how it goes. Always, whenever you enter in a conversation with a mentor, one thing has to be clear. What is it for him or her? because nobody is just going to engage with you just because they love your idea. there has to be something in return, maybe they just want to give it back and they find the right mentee and hence they want to do that or maybe they want to have some equity in your company so that they can be part of your growth. maybe they want some value for the time that they’re investing so that they can help you for that being. it can be maybe they have a business where your business can be a backward or forward integration hence, they have an interest over there. so you need to also figure out why a mentor would engage with you and make that pretty clear on day one so that there is a give-and-take relationship. hence the bond becomes much stronger. so that is step number one. another way to find a mentor. There are multiple forums and multiple events that keep happening across the globe. some are offline. some are online. be a part of those events. hear them out speaking. If you feel they are the right person for you, get an introduction either through a reference or just walk up to them and say this is what I need. So in fact, many a time, when you dare to just walk up and talk to a person whom you may feel a little apprehensive because of the stature that the person has that will help you the most because you are first overcoming your fear. Secondly, the mentor would be really happy because he knows what stature he holds and if somebody has the guts to come and talk to the mentor face on the face and ask for help, that shows so much about the entrepreneur and his ability to perceive a two of perseverance and to move to the next level. So I think these are some of the ways that one can figure out the right mentor and then engage with the mentor on these parameters and then be with the mentor over your journey. Having said that, you may not have only one mentor in your life. There can be multiple mentors. so one mentor can be who can help you with your domain. One, mentors can help you with your marketing. one mentor can just be like a coach to you who’s helping you build yourself while you are starting from the base to actually climb up the mountain and then reaching on the peak and ensuring you stay on the peak. so for that you need a coach in your life. so it has to be a combination of mentors and coaches in your life which help you to scale up and grow. I hope that justifies your question.
Jeffery: Oh that was awesome. I love the ’empower people’ part where you go to them but they need to help you. So how do you know that they’re a mentor? Does it say their name? or do you just go to somebody that’s an industry expert that you believe can help you and empower them so that they want to be part of what you’re doing? and empowering, as you mentioned, comes through different stages. it can come through giving them equity. It can be part of giving them cash. you can give them a job. it could be they love what you’re doing and they want to help you. So empowering is so powerful and it makes people feel part of your journey. and i love the last part you said which helped you stay on top of the mountain. i think that’s really important because as you’re working your way up nobody wants to fall off the back end and lose everything they created. After all, they weren’t strong or they didn’t figure out the right ways to maneuver. So I think that’s all very amenable and exciting to share. So thank you for that. Now you mentioned that these are the tactics that you’re going to go for and you’re going to look to get this mentor and this person that helps you. and just like a relationship or a marriage, you need to put the time and effort into it. What are mentors looking for? like what is the thing that’s going to get them interested? do they have to be in the same domain as you because that’s where the passion is going to come from? you mentioned marketing. So if you sell water, do you want to find somebody that’s been selling water for 30 years that’s in marketing? What or do you want someone that’s selling diesel fuel but brings a different perspective? What are you trying to get someone that challenges you or somebody that supports you? What kind of mentorship, because I think this is important as a founder? What type of person do I want to have in my life that I’m going to regularly speak with that’s going to drive me or make this work and help me overcome problems?
Devesh: so there are different mentors with different thought processes. so some mentors have their expertise. For example, their expertise is to scale up. so they’re okay with any business. They are sector agnostic but they just want to scale up. Let me give you an example. So the other day, I was sitting with a person. She is in her early 70s. She has already built a huge business and today she is sitting on a pile of the surplus pile. Let me convert that into dollars, around 10 million dollars. so that’s the surplus cash that she’s sitting on and she’s just looking for startups or companies where she wants to invest that into and mentor them. and she is completely sector agnostic. What she wants is just a startup where she can put in some money so there is skin in the game and she wants to help them in their operations. so her USB or her plus point on her forte is quality control, quality assurance and operations. she’s like give me any business on this planet and i can scale that upon these three parameters. So now this is what a mentor may look for in any business. but that’s the photo the mentor brings on the table and he wants to scale up. Another type of mentor could be very sector-focused. so, for example, there is a person who has built one of the well-known logistics companies in our country and it’s very famous. Now he’s only looking for companies which are into the business of logistics and he feels he can give his domain expertise there where he can scale up the business to that level. so every mentor has different expertise, different forte. what he can contribute to the startup. so maybe that answers a part of the question. The other part is what does a mentor look for? So for the mentor, it is really different. So sometimes it is just that he clicks with the founder and he wants to invest a lot of time. What works with an investor and a founder or a mentor and a founder or a client and the founder is the chemistry that they build with each other. They need to like the person more than the business. So if the mentor really likes the person who’s building this business, he would want to go all guns in and support in the best possible manner whether it’s through his network, whether through his domain expertise or whether it was through his money. so that’s what mentors look for when they really want to engage with a startup or a founder.
Jeffery: I love it. and only because we’re going to transition shortly, i got a couple of quick questions on this mentor’s side. but more now shifting into the founder with the ups and downs and the roller coaster ride that these entrepreneurs go on especially early on in those first three years. Is there anything on the motivation side, so you’ve got a mentor which is huge. It’s helping you especially in that first three years you go out and find a couple of people to support you. How do you manage the ups and downs in the roller coaster of this? is this a mentor problem that they can solve? but how do you work through that? and then a lot of startups fail. So how do you work yourself to get to that first three years? What types of things, risks should you take? Is there any kind of advice you can share on that side because I think that the first three years are crucial and I think there are a lot of ups and downs and a lot of failures? What kind of things can you do to help prevent that?
Devesh: Surely so, I feel every entrepreneur should have a two filter mechanism. While they are starting their entrepreneurial journey, the first filter is money. and the second filter is time. So let me take an example here. Let’s say I have started my entrepreneurial journey. I’m going to give this journey three years and say half a million dollars. So that is to say the savings that I am happy to let go down the drain if my startup does not work and it won’t affect me. in a very substantial way of course, you’ll affect me. Half a million is a huge amount but not in a very substantial way. and i’m going to give three years of my life to this business. Everyone may have a different time. So for some, it may be just one year. for some, it may be just a quarter-million-dollar or maybe a hundred thousand dollars. so everyone may have a difference. but let’s take an example here. three years and a half a million dollars, i am going to start with my entrepreneurial journey. I’m going to make a business plan. I’m going to make everything on paper. I’m going to do a market survey. I’m going to see what my customers want. I want to be sure of whatever I’m building when I talk to my customers. Are they willing to take all these features? do they find the features are a little more a little too less? take the feedback. make the product number, one number two. I even crowdsourced the pricing from my customers to be sure that what price they are willing to pay, not just because my product can be compared with the world leader and he’s charging say 10 times more than what I can afford to charge. I would also charge say 10 times. I should actually charge even if I’m able to create a healthy margin over the cost of my product. I should charge that amount if my customers want me to charge that and not overcharge them initially. unless i build a brand and i reached that scale. so my first step would be to reach out to the customers. take feedback on the product. Second, take feedback on the pricing. The third step that I would do is, which is a very difficult step, and only say 10 people can do it but if they do it the chance of success increases dramatically, which is that I go out to my customers and say that. you know what, you said you like my product. you said you’re willing to pay this price. Are you willing to give me a 10% advance for this product before I bring this product to you in a month? if I’m not able to bring the product to your level, I’ll refund back your money but would you be able to give me a 10 advance so that I’m sure that what you’re talking you mean it and you’re just not saying it you just show me a way because saying no is very simple sorry. saying yes, it’s very simple but saying no, they use the customer. the founder usually keeps pestering the customer to understand why he does not want the product, and that reason to say a no gets into a maybe a half-hour conversation which is time-consuming for a customer so usually, they say yes and when the founder goes back with the product, they say we don’t want it right now. we find it too expensive or we already have it. so, all those reasons start coming in. so by taking a ten percent advance, two-three things happen. number one, you’re very sure that your customer is going to pay the remaining 90 percent because if invested that 10 percent is going to give you the 90 as well. number two, your customer, if he does not want to pay you the 10 percent, will give you the real problems in your business which you need to work upon and build a solution. number three, it’s human psychology. The pain of losing 10 percent is higher than the gain of getting 90 percent. Let me give an example. here if i have a wallet today. in my wallet, I’m saying a digital wallet, i have, say a hundred dollars or say even ten dollars for that matter. and if it says the digital wallet is going to lapse tomorrow, the entire money, if i don’t spend it today, i’m sure i’m just going to get on amazon or any other uh online shopping and spend the ten dollars right to waste it because it’s there with me in my wallet. but on the contrary, if i’m walking on the road and if i find a, say even a hundred dollar, i may not want to pocket it and maybe help it to someone in need because that’s not my money. so as human psychology, the pain of losing 10 is higher than the gain of getting 90 percent. So with that psychology, anyone who’s paying you the 10 percent would not want to lose the remaining 90 percent would pay you that and use your product and would not just show you away by giving you the ten percent. The last important point is that I feel that as an entrepreneur, apart from being strong on integrity, the other aspect that one needs to have is to be a good salesperson. he should be able to sell a block of ice to an Eskimo. So today when you’re able to sell your product to somebody without it being launched talks a lot about your personality, talks a lot about your sales skill which is very important in an entrepreneur. so I feel that is the first few steps that an entrepreneur needs to do once he’s sure on this base. then he keeps a filter of time so in the next three years, if i’m not able to achieve even 70% of what I’ve planned for maybe, i should take a step back and rethink or maybe quit entrepreneurship and get into a job. maybe it’s not meant for me. let’s not just force me to be an entrepreneur simultaneously. if i have blown over my entire money of half a million dollars and have not reached even 70 percent of what i’ve planned myself with this half a million dollar, maybe i should step back, reassess or quit this and pick up a job and maybe come after four-five years and see if i’m fit to be an entrepreneur then just not get forced into being an entrepreneur just because you started off. let the ego not take the better of you. so i think these are my advice to any newbie entrepreneur before they start the journey.
Jeffery: Those are amazing. I love the 10 advancements. it forces everybody to get on the same page. it helps you line up a customer and it helps you generate some dollars so I think that that is a great way. I love the story. it makes a lot of sense really, will help an entrepreneur. and of course, the planning side, taking that time to plan out how much money am i willing to spend, how much time am i willing to drive on. This I think is a great way to start. It puts you into the right frame of mind and also it allows you to understand what your goal is. How hard do I gotta hustle? And how hard am I gonna push myself? so that’s brilliant. all of it. I think the way you just shaped it, it helps kind of encompass what it takes to be an entrepreneur and I think the bottom line to the whole thing is that what you just said was, sell, sell, sell, sell. learn how to sell. I find that you have a 97% chance that businesses are great builders but they forget to learn how to sell and if you can’t sell, your products are not going to go anywhere. so i think that’s some great advice. How do you work your way through the scammers, the people that are naysayers, the negative side of the business? How do you get yourself through that and what ways can you workaround? you know, i think everybody goes through business and they say, oh you got your stripes. you got sued. Those are all the dirty things that I just didn’t like about starting a company. So is there any way that you can red-flag stuff before it happens so that you can avoid it as much as possible?
Devesh: So if I get your question right, how do I avoid negative people? How do I avoid people who just don’t have the faith and want to pull the founder down? Is that right? that part and the people that are coming in and taking your money but not helping, so it’s kind of that whole side of that. How do you avoid those things? What are the red flags they said, say stop, you need to go for? don’t stay here you’re in the wrong spot. I feel that is something. but you’re not growing anywhere. So in that case, maybe one needs to understand that if somebody takes some money and goes away and you’re not going anywhere, it can happen once, twice, thrice. anything beyond that is not a coincidence. Maybe it’s the red flags that start coming from the third instance or the fourth instance, you start building in more caution and maybe by the 10th or the 11th time. So of course, you need to understand, what is the stop loss? so I don’t know. I don’t understand. I’m not sure how many people who would be listening to this would know how trading happens. but for people who understand trading, whenever you take a trade, there is a target. there’s a stop loss and you. and there’s money management so you know if you’re putting in you have 100 bucks with you you’re not going to deploy more than say uh 10 bucks into a single trade and you are not going to have your stop-loss which is going to be more than say two to five percent of your overall corpus. In the worst-case scenario, likewise, while you are into your business you need to understand what is the corpus that you’re willing to let go of. you need to understand what the max is. So what’s the overall corpus and what is the part you’re allowed to let go once the 50 percent of that is going off. and you’re understanding those are the negative people who are just coming and just getting your money and not going anywhere in life. you need to start getting your red flags on so maybe you can divide that bucket into 20 instances. maybe of the four instances, you get more alert fifth more up till 10. you should be sure which way out of it and the remaining ten is a buffer so you know sometimes people just say the eleventh may be the better one, the twelve may be the better one. so have a buffer but by the tenth, you should be sure and just get out of that and you should know this is not the place for me. maybe I’m able to give justice to the question.
Jeffery: I like that. Using the training example, you’re protecting yourself but also being alert enough that when these problems are occurring, you’re figuring out how to solve them. but if they keep happening, you need to pivot. you need to change but paying attention to how much you’re losing and trying to protect yourself. so don’t deploy it all in one spot and break that up. and i think that goes for all the problems an entrepreneur will face. they’re going to face a lot of them and it’s figuring out which ones you need to attack, which ones you need to let go but protect yourself through process, policies and governance. new things that will help support your business while deflecting and removing the pieces that aren’t working. So I think that’s a great analogy. I would say that I didn’t know that the two to five percent, so I think that that’s a great holdback. I think we could talk for hours about all this stuff. There are so many things about what it takes to be an entrepreneur and how you can grow a business as an individual through mentorship and through building your business and really growing and climbing that mountain. so the one last question we’re going to go into just before we finish up with the rapid-fire questions is can you give us a quick story of what you found with an entrepreneur and what it took for them to be an entrepreneur and just kind of that heartfelt story that she or he went through that just blew your mind that you had no idea they were going to make it you thought this company was done and they just pulled it off and built a successful company. any type of story that crosses your mind that you can share.
Devesh: So this happened to me. I think in the year 2017. so there were these three entrepreneurs who reached out to me and they said that you know we need your time. We have seen a product in the UK and we think we want to build that in India. so we just want your time. so of course, they had been following up with my team for a while and maybe after say 30 -35 days, finally, i was able to give them some time. They came to the office. They discussed the idea with me. So I said you know whatever you guys are planning to do right now, a lot of people are doing that and according to me you need to build a very strong tech platform to create this difference. so they said that you know we are ready to do that, you just tell us how to do it. So I said, fine enough, if you want me to engage with you, these are my terms and conditions. but let me be very clear with you. I feel the chance of success of this business is just two percent and 98% will fail. The only difference that can come is a tech b. you as founders have to give your heart and soul to this. You have to just blindly follow what I’m saying and if you can do that you will achieve success. But I still doubt that you will fall into that two percent chance of being successful, so they said that you know we have heard a lot about you and we feel that if you are there to guide us, I think we will be in the two percent category. you just be ready to onboard us as your portfolio company and we’ll do the remaining. so you know i like the passion and i wasn’t sure if these guys could pull this off or no. and to my surprise, they started at zero. As we speak today, they have got two offices in India with a team strength of 40 plus employees. they have built the tech product they have already reached 2 million dollars. They have a valuation of 22 million dollars as of date. They have already got an offer from Google Home Automation to acquire them which they denied because they feel they can go much higher and they have built it into a success story so they fell to that two percent where I was really impressed because they really hustled very hard. they followed everything to the tea what was asked to do. They used their dedication, their hard work, their smart work. They built the technology. they followed the mentor, which in this case was me, and they did everything that was needed to build this and they wanted to follow that two-person they were highly motivated inspired to do what they want and this was a really beautiful case study in my portfolio companies where i wasn’t confident of them falling into the two percent but they were confident if they had the right guidance and they really took it to that level.
Jeffery: There was a story that you talked about and it really happened. That’s amazing and maybe them falling in the two percent bucket was that extra little drive that they needed to be successful. so kudos to you for seeing what the opportunity was, labeling it and then helping them be successful. That’s pretty amazing. I love the story. Okay, we’re going to go into some rapid-fire questions, just because we’re getting really close to the end and so far it’s been amazing. So first question: founder or co-founders?
Jeffery: We got a couple of those last questions. they’re not as rapid-fire. How many companies do you invest in per year?
Devesh: five to seven
Jeffery: Any verticals you like to focus on?
Devesh: So for me, the founder and the team make a lot of difference. So for me the 70 percent emphasis is on the team and the founder and 30% of the business. So for me, if I get the right team, the right founder, my money is on the table. However good the idea is, if I’m not confident on the execution by the team, my money is not in there. So I bet on the jockey, not on the cost.
Jeffery: any preferred terms? prep shares? common safes?
Devesh: So of course, apart from preferential shares that I would like to go ahead with the other terms that I want, is that I don’t want the entrepreneur to dilute more than 51 percent of a state in the company. so he needs to have major control in terms of state and the board seats because if his interest is there, i know my money is there. so i usually take an exit once it enters a series b and beyond. whereas equity starts diluting in the value of the lesser equity. but i also have seen with my experience the involvement of the founder is not as heavy as it is in these initial years. So for me the founder’s stake has to be always higher and till that is there, my money is in the business when the seas are diluting out. I also pull out my money.
Jeffery: I love it. favorite part of investing?
Devesh: i think that is spending time with the entrepreneurs and understanding their psyche, understanding their thought process of scaling up their business so every entrepreneur has a different thought process. but i think that is something that excites me the most spending time with them and helping the business grow together.
Jeffery: alright. I love it. last three questions on the personal side and we’re almost there. favorite sports team?
Devesh: So when is your favorite sports team uh in what sport?
Jeffery: any sport, whatever you think is the best.
Devesh: so i think cricket and India.
Jeffery: Okay, perfect. favorite movie and what character would you play in the movie?
Devesh: There’s a movie called Guru. I’m not sure if you’re aware of that. so it’s on the life of Ambani, who is the founder of Reliance Industries. Currently, it’s Mukesh who’s managing that. so i think my favorite movie is Guru. very inspirational, very motivational and i would love to play the character of the main lead.
Jeffery: alright. you’re gonna have to send me the link to it. I’m gonna watch this.
Devesh: I’ll share with you.
Jeffery: Okay awesome. Last question, what is your superpower?
Devesh: oh good one. So, I think my superpower is the way I can connect with people. so i can feel my entrepreneurs. I can feel my team. I can be with them. so the empathy that i can bring and the way i can connect with them, i think that is the superpower or the differentiator that i bring to the table.
Jeffery: I love it. It’s an amazing skill to have and I want to say to Devesh, thank you very much for joining us today. As I always do, I take lots of notes. big fan. you’ve done some amazing things. you’re helping an entire country shift its way into entrepreneurship. you provided us with lots of data points on how to be an entrepreneur and how to be an investor at that same account so thank you very much for all your time today. you’re fantastic and what we like to end our show with is i like to give you the last word. anything you want to share to investors or for startups? the floor is yours. but thank you again for all of your insights.
Devesh: So thank you, Jeffery. You have been a wonderful host and the kind of positivity I get every time I speak with you is immense. so i think it’s great to have a conversation with you. my last two cents to entrepreneurs before we say goodbye is i think there are three things that i look for in an entrepreneur before i decide to invest in his company. One is a business plan and the other is a pdf. so when i’m saying pdf, it is not the adobe pdf. but perseverance, discipline, and focus. so i’ll spend a minute here before we wind up. So why do I focus so much? so my 70 percent focus focuses on the entrepreneur and whether he has these three skills in him. The pdf is perseverance, discipline and focus, and why perseverance? So we all know Col. Sanders who started KFC. I think he started at the age of 63 – 65 and he had around 1009 failed attempts before what KFC is today. Thomas Edison had 10,000 failed experiments before we could see electricity. That is the kind of perseverance an entrepreneur needs to have. So I usually spend 30 to 45 days with the entrepreneur and have my different ways of assessing that to ensure that he is persevering enough. He shouldn’t make the mistake that I made when I gave up after six to seven attempts. He has to be perceived enough to ensure that he achieves his dream. number two is discipline. so you know what i’ve seen is before i invest in any company or this happens with most of the investors before they invest into the company, the entrepreneur is working very frugally. he is saving costs. he’s saving corners to help his company scale up the moment he gets the funding in. he behaves like that college student who just got his first job and the first salary and just wants to blow the entire money. So that discipline is something that I ensure that the entrepreneur needs to have and the third point is focused laser shaft. Focus is very important. You know people who go to the farm and go to catch rabbits, what usually happens is if there are six rabbits and you’re running behind one the other one comes closer to your leg and when you are about to hold the other one, you see that the first one moves away. and then you move on the first one. This way you keep running for the next 30-45 minutes and there’s not a single rabbit in your basket. but if you focus on one and you enter into the bush as well you just get the rabbit in your hand, you will ensure you will see that all the six rabbits are into a bus in the next 15 minutes. So that’s the kind of focus that one needs to have but usually what entrepreneurs do is every time they see something new coming in, they just want to jump into that and they forget the goal or the vision with which they have started their business. So I think a laser shaft focus is another very important thing. So yeah the pdf is there. i think that’s my two cents that every entrepreneur needs to have something that helps them in scaling up the business dramatically and even investors feel more confident investing into those businesses. very inspiring. Those are awesome. I’m going to use the pdf. That’s brilliant. I love it and you’re right to focus, discipline and perseverance really can make and shape anybody. Thank you very much again for all your time today. i learned a lot and I’m sure everybody else will but thank you that was awesome. Well, that was amazing. lots of learning therefrom Devesh. I think man learned so many different things. I love the last one that he talked about on the pdf side, perseverance, discipline, and focus. Huge. I think every entrepreneur should work off those three things. They make a big difference and of course, you know as an entrepreneur the risk that you’re going to take and the things you need to do. He came up with some great opportunities thereby sharing like 70% of it and 30% effort. do a lot of planning. figure out how you’re going to become that entrepreneur and how you’re going to move forward. I think as a coach, as a mentor, find the right people that get around you. I think all of those things make a big difference and he shared so many great stories and great analogies that really can help an entrepreneur think a little bit differently about the journey that they’re gonna go on but also making sure it’s set up for success. So again thank you, everybody, for joining in today. It was well-received and a great job. so excited that we had that conversation. So thank you for joining us today. If you enjoyed this conversation, please subscribe to our youtube channel or follow us on Spotify, Apple, podcast or stitcher. you can also check us out at supportersfun.com or for startup events visit opn.ninja thank you very much and have a fantastic day.