Okay Rohit, maybe why don’t we start off by just sharing us where you are calling in from today and then we’ll jump into the meat potatoes of everything.
Rohit: Yes, hey! This is Rohit. I’m signing in from Bombay in India. It’s- yeah like I said, it’s about 1:30 in the morning today.
Jeffery: Perfect! All right. Well, Rohit we’re excited to get to dive into the conversation. I know we’ve chatted a few times before, but today we’re gonna dive into kind of anything and everything to do in this whole world of exciting, early-stage startup investing. So perhaps you can give us a little bit of a background, to start, where you came from, all the great things that you’ve kind of been doing over the years, where you’re at today, where you’re looking to go in the future. I know that sounds like a lot and then one thing about you that nobody will know.
Rohit: Okay, okay. Anyway, thanks JP for having me. Oh, I think we had some good conversations earlier and I think this is a good lead up to that. I’ll give you a quick run through of where I’ve come from and what’s next in around that front. so from a point of view, well I call myself- I entered, I’m actually from the advertising segment. So I’ve been working in advertising but again I’ve never really worked in advertising before. So that my first ever entrepreneurial venture was in advertising. So I’ve- I founded three different companies and first ventures in advertising, got in early in 2009 in the digital spectrum. This is when the word digital was still unknown in this country. It was just kind of picking up people who are confused about what social lead advertising was etcetera and that’s where we came in. So we were right place, right time. We scaled very fast, we grew to becoming one of the largest advertising agencies in the country. So this is the agency I co-founded with a friend of mine called Varun. It’s called Glitch, so we scaled quite quickly. So as anything that scales at some point the big guns came knocking, so we had about a few people knocking at our doors saying, “Hey, what’s next in line for you guys?” So- and we had to look at it we waited from that length saying, “That scale versus control, where do we look at?” So we decided that we want to scale further. So the best way to scale further was to align ourselves with a big network and that’s when WPP seemed like a great fit. WP is one of the largest advertising networks in the world, so we jumped on ship with them. We got acquired by WPP in about around 2017. Apparently, while the Glitch journey was on, I did start another company called Chtrbox. This is, I found this space that was booming called Influencer Creator, etcetera. So we said, “Hey, can technology come and disrupt this?” So that was another company that we started that’s still running on its own while I play a much smaller role there, more strategic investor in Chtrbox but that’s actually where the journey has been. Now, it’s been, well it’s been about 11 years that I’ve spent in advertising. I’ve been working with multiple brands, helping brand scale, find their footprint, both online, offline, etcetera. So I thought it’s a good way to now adapt and go and see how where else can I lend this to. So that’s when I started working with a bunch of startups who were- who I was mentoring, advising on that front and that space really excited me. So that’s when I said, “Hey, while I’m mentoring and advising you, how about I come on board because I also had access to capital because of an acquisition, right?” So okay how about I start investing in them. That’s the way where my investment journey started. So where if you ask me where I’m headed to now? I don’t know. I’m still with Glitch. I do have a daily job there with Glitch. I do actively invest, I end up meeting about 10 to 12 startups a month, chatting with them, try to see where synergies match, whether it sits in my theses and sometimes I end up investing. What’s next? I don’t know. It could be another- a new venture on its own or do I get into capital that’s something I left it largely open for me to decide that. So yeah that’s a quick gist of my journey so far.
Jeffery: I love it and one thing about you nobody would know.
Rohit: Oh, well that’s- so I have, one thing that nobody knows is that I have never worked in advertising before. So when we started an agency, both of us had never worked in advertising. So the good thing was that, that really helped me. When we started advertising agency, we didn’t because we didn’t work in advertising, we didn’t know the rules of advertising, so we wrote our own rules. So similarly, I think my next piece, if I look at venture capital or relocate investments, I have never studied finance before or I’ve never studied venture before. So it’s, I’m literally writing or learning the things on the go as I play around. So, yeah. That’s- I like to take a jump into things which are the unknown.
Jeffery: I love it. So it gives you a good way to challenge yourself.
Rohit: Yeah, absolutely.
Jeffery: So one of the things that I wanted to kind of go back to and this is just based on the conversations and your background, one of the things that I found interesting about you jumping into a space that you’ve never been in, built up a company, sell the company to the largest advertising platform, so you’re able to change the way people do things but inside of this there’s also another element which is part of marketing, which is your kind of self-marketing aspect and building a brand around yourself. And what I really enjoyed and liked about the things that you’ve done in your past experience, and I’m assuming you’ll take this going forward, was the things around TEDx, top 40 under 40, like all of these things that create impact around you which brings value back to your business. So if we were to go back and say, you know, is there something that really drove you to- was it because you were going into a new space or was it because what you were trying to show and prove was, “Hey, we’re doing something different and I got to use these other vehicles as a way to market myself so that all stand out. So that you’ll believe me then what we’re doing is great.” Because it’s kind of I wouldn’t say it’s abnormal but the great thing is that you’ve built up this really great persona and that makes a big difference when you’re trying to get investors to invest in you or with you. So can you give us a little bit about that journey because I think that makes a big difference for startups to be able to say, “I never thought I was worthy enough to get on a stage,” or “I wasn’t worthy enough to brand myself I didn’t think I knew enough.” But you took that reins and went right at it and blasted it all over the place with great content which is a total marketer’s dream. So how did you kind of start that journey and what got you interested in doing that?
Rohit: Well, I think a large part of what we do in advertising is: take brands and kind of literally brand and tell a story around it, right? So, we take a brand tell a story and market it in a certain way. Now, that same principle at some point has to apply to us as well saying- and the good thing is today, I wish hindsight was foresight, as I said, right? Because today, I can turn around and say, “Hey, I’ve never worked in advertising before,” so when we started an agency we managed to rewrite the rules. It could have gone south. It could have gone in a different direction. I could have turned around and said, “I wish I had worked advertising before for me.” So the thing is you always play to yours- play the right strengths that you seem to have a right usb that you have and then brand and work things around it and that’s something that we’ve gone ahead and done, so the minute we saw success we said, “Okay, how do we position ourselves differently from everybody else that exists in the market?” So if people are saying that, “Hey, listen be it we are the largest conglomerate, we’ve got 18 years of experience and 30 years of experience in the same- that’s how our companies are built.” We don’t say- no. We probably have no experience in building a company but we have experience in solving problems and we’ll find the fastest, easiest way to solve for whatever problem it is and that’s the position that we took. So it’s largely what I do for brands and I think it’s important to apply that to individuals, to startups, to invest in companies, etcetera. Build a brand around yourself: to have a thesis, to have a thing that people will identify you with, and then we can go from there. So that’s largely what it is.
Jeffery: So when you did this and you put together this branding around yourself, did you find like going in and doing the impact 40 under 40, that it bring- it brought you guys a lot of notoriety in a space or a business that you probably said to yourself when you started ‘why are we doing this? We’re not marketers’, and then you were able to just turn this into a real successful business? So what made you think ‘I need to do this’? Was it a mentor or like what got you to say, “I need to go and apply for these things. I need to be part of them because I got to create an image around myself. If I’m going to take this risk, I better be the damn good at it and be the best at this risk.”?
Rohit: Actually.. it’s actually the other way around and I really wish I could turn around and say that, “Hey, this was.. this is the idea that we had and we wanted to position ourselves.” It’s actually not that way. So what has happened is for the long, we’ve been really bad at talking about the kind of work we do of doing this. We were so busy doing the work and this somebody in the company once made this statement saying ‘the shoemaker’s son never has shoes’, right? So it’s literally that. So it’s we were too busy making shoes for everybody else. So at some point we took a conscious call saying, “We need to get a PR agency on board that will help you at least put out a point of view out there,” and that’s so all I mean the one that you’re referring to the fact that you’re on lists etc. is something that they managed to send your profile across and then it’s chosen by a set of people on that front. So it’s not an active effort from our end but we did make an active effort to bring in an agency, a PR agency who was able to drive a narrative. So we were able to sketch out a narrative and give it to them and they kind of reached out to the touch touch points and put that out there.
Jeffery: Awesome! So how much value do you now look at a PR agency or the marketing side, as you’ve been in this for so long, how valuable this is to a startup business?
Rohit: I actually think it’s extremely valuable, so I- when I talk to a lot of these startups, when they talk about saying, “Okay, hey. We look- we’re now ready to get into that space.” I said, “First thing is that people need to know that you exist. So then so before you go out and build a larger brand story and brand persona, what is important is somebody to discover you straight up. So it’s important for you to be seen in the right place,” right? So sometimes, and this is largely for a lot of consumer-facing guys, now it helps in different spectrums so one, if you’re going to be fundraising, then if you’re you’ll see that a lot of companies that come out suddenly bursting in the press, it clearly means the fundraising. They’re looking to raise funds so which is why they’re putting their story out there. Two, it is- it’s a great form of marketing to pull your product out, right? So talking primarily about your products say- and pr for me right now, is evolved. It’s no longer just a article in a newspaper, magazine, could even just be an influencer talking about it. So the minute people start talking to your product that’s when somebody starts looking for this product. They google you, they find you, and then you lead them to the destinations telling them the whole story but it’s important to is PR important I think it’s a very very important part in the life cycle of marketing for a brand. I would say definitely in the early stages, the more PR you use because it’s far easier for people to discover you as part of something that they’re reading consuming, etcetera, than for them to discover you otherwise. So I would say PR is definitely a key part.
Jeffery: No, that makes a lot of sense. So how much of a budget, marketing budget, if you’re an early stage company and you’ve got, and I’m all for this this is why we’re talking about this stuff because I agree 1000%, that when a startup becomes.. starts off, I find that a lot of them go right away to ‘I need to build. I want to build this thing.’They haven’t really verified that the problem exists. They haven’t gone out and got a client to support it they just feel that there’s a need for this they start building. So I assume and put this number about 95% of people are builders, 5% of people are sellers and if the sellers, there’s some marketers in there, of course that’s part of selling but there’s this 95% of builders and they don’t always take on that idea that, ‘I should start testing, marketing, PRing. I should do some stuff to validate myself first. So taking what you’ve just shared and what is a good percentage of that, is there a percentage that you look at and say, “Okay, you know what, if you’re going to build some success you need to do a triple-trickle effect. Start something small while you’re building along. Get some ads, do something that gets your brand out there a little bit so that as you build your product and build market fit, your marketing is following along with that and you’re pivoting and shifting all the same time. Is there a percentage that you would recommend early stage, pre-seed, seed rounds, that you say, “You know what, 5% always,” and then build on that? Like is there something you would recommend? Because I think there’s a gap here.
Rohit: Yes, I’ve actually- I read this before. I think it was a line from Facebook but I stick by that it says “Ship it to 30%” because you will never be a hundred percent satisfied with your product, right? So you- what you think is a 100% in your head, will keep changing month on month because you will keep getting feedback on different points. So unless you don’t put it out there in the market, you don’t know what’s coming up, coming your way, or if it’s even worth building what you’re building. So I’ve always said, “Ship at 30%” at no matter what you’re doing on that front and it’s- I mean from a from a point of view, I say that when you ship at 30 it also means that you put the right kind of ammunition behind that 30, and see what is being adopted from this. So there are 9 out of 10 times, you will end up pivoting from what you are trying to build to what you are going to because at 30, you realize what the actual use case for this is, or is there a use case at all. I have seen this both with I mean primarily with a lot of consumer facing startups which what we think is a great idea to solve for on paper, the minute it goes there that’s not the idea to solve for and suddenly people are looking for a different solution at 30, you’ll realize this. But there’s no point trying to aim to perfect your product and put it out because I mean it’s about who gets to market first. It’s not about who not necessarily always about the best one in the room so..
Jeffery: Awesome, and I like that ‘30% ship’. I think we should put that on like a big flag so that everybody sees it because they’re like 100%, 100% and by the time they ship the product, they’re broke. So now you’ve got this real concrete structure that says, “You know what, you’re going to learn and work with your customers and you’re going to ship at 30%”, now how much of a budget would you allocate to supporting your ship, your launch? Is that marketing budget you put something there? I know people will always waste- wait until they get to their first raise of seed round or something before they put marketing dollars in, but do you recommend something else to get this brand story going? Because I know it’s so important and people don’t seem to think this.
Rohit: Yes, I definitely think it’s so- I think a brand needs to be built from day one so it’s as important to your product as, and again it depends on from companies to companies or different from the category you’re in, but if you’re a consumer facing company that you’re trying to build then end of the day whatever you build is it there needs to be a brand story attached to it, and the earlier you do it the better because what happens and I’ve seen a lot of people do is that they go ahead and they they try to put it out, and I’ve seen this with a few startups who don’t put these are more direct to consumer startups, right? So they don’t invest in design, they don’t invest in telling a brand story, etcetera, in the first half. So they put a great product out, but it’s not packaged the right way. So they don’t see the kind of sales they do, they necessarily need to see. What they’re all waiting for is that, “Hey, we will hit a certain number then we’ll raise our series A, and at series A is when we can try to afford an agency.” Now, and this is also a large problem that exists in our- in the advertising spectrum, right? So we have been working very actively. I read an article the other day calling something the ‘creative capital’ so which I call the ‘ultimate capital’ right? Saying, agencies are also very nicely primed today to make that space into venture capital. Where they turn around and say, “If I was to work with a young D2C brand who’s making a great product, their expertise is probably not brand building. I will turn around and say, ‘Let me help you build a brand and take equity instead,’ because they can’t afford to give you money. But let’s say equity so which that then converts into a larger story so we’re both accountable on that front. So if you ask me, right now, I would say that a brand needs to be built from day one. You need to have a vision or a story or everything to say from day one. The amount of money you spend on it is not the the actual aspect of it. It’s more saying that, “Okay, hey. We’ve managed to package it a certain way that people look at us in a premium light.” So I know somebody who was building a company where the product was excellent. It failed because people didn’t want to pick it up the shelf because it wasn’t attractive enough to pick it up. If you picked it up, you would have come back and bought many, many- you would have had enough repeats but if you didn’t get somebody to pick that up, then there’s a problem and that picking up happens with branding so..
Jeffery: I love that and branding does play in all of this, in all the things that you’ve done in the 40 under 40, TED Talks, it’s all branding. It really emphasizes how you or your company can value from that. So there was one thing that, and I’ve mentioned this in talks that I’ve gone on and done before, and still do it’s: that there’s 12 touch points before you close a customer. We don’t realize what those touch points look like. They could be an email, they could be a message board, they could be a friend talking, they could be a TV screen, they could be a million things before a comfort level comes in to close people. So if branding is key to your business and you’re allocating that little budget from the beginning. Like you said, building that brand that that touch point can come over one month or it can come over two years. So you really do need to focus in on starting early because you never know when that 10th or 12th conversion is going to happen to win that customer over. So if that means you got to try a lot of different things along the way, one of the things I like that that you’ve done is that you’ve pushed into awards and things like that that you guys have benefited from on the great content you put together, are the things that you suggest that are a ways to get other people to support your brand and do awards work. Do that type of thing really support an early stage company like getting an every pitch event, working awards in a sector because you’re in manufacturing and sciences go to a university and win an award, like do you feel that all of these things really support and help that startup get those touch points?
Rohit: So I’m not sure if awards will.. so what we talk of touch points technically is what we call a consumer journey, right?
Rohit: So and if from the moment I see a product to the moment I click buy or pay for it, there are multiple places where you can come and talk to me at and that’s what you mean by touch points. Now, when I draw this out awards for me is the early stage part of it, which is if you’re the most awarded product there certainly and then yes, you have my attention. Now, that’s only one small part of it. I don’t know if an early stage company awards matter as much. It’s probably going to be much unless. You build a product that’s just like it’s game changing on that front, right? So when I open the Apple app store and it tells me the most awarded game this year is so and so, I mean it’s not a genre I play but because it said it’s the most awarded game. I will download it just to give it one shot at. So, you- yes is awards a touch point. Yes, it’s a- it’s some form of a recognition or it’s validation, right? So and consumers are looking for some form of validation there. So it is but for an early stage company I don’t think awards are going to be their key aspect because I get even- to get to that award they have to be about a year in the system, they have to be running, they have to have sold an x amount of products. So I don’t think an award is a key aspect but there are multiple such touch points that come in from- I mean and which for me largely, it is a lot of word of mouth that will be build it in. it’s people who you trust which again which brings you back to that whole influencer conversation I’m having, right? So it’s people you trust in that trust pyramid. The problem that the legacy brands have is that in the pyramid of influencers, they go and touch the top one percent which is the celebrities, etcetera, who 9 out of 10 times are not using a product. The ones who actually convert for you are the mid segment. So getting the right people in to talk about it whose trust value on on that category is high enough is one way to get your product out there. So I would, I mean, when I speak to founders I keep telling them, “Your aim shouldn’t be to bring Tom Cruise to use this headphone that you’ve got.” It’s probably the guy in my class or my office who’s an audio feel, who’ll turn around and tell me that, “Hey, listen. This is the best one to wear,” and I’ll trust him more than I do. So try working towards that because everybody gets swayed by the glamour of advertising which is that top one percent but the actual effectiveness is much slower than that.
Jeffery: Oh, that’s some great advice! And yeah, you got to kind of start somewhere and going all the way the top might not be the best usage of your dollars.
Jeffery: It’s interesting because the startup was telling me that the other day we’re just like, “We need to figure out how to get Lebron James to use this.” I’m like, “Not sure that’s really where you want to go. Might cost you a lot to get that high but maybe there’s somebody a little lower.”
Jeffery: So you’ve kind of put together this a little- a clean approach for the startup to kind of move forward so and all these little touch points make a difference in the long run, and you’re starting these touch points at the beginning. So now kind of fast forward your business, you’ve got market fit, you’re growing. What kind of things do you see that will really help an investor have more interest in that startup? So now you might be at that seed level or maybe or you’ve just raised your pre-seed, what kind of things do you think investors are attracted to? Because you mentioned it before, it’s about de-risking, it’s about finding ways to well convert somebody. So what other things would interest you in investing in that company? They’ve built a brand, they’ve got some great things going, what kind of- what other things do you want to see that come out of this?
Rohit: So I- because I’m more of an angel investor or early-stage investor, right? So I come into companies at a much early-stage which is probably there then kind of trying to find their product market fit, and my advice to all of them is that, “That’s great! You will find, we can work together, we’ll identify the space that you need to be in.” But I post all that anything you want to go from an institutional round upwards then you need to be able to have a problem that’s big enough to solve. A lot of times you end up working towards a problem which you think is a big problem, but it’s too small for any big investor to come in and park money because that for them is not a vibrational solution. So we- I work very actively with these founders to say that, “Hey, let’s- you may think right now that this is the problem but is there a bigger problem?” So there’s a lot of times when some startups, some founders pitching an idea to me and I see that he is right now either not wanting to reveal the larger plan because what he’s trying to solve is probably a one million user base kind of a space. Whereas the actual magic happens at 100 million, right? So there is so much more in the thing. So keeping- so founder market fit is where I enter, then we identify a product market fit, and then we say is that a problem? Is that the right problem to be solving? Is there something else to be solved? Are you in the right space? So it’s largely that’s why I would advise these guys when I work with them. So because I come in very very early it helps, because early sage and I also don’t just come in with pure play capital rights, I do enter from a strategic investor point of view, where I do have a point of view on this. Where I can- I literally work closely with the founder saying, “Okay, let’s identify a space. Let’s work towards it.” I’ll give you an example, there’s one company called Desi Wood which I’ve invested into. They- what they were doing is they do speakers, so I don’t know if you’ve seen Marshall. They’re trying to be a speaker company but this is a wooden speaker that they built which is entirely customizable. Now, the pitch to me that came from them was, “Hey, we build our own bluetooth speakers with wood which is eco-friendly. It’s- I mean the market for that isn’t big enough so I had to literally probe them into multiple different meetings on design saying, “Are you looking at this at a scale or not?” Till we finally turn around and said that how they were disrupting the space of speakers whereby making speakers not a one-time buy but FMCG product, which is you could buy a speaker. It’s almost like how you lease a car, you take a speaker, it’s customized to you basis whatever you’re listening to today, so the design is customized. Six months later, you can just come give it back, pick up a different version for a small fee. So it’s almost like your speaker’s always on. So that now generated a far higher demand. Now, you know, look at it from that lens, now you have scale. Now you have pieces that you can get into. So it’s, are you solving a small problem? Are you solving a big enough problem? That became a bigger question to answer. so that’s largely where this conversation goes with them.
Jeffery: I like that and really investors all look for scaling, and in your case you’re not just looking for scaling you’re looking for which is very similar to problem solving but are they solving a big enough problem that then can scale into a larger entity and it’s worth investing in or does it become a mom and pop smee and you have a potential of being bought, but is it really big enough for venture capitals to jump in?
Jeffery: That’s some great advice and I wholeheartedly agree with that. I think that that’s a good way to approach it and of course if you’re getting in there earlier you’re helping them not get stuck in a the smee start of things but being able to work their way through and get to larger rounds on their way up.. which again, I guess will allow me to come back again to the branding side, in that scale up side of things, do you then see that that brand can pivot as well just as the product will pivot as you pivot the product to get to funding, will you brand will you have the brand pivot as well and start to brand bigger too? Is that all part of that same process?
Rohit: The story of the brand will keep evolving with the product, right? So it’s for lack of a better word it’s the gateway drug that you launch when you come in, right? And then you’re now taking that forward and you’re scaling it. Now, if I look at from a brand perspective, if I were to put this out. Think- okay, here’s the story you’re telling about the niche product that you’ve launched that talks to a certain market. You’ve understood product market people, you’ve got the right kind of people, now you’re going to keep expanding. Now as you expand you need to- you’re.. the difference between your first million and your next 5 million and the next 10 million, your- the brand narrative needs to be wider and wider and wider. So you have to keep adapting to that, so even the brand story will have to keep changing as per how your product evolves in terms of what it’s talking to what’s talking about.
Jeffery: I like it. That’s very cool, so now let’s jump into your- the newest company that you’re working on and the product that you’re building there. How have you guys approached the market taking all this new amazing learning that you have from raising, selling, working in a space you’ve never been in before, how much of that did you bring into this new company? And can you say that you wish what you learned in the past, you would have learned on other things way beforehand or has it just been good timing and now it’s really helping for what you’re building?
Rohit: Are you talking about Chtrbox? Are you talking about my latest, my newest investment?
Jeffery: That’s Chtrbox.
Rohit: Okay, so Chtrbox actually came out from a problem that we faced in 2014, where the influencer space was just growing and somehow somebody decided to define an influencer from a lenser saying, “It’s anybody with x number of followers and above.” So that was a very bad definition of an influencer in our opinion. So we looked and said why is it- why is a person being termed an influencer base of his followers whereas and not by the influence a person has in a category? So everybody is an influencer. I am, you are. I, for example, from a food point of view if I was to talk to my friends and tell them of a great restaurant, they will take my word for it and they will definitely go there. So I’m a great influencer in food. I don’t have a million followers with me but that still makes me somebody who converts. So as I said, so Chtrbox is born from this particular problem inside saying can we now use technology and data to identify people, and we’re a country of a billion in India. So can you scan all of these profiles that are there and identify who is influential in what and kind of democratize this. It came in what it did was if there were one percent of the people making all the money in influencer marketing in 2015, suddenly that the influencer economy grew out of proportion here. So suddenly I may only have a thousand followers but in my class, in my school, in my college, I would be the most influential person in tech. So I would still be able to make money out of the phone by different electronics and tech companies, trying to get in touch. So it’s opened up a whole new creator influencer economy and that’s what we did with Chtrbox and it’s kind of built in. so when I drew out my thesis of influence of investments later which is why I don’t know if you read that at some point mentioned saying that I want to keep a consumer at the center of it, and my thesis lies right from there, it stems from there saying, “Any company that helps you make a new consumer which is basically make help consumers make wealth out of it, that’s the place that I want to operate in; Any company that will help this consumer that have who’s made this wealth kind of spend his money, that’s another space I want to operate in; And the third space that I generally invest into is, anything that delights a consumer.” So consumer is always at the center of it. So now, Chtrbox sat exactly in that first level. It was helping identify new customers and helping them make money out of their influence that they had. So that’s- took a lot of learnings from what we’ve done in the past, we’ll put that into this as well. So glitch taught me what the larger problem statement was because we were as an agency trying to find influencers, we were not able to find the right ones. So this one was coming in to help it. I was obviously because of a technic product we needed to raise some money, so we ended up doing a small little raise with the angel investors around. That gave me a lot of understanding of, okay, how- what is it that people are looking for, what is- how do you- what kind of a valuation can you put to a table, what are the other instruments that can count. So everything that I’ve done in the realm of investments has been a learning here. So all these learnings was applied to Chtrbox. Chtrbox box, again, over time has evolved into multiple pieces, the different things within Chtrbox which are but they’re all branded under a single umbrella called Chtrbox.
Jeffery: Awesome! So it sounds like you learned a lot and then implemented those learnings as you continue to grow. You built a brand up, you solved a bigger problem, and that bigger problem continues to grow, and you continue to solve it but it’s scalable and that’s the key to all of these investment- investors to want to come into the brand into the business. So you’re a better second founder than you were a first founder, and you’ll be even better as a third founder because all this learning and now coming in from an investment side you’re going to be even stronger and better because you’ve got even more tools to bring into this mix.
Rohit: I would really hope.
Jeffery: So, ah that’s awesome! Oh, that’s good and some very good learning there too. Well, we’re going to kind of shift a little bit but so one of the questions I have is that in all of the, before we get to rapid fire questions, in all of the experience you’ve had in the last 10, 12 years of this, when you shape it down you’ve come across lots of different startups, they’ve told you many different stories, is there one story that really kind of stands out that really blew you away of this amazing feat of entrepreneurship where the startup just totally changed the way you look at entrepreneurship? They went in they did this little change and then they turned it into a skyrocket ship or something whatever you want to call it but a real good showing of what an entrepreneur goes through to be a startup. I always like sharing these great stories that other investors come across and they’re blown away by what the startup’s done.
Rohit: Well, I don’t know if there is a big story like that in my portfolio but I will definitely talk about something that I had seen at one point and I passed on it. So somebody was trying to disrupt the content space of saying written content and he said like, “Hey, let me put things in. Can AI help you write content for the future?” and things like that so but the way he it was initially positioned I looked in and said, “It’s one more of the service industry thing. I didn’t see scale,” but when I look at them today, it’s called Pepper Content and if they’ve kind of really skinned, and they’ve taken- they’ve actually got so today when you hear a lot of startups, right? So these keywords are put in so that investors get interested in machine learning AI. Here, they actually did use AI largely to do this but that’s it. I keep meeting a lot of founders and that is- and I call it ideas that make you nervous so I recently met somebody who wants to start a sneakers as an investment vehicle. So it’s- he was and it’s not stockx that he’s building but it’s a complete it’s almost like he’s trying to build a mutual fund as we call it or something of that sort with sneakers. So it’s you can invest x amount of money say if a sneaker costs 5000 these are all these high-end exclusive limited edition sneakers, and it’s like sneakers cost four thousand five thousand dollars. You can invest a hundred dollars if you have, and own a part of that sneaker. So it’s technically he’s opened a micro fund for sneakers. Now, so it’s a young 21 year old who’s telling me the story and I hear him out and I say I don’t understand the sneaker market the way he’s talking. I don’t understand who spends five thousand dollars on sneakers, and but there is an audience for that, right? So it’s not a space that I understand etcetera, but the way he spoke to me about it, the way he explained this to me, and the way he had his plans and his feet on the ground, I looked at it and said, “For me, this is an idea that makes me supremely nervous but I don’t think I’m parking money in the idea. I’ll park on the founder so I will cut him a check and I will say, “Hey, you can- I will watch from the sidelines because there’s nothing that I can do here that you seem to have a much much better clarity on this front.” So there are many such people and that’s the best part of- that’s what I really like about what I do from an investment point of view, for early-stage investment. I get to meet so many of these young, smart, absolute geniuses, right? And who are trying and they open up my perspective to solving problems. I’m looking at suddenly I’m like, “Hey, I’m oh- I never thought of it this way.” So it’s just, for me this is a great what I- when somebody asked me the other day saying, “Hey, so are you looking at this as a full time?” “I don’t know at this point of time,” but from as an early stage investor what I take of it is it’s my way of keeping myself updated with life, of keeping myself abreast with things, and making myself relevant in this universe, right? So suddenly it’s like every conversation I have with a founder who’s trying to solve a problem, he’s showing me a whole new perspective and it’s game changing. The question you asked me about saying, “Hey, have you seen a startup that’s- use.. what you thought was a small little thing but they’ve gone crazy with. There’s another stand about India called Dunzo and you should probably look at it. What good is- what technically was started as a Whatsapp group is today a unicorn. It’s a upwards of two or three billion dollars as a company, and what technically was that he was one guy who sat there and said, “Hey, listen. I- if I need to get somebody to run an errand for me can an app do that? Can an app find people to do this?” And he literally started a Whatsapp group with his friends saying that any errand you want, I will run it for you. And that’s how dunzo was born and technically today I look at it and hear their story I mean they have a much deeper story than I told you but there are upwards of two billion dollars and in valuation and so one of the most booming unicorns right now. So again, audacious ideas, ideas that make you nervous but they also make you look at it from a different perspective and that’s the- that’s what I enjoy the most on this.
Jeffery: I love it and the sneaker side of things, it’s interesting because I’ve seen a lot about it in the last little while about all these different things you can do with sneakers. A company we invested did the same thing where they were giving you partial ownership of products.
Jeffery: NFTS and stuff like that are now kind of pulling that out but what’s fascinating is that a friend of mine that I’ve known probably, geez, 15 years, he’s been collecting sneakers that whole time. He probably has a whole house of sneakers. I don’t even know how many there are and I always thought it was amazing. I love my sneakers but he did them as a collection never wore them and just kept them in the original box, the original everything, and it’s pretty sick the collection but who would have known right so he was able to see this vision of you know the Michael Jordans and having this one pair, and what it would look like and what it would be in 10, 20 years from now and it was bang on right now. The sneaker phase is not a phase, it’s a real investment vehicle and but everything is almost becoming an investment vehicle now. So you know, anything that you can find that can carry a short-term and long-term value and if I keep it, it really does take off and and have its own life. So that’s pretty exciting those the stories you shared. So thank you. All right, so you mentioned your favorite part, we’re gonna do rapid fire questions. You mentioned the favorite part of why you invest and I love that answer because it is huge. The things you get to learn from every startup and from every founder, I love that part. It’s what drives me to wake up because I don’t know the next story I’m gonna hear and the cool business that’s gonna come out of it, and the excitement of being able the opportunity to maybe invest in them. That’s always exciting, right? How many companies do you invest in per year?
Rohit: I don’t go in with a number, literally. So it’s, I kind of tend to back up founders. It’s the times when I go three, four months and know I’ve met about 100 startups and not put money into any of them. But if I have to go with 2020 as a indication, I made about eight to nine not investments in 2020.
Rohit: So yeah that was-
Jeffery: Breaking the average! That’s brilliant! I love it, any verticals you like to focus on?
Rohit: Well, this is what I was telling you earlier, right? So it’s very consumer is at the center of whatever I do. So it’s startups that help a consumer generate wealth, I’m on let, me understand that. Startups that help consumers spend this wealth, I’m on. And startups that bring consumer joy, another thing. The common point to all of them is they’re all driven by tech at some point. Tech does like the center of disrupting the or of disrupting the existing problem that they’re trying to solve, right? And which helps you now operate at scale. So scale is definitely very very key for me, so I don’t I couldn’t invest into something that’s too small. As long as it’s disrupting something and there is and a lot of times to disrupt a space you need to have a new way in which is tech at this point of time. So that’s largely where it is. So consumer at the center and move on.
Jeffery: I love it. Is there timelines for your investment from day one to the time you close with them? Like is it one month, two weeks? What time is the time frame usually takes?
Rohit: I actually make my decisions very quickly so I think by my second meeting, I’m morally sure if I I’m coming in or not. So I go from- so once I give a yes then it it’s what it’s about a couple of weeks from there in to close the deal. So but yeah by the second first and second meeting, I- first meeting kind of gives me an idea of what they’re trying to do, that’s when I do my reading. I come back with a bunch of questions. By the second meeting, depending on the kind of answers I get, I’m more or less sure if I’m in or out.
Jeffery: Awesome! Okay, any sort of due diligence that you need to see to make the investment? Like paperwork wise, team wise, anything that really has to stand out for you to now go over your second meeting and saying, “I’m in”?
Rohit: So because a large part of my investments are very early stage. The due diligence on the other, it’s very surface level on that front. What I look at is how big is the problem that they’re trying to solve, so even if they, I mean, when the founder tells you what he’s trying to solve a lot of times they’re not telling you the entire picture, right? This- they do want to get your investment for that first little check and then say, “Okay, now but is there- is that problem actually works on- is that a much much bigger problem that’s something that I really-”, so I genuinely do study the space I invest in. Like I spent a good two days reading everything that I could about the sneaker space before I committed here and that’s.. so it’s, I do look at projections. So how I do it is once my first meeting is done, I kind of ask them a bunch of questions. I do ask them to share some form of projections of where they’re headed to et cetera and my second meeting is more to understand the founder: is how rigid they are, how fluid they are, how stuck up they are on are they willing to? Because some people are very headstrong who believe that this is the vision and that’s where it said it, and who refused to adapt to and that’s what it goes out.
Jeffery: Okay, do you lead rounds?
Rohit: I tend to avoid leading a round. It depends again on the kind of startups I’m talking to. I choose to lead or participate but I tend to avoid leading around because the leading around requires a lot of time and invest- investment of time from my end which I would rather invest that time working closely with the founders in the product space because my expertise would rather be on that than spend the time on the- then because if I’m leading around then it’s finding the next set of people or forming the syndicate, finding those. You know that takes a large long chunk of time for me and that’s time is a luxury I can’t afford at this point because I do have a active day job in advertising building brands. So yeah.
Jeffery: Sure, I love it. Okay, do you have any preferred terms that you like to invest on? If it’s prep shares, safes, none of those matter, you just go with the flow?
Rohit: Yeah I do go with the flow. I mean so the safe equivalent in India is the CCPS as a convertible note. I always push these guys towards the CCPS or convertible note because it’s very easy. I mean safe is so easy, I love it when I have to invest in anybody in the valley who’s open to taking safe because it’s I think y combinator made that very very easy for you to invest with that lens. So yes, safe definitely. A lot of times because I come in from a strategic point of view. There is a good mix of advisory capital and the regular capital that I get, right? So now that then differs so it depends on the kind of startup I’m working with or depends on the kind of problem they’re solving. If I do have an active contribution to do there, and they see the value, they need me on the advisory board, etcetera, then that comes with a whole different set of shares. So yeah that’s but safe or CCPS as we call it in India is my is what I prefer because it’s just- it’s it otherwise everybody can value a company in any given direction. In an early stage, it’s very easy to turn around and say every company is at five million dollar company. You’re not. You- it’s only when you start selling a certain amount when there’s some form of numbers that I can figure the valuation.
Jeffery: No, that makes sense, that’s a good point. Okay and then the the last question would be, do you do follow-on investments and do you take board seats?
Rohit: So far I have not done a follow-up round yet but something I’ve always kept open so it’s in the term sheet, I tend to do always add the first writer refusal clause of sort somewhere. So I do that. From a broad state point of view, I do. So again, I’m not precious about board seats, right? So it’s, I will be on the advisory board of a few companies in my portfolio because I genuinely will be adding value to it. Again, what happens is when you hold a board seat, you only hold it till an institutional investor comes in a lot of times because when they come and they don’t need angel sitting there. So then you’re more of a board observer or whatever.
Rohit: So if there is a company you want to just make sure that they’re not the money that you’re being put in, you want to keep a check on it, etcetera. That’s when the board seat comes in but I’m not precious about it, right? Generally, we discuss amongst the people and say, “Hey, am I going to be adding value?” then I’m happy to take it but I want a couple of advisory boards across the portfolio.
Jeffery: Okay. No, that’s good to know and that’s good insight for the investor side and for the startups for us. Okay, we’re gonna slowly or maybe quickly shift into the more personal side of things. So we have a couple of questions. We’ve learned a lot so far it’s been great. Question number one what would you classify as your superpower?
Rohit: Oh, that’s a good question. I would have said that I have the ability to flip my way through things which is why my career in advertising comes in. As a child, I used to make up stories and I could make people- I could convince people. I have really good convincing powers so I can convince people of things that never happened till I got caught for bluffing my way through at some point.
Rohit: But then so my parents said either you stop bluffing or you make a career out of it. So that’s when I went to advertising but I have a good I think if you ask me a superpower I can have a good convincing skill.
Jeffery: Well, it sounds like you just have a good storytelling which is what you can do in advertising. You got a good way to get people to get behind your brands or the brands you work for.
Jeffery: That’s awesome. That’s a good superpower to have. Everybody needs to be able to tell a story and if you can tell a good story that’s going to help anybody get comfortable to win, right?
Jeffery: We’ll just have to change the way you tell the story so that it comes across better as you’re very good at telling stories.
Rohit: I like I said, I can convince you about anything else and that’s anything I want you to believe. So yeah.
Jeffery: I love it.
Rohit: That’s the super power I hold.
Jeffery: Yeah that’s very good. All right, your favorite sports team?
Rohit: My favorite sports team? So this I mean, I’m not an active sports enthusiast. I’m it’s not I play a lot of sports but I don’t watch as much sports. So it’s- so if it depends on the kind of sport you’re talking about, so if it’s tennis, it’s federer. If it’s cricket, it’ll be India. But if it’s football, it’s Argentina. So..
Jeffery: Oh nice! Yeah, all right. No it’s all- it’s more of a question just to kind of understand the breadth of what you like, so you’re a cricket guy, you like playing tennis. Like those are all very exciting sports, right? So and sports tends to be a way to bond people together for some reason, and for me I love football. So I’m an Arsenal fan but I had to become an Arsenal fan because I wanted to have a team that I could say I had a team. Because everybody be like, “Who’s your team?” You’re like, “I don’t know.” “Well, that’s terrible. You don’t have a team. You got to have a team.”
Jeffery: You’ve got a team. There you go, right? But that’s cool. I like it. All right, this is a tough question here,favorite movie and what character would you play in the movie?
Rohit: Oh okay, so my favorite movie is a tough one because it’s the two films that sit right next to each other. So it’s Inglorious Bastards and Pulp Fiction. So it’s right there.
Jeffery: Okay. So Inglorious Bastards and which one?
Rohit: Pulp Fiction. So I’m a tarant- I’m a huge tarantino pulp.
Rohit: So yep.
Jeffery: Which character would you play in both movies?
Rohit: Well in Inglorious Bastards, it was, it’s- I would damn how do I forget the name of the character there, Eli Roth played this guy. I think I could- really blanking out on the name of the character but Eli Roth played this guy in-
Jeffery: Is that the bear?
Rohit: Yeah, the bear. Yeah, the guy with the baseball bat. That’s- yeah that’s the guy I want to be.
Jeffery: I actually like that movie. I’ve seen it so many times. I have it on the player. I just play it all the time when I’m like bored I will play Inglorious Bastards because I love the fact of the humor but just how they twisted the whole thing around to make it-
Jeffery: More palatable for the stupid atrocities that this world creates but yeah it’s fascinating.
Rohit: I mean if you actually study that film, you realize the kind of genius this man. He opens the film with once upon a time so it’s he’s very clearly saying this is my fairy tale.
Rohit: He ends the film with Brad Pitt staring at you as the audience and telling you this might just be my masterpiece. I mean he just did- that was just magic running there.
Jeffery: So yeah, no I like I said, I always liked that movie. So that’s awesome and then Pulp Fiction? I’ve seen it.
Rohit: Samuel Jackson.
Jeffery: Samuel Jackson? Yeah, only because he’s hilarious. Yeah there’s- just for fun, you have to look up Samuel Jackson, he does a mini skit. I’m sure I can find and send it but he does a mini skit for hockey and he’s a coach. He’s a hockey coach so you have to look it up. It is seriously the funniest thing ever. It’s very old it’s probably like I’m going to say it looks like 20 year old footage but he Chris Celios is part of it like famous hockey players in the skit.
Jeffery: He talks about how what they were like this coach was amazing, “Oh, I remember this guy,” and they talk about it but it is absolutely hilarious.
Rohit: I will definitely look that up.
Jeffery: Look that one up but that’s awesome. So I love the movies and I don’t have to- most of the time I have to go and watch them, and it looks like I’m just getting movie reviews. But in this case, I’ve actually seen both recently. So I think it’s brilliant. Great!
Rohit: Oh, great!
Jeffery: Okay, so Rohit, I want to say thank you very much for joining us today. It was a pleasure. It was a lot of fun. I got to learn a lot and hopefully the audience learned just as much as I did but I appreciate all your time and the way we like to kind of end things off, is that we like to give you the last word. So anything you want to share to investors or to entrepreneurs, I give you the floor and you know share away but again thank you for all your time today. It’s been a pleasure.
Rohit: Thanks Jeffery! I mean I thoroughly enjoyed this chat. I don’t think I would have enjoyed it 1:30 a.m chat more ever, so well I- from last word, I don’t know if I have anything much to add beyond what we’ve spoken about. But I personally think I really like working with startups like I said from a point of view of learning, right? So for me it’s it’s just about meeting people. It’s about- it’s my way to stay relevant and the more people who look at it from different perspectives, I keep an open mind to that I say that, “Hey, this is a great way to have solved this problem,” which I’ve never seen. So maybe tomorrow if I want to go start my next venture, there are lots of learnings that I can take. But my one and give a lot of people and so when even when we started I think that is it’s- don’t be afraid to make a mistake and that’s something I tell every single founder that or every single startup that I put money in. I say that, “Don’t be afraid to make a mistake because it’s only when you’re making new things you make mistakes.” So as a founder if you’re trying to solve a new problem, it’s fine to go into the unknown. Go, it’s okay to fail you can come back we can always figure a way around from there but if you start being very risk-averse and you don’t make these mistakes then you’re you’re only aping somebody else who’s doing something else. So you’re not making something new. So if you’re making something new, you’ll make a mistake that’s okay to make a mistake. So you go with that flow and anybody who’s willing to do that is he’s got my attention. So that’s my last word for this.
Jeffery: Brilliant. Well, thank you very much for that.
Rohit: Thank you.
Jeffery: Very good words. Very wise. You will make mistakes, learn from them and keep growing. Again, awesome to have you on today and we will keep you posted on when we post this out and blast it out so we can support each other. Thank you for jumping on such a late hour and outside of that I’m just gonna pause it but thank you for one for joining us.