Experimenting is at the core of building and tying new ideas. A opposed to having a clear problem to solve, experiments are designed to “try” out ideas that you have and yet know if they will work or not.
At most startups, I notice two primary “ends of the pendulum” issues. Most (over 90% of startups) dont run enough experiments. The rest (< 10%) run too many experiments in parallel.
If you fall into the first category, then my only suggestion is to think about experimenting and commit to doing one. The AirBnB blog is a great place to start, in terms of understanding the user experiments they run. They actually have a experiment reporting framework, which shows how evolved their thinking is in terms of this facet of work.
This post is about the < 10% who run too many experiments in parallel. That’s the biggest challenge I see with startups that hire amazingly entrepreneurial talent for their first few hires.
Since each of the first 5-10 employees are entrepreneurs themselves, they all tend to run multiple experiments, either with product, marketing, customer acquisition, sales, etc.
The framework I have for thinking involves 3 “sets of steps”. I call it “Trail, Nail, Scale”.
The “Trail” comprises of 5 steps, the “Nail” comprises of 3 steps and the “Scale” comprises of 2 steps.
Here is a visual to think about it.
Obviously this is very early thinking, but I’d love your feedback.
The way to think about experiments is you to pass through gates and assign the appropriate resources at each stage and have a “rough sense” of what you are trying to achieve. If you know exactly what you want to get out of your experiments, you are not “experimenting”.
What I have noticed is that the 3 stages end up being a funnel. There are many experiments you run, a few of them you will nail and a fewer of them you will scale.
If you have 100% of your “experiments” when you start, (on the left of the graphic), then 20% (or less) will be nailed and 10% you will scale.
In terms of allocating time and resources (if you dont have a large team as a startup, allocate your time), 10% is spent on “Trailing”, then twice that time or 20% on nailing and 70% on scaling.
There are many questions that this throws up, which I want to address over the next few days.
1. How many experiments should you run at the same time?
2. How do you define the success of an experiment?
3. How do you internalize and document the learning from your experiment?
4. How much “money” should I spend on trailing? How about in nailing?
5. How do I leverage lean principles into this thinking of Disciplined Experimentation?
Anyway, I’d love your feedback on this framework. As I share more of my work, which I am interviewing people in larger (Unicorn) startups at, I will also give you some case studies to see what they learned.
The interesting thing I learned last week from a founder of a small startup last week, was they have weekly celebrations. The reason was it forces the team to think about what they should be doing to celebrate in a few days. Every Thursday, their team would get catered lunch, and a cake, providing the opportunity for one person to be the MVP for that week.
When he was presenting this to us at the advisory board meeting last week, I thought it was pretty cool. I loved the culture they are building of celebrating smalls wins.
Another member of the board, who was an angel investor, nodded his head, and moved on to the next item, which was a milestone he really cared about – $10K in monthly revenue, which the entrepreneur had committed to last quarter. The progress was slower, and so it was likely they were not going to hit that number in the quarter, but he was confident they would in 2 months.
I gathered later (post the board meeting) that they were unable to hire a “Growth Hacker” to their team, since they had interviewed 3 great candidates, but they all picked up offers at other companies.
I asked him what the issue with hiring was. He mentioned that the companies they lost the candidates to were smaller, earlier and were wooing the candidate with a different culture (free food, benefits, pay were all table stakes) of work from anywhere and 2 weeks paid work from a place of their choice (think Hawaii or Bulgaria or anyplace you choose).
That’s when it struck me. You will always have investors who have been through the startup experience and those that have not. Those that have not, will not understand the nuances of what it takes to actually be an entrepreneur, so they are less appreciative of the “many little things” that go towards making the big things happen.
What this entrepreneur was planning to do was to have candidates attend their final interview (if they went to that stage) on a Thursday, so they got to see the culture in action.
In this particular case, the outcome that the investor cared about was revenue. To achieve that though, the #1 thing they needed to do was to hire a good marketing person (Growth hacker) and the #2 and #3 things were to build a good pipeline of opportunities for their newly hired sales people and tweak the on-boarding experience for new customers.
Unfortunately the entrepreneur had failed to explicitly communicate this to the other investors, who were not entrepreneurs before.
If you do not have investors and advisors who are entrepreneurs, make sure that you are clear about the “little” things that need to happen to make the outcomes happen.
Depending on the audience you will be asked to show a “competitive landscape chart” of your domain and the major players in the market. The main purpose of the competitive landscape chart is to position your company or product against others in the market. You need not to go into details, but, will be required to provide enough clarity for the audience to make out the differences between you and others in the market.
There are 2 important things you need to consider when putting together the competitive landscape analysis chart –
What you show (Features, Customer Segments, Market Requirements, etc.) and
How you show it (Visualizations such as Venn Diagrams, Harvey Ball Table, Process Map, etc.)
I follow a 3 step process to come up with the competitive analysis landscape:
Step 1: Identify: List all potential and possible competitors on a spreadsheet – one for each row
Step 2: Analyze (What you show): Start putting a list of features that you can claim you have they don’t, or segments of market which are market determined or a list of capabilities you intend to build which your customers care about or any other set of capabilities you can distinctly and objectively bucket each offering by.
Step 3: Visualize (How you show it): Look for patterns to showcase a small subset, (2-3) of the key dimensions you can differentiate and then choose the right visualization.
From the many hundreds of competitive analysis charts I have seen, here are the 7 most frequent.
Market Size – Dimensional Bubble
Market size analysis is typically good for early stage investors (institutional). The size of market tends to be a big determinant for many investors, so if you can show the potential size on a chart featuring bottoms up numbers in the X and Y axis and the cumulative size of the market as the size of the ball, you will end up giving them a sense for the potential of your company. In the example below I have shown the # of users and Price per user in the X and Y axis. The size of the bubble is (not to size) will then indicate size of the market.
Customer Segments – Multi Tier Axes
A good way to differentiate if you don’t have a different product is to differentiate by segment of market. You can segment markets by any number of ways, and the type of company / user / customer you are going after is a good way to show your competitive landscape. Most consumer companies tend to do this. As an example, Twitter is good for 30-45 year old males, Pinterest is good for 25-40 year-old women, Snapchat is for 20-30 year olds, etc.
It is okay to have an overlap of companies across multiple segments and the other twist I have seen is to show the value proposition to your customer on the other axis. In this example the key 3 capabilities of Price, Ease of Use and Integration is what I have showcased.
Customers Process and Systems – Process Map
The Process map is best used when you have a lot of companies in the “space” but they all do different things for the customer in terms of their usage and solve different portions of the same larger problem. For example, when I was starting BuzzGain, the listening solutions were good to get an understanding of what was being talked about a brand on social media, but engagement products were used by customers to interact and respond and analysis solutions were used for market research.
This chart could be a double-edged sword. One on hand a customer or investor could see this as clear positioning of where you stand in the process map, but on the other hand they could see the other products wanting to build the different capabilities across the process, which leads to consolidation, which to them indicates, they should wait until the market settles, or buy from a “large vendor, who has a significant but not best of breed products across the spectrum of their process”.
Feature Capability – Venn Diagram
Best used when you want to convey that customers need the best of 3 (or 2/4/5) different capabilities or features which all make the product unique. For example the fact that you have not he lowest price or the easiest to use product or integration alone will not rule your product out in the customers’ mind, but the fact that you have all 3 covered in the perfect blend makes it appealing to customers or investors.
The Venn diagram is best used when you can show that you have the capability to showcase you in the center and competitors on other intersections.
Key Features – Quadrant by axis
The simple McKinsey quadrant is actually the most used in investor presentations. This shows 2 axes with opposite ends of the axis values for e.g. simple vs. complex and fast vs. slow on the implementation speed.
You want your company to be on the top right ideally and others to be at the other quadrants. The way this sometimes backfires is that investors believe that the person in the center will win because they have the “perfect blend”.
Feature Spectrum – Silo Systems
Silos are best when you have a short list of 3-5 features alone to compare competitors with, and you have more than 3-5 competitors to show. That means a market where there are many competitors but few things to differentiate them by. Most used in rapidly growing markets, they tend to show why and how you can build a product or company quickly if you focus on a set of features that spans multiple silos.
Feature spectrum Silos are also very useful if you expect the number of competitors to increase. That way your investors don’t get alarmed when a new post shows up on a tech blog which has them sending you emails asking if we have a good plan “to compete against this new startup”.
Feature details – Harvey Ball analysis
Customers prefer this landscape analysis best on the website. Sometimes if you are talking to corporate venture teams, they tend to like this level of detail as well. The Harvey balls indicate the “feature completeness” of each of your competitors versus your feature set. Typically you want to highlight features where you will be “complete” and those where others are “less complete”. I have found though, that if you do a more objective analysis and focus on which features your customers really want and show a ball or two where you are less complete than others, it will give you more credibility.
The other way to do Harvey Ball analysis is to provide a list of key scenarios where the customer has to choose one product vs. another. In this situation, you will find customers self-selecting one product because of their own situation.
The table format is the most detailed and most useful only if your audience is potential customers. Most investors prefer a high level analysis of direct competitors, potential threats and incumbents. Your customers are currently using some solution (even if it is manual) or an incumbent (old dinosaur company) as a solution possibly, but they are competitors as well, which you must acknowledge.
There are multiple methods to keep track of your projects and priorities. Here is one technique I used when trying to keep track of customer validation. This approach works best when teams are in one single location since it is visually appealing and easy to update.
The most important item to remember is that the method works best for discrete, defined tasks that take a short period of time. If your item takes many weeks or months, you have to break it down into simpler steps.Customer validation or pricing strategy cant be a step. Pricing strategy has to broken up into price tiers, price testing, pricing validation, pricing research etc.
When validating customer problems, you are trying to understand the following questions:
Is this a real problem? Is is a big enough problem for them to look for a solution?
What will it take for them to adopt a solution? Adopt my solution?
How much will they be willing to pay to adopt?
I have used post-it notes as a great way to segment the steps in the process and use colors to validate different items I need to:
In the customer validation I put forth a process comprised of 5 steps:
1. Secondary research
2. Primary research with insiders
3. Proxy market sizing
4. Online validation
5. Customer interviews
The best way to use color is to put these various “sources” into different colors. So, influencers may be blue, proxy sizing sources may be yellow, etc.
When you get to the customer interview step, you are likely finished with the previous steps, so you can color code segments of your customer with different colors.
So “Segment A” will be yellow and “Segment B” will be green and so on.
The reason for colors is then you can put them all into a board at the end and find a way to look for patterns that correlate.
The big advantage of the visible productivity map is that everyone is motivated to make changes to the charts so you can see progress daily. Try it and let me know if it works for you.
Customer segmentation for entrepreneurs is a tool to reduce distractions, focus your product roadmap towards your Minimum Viable product and create personas that can help your marketing, sales and development efforts.
I am often asked 3 questions associated with customer segments, which I thought I’d address in this post. I am going to use an example of a company building a new age mobile Patient Records Management solution (or EMR – Electronic Medical Records) for the tablet as an example.
1. What are the steps to a good segmentation strategy?
The first thing you need to do to ensure a good segmentation approach is to write down your ideal customer attributes. You dont need any framework to do this, just a list of attributes will suffice. Your attributes need to be specific, numerical and descriptive.
(I) Specific means, you will have to outline their environment. What are they using currently? How specific is their problem? Do they have alternatives? If your target is doctors in our above example,. that’s too large a segment. Instead there are different types of doctors:
a) Those that practice independently vs. those that are attached to a hospital
b) Those that are general physicians vs. those that are specialists.
c) Those that see < 10 patients a day vs. those that see more, etc.
(II) Numerical means there has to be a set number of customers that fall into this segment. It has to be a number much less than your entire target market, and not more than 2.5% of 2.5% of your target market. Why 2.5% of 2.5%? That’s usually the second question.
(III) Descriptive means, you have to outline their current day-in-the-life scenario without your product. Explain how they are currently solving the problem (if it does exist) and how they are solving it without your product. It cannot be that they are not solving it. They may be used pen and paper to keep medical records, but a system does exist.
2. How many customers is enough to build a segment for? Is there a minimum number?
According to the theory of diffusion, we have 2.5% of customers who are innovators. These are your earliest of early customers and your initial targets. What I have found with most of the startups I am helping is that 2.5% of those innovators are truly the engaged, early influencers who will be willing to have the discretionary time and budget to try truly innovative products and then be willing to evangelize them to the rest of the innovators.
To be clear, you dont need all of the 312 to be your early customers. These are your early segment of potential customers. Typically 10% of them being early customers tends to show “traction” for an investor.
Lets say the total number of doctors in the US is 500K. Then your Innovators are 12.5K. Of them, 2.5% should be the first segment, which is about 312. That’s the ideal target for you to have as a start.
3. What if most of the target customers dont have the pain point or dont want the product? Does that mean the segment is incorrect or there is no market need for this segment?
If you have targeted 312 doctors who are primary physicians (segment by practice type), in the Texas area (segment by location) who work in a multi-use work location (segment by work area) and are currently using paper based medical records (segment by current product usage) theny you now have a segment of customers who you want to go after.
A trick that I have seen most people use is to segment based on Google Adwords segments (see diagram above) or segment by Facebook targeting options.
Once you have your segment at 2.5% of 2.5%, then you are doing a combination of ads, conversions, focus groups and interviews to understand if they have the pain point.
If you end up finding out that customers dont have the pain point or the conversion rates on your ads is low it is indicative of either poor targeting,poor messaging (your message did not resonate), incorrect framing of the problem or lack of the problem in the first place.
What I have found in my experience with over 300 startups is that the number one problem is poor targeting, followed by lack of the problem existing for the prospect in the first place.
One of the first things you will realize as an entrepreneur is that you will need to be absolutely clear about your customer’s problems and envision your product solving their most important pain point. This realization results in an appreciation for the “micro” problem for a “small set of customers” to begin with.
That in essence is customer segmentation.
The discipline of finding the factors that differentiate one set of your potential customers from another based on a set of characteristics.
First, segmentation is a discipline.
The output of that disciplineis a) a way to make it easier to identify your customers via a known name or persona b) a means to target them more effectively and c) a language to explain their problems / pain points and d) an ontology to express your solution to help them solve the problem.
Second, you will have to find factors that help you differentiate customers.
The idea behind the factors it to help you focus on those customers who have the highest pain, and hence the most propensity to buy, or the most desire to solve the pain and eliminate (during that period) than those that dont have the need immediately.
Third is to identify and document the characteristics that help you find the patterns or a set of questions to help guide your segmentation.
The best way I have found you can document the characteristics is to write down a set of interview questions that can help you during a discussion with potential customers. Others have used the buyer persona canvas or a simple tool to document thinking, feeling, seeing into maps.
The empathy map is more relevant for design, but it can be made very relevant for you to leverage as a founder to understand the sales cycle, buying process, marketing criteria or service design.
Lets take an example. Assume that you are building a CRM system for SMB, to help them track their sales and allow sales reps to directly provide a quote and contract using just their mobile phone.
Most entrepreneur’s state that all SMB are their customers. This is usually done to prove that the market is very large and hence deserves attention.
The goal of the segmentation exercise is to make the market extremely small (a set of customer you can get in front of, collect feedback and test your hypothesis in as short a time as possible).
In most B2B scenarios there are 3 major and many minor characteristics that define segments of customers.
1. Size of the customer: Some people define size by revenues, others by # of employees, still others by # of sales people within the organization, still others by # of quotes the company delivers in a year, etc.
2. Industry vertical: In industries where speed to quoting and contract delivery makes a difference in the sales process, your solution might be more valuable, (e.g. some insurance verticals) than others were the contract process involves multiple rounds of competitive bids.
3. Title of the buyer: Titles (VP of Sales, Director of sales, Sales Manager, etc.) are usually an indicator of spending authority. In our case the VP of sales at a small company in the insurance brokerage is likely to have the ability to try and purchase the solution to help his sales professionals be more productive, than a Sales manager, who, is likely going to focus on trying the solution to offer feedback, but may not have the authority to buy. They will end up being a user, but not the economic buyer.
It used to be that location was the 4th characteristic, but with the Internet, is highly possible that your customers are in a different location (physically) than you are.
For B2C companies, most segmentation is done by demographics or psychographics. The 3 most frequently used characteristics are age, gender and income. There are many others as well, but these are the primary. I will share the B2C example in the next post.
Most founders will come up with following variations of milestones when they get started with their company.
1. Ship beta version of the product by Dec
2. Raise $XXXK in funding
3. Get to $YY in revenue.
Unless there is a team that’s large enough to have each person take on ownership for each of the milestones, the founders are the ones that are responsible for them.
This means that there is little else you can do other than focus on these milestones.
Lets assume you have a cofounder and you split the roles into technical and business.
The technical person takes responsibility for the beta version and the business person for the funding and revenues.
Now a few months in, a new set of responsibilities come forward including managing your board, your mentors, talking to potential partners and others.
Your team has not expanded to take on the executive level challenges, so you still have the 2 cofounders taking on more.
Some of these new tasks are enjoyable – having conversations with partners or mentors for example, so you get “distracted” and the top 3 goals no longer get enough time. That’s when you realize you need a to-dont list.
A few weeks go by and you hopefully realize you are behind and try to catch up, this time removing the new tasks on your list and replacing them with items on the top 3 milestones.
The problem is getting to the new items is tough until you have enough folks on the team who can take on the high level, cross functional priorities.
Here are the top 5 tips I have learned to come up with milestones that you can manage. You may have heard about SMART goals, so I am going to skip that portion and assume you already do that.
1.One person per milestone. You cannot have joint owners for a milestone. Even if you and your co founder are “two peas in a pod” and “complete each others sentences”, have only one person assigned to each milestone. You will achieve greater accountability that way.
2. One milestone per person. If you have more than one milestone assigned to a person, reduce the number of milestones. Obviously if you are a solo founder, that means work on one thing at a time until you have a management team to help you take tasks off the plate.
3. Milestones cannot be overloaded. Milestones need to be specific enough for one area of work. If your milestone reads “raise a seed round and ship version 1 of the product”, that’s 2 different milestones with responsibilities for 2 different people.
4. Milestones need to have a specific date, and be reviewed weekly. To track your progress, I have found that a weekly review works better than daily or monthly. During the weekly review, you need to understand the tasks and projects that make up the milestone and understand where the blockers are with an “plan B” for any blocker.
5. The owner of the milestone needs to have cross-functional authority. You may have silo functional ownership of roles but most milestones, if they are important have cross- functional impact. So if you need to ship a beta version of the product, the owner of the milestone may need to get customer access from another person and market data from a 3rd person. Even if they are peer’s for the success of the milestone, the owner needs to have full authority to help get the resources to get the milestone done on time. This ensures that even if you have to transition from a role of control to a role of influence, you still have the ability to execute on the milestone.
Which is why I have a tool in my box called the “To Dont” list. It is not my idea or a new one, but I have benefited from it a lot.
It is a list I keep of things I am not going to do.
I have a list of 3 things I want to do each week and 1 thing I want to get done daily.
I have close to 45 items on my To Dont list. Examples – writing a book, learning Mandarin, learning awesome photography skills.
Every startup CEO and entrepreneur needs a To Dont list actually. Why?
1. Limited resources. When you are small you dont have an army of direct reports who can each own an initiative and “run with it”. If you, as the CEO, are not spending time managing projects and helping remove obstacles for people, you are not getting further ahead. I know a CEO who keeps blaming all the people she hired on her team for “not stepping up” to take responsibility for the top 3 items that the company must achieve. All along while she is working on priorities outside the core priorities she identified for the team.
2. Limited energy. If you are not spending time on your top 3 priorities for the day / week / month / quarter, and dreaming, eating, sleeping, brainstorming and executing those priorities, then your energy and brain power is being consumed by 100 other “shiny” non priorities. It tends to be the “death by a thousand cuts” problem where 7 to 9 things take up your time, and before you know it, it has been over 4-8 weeks and you have not made any progress towards the top 3 things you need to achieve as a company to get to the next milestone.
3. Limited time. If you work 10 hours a day, god bless you. If you work 15 hours a day, you are fooling yourself into believing that you are “working and productive”. I dont know the exact capacity and stamina that different people have for work, but everyone needs some time to rest their brain, their body and their mind. If, for example, you believe you should spend 8 hours on your top 3 priorities and only 2 hours a day on your bottom 7 priorities, I still would question your ability to focus.
The main reason is that it is not time alone that you are spending – you are spending your energy, which is another thing you have in limited supply.
I know that Google has said you have the 20% time where you can work on things that you enjoy doing, outside your core priorities, but you are not Google.
You are a startup, with very limited resources and time.
If you want to work for 12 hours, daily, by all means do so.
Just make sure that your top 3 priorities get the all of your attention – until they are completed.
There are some tasks that you might believe “you cant make progress” on, until there’s something else that happens outside your control.
Bring more things back into your control by spending time and energy on alternative paths.
For example, if you believe the “customer” will take 1 month to get approvals in place for you to get the POC ready, try to get another customer on board, or work the org chart of the customer to get other approvals in place. Dont spend time trying to talk to a new integration partner since that’s not on your priority list.
That should belong on your to-dont list, until it is important enough to belong on your To Do list.
The To dont list should be as sacred as your to do list. Put everything in there that catches your attention until it is worthy enough to make it to your to do list.
I have noticed that the biggest mistake most startups make when they are at an accelerator is that they focus on
“Increasing their total surface area” instead of “accelerating their business”.
This results in the “tail wagging the dog”, where the accelerator schedule, mentors and connections determine what the entrepreneur and the startup does each day. It is important to ensure that you get enough value from the accelerator program, but I would recommend entrepreneurs optimize for acceleration.
It is almost as if after the startup got into the accelerator, the entrepreneurs believe they have a new boss – those who run the accelerator. That could not be farther from the truth.
If you get into an accelerator program, the #1, #2 and #3 thing you should be focused on is validating key assumptions, building product and customer development. Most everything else at the accelerator stage of your company is a waste of time, including attending knowledge information sessions on term sheets, understanding the “local” investor scene or going to “startup events” – unless startups are your target market.
There are 3 important things that most accelerators promise:
1. Learning from mentors, other members in your cohort and industry experts.
2. Connections to investors, potential customers and influential early users.
3. Infrastructure, office space, and a little sustenance money to get your team and product ready for seed investment.
If you look at these 3 items in isolation, there are many other entities that do a much better job individually, but a good accelerator “bundles” these items together so you can have a great experience.
Let me explain with 3 specific examples of what increasing your total surface area is versus accelerating your startup.
a) The best learning is via practice and teaching. So if you spend as little time as possible understanding the contours of the topic you want to learn, you can spend more time practicing and refining your learning.
Instead, I find most startups attending every learning workshop including “how to sell your company” or “the legal ramifications of your series A investments”. While <10% of the startups in any cohort will really be ready for a series A, 100% of them actually “try to increase the surface area” of their learning by attending sessions that they dont need given the stage of their company.
Instead, I would spend more time accelerating the learning of specific topics from your customers – what real problems they face outside of the pain point your company addresses, etc.
b) The best connections are those that are mutually beneficial. So, if you can help your mentor or adviser learn about your business, the market or new updated techniques of engineering, marketing, sales, etc. they can help you learn more about the nuances based on their experiences. If they are unwilling to learn or are not interested, they are not the right mentor.
Increasing the total surface area is trying to network with every mentor from the accelerator and networking with every potential investor, even if they have not invested in any company in your market or domain.
Instead, accelerating your startup is focusing on specific investors by domain, check size, background, connections, and other criteria you need to help your company grow.
c) While the infrastructure is available to have meetings, get the team together and learn from other entrepreneurs in your cohort, increasing your total surface area is trying to spend every evening with other startup entrepreneurs, networking over beer or having a lot of meetings at the space with other startup influencers from the community.
Accelerating your startup, instead is spending enough time with your own team, learning about the challenges they are facing and understanding how to remove the roadblocks. Or, spending time outside the building, trying to meet potential users and customers to refine and validate your assumptions.
If the accelerator focuses you on increasing your total surface area, they are wasting your time.
I was in Bangalore for 3 days, meeting about 30 entrepreneurs on day 2 and about 50 earlier stage in-the-process-of-starting-a-company entrepreneurs. The first thing that strikes you is how amazingly vibrant the ecosystem in Bangalore is. I met with over 100 investors (angel as well as a few VC’s) as well at the Lets Venture event and they while many were complaining that “valuations are higher” and “entrepreneurs are pushing them to make decisions quicker”, they were very upbeat about the opportunity in the Bangalore ecosystem.
The entrepreneurs are also much more savvy than folks were even about a year ago (I know that I spoke with a curated list, but previous curated lists were provided as well and this cohort of entrepreneurs were far ahead of those a few years ago).
The most interesting part that I noticed was that there was a bigger focus on “traction“.
I can confidently say that having been to 23 cities in the last 6 months including New York, Beijing, San Francisco and other cities in the US, Bangalore has a clear shot at being in the elite “top 5” entrepreneur ecosystems (Of course it will be Silicon Valley (Snow White) which will be #1 by a wide margin, but the other cities (the 7 dwarfs) are doing well relatively. I look at ecosystems for entrepreneurs around cities more than countries.
There were many observations I had in my 3-5 indepth discussions with Venture Capital investors in India. One of them was their necessity to now “compete” to get entrepreneurs’s attention.
Which in itself indicates a strong and vibrant startup funding ecosystem.
The most important takeaway for you as an entrepreneur, that I have learned is this –
If a venture firm has spent any time forming an “investment thesis” in a particular market or segment, then they will move much quicker than other firms who have not.
So that’s the million dollar question you can ask to determine if a VC will move quickly in India. I know this is the case in other locations as well, but the funding frenzy has been more acute in Bangalore than I have seen before.
I would ask a variation of the question – “What is your investment thesis in XYZ market”? Or “Do you have an investment thesis on “my XYZ” market”?
if they do, then your job is only to convince them that you are the best team, company and startup with the right traction to invest in.
If not, they will take weeks to understand the lay of the land, look at competitors and then form an opinion on your market.