Indian VCs are Unimaginative
In 2008, I had quit Microsoft and Apollo Hospitals and was looking for areas with potential, the first thing that came to mind was e-commerce — India’s internet was booming and the physical retail was going nowhere, logically e-commerce was a no brainer! Since I had no money of my own I started approaching people with a business plan — agreed the plan was kind of thin — we will do e-commerce.
I made this pitch to the biggest group in the country — I would work for you for free and a stake if you invest in e-commerce — they declined, however they pointed me to another very large group with interests in electronics, retail, telecom and D2H who were interested in doing something new. I worked with them for close to 9 months on making the business plan, inventory plan, delivery plan and god knows what else — we were trying to be amazon of India (Yeah right!), however there was a small catch — the big group did not want to invest $1Million that was required to operationalize the company, they said the plan was risky and they would be glad to chip in 1 Million Dollars once the VCs put in. So essentially I needed someone to validate that e-commerce was going to be big in India.
It was now 2009 I approached some of the VCs that I knew — they were my friends from work and school. By now I had a decent business plan and I plead with my friend VC to give me $1,000,000 for operatializing the business plan, My case was
- e-commerce was going to be huge in India
- I am from IIT — Banaras Hindu University
- I have worked at Microsoft and IBM
- I have experience of running startups at Apollo & RMSI
- I have a partner who is one of the largest retailers in the country
- I had a working site and supply chain
My friends who were VCs declined — I sent a mail to every other VC, I could find and they all declined, their reasoning was e-commerce was not going to take off in India any time soon. However when it did they were left scrambling for “safe” investments and invested in companies that sounded like porn sites more than e-commerce sites, of course those things did not pan out. This episode made my believe that VCs in India are unimaginative and safe players who have no idea of what the future is going to be and what is going to be big or not, so if you have an idea that is out of VCs “focus” areas please don’t bother with the Indian VCs.
6 months into the new year my partner told me one of their senior managers “feels” e-commerce has no future in India and that they should not move forward with the plan. This senior manager (jackass by appearance and brains) was a favorite of papa, and his brothers, hence his word was very important. Its another matter that the senior manager actually cost the group at least $1 Billion in profit (currently they are in a debt of $7 Billion. I don’t blame them — they were not geared for the new world, they were old world traders who did not want to take any risk. Yes I did send them a “Ha Ha” mail to my partners when Flipkart got funded by hand over fist.
I did not have any money of my own to invest so I had to go do something else, which I did!
