Amit Rai, Managing Partner and Director and former CEO of MachineMax onsite at the BCGDV-built venture

Talking Startups, Business Building, and Leading World-Class Teams with Amit Rai

We caught up with BCGDV Alum and ‘boomerang,’ Amit Rai, on his first day back at BCG Digital Ventures

At BCG Digital Ventures (BCGDV), it’s always exciting when employees depart to work on the ventures they build, but it’s even more exciting when they “boomerang” back to the fold. That’s exactly the case with Amit Rai, who has rejoined BCGDV as Managing Director and Partner after four years as CEO of BCGDV-built venture, MachineMax.

We caught up with Amit to learn a little bit about his journey to BCGDV — and how he found his way back again.

Before joining BCGDV originally in April 2017, I spent more than 15 years in the technology industry, primarily focused in three main roles: product development (Microsoft, HERE), strategy and business development (McKinsey, Nokia, King), and entrepreneurship (Coo, a group calendar app for school communities; and Helion, an India-based early stage VC company).

After selling my last startup (Coo) in 2017, I was looking for a place where I could leverage all my experiences to create new disruptive global businesses — BCGDV’s approach to business building felt like a perfect match.

Large corporations have so many assets; intellectual property, route to market, talent, brand, cash, the list goes on, but they often struggle with entrepreneurial thinking and innovation know-how in-house. I wanted to be part of a team that could take the best of what corporates offer to disrupt, transform and accelerate digital growth.

In many ways I never really left BCGDV! I originally joined BCGDV because I loved the idea of being able to create a disruptive global business, and that’s what I did at MachineMax. BCGDV was there at every step of the journey, from initial ideation and company formation to the scale-up. BCGDV was also a key investor until recently [MachineMax was wholly acquired by Shell in June] and Ajay Chowdhury [BCGDV managing director and senior partner and regional lead, Western Europe, South America & Africa] guided me regularly, informally and formally via the board, plus many of our large customers were introduced to us by BCG and BCGDV colleagues.

What excited me most about coming back to BCGDV was having the opportunity to work on remarkable business ideas with world-class clients. The final clincher was the people! You’d be hard pressed to come across such a mix of talented and passionate people as the team at BCG and BCGDV.

BCGDV has a time-tested methodology and approach to creating new businesses, allowing it to move from idea to market in less than 12 months. Working with BCG and BCGDV colleagues gave me valuable insight into how to make the most of this ‘secret sauce’.

I was able to take this knowledge and experience and apply it as MachineMax went from an idea on a piece of paper to a business tracking more than $300 million worth of assets across 30 countries.

“I wouldn’t have been able to make the transition to lead MachineMax if it wasn’t for my time at BCGDV.” — Amit Rai, Managing Director and Partner, BCGDV London.

Incentives, incentives, and incentives!

First, think deep and hard to understand the real incentive of your customer. What is the customer’s true problem and what will solve it? Far too often, we think efficiency and optimization is a goal worth pursuing but that’s not always the case. For example, a car rental company makes money if a driver rents a car for an extended period but never uses it. If you try and sell the rental company software that helps drivers return their car earlier, they won’t be interested, even though it would be in the customers’ best interests.

Second, think about the incentives you offer your team. Bean bags, free food, and long-term stock options are all very well, but many employees are now primarily motivated by a company’s core purpose. Attracting and retaining world-class talent takes a mix of culture, compensation, benefits, career growth opportunities and more. If you can’t build a world-class team, you can’t build a world-class company.

Finally, you must be deliberate in aligning the incentives of your corporate partner. This can be quite tricky as long-term enterprise valuation (EV) upside is not enough. Corporate partners need access to innovation, customers, talent, and branding benefits, in addition to short term revenues. It’s vital to identify and align these incentives (both at a company and an individual level) to unleash the unfair advantage.

There are so many learnings from being on the front line, but three key things spring to mind.

Preparing for growth: we’re all guilty of building hockey stick projections, but very rarely do we get into the detail of what will drive that exponential growth once product market fit is achieved. For B2C businesses, building virality and retention into the core product is key. For B2B businesses, it’s imperative to plan scaling of direct and indirect sales force from day one, as well as building long-term retention by integrating your service into existing corporate workflows.

Securing long term funding: invariably things never go the way you plan which is why it’s important to plan for long-term funding. The source of funding will drive the strategy and day-to-day execution. For example, a pure play SaaS VC is likely to look for strong top-line growth, whereas a corporate investor needs to see short-term strategic benefits for the parent. These goals can sometimes be contradictory, and it’s critical that the startup doesn’t try to become everything for everyone.

Realizing unfair advantage: BCGDV startups have one big unfair advantage in the form of corporate assets. However, to truly realize the benefits, the product and go-to-market approach needs to be baked into the corporate engine. For example, if you expect a corporate sales force to sell your product it’s not going to happen unless the entire sales team, down to sales development representatives and account executives have it in their monthly quotas.

The biggest challenge will be to avoid doing too many things at the same time. There are so many exciting growth opportunities in industrial goods (especially construction), internet of things (IoT) and consumer tech. I’ll have to really focus on a few initiatives, but it’s like asking an excited child to pick just two sweets in a candy store.

The other challenge is transitioning from an executive role to an advisory role. We all like to be armchair coaches, but it’s critical to remember that both the strategy creation and day-to-day execution must be done by the startup team. I’ll have to remind myself that I’m moving back from playing on the field to being the excited coach on the sideline.

The best piece of advice I can give is to be brutally honest about your personal motivations and personal risk-taking ability. Startups are risky by nature, so it’s important for you (and your loved ones) to truly understand the trade-offs involved.

I can’t tell you the number of times I’ve met people who want to work on something cool and have a shot of becoming a billionaire, while at the same time wanting economic stability and the work-life balance that comes with a corporate career. Startups take an inordinate amount of time and energy, so be sure you’re ready to spend the next five to seven years of your life fully dedicated to a single cause.

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