Never a Start-Up, Always a Business.
I recently started following Mahesh Murthy on LinkedIn (who doesn’t). In the semi serious world of LinkedIn, it is perhaps the only genuine entertainment you will come across.
He recently criticized a Facebook post where Bookmyshow highlighted itself as the only major startup that is in the green. The post highlighted the losses all the bigwigs made. From Flipkart (2000 crores), Snapdeal (800 crores) to PayTM (1000 crores) – every major tech startups losses were chronologically arranged and the companies were even categorized into sub-sectors for us commoners to analyse the ones who have drowned the most money. Personally, I found nothing wrong with the post. If you are the only big league start-up in the green (3.1 crores to be precise), use every inch of your social platforms to flaunt it.
Importantly, it got me thinking about what kind of companies qualify as startups. Is it Mahesh, is it a VC or should it be ME? Not one for boring technicalities, for me it was always a matter of perception. For a millennial (which unfortunately I am not) or a new entrepreneur (which I am) – Bookmyshow, Zomato, Flipkart and the likes have become gold standards. Funded repeatedly. Co-founders from IIM or IIT. More press coverage than even a Reliance and a solid tech platform to backup their ideas.With the continuous losses these companies make, are the new gold Standards of entrepreneurs misdirected?
My own company, a content marketing firm called Facilius Inc, doesn’t qualify if any of these benchmarks were real.
We are not repeatedly funded (only once till now). None of the co-founders belong to the IIM-IIT breed. Perhaps most importantly, we have not been in the red EVER. This company was started with an investment of 12,000 rupees and we haven’t made our 120 crores yet but that 12,000 rupees has got it’s fair share of returns.
I grew up in a modern but Sindhi business household. It was not a start-up friendly atmosphere. The one rule of business was profit (well, two rules – profit and goodwill) but the question of taking someone else’s money and making a loss in continuity would have been an idea that would have got me disbarred from all business talks. So when we see the Bahls and the Bansals as celebrated entrepreneurs, there are days I wonder if we are celebrating their insane ability to change the landscape of business in India (which they have) or their ability to run a business (which I, in my humble capacity don’t agree with).
Following the rules I grew up with, when I started my company, I was very clear that it needed to be my source of income. No decision was made for cosmetic reasons. It had to make sense to the bottom line. Clients were taken if the pricing made sense. We did do work at rock bottom prices to build a portfolio but the volume justified the pricing then. Admittedly, I don’t have a tech company. The rules for a service based business are different but the employees working with you must grow and my partners and investor MUST not lose any money.
Everyday, we do take risks that we hope will pay off but never has a decision been taken to ‘look bigger’ or for the press. In September 2016, we got funded. I wanted to increase the pace of my growth and an external infusion was needed. During the very painful negotiations, I very clearly told my investor, we will not make you 15x in 2 years on your investment but I will make you 3-4x in that time. Following the investment and subsequent expansion, I am VERY proud to say that I will pay my investor his first dividend in April.
It was at the dinner table with my investor (at the closing) that my father (who by the way completely disapproved of me bringing in an equity partner) asked me “When do you stop being a start-up?”. Almost immediate was my reply “Papa – we were never a start-up. We were and always will be a business.”