Samir Bhatia - Don’t Go With a Powerpoint Presentation Asking for Money Because You Will Never Get a Valuation (Founder & CEO - SMEcorner, Series B Company)

I realized that I wanted to reinvent myself, I wanted to learn something and do something more challenging than a steady-state job. I decided to set up something on my own and it has been a wonderful experience because what I’ve learnt in the last five years I’ve not learnt in the ten years before that.

Tell us about your background, upbringing, and journey.

    

I studied Charted Accountancy in Bombay and started my career at Citi Bank where I worked and built credit models for around 17 countries. I was one of the founder members of HDFC Bank, I was one of the 6 people who set up the bank. I did that for 13 – 14 years and I was the Chief Executive Officer for Barkley’s Bank in India and two other countries. After that I did one more assignment and later, I set up my own company SME Corner in 2015.

 

 

When & how did you get clarity on what you wanted to do and how did this idea come to you?

 

I have worked already for almost 27-28 years and I realized that the start-up world was the place where one could challenge oneself. So, I wanted to learn something different because what typically happens is as you move up the ladder in corporate life and you occupy the corner room, learning kind of becomes lesser and lesser because you’re not involved with everything on the ground the way you would be in a smaller or a startup organization. 

So I realized that I wanted to reinvent myself, I wanted to learn something and do something more challenging than a steady-state job. I decided to set up something on my own and it has been a wonderful experience because what I’ve learnt in the last five years I’ve not learnt in the ten years before that.

And in everything you do with the new age online, digital, social media, Artificial Intelligence, machine learning and technology is all deeply embedded in startup life. Also doing something challenging when resources are limited, you must challenge yourself to create something new and create something with those limited resources. That has been a driving force for me while learning and doing something challenging.

 

 

What have been your biggest challenges as a Founder CEO & what advice would you give to others to avoid them?

 

One is that you’ve to be patient because this a long journey and not which you do and create overnight. So, one must be extremely patient, there will be ups and downs. There are many ups and downs, some of them may be related to your own decisions about what you choose to do and how you choose to do things, some may be influenced by the environment, where for example funding may stop, the economy may not be doing well and there will be different times in your life, and this is never-ending. 

I’ve spoken to entrepreneurs who have 10 years journey, they tell me the same thing. This is a constant cycle of ups and downs and things and challenges coming your way. Everything around you will be moving too fast and changing, so you have to be patient and believe in yourself and you have to have faith that what you have set out to create is something that you truly believe in and continue to do it. That’s one of the biggest challenges.

 

Second is one should be willing to roll up your sleeves and learn and be open to the fact that no one knows everything. You may be whoever you are, I like was CEO of banks before this, but I was willing to accept the fact that I did not know a lot of things and I would call people in their 20s, asked them to sit with me and teach me. Teach me A, teach me B, teach me about technology, Artificial Intelligence. Teach me about social media marketing. So, you have to be willing to learn, so if you are not willing to learn and sitting in your Ivory tower thinking that I know everything, that’s not going to help. You have to be humble and open.

 

Lat thing is that you must be willing to work with limited resources. Know the fact that it's not easy, money may come may not come at the time you want it to come, and you must learn to optimize and learn how to keep cost low and ensure that you are always running a good lean outfit.

 

 

What is your advice to an early-stage founder looking to build an ESOP program today?

 

ESOP programs are very critical, unless you have a good ESOP program, you’ll never acquire good talent. What people are looking for in a startup is a wealth creation opportunity.  Everybody wants to make sure that they are not risking their career working for a startup and they are working 16 hours or 18 hours going through the grind. 

They need to see some rewards waiting for them and so unless there is a visible reward pool it's not possible. So, I would encourage all entrepreneurs and startup founders to ensure that there’s an adequate ESOP pool is available for their key employees to keep them motivated enough to continue to work with the same passion over the first 5-7 years of the company.

Qapita helps founders, CFOs and CHROs to organize their equity ownership record at one place making it the single source of truth. You can use Qapita to run scenarios, issue ESOPs and communicate their value to employees, run buyback or liquidity programs and engage with your employees effectively. Do click here for a demo. 

 

What is your view on implementing ESOP buybacks and liquidity programs in startups?

That is the part of the ESOP program, unless and until you provide a liquidity program it's difficult for employees. Liquidity programs are not easy to create, companies need to be in existence for at least 3 to 5 years before you can create a good liquidity program because unless you are doing a C or D it's difficult to create a program for employees. 

For the company obviously, this is a key objective and the employees also need to be patient and should have the faith that the company will create a program for their employees and that the promoter and the investor of the company believe that and will deliver on their promise to ensure that there is wealth in the hands of the employees.

When should one consider raising funds, what according to you is the right time?

It again depends on what is your resource capability. Ideally, I would say you should bootstrap. You should try and raise money from your resources, family or friends whatever you can which should last you for about a year. What I would say is don’t go with a PowerPoint presentation asking for money because you will never get a valuation and you’ll never get the right investor. 

Find some bootstrap money, create a product, or create a service or create an offering and build the tech around it to a piece of concept, onboard a couple of customers, if one customer is B2C and that leads to X number of customers. Once you see some traction or you've proven that this is an idea that works, then it's very easy to get funding. 

As again saying this is my PowerPoint presentation and I’m just starting and I need money. I'm not saying that you won't get it. You will get it, but it's harder and the quality of investors that come at that stage is very different from the quality of investors and you won't get seed-stage funding if you’ve not even launched your business. You’ll get angel investors coming in. 

I had bootstrapped, so my first investor was a seed-stage fund that came in straight away. It was an international American venture fund and so obviously I started with a great quality of the first investor, that’s because I had bootstrapped and it went on for a year. We had launched, built the tech, and built the platform and then we went out. That would be ideal. But I had worked for so many years so I had some money to be able to do it. 

But so many people may be young entrepreneurs, right out of college and they want to start, they may not have the money to bootstrap. In case if they can't find close friends and family to support them, they can go out to angel networks which are there like Indian Angles Network, Mumbai Angels Network. There are some well-known angel investors, we can reach them on LinkedIn. Write to a thousand people and tell them you want to talk to them and then you’ll find some money.

 

What does your typical day look like and how do you handle setbacks?

 

Every day is different. I have a good team of people so operationally they look after the business. It's not the same for everyone. I spend more time dealing with banks, investors, fundraising, strategies, overall reviews and things like that. Early-stage was very different, later stage is different. Early-stage I was doing everything. Now I have a team of people, there are over 600 people in the company. It’s a different organization and the work profile changes over time. If a fundraiser is going on, I’m back to working 15 hours. It just depends on what’s going on at what point.

 

It depends on your mental makeup. I am very strong in my head so I know the fact that if I stay strong and I know if I think clearly, then I will be able to come out of it. I am typically very calm and patient. For me, it is not as difficult as it would be for a lot of people and I think the idea is to think clearly at that point and try and find the solution rather than get super stressed and think that your whole world is collapsing. There are multiple stages in a company's life and that happens. At every point, if you believe that there will be a solution, something will come out of it. Think clearly and positively and that helps a lot.

 

 

Which is your favourite book and why?

I can't really think of one book at this point that I can say that this is the one book that I want. There is a lot of information available and a wealth of wisdom available out there. I don’t have a favourite book or anything which I use as my bible as my guide to anything and everything.

Interviewed by - Bhavana N