Startups are cool, but behind the million-dollar valuations and photo ops is the reality of running out of cash, working long hours and being swamped by the competition. Founders who tried and failed tell TOI what they learnt and what they’d do differently next time around
‘Entrepreneurship keeps pulling you back’
Mihir Mohan along with Jyothsna Pattabiraman and Debasis Chakraborty set up unamia.com, an e-commerce kidswear startup in 2011. Despite raising $1.2 million from Prime Venture Partners and Blume Ventures, their cash needs were high. Further funding dried up and they decided to return the money and shut shop in 2014. Mohan took up a consulting job to repay his debts and has recently started Pitstop, a car service startup with seed funding from Myntra and Livspace founders.
“Our clothes were simple but stylish at affordable prices and adhered to international standards. We spent on branding because we were a private label. Being an e-commerce business, we had to maintain high inventory, which made things difficult. We were also a little late to the game, and players like FirstCry and Babyoye had established themselves. Success comes when one is at the right place at the right time. The biggest lesson I learnt was that it’s the journey that matters. The relationships I built with investors are the best thing that happened to me. The fact that someone wants to back your idea is a big kick. I have no regrets and I’m back in the startup world. There is something about entrepreneurship that pulls you back into it.”
‘You start each day believing the idea will work’
Sanjay Rao worked with several MNCs for eight years before chasing his love for sport with childhood friends Sandeep Kannambadi and Vijay Bharadwaj. They ran Sporting Minds, a sports analytics platform, from 2006 to 2012. They worked with several IPL teams, international sports boards and players like Brian Lara, but they were in the field too soon and were struggling financially despite funding from Blume Ventures and several angels. The three co-founders are back together again with MonkeyBox, a kids nutrition startup.
“The good part was getting work with sporting idols and doing what we loved. The market wasn’t ready for analytics in 2006. While it drew interest, most weren’t willing to pay for it. We had passionate employees, which made taking the decision to shut down that much harder. When you are on the upside, meeting sporting stars, everyone thinks it’s a cool job. When you are down, it’s only family that gives moral support. When you fail, it is a deep feeling and one is alone. Every entrepreneur needs motivation from within. You start every morning believing the idea will work. This is the bottom of the abyss and the only way now is to go up.”
‘No driving, I’m going to be navigator for a while’
Udit Saran started EatOnGo in February 2015 with Taru Raah Agrawal to provide breakfast and brunch options to people in Bengaluru. They closed a round of funding in January 2016, but the money never reached the bank. Within 45 days, the company was out of cash and they had to shut shop. Saran has now joined an FMCG company, Fizzy Food Labs, as business head.
“When our investor backed out at the last minute, we tried to reach out to others but it was a bad time for food tech companies with funding slowing down. The most painful moment was letting our 30 employees go. We had to cancel offer letters. Founders might just get by but it is employees who suffer the most. I took a 15-day break and went on a trek to get my mind off things. I was broken, personally and financially. I started cycling to reduce my stress levels. Gurgaon-based meal-kit startup Innerchef was looking to enter Bengaluru and acquired EatOnGo in July. I’ve taken a regular job now. I don’t want to drive for some time. I’m happy being the navigator. I will definitely venture out soon but for now, this is my break.”
‘A spouse gets the worst of an entrepreneur’s life’
Bharath Kumar Mohan, who ran Insieve as co-founder for four years, now has another startup Sensara, a smart remote for TVs. Insieve offered a product for content discovery, which suggested content based on what one shared. Insieve was founded in 2010 and had a team of 10. Mohan, now 39, had raised $750,000 from Blume and Ojas Ventures, but had to shut down in late 2014.
“The biggest mistake we made was to do direct consumer distribution instead of looking for partners. Consumer distribution is expensive. They need our software, but they do not want it. We were ahead of the curve, and launched a year ahead of Google Now. We had four offers to get acquired, but none suited us so we were happier to shut down. When a startup is not doing well and you still see the entrepreneur around, it is sure that her/his spouse is the biggest strength. They get the worst of your life both economically and emotionally. As a founder, you keep the spirits high at work and by the time your reach home, you are dead tired. The timelines of your friends are all about foreign vacations but ours are all about work.”
‘We’re looking to pay back our investors’
Vishal BM founded Bengaluru’s first bike taxi, Hey Bob, in 2014 but shut down a few months ago after it ran out of cash. At its peak, Hey Bob had 200 bike taxis and 1,000 rides a day. It raised angel funding from high net worth individuals, but could not raise further rounds. Vishal now works with Giftxoxo as new products head.
“There are no regrets as investors had lost faith after Uber and Ola entered the market with subsidised rates. We tried moving from a consumer business to a business-to-business model, but it was too late and we ran out of cash. We were lean with just seven employees, including founders, and ran an efficient operation but investor sentiment was down. We sold our technology to four companies. We will get royalties and hope to pay back our investors. All the founders had sunk a chunk of savings into it. I got married last year and there was pressure from the family to get a regular corporate job. After we shut down, friends and family offered us money, but it would have been risky. We needed a big seed round to challenge deep-pocketed rivals.”
‘Entrepreneurship is not easy but totally worth it’
NIT-Trichy graduate Navneet Mishra worked at Ashok Leyland before setting up RawKing, a cold press juicery platform, in 2014. The soft launch was a hit among friends. He started selling to customers in January 2015, and was one of the early movers. Although the initial response and customer retention was good, he ran into money troubles and closed in June 2016. Mishra is now planning his next step and spending time with his three-year-old son, making up for the lost family time.
“I had limited resources and did not go for external funding. The scale and operations were challenging. The product was not suited for retail as the shelf life of the juice was only three days. Soon many players started pouring into the market and we had only 20% of the capital our competitors had. We had to stop. Family usually supports an entrepreneur, not because they believe in the idea, but because they want to see us happy. So when the struggle comes, and they see you stressed out, they wonder if it was worth it. Entrepreneurship is not easy but totally worth it. Even if you fail, you learn and have a richer experience.”
‘I didn’t want to drag a dying company’
Former software engineer at Aricent, Vinod Shankar started Simply Cook in October 2015 as a meal-kit platform that provided traditional food recipes with authentic ingredients. It sold around 50 meal kits but was unable to increase customer numbers as people did not see the kits as a daily cooking option. Shankar is currently working with Bhive workspace as a consultant and looking for other opportunities.
“A lot of people saw the product as a one-time experience. By April-May 2016, we knew the market was not ready for it. I didn’t want to drag a dying company, although we could have waited another six months. You are extremely focussed during your time at the startup but it is completely different at the time of shutting down. I travelled to Kashmir, trekked, visited places, and recovered. It doesn’t matter if you have had multiple startups before, you can still fail. It is about how you execute your current idea. Entrepreneurs shouldn’t get swayed by the glamour. What goes on in between doesn’t get captured in the media. You have to get into it full time.”
This article was originally published on EconomicTimes
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