The Exchanges

Q Fantastic. And, uh, can you share about the portfolio companies of special investor? Who are they and what are they doing?

A Yeah, so I, so at, at this point, um, you know, we've made about 10 investments across the first two and a half years. We'll make another seven to eight. I think our belief is a portfolio construct will be about 18 companies for every fund, and every fund will invest over a four year period. We're in the middle of raising our second fund, which I think we hopefully will have it sorted before the end of the year. Uh, in terms of fund one, we've made 10 investments, uh, four on the hardware side, and six on the software side. Uh, on the software side, we've sort of got two broad categories. One is developer tools and infrastructure, where we've got, um, companies like Skipik, which is a, a no-code tool for creating AR, VR, and QD content. And applications include, uh, advertising and commerce. Uh, we've got, uh, Kava space. Kava is a company that helps draw intelligence from space for business decisions. Again, no code, no product. You click in and, and you can sort of define outcomes. Total Cloud is, uh, is a developer tool solution for, um, managing cloud infrastructure across a, a multi-cloud environment. And some of the key things we offer is security, compliance, and among other things, cost management. And I think the last one in that category is a company called IRO. This is a, um, a product development company that's sort of pivoting from having people develop products to…

AI assessment note: “we've got companies like Skipik, which is a no-code tool for creating AR”

Q And, uh, uh, India, uh, you have seen, you know, the last, I would say, 13 years of venture investing. Do you consider today to be the most exciting period or what, how would you classify today as compared to the rest 13 years you have seen?

A Well, if you ask me today, I think you're significantly ahead and better. If we do this podcast five, 10 years from now, I, I think I'll say the same thing. Uh, I think certain advancements have been made just in terms of technology infrastructure. And I think culturally the entrepreneurial ecosystem has also evolved significantly from when I started. Uh, investing in 2007, 2008, you know, your typical entrepreneur persona was someone who spent 1520 years in the domain, single founder, has been at this for five years already, and then is raising capital for growth. And today, no, the spectrum is much wider. You've got anywhere people just graduating from college to sort of taking an idea to Slightly more senior folks, and you've got people in between them. I think what's fundamentally changed is the appetite for risk. There is no stigma attached to failure. People don't worry about failing. People don't worry about getting a job if this doesn't go anywhere. So I think they give it all, all they have in sort of how they're building these companies. I think the environment is also different, you know, failing, uh, in a company, 15 years ago, and I'm sure had a lot more taboo to it, uh, than, you know, having a startup that went down now. People are ready to live with that situation. And I think the world is, um, is seeing failure very differently from how it saw, uh, two decades …

AI assessment note: “Well, if you ask me today, I think you're significantly ahead and better.”

Q And, and what about the habits that, that you were mentioning? You know, what, what, if, if I may ask you, what are the habits that has developed Vishesh of today? Will you have successful VC?

A I think it's just very individualistic habits. None of what I do may or may not have relevance for the, for the business I'm in. I think I generally hit the bed early. I'm, I'm up very early. That gives me time to sort of do things very early on. Um, I'm, I'm very organized. I, uh, sort of paranoid to make sure I don't miss out on things, so I'm pretty tight on my tasks and my calendar. I think the only thing that I have is time, so it's very important on how I prioritize and allocate my time, so those are two or three things I'm very picky about, um, but other than that, I'm just, just another normal man.

AI assessment note: “I generally hit the bed early. I'm, I'm up very early.”

Q the, uh, salesman. Currently, the salesman in a SaaS company can Can use it, you know, to enhance his closing rate, enhance his sales pitch. This would not have happened, say, five years ago, when India SaaS was not known, or even the global SaaS was not as good as it is today, right? Today is the perfect timing for it. And, uh, could you have to use Sporting District?

A Yeah, absolutely. That's on the market side, and I think we're also reaching a point where voice transcription, understanding voice, um, sort of reached a certain amount of maturity that the big tech has sort of led its way, and then we're now using AI in a very contextual and a very specific way. I think one of the things we believe is, while there is AI, we're big believers of AI that works in a very narrow scope than general AI, and I think general AI is a lot more harder to sort of build out. And hence sort of building an AI solution that works within a certain sector, within a certain segment, with a lot of known things around such as customer, product, all of that, then I think then the accuracy rates are, are a lot tighter. The standard deviations are a lot lower, uh, and the algorithms can work a lot better, right? So those are also timing wise, all of them sort of coming in together for it to work.

AI assessment note: “Yeah, absolutely. That's on the market side, and I think we're also reaching a point”

Q And it's been a very interesting journey because you, you come from a finance background, but you took a very deep standing for tech. What was the reason for that? Like, and how did you build that expertise?

A Well, I, I can't claim to be being an expert, uh, but what I can claim is that I'm a learner and I think that's the attraction towards anything tech. Um, and also purely looking at it from a finance background tech, Among many things presents a strong ability for nonlinear growth, non, nonlinear returns as well. I mean, I've dabbled in pharmaceuticals, right? You've got to make hundred kgs of a product, and you can sell a hundred kgs of the product. When you want to sell another hundred kgs of the product, you've got to go make another hundred kgs of product, right? And that's how that works. But in, in certain aspects of tech, you're going to be fundamentally creating things that didn't exist before. In certain aspects of tech, you have the blessing of repeatability at very low production cost. Like, take SaaS, take software. I mean, after a point, you know, the only incremental cost of an incremental customer is the marketing cost of it, right? Of course, there could be servicing and all of that, but those end up being high margin products. So I think the fascination for backing businesses that could have gross margins as high as 60 to 70% sort of what drew me to tech. And, you know, we're in a world where we have to constantly learn. There is no escaping that. And I think that's what I love doing.

AI assessment note: “tech, Among many things presents a strong ability for nonlinear growth, non, nonlinear returns”

Q And what do you think are the two, three tailwinds behind the sectors you invest in?

A So on the, on the hardware and the deep tech side, I think there are quite a few things. I think there are two, three curves. One is just the majority of optics, the prices of lithium sort of stabilizing. I think we're seeing that there are technologies which have seen their cycle ones and now beginning to see their cycle tools. And generally cycle one is where there's a lot of learning and unlearning and cycle two in some of them is when their commercial viability and opportunity sort of represents itself much better. And I think some of those typically lean on and support our hardware companies. If you take our nickel, for example, three D printing is one of the core elements of it, right? And trying to do this 15 years ago was virtually impossible. Uh, versus trying to do it now, uh, take our robotics company. Now it's a convergence of both machine vision and, uh, optics and DNN models, and clearly not something that we could do seven, 10 years ago. Uh, if you take our optics, uh, photonics company, same thing applies to it. Um, clearly on the software side, it's also the question of evolution of the market. More people using software and, and hence that sort of having a, a, a ripple effect or a, a snowball effect. A lot of these, we couldn't have done some time ago, and these are opportunities that are emerging off other opportunities or other trends that constantly move. A…

AI assessment note: “I think there are two, three curves. One is just the majority of optics”

Q And you mentioned on the founder side, so you have worked with both B to C companies and B to B companies. What are the key, you know, qualities or trends? I would, if I ask you, uh, they are in the B to B founders because I believe both come from a different DNA, uh,

A I think the common denominator is, is hustle, ability to survive and desire to survive and build, right? I think that that's sort of common across both because capital is always scarce. But then I think the, the markets otherwise are very fundamentally different, right? Uh, particularly the, the go to market, uh, uh, you know, the customer satisfaction and the ability to pay all of those, I think are fundamentally very different businesses. And, and I think generally the BTC ones need a lot more capital to play out, which means that the founders themselves need to first understand that. And understand that fundraising is a, is not a seasonal job. It's an everyday job. I mean, you've got to be constantly fundraising in some of these companies. Uh, and I think in the B to B, while you do need capital and it's not that, you know, you do one round and you're done or they need capital and there is a certain amount of capital that typically goes towards sales and marketing, which, you know, which sort of, as the company grows, needs more money. But there are, there are strong proof points at each level, you know, at, at the, at the pre-seed level, you're looking for founder market fit, and at a seed series A level, you're looking for product market fit, and then at B, you're looking for go-to-market fit. So in sort of the, in all of those cases, some parameters Some yardsticks for ev…

AI assessment note: “I think the common denominator is, is hustle, ability to survive”

Q in, you know, and had some personal exits, which you shared, and one on from the fund. So do you believe India has the right timing for exit? You have seen like five of them. It's not plain luck. It's, it's, it's a repeated pattern now. By investing in tech and those exits don't, we don't have to wait for, let's say, 1012 years in a company's lifetime for that.

A So I think Let me, let me break it down into three parts. I don't know if I have a perfect answer, but I have a few thoughts. I think the rest of the world is now well aware that India is very well capable of building technology. And we have some very good examples of not only building technology, but also scaling technology, right? So I don't think we have a situation where people doubt the capability of innovation coming from our country. There are trends that are there. I think the belief is we may be better in SaaS than in hardware at this point of time, because there are more successful SaaS companies than, than there are in the hardware side. But these are all cycles, and I think in a 20, 30 year time frame, all cycles will sort of see their full turns and full life cycles. The important part to keep in mind is that real value comes typically when you scale companies, you know, six, seven, eight, nine, 10 years. I think three, four years ago, it was an unwritten rule that strong value creation takes about 10 years. Uh, of course, now there are examples like Postman and a few others, which essentially show that it could be sooner. It can't be two years or three years for sure, but I think it's more in the six to 10 year timeframe, if not, if not shorter. And if you're truly playing out for the big wins and, you know, build, building big companies, and you've got founders t…

AI assessment note: “it can't be two years or three years for sure, but I think it's more in the six to 10 year timeframe”