Crossing The 50 Crore Chasm Edited April 11
-
Upload
ashok-korwar -
Category
Documents
-
view
1.380 -
download
0
description
Transcript of Crossing The 50 Crore Chasm Edited April 11
![Page 1: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/1.jpg)
Crossing the 50 Crore Chasm
Anand Deshpande and Ashok KorwarApril 2011
![Page 2: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/2.jpg)
Workshop to help
Companies grow from Rs. 10 Crores
to Rs. 50 Crores
![Page 3: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/3.jpg)
Know our biases …Our view from the fish tank.
3
![Page 4: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/4.jpg)
Ashok Korwar
• Independent management consultant based in Pune
• Professor at IIMA, 1990-2000
• Strategic Advisor to Chairman of Polaris Software, 2000 – 2007
• Division VP at EDS, Dallas
• Ph.D. – UCLA
• B. Tech, IIT Bombay
![Page 5: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/5.jpg)
Anand [email protected]
• Founder, Chairman and Managing DirectorPersistent Systems Limited.
• Persistent is a 6000 person; Rs. 850 Crore NSE/BSE listed Company.
• Techie background
– B. Tech, MS, Ph.D. all in Computer Science (Databases)
• http://www.linkedin.com/in/ananddeshpande
![Page 6: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/6.jpg)
Believe in nothing, no matter where you read it, or who said it, no matter if I said
it, unless it agrees with your own
reason and your own common sense.
Gautam Buddha
![Page 7: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/7.jpg)
Growing a business is a matter of choice. Before deciding to grow, be sure you know why you’re doing it.
![Page 8: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/8.jpg)
![Page 9: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/9.jpg)
Rs. 50 Crores
Rs. 50,00,00,000
Rs. 500,000,000
Rs. 500 Million
Rs. 5 x 108
![Page 10: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/10.jpg)
As of May 30, 2010
![Page 11: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/11.jpg)
• Infosys Rs. 5 Crore in 1991 and Rs. 50 Crore in 1995.
• Cognizant
• Persistent did Rs. 10 Crores in 1999-2000 and Rs. 50 Crores in 2002-2003
![Page 12: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/12.jpg)
From Rs. 10 Crores to Rs. 50 Crores:
How fast will you get there?
Years CAGR CMGR1 400.00% 14.3530%2 123.61% 6.9360%3 71.00% 4.5721%4 49.53% 3.4098%5 37.97% 2.7187%6 30.77% 2.2605%7 25.85% 1.9345%8 22.28% 1.6906%9 19.58% 1.5014%
10 17.46% 1.3502%
10
50
time
![Page 13: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/13.jpg)
Visualize your Rs. 50 Crore Business
How many units sold?
How many people?
How many customers?
How many projects?
How many managers?
How many sales people?
How does my balance sheet look?
![Page 14: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/14.jpg)
![Page 15: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/15.jpg)
Visualize your business at Rs. 50 Crores
![Page 16: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/16.jpg)
Applying Goldratt’sTheory of
Constraints
http://www.goldratt.com/
Eliyahu M. Goldratt
![Page 17: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/17.jpg)
What determines your speed on the road?
![Page 18: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/18.jpg)
Every System..• Has one constraint
• That chokes throughput
• The ‘Bottleneck’
![Page 19: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/19.jpg)
What determines the strength of a chain?
![Page 20: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/20.jpg)
External Constraint?
• The market?
– Do you have 50% market share?
– If not…
Internal Constraint?
• Who will bell the cat?
![Page 21: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/21.jpg)
Constraints …What prevents a bonsai tree from growing?
![Page 22: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/22.jpg)
Identifying Constraints..
• Depends on the business model..
• Use common-sense, it does not take statistical analysis!
• Thought experiment: if throughput goes up by an order of magnitude (10x) where will my system break down first?
• If I strengthen x function, will throughput go up?
![Page 23: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/23.jpg)
Policy Constraints ...
Mental blinders we put on ourselves ...
But also the most common dominant constraint..
![Page 24: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/24.jpg)
Policies as Constraints..
• .. I will hire only people from IIT ?
• .. every project must earn 40% margin?
• .. I can trust only Indians in the field?
• .. I can’t pay more than..
• …CEO must see every customer communication
• …people must be kept busy all the time..
![Page 25: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/25.jpg)
HOW DOES IT HELP..?Ok, so I found the constraint..
![Page 26: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/26.jpg)
Constraint Is also Lever
![Page 27: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/27.jpg)
What should the CEO focus on?
![Page 28: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/28.jpg)
Goldratt’s 5 step process
1. Identify the constraint
2. Squeeze the most out of the constraint
3. Subordinate everything else to the constraint
4. Elevate the capability of the constraint
5. Go back to step 1!!
![Page 29: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/29.jpg)
What is holding you back? What’s your constraint?
![Page 30: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/30.jpg)
Identify your constraint
![Page 31: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/31.jpg)
How do we select which vendor to work with?
![Page 32: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/32.jpg)
32
We do business with people we trust!
![Page 33: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/33.jpg)
For a small company, strategic positioning is critical for growth! Positioning establishes trust.
![Page 34: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/34.jpg)
![Page 35: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/35.jpg)
Small Companies have limited management
bandwidth.
![Page 36: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/36.jpg)
To Grow.. • Vertical positioning is always better than horizontal
• Except in very early stage –technology enthusiasts.
![Page 37: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/37.jpg)
Case Study
• Company Documentum.
• $2 million revenue for 3 years in a row
• Document management technology
• Potential: all people in all companies who manage complex documents
![Page 38: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/38.jpg)
What did Documentum do?
• Focus on pharma companies, management of regulatory affairs.
• Applications to be submitted to over 100 regulatory bodies around the world!
• Takes one year to submit an application! (not to get it approved, to submit it!)
• Documents come from clinical studies, written reports, mails, databases…
![Page 39: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/39.jpg)
With whose support?
• Technology departments? No – content to work with existing vendors
• Function head and his bosses
![Page 40: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/40.jpg)
In one year..
• Demonstrated that problem could be solved
• Signed up 30 leading pharma companies’ regulatory affairs departments
• Revenue to $8 million
• $25 million the next year
![Page 41: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/41.jpg)
Analyzing Market Share and Segmentation
![Page 42: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/42.jpg)
Defining entirely new markets.
Blue Ocean Strategy.
![Page 43: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/43.jpg)
It helps to catch a wave.
![Page 44: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/44.jpg)
“Simplified” Pencil Sharpener
• Open window (A) and fly kite (B). String (C) lifts small door (D) allowing moths (E) to escape and eat red flannel shirt (F). As weight of shirt becomes less, shoe (G) steps on switch (H)which heats electric iron (I) and burns hole in pants (J). Smoke (K) enters hole in tree (L), smoking out opossum (M) which jumps into basket (N), pulling rope (O) and lifting cage (P), allowing woodpecker (Q) to chew wood from pencil (R), exposing lead. Emergency knife (S)is always handy in case opossum or the woodpecker gets sick and can't work.
![Page 45: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/45.jpg)
Ensure that the troops are aligned with the message!
![Page 46: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/46.jpg)
Define the Battlefield.. To YOUR advantage
![Page 47: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/47.jpg)
Your elevator pitch: Framing is key..
• Serving the same need as.. (in some other industry)
• Like.. Established Competitor, only better because..
• Competitors are extremely useful for FRAMING!
![Page 48: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/48.jpg)
Home in on the differentiation..eg
• Market alternative: BPOs who are struggling to handle complexity
• Product alternative: like XYZ, the market leader in workflow
• Except that we are optimized for PPP pain area
• And we have the entire package ready
![Page 49: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/49.jpg)
Example: Intuit
• For the bill-paying member of the family
• Who is tired of filling out the same old checks month after month
• It is a home finance program on your PC
• Unlike ‘managing your Money’ which is a financial analysis package
• We are optimized for home bill-paying
(from Geoffrey Moore, Crossing the Chasm)
![Page 50: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/50.jpg)
In this growth phase..
• CEO’s number one job is..
![Page 51: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/51.jpg)
Win that first big deal ..
Systems and Processes will get aligned to win it, to execute it..
![Page 52: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/52.jpg)
The mountain will teach you what you need to know to climb it..
![Page 53: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/53.jpg)
Ability to hire peers is the key to success.
![Page 54: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/54.jpg)
Why should someone join you?
![Page 55: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/55.jpg)
Your Company’s culture is the most powerful tool for finding and keeping great employees.
Don’t miss opportunities to reinforce it.
![Page 56: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/56.jpg)
Growing businesses can be thrilling!
![Page 57: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/57.jpg)
You must use your
passion to attract!
![Page 58: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/58.jpg)
Wealth in the future?
![Page 59: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/59.jpg)
60
What do you really need?
You need a small and hungryteam that wants to go for it!
![Page 60: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/60.jpg)
• How you think is more important than what you know.
• Pick teammates for what they will do, not for what they have already done.
61
![Page 61: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/61.jpg)
62
• The mountain does not give a damn about your resume.
• Without hunger, both skill and experience will remain in the base camp.
• There is nothing more dangerous than a moderate mountain.
• Only an ultimate mountain can forge an ultimate team.
• The only guidebook to your mountain is the one you will write.
• The best plan is the one that works.
![Page 62: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/62.jpg)
Employee Stock Options are useful mechanisms as an
incentive for attracting and
retaining employees.
![Page 63: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/63.jpg)
10%
20%
30%
40%
Vesting Plan
ESOP Plan Basics
• Shares and Options
• Grant Price
• Exercise Price
• Gain
• Vesting Plan
• Cashless exercise
• Buy back – gain
• ESOP Trust
4 years
![Page 64: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/64.jpg)
1936 Indian Olympics Hockey Team
Beyond the leaders; you need a team.
![Page 65: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/65.jpg)
Getting the Organization Structure right is very important but rather difficult.
![Page 66: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/66.jpg)
Hire good people even if you can’t figure out their role.
By definition, they will find a way to contribute.
![Page 67: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/67.jpg)
Difficult Decision:
Should you hire a CEO?
![Page 68: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/68.jpg)
Set up Internal
Systems and Measures
![Page 69: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/69.jpg)
Publish audited quarterly results within four weeks every quarter. Share them internally.
![Page 70: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/70.jpg)
71
![Page 71: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/71.jpg)
Profit is an opinioncash in the bank is fact
– Old adage
![Page 72: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/72.jpg)
Track what makes sense to your organization and your context.
• Net Profit
• Gross Margin
• Cash flows
• DSO
Finance
• Sales pipeline
• Number of sales persons
• Sales productivity
Sales
• Number of employees
• Attrition
• Recruitment pipeline
Employees
![Page 73: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/73.jpg)
Align the granularity of your measurements and your decisions
Does your data help you make decisions?
![Page 74: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/74.jpg)
Avoid borrowing from amateur money lenders.
![Page 75: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/75.jpg)
Do you need money? How do you plan to use it?Can you borrow from customers?
![Page 76: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/76.jpg)
Understand the VCs investment philosophy andmotivation
![Page 77: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/77.jpg)
Beyond money.Be clear and upfront about what you are expecting from the VCs
• Attend Board Meetings
• Provide References –Business Personnel
• Help make understand industry best practices
• Freedom to operate
• No compete
![Page 78: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/78.jpg)
Understand the Veto Rights VCs will Demand
• Board composition
• Change in management
• Changes in key resources
• Operational items – CAPEX / loans
• M&A
• Diversification
• Dividend above a certain level
• Appointment of Auditors –both statutory and internal
![Page 79: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/79.jpg)
Understand and Beware!
Claw back / Anti Dilution Clauses
Drag Along / Tag Along Rights
Restriction on Transfer
![Page 80: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/80.jpg)
Preference Rights
Liquidation preference
Dividend preference
1st right of refusal for any new investment
1st right of refusal to maintain their % holding
Conversion to Equity – when / what valuation
Investor
You
![Page 81: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/81.jpg)
Have clear clauses for deadlock resolution, indemnities and warranties.
![Page 82: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/82.jpg)
Exit is important. VC Funds have a time-frame.
• IPO
• Buy back
• Sale to third party with right of first refusal with Promoters
Set criteria for exit and a formulae for valuation
![Page 84: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/84.jpg)
Leverage Your Board.
Independent Directors: your advisors and critics!
![Page 85: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/85.jpg)
Select Independent
Directorseffectively
Who can
Commit time
Have expertise that aligns with the needs of the business.
Are passionate about your business
Not just because they are
X Famous
X Relatives, friends
X Customers
![Page 86: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/86.jpg)
Ensure that you have the right Capital Structure to scale
![Page 87: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/87.jpg)
Read and understand legal
documents carefully.
Think through indemnities,
warranties etc.
![Page 88: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/88.jpg)
Think long-term. Run a clean business
![Page 89: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/89.jpg)
90
Make your contribution to the society.Commit to Corporate Social Responsibility
![Page 90: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/90.jpg)
Failure defeats losers, failure inspires winners. – Robert T. Kiyosaki, author, entrepreneur, investor
![Page 91: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/91.jpg)
Go for it!
![Page 92: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/92.jpg)
Technology Market Development Life-Cycle
![Page 93: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/93.jpg)
Do…
• Pragmatists reference Visionaries?
• Conservatives reference Pragmatists?
![Page 94: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/94.jpg)
How do they Behave?Visionaries
• Can see the business value of a new product or technology
• Want to be the first
• Willing to champion a small company, if they see a fellow-visionary
• Are often highly ego-centric
• Don’t really care whether support exists or not (that is an SEP)
• Not price-sensitive (probably grabbed someone else’s budget anyway)
• But very heard to please: vision, after all!
• Project by project mode
• In a tearing hurry
![Page 95: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/95.jpg)
Selling to Visionaries
• Give them the importance (they think) they deserve! Assign high-level executive to work directly with them
• Be willing to modify your product or service to suit them
• Manage expectations!
![Page 96: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/96.jpg)
How does one find Visionaries?
• Industry conferences
• Often they find you, through their contacts in technology companies
![Page 97: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/97.jpg)
How do they Behave?Pragmatists
• Want to buy from established leader
• Will take risks if required but will monitor, mitigate.. So don’t like single vendors
• Suspicious of breakthroughs, want to move step by step
• Want to standardize, standardize, standardize..
• Usually network with peers in their own industry
• Have the big budgets!
![Page 98: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/98.jpg)
Selling to Pragmatists..
• Reassure them that your product/service will not disrupt their platform
• SoA
• Guarantee support and service
• Create competition if necessary!
• Create alliances to reassure them..
![Page 99: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/99.jpg)
Technology
Product Market
Company
experimenters
visionarypragmatist
conservative
![Page 100: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/100.jpg)
BEST WAY TO BEGIN AND GROW IS…
![Page 101: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/101.jpg)
Find One Good Customer and Grow With Him !
But remember to protect your IPR!
![Page 102: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/102.jpg)
103
Selling to Big Companies is
important.
How to Win and Keep BIG
Customers
Steve Kaplan
The Difference Maker
http://www.differencemaker.com
![Page 103: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/103.jpg)
104
You’ve Got to Believe
Elephants need you, too
![Page 104: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/104.jpg)
105
Six Keys To The Elephant
1. One and Done• You’re going to be working very hard
for one shot at a potential client – and if you blow it you are done.
2. Priority One• Lavish plenty of attention on your
Elephant.
• Make the big Company looked after and cherished. Return calls speedily, Answer questions quickly. Address problems immediately.
• Be kind to your Elephant, and it will be kind to you.
3. Whatever it Takes• Throughout the Company, new
opportunities await, some of which seem removed from your core area of business.
![Page 105: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/105.jpg)
106
Six Keys to the Elephant (2)
4. Long-term vision• Pigs get fat; hogs get slaughtered
• Don’t get greedy. View your customer as a long-term relationship.
5. Breath of Fresh Air• Having fun is good for business.
Having fun – and showing it – is a great way to distinguish yourselves from your competitors
• Potential customers should feel that working with your business is a pleasant experience. It strengthens the relationship.
6. Partners• Seek ways to help your elephant
streamline its operations and save money.
![Page 106: Crossing The 50 Crore Chasm Edited April 11](https://reader031.fdocuments.in/reader031/viewer/2022013118/559ac6b21a28abcd138b4721/html5/thumbnails/106.jpg)
107
Looking the part
• Perception is one of the
rules – you may not be a
fellow Elephant, but if you
can play the part, you are
half-way there.
• Think Elephant
• Act Elephant
• Be Elephant