“You Can Strategize To Be Lucky Often.”- Kunal Shah, Founder and CEO CRED
The most important lesson is the fear of execution. You can have all the great ideas in the world if they don’t reach the desired distribution it’s of no point.
This was part of a discussion in India Internet Day by TIE Delhi NCR. The keynote discussion was on Entrepreneurial Milestones: Unboxing Pivots and Pirouttes to Exits.
What was your process of coming up with the Freecharge? For Cred you did a lot of surveys before coming up with the product? Tell me a little bit about that?
We did a lot of surveys. We had around 50 interns who went to malls who tested our products before we launched. We did this for 7-8 months before we launched. Why can’t we plan better? It takes a lot of user feedback to understand what the core user motivation is. Everytime I decode an idea I test it before taking to the market. Unless I get thousands and thousands of positive replies I don’t even think of building a team or writing a code. For example for Cred we started researching in November we launched the company in November after that. So 12 months of building and researching. Out of which 8 months was researching and 4 months was building. Founders can benefit a lot from this method. I believe we don’t ask each other questions. When I ran Freecharge I had an understanding of most of India’s internet consumption behaviour. There is curiosity missing from our ecosystem that does not allow us to create original ideas. I believe that a lot of global players that come have much sharper insights about India.
Can you share some lessons From Freecharge. What are the top 2-3 things that you would avoid doing in your new venture?
The most important lesson is the fear of execution. You can have all the great ideas in the world if they don’t reach the desired distribution it’s of no point. Second thing is having more self-confidence. When you are a founder doing original ideas in this country there is nothing you can be comfortable with. Very few other original founders will be telling you that this is a very good idea. Or you will rarely see the ecosystem supporting you.That has become much better. After Freecharge and before Cred I’ve probably seen close to 300 companies up close. If you are thinking differently it doesn’t hurt. Thirdly, betting on younger teams. Older team members come with a lot of baggage.
When you started Freecharge did you start it with an intention of selling it or was it more towards a long lasting company? How did you decide to take the path that Freecharge took?
I don’t think any entrepreneur starts a startup with a mindset to sell. When we merged with Snapdeal we had 95 million dollars in the bank. It was not a distressed situation.The amount of capital we had burnt to get to a stage of 1 million transactions a day was probably 15-16 million dollars. We were fairly frugal. At that point it seemed as the right option considering the competitive environment. Then we needed a monetization platform. As an entrepreneur I managed to give returns to the investors. Made wealth for the people. Potentially had the largest takeover at that point of time. But the smallest misstep and people say that the company was sold for 450 million dollars and then sold to Axis for 60 million dollars. People love to say that because they want to put you down. The company’s metrics were 2X on every count. When a company has a distress situation you sell the asset for whatever price you get.
What can you tell us about the transaction that happened with Freecharge?
At that point of time it looked like the right transaction. For some reason because of Snapdeal’s challenges with the investors. Everybody had the right intention. I would not regret it. I would not blame anyone for it. Sometimes things don’t work. The moves you make. Sometimes you reap the benefits of it sometimes you pay the price for it. As an entrepreneur it is extremely hard to go through an exit. People think that you will have all this fun. You go through crushing depression for months. Their purpose is taken away. It’s like when Astronauts come back from space or when people come back from war. Everybody in my family called me up and said that they were upset. Our understanding of capitalism is very primitive. What we tend to describe as empires are actually businesses. Traditional Indian mindset is that empires are built and will last for 100 years. Especially in the world of tech how do we build a long lasting company when the core platforms are changing every 5-10 years? We forget that smartphones didn’t exist 10-15 years back. We don’t know what game we are entering into. For us it was a decision that created a lot of positive outcomes for a lot of players involved. I am very fortunate to have that experience in such a short period of time.
Great companies are bought and not sold. What is the motivation for the second company? What do you think is the role of destiny or luck?
You can strategize to be lucky often. People should constantly strategize to be lucky. Lot of people in India. Especially people who have worked really hard to get certain seats in college. However, business does not require hard work. It requires chess moves and the right things at the right time. Sometimes it does not require hardwork, it requires timing, and sometimes it requires doing the right thing building the right product at the right time. Our education system has trained this behaviour in us. Chinese founders are hunting in packs. Indian founders are happy fighting against each other.
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