By January 29, 2013 Read More →

Fundraising is hard but, keep the faith

Gaurav Aggarwal, SavaariSoftware engineer Gaurav Aggarwal quit a job with Cisco Systems in the Bay Area and moved back to India to start Savaari, an online car rental company. Last April, the Bangalore-based startup raised a $1 million Series A round of funding from Inventus Capital. Since then it has grown to a network of 158 operators across 60 cities and currently clocks over 7,50,000 trip kilometers per month.

Aggarwal shares some the most important learnings and mistakes from his entrepreneurial journey so far:

TEN LEARNINGS

1. Lowest price doesn’t equal customer loyalty: It is convenient to price your services the cheapest in the market. But it will not get you loyal customers. In the unorganized car rentals segment, which lacks standardized services and pricing, the challenge is in offering the customer the best value for money.

2. Small cities are big on talent: We have always believed that there are amazing people in smaller cities. This is why our operations and customer support are based in Moradabad and Dehradun respectively. Attrition is zero and operational costs are attractively low.

3. Fundraising is stressful but, keep the faith: It is stressful to raise capital and often takes longer than anticipated. You have to meet more VCs than you would want to and there will be at least a couple that you wish you hadn’t met. But believe in what you are doing and you will certainly meet the right investor who will appreciate what you are trying to do.

4. Build the right culture to manage changing people expectations: The expectations one has from people when the company is five-people strong are very different compared to when it is 100-people strong. When you are just five people, everyone is expected to do everything. As you grow, you need experts focusing on specific things. It becomes very important to build the right culture so that people can adapt to fast changing requirements.

5. Establish a capital efficient model early: We have had a capital efficient culture and operation right from day one. Even when we were proving our business and service model we were cash flow positive. This is an amazing thing to have because you will realize that even when you are funded, the goals that you have to achieve are far bigger than your resources.

6. Entrepreneurship is pervasive: While running a startup, one has to interact with a lot of people, be it for legal or financial advice or to get your office up and running. In fact, even more exciting was to see the entrepreneurial spirit of our vendors. One proof of that, apart from starting, building and growing their business, was their openness and ability to appreciate a new idea like ours and to stick with us and help us grow.

7. The team is and will always be your best resource: Internally, we have seen that a good guy is four times more productive than the average guy. Investing in building the right team pays the highest dividends.

8. Running a startup is a roller-coaster ride: As an entrepreneur, for no tangible reasons, you can feel extreme highs and extreme lows, and sometimes one extreme within moments of the other. It seems strange but it is pretty common.

9. Technology is your most efficient tool: Technology is essential and helps immensely in scaling the company. It also helps in building features to delight customers.

10. Lots and lots of hard work: Being in a startup means tons of hard work and long hours. But, it is also lots of fun.

THREE MISTAKES

1. Fire faster: As you grow, you hire fast. But as they say you should fire even faster as not all persons can adapt to the startup environment, at least in the initial formative years. That does not mean the employee is bad, just that the employee does not fit in. There has been at least one occasion where we waited too long in the hope that things would change. They didn’t and we ended up wasting our time.

2. Being quicker on our feet: In hindsight, we should have done a lot of things that we have done so far faster and quicker. For a startup, time is scarcer than money. We have now built processes that enable us to execute in the quickest possible manner.

3. Controlling the engineer in me: Having done core router development for over a decade, I thought that I could manage technology along with all other things that I was managing. However, I soon realized that handling technology is a full time job and we got a great guy to manage it for us.

Image credit: Savaari

Posted in: Guest Post

Comments

  1. Dhiman Bhowmick says:

    Fire faster: Is there any process or method by which one can assess whether a person is suited to a startup environment? Are there HR policies you have evolved that could help?

  2. Santosh says:

    Good effort but these are mostly general and pretty common learnings for entrepreneurs. The writer could have shared more specific learnings related to online car rentals. That would have given real insight into his learnings.