1Mby1M Virtual Accelerator Investor Forum: With Dr. Aniruddha Malpani, Founder of Malpani Ventures (Part 4)

Sramana Mitra: It’s wonderful to exchange notes. There are a couple of things you’ve said that I want to underscore. One is the importance of failure. The Indian ecosystem didn’t accept failures for a long time. It’s a cultural change where it’s okay to fail. You’re not penalized.

A very long time ago when I was a young entrepreneur, I talked to a lot of investors all the time. They would say, “We love entrepreneurs who have failed once and are doing it again.” This is deeply underappreciated.

Somebody who has tried it once and failed has already done a lot of learning on somebody else’s dime. It’s a prized commodity for investors.

Somebody who has tried it once and failed has already done a lot of learning on somebody else’s dime. It’s a prized commodity for investors.

Sramana Mitra

Then on the point of small frugal investments making earlier bets, the exit story in the Indian startup ecosystem has become smoother. Remember ten years ago, exits were not yet happening. That was creating a lot of hard burn in angel investors who are investing their own money. There is no liquidity for a long time. That situation has improved. We’ve had exits in our portfolio.

Of course, there is the Freshworks IPO. Freshworks is a very traditional venture capital deal. It’s a concept arbitrage on a concept that was already successful in the US. It was lavishly financed. It’s like a textbook venture capital deal.

My view of the Indian startup ecosystem is all of these models need to succeed. Bootstrapping to exit needs to succeed. Early angel investors who have put in the hard work need to find their exits. If that exit is into a venture capital round, that’s fine.

Yes, the Indian ecosystem is still somewhat immature but there have been a lot of building blocks that have fallen into place.

Sramana Mitra

Dr. Aniruddha Malpani: I completely agree with you. We’ve seen the change over the last 10 years. There are going to be multiple kinds of exits. Every exit emboldens new entrepreneurs. It’s a validation. We definitely need lots of success stories.

I don’t think we should gloss over our failures. We also need to tell and remind entrepreneurs that this could be a lonely journey.

Dr Malpani

What we try to emphasize is resilience. That’s one advantage of being a doctor. As a doctor, you have to be empathetic. That’s what we try to do. When you’re building for a product, your requirements are so much. The social impact space is pretty much neglected. It’s not very easy to figure out how to make money off it. That’s something which I’m hopeful about.

Sramana Mitra: In general, the very top piece of the pyramid is where most of the action has been. The gamechanger a few years ago was the introduction of Jio. That opened up a channel through which the next level of customers could be reached. Otherwise, the whole venture ecosystem was focused on that tip of the economic pyramid.

I remember when we were looking at companies that were catering to Indian SMBs, VCs were not interested in that. It was too slow. That is also starting to change a bit. The Indian SMBs are starting to learn how to consume technology more effectively and more seamlessly. Those are good movements.

This segment is part 4 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Dr. Aniruddha Malpani, Founder of Malpani Ventures
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