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Gautam Munshi, CEO Redwood Algorithms: Opportunities are everywhere - So maneuver around time and assets carefully. When setting up a business- prioritization is the key!
Balancing money is the key to having enough– Elizabeth Warren
Entrepreneurship is growing in India at an unprecedented pace. Success stories of IPO listings, billion dollar valuations, unicorn club entries and acquisitions have become part of daily news headlines. Several women-led startups like Nykaa, Mobikwik, Sugar Cosmetics, have made a significant mark on this landscape.
Yet, the number of women joining the entrepreneurial race is abysmally low compared to their male counterparts. A 2020 study states that only 7 out of 100 entrepreneurs are women who start their own business out of necessity rather than aspiration.
When starting a business venture, the choice of leaving behind a corporate career, stable income, supporting the family and ongoing commitments start playing in their minds.
Often, women are expected to prioritize their family’s needs over theirs which prevents them from taking bold decisions to join the entrepreneurship race. Beyond these aspects, financial risk is a critical element that holds them back. Only guidance from Industry experts with valuable experience from their own journey or interactions could enable entrepreneurs to overcome these barriers.
Today we bring the journey of an industry veteran who embraced the entrepreneurship journey a decade ago. He built a successful enterprise and is currently helping several startups to find their footing in the initial phase.
Meet Gautam Munshi, CEO of Redwood Algorithms which specializes in Data Analytics for smart decision making for business leaders. Gautam started his career with Standard Chartered Bank where he got an exposure in the early stage of data analytics in the country. Subsequently he went on to head Product Analytics for Marketrics Technologies which was acquired in 2007 for $65 million. With over a decade of experience in data analytics and financial management, he began his entrepreneurial journey with Redwood.
Here’s a discussion with Gautam Munshi about his entrepreneurship journey, learnings, and experiences, which could be valuable to entrepreneurs reading this.
You started your career as a banker, then became an entrepreneur specializing in Data Analytics and Digital Marketing. Currently, you are supporting several entrepreneurs in their startup venture. Tell us how this journey started for you?
I started my journey as a Management Associate in Standard Chartered Bank when I got an exposure to Data Analytics. While working in a bank helped me understand how wealth is created, managed, and moved, I felt there is a lot more to business beyond banking. So I decided to pursue my passion in data analytics which can be beneficial to more businesses.
The first startup I joined was Marketrics Technologies which turned out to be a successful venture when it was acquired. That taste of success put me on a path to build something on my own.
Large MNCs or funded companies can invest heavily in data science technology and reap the benefits of understanding the customer. But in today’s world, similar technology can be brought to SMEs, Start-ups at an affordable cost. I saw this opportunity and decided to set up Redwood Algorithms on my own.
Over the years, I have trained a lot of people in Data science technology and Marketing analytics. With my background in Finance, I branched into consulting for startup ventures.
India has a salient contribution on women entrepreneurs in the startup sector. Tell us about your outlook on female-led businesses and how their challenges are different from the rest of the industry?
At Redwood, more than 50% of our colleagues are women, and surprisingly that is not by design. Our recruitment focuses on problem solving ability, handling challenges which is critical to data analytics. Women are naturally better in these aspects. Similarly women entrepreneurs are better placed to balance key skills required for running a business.
But the real challenge lies in the society’s expectation on how women should prioritize their family responsibilities over their own ambitions. Hence when it comes to starting a business, each person needs to take a different approach based on their lifestage, challenges and skill-sets.
I would classify women entrepreneurs in 3 segments depending upon these aspects.
Firstly, women who need to earn to support the family – They usually find it very difficult to make the decision to start. I would suggest they build a certain level of financial stability while continuing to upgrade their skill set. Key here is to build steadily with proper planning.
Next is women who don’t earn but are dedicated to taking care of their family. Though it would be easier for them, they need to find time for exploring business opportunities. Most importantly, they need to align the family to accept the change needed for their entrepreneurship venture. I recommend choosing a business which is aligned to their education and immediate cash flows. Instead of focussing on innovation, find products that are easy to sell and generate a cash model. Once you build the credit line and a stable customer base over a 2 year duration, scaling up becomes easy.
Lastly, women who are free to create their own business ventures have a great opportunity. Focussing on building a business model is critical for them too, but they could even scale up in 6 months!!
So it is important to understand your own situation and take advantage of it. Comparisons and self pity need to be avoided by all means. Instead keep focussing on finding a way out.
Opportunities are everywhere – So maneuver around time and assets carefully. When setting up a business- prioritization is the key!
Startup industry has gained a lot of attention recently due to its growth potential and success stories. However, many bootstrapped businesses struggle to win the race. What are the factors that affect their success potential?
Most important thing is being razor focussed on the customer. Only if a transaction keeps the customer happy and the client makes money, it is acceptable.
VC funded businesses have a different financial model which allows higher degree of risk-taking. Bootstrapped businesses need to stay clear of that route.
Few recommendations when it comes financial management based on my experience are as follows:
Remember, Hope is not a strategy- So 90% of your business model should be sure-shot.
An entrepreneurial venture needs to be looked at as a place which gives you freedom while providing a source of revenue. Especially if it is needed to run your own household, be mindful of the latter part.
In the early stage of entrepreneurship, Financial stability plays a vital role in affecting the future of a business. Please share your views on how this impacted your business and learnings from the experience.
When working on the technology side, don’t be obsessive about building everything from scratch. Instead focus on adding value to the customer from Day 1. For example, I once made a mistake of doing ground-up coding which was very expensive. While I could have gone for customization on an existing product and supported the client at a lower cost. So be clear on the fundamentals – identify the right problem, solve it, and choose the technology for it.
Next, revenue should be higher than cost for the initial 6 months to 1 year. To achieve this, choosing a financial advisor with a proven track record and aligned thought process is critical. What worked for someone will not work for you as well! So be mindful of the network you create for support.
Lastly, when setting up your startup – do not build an extravagant lifestyle around it. It may be a simple decision like choosing a 2BHK apartment over a 4BHK right now- but the higher EMI will have a role to play when you need cash to scale up the business. So get the foundation right with a good credit score and manageable loans.
Personally, I have done each of these mistakes a decade back and taken a financial hit. But luckily, my banking experience helped me- cause I didn’t risk more than I was earning.
Electrical engineer turned into Marketer. From heartland of Tamilnadu but almost Mumbaikaar. read more...
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