Nandini Hirianniah: Mentoring Entrepreneurship In India

Nandini Hirianniah, Co-founder of The Morpheus, a start-up mentoring firm talks about the excitement and challenges of entrepreneurship in India.

Nandini Hirianniah is a pioneer entrepreneur who co-founded Madhouse Media, India’s first online/offline movie rentals company in 2004. Madhouse was acquired by Seventymm in 2007 and after working with the new entity for a year, Nandini moved on to create a start-up incubation and mentoring firm, The Morpheus with her co-founder at Madhouse, Sameer Guglani, and Indus Khaitan.

Here, Nandini talks about start-up companies in India, the opportunities open to them and the causes of failure. She also discusses Morpheus’ work with start-up companies, especially with helping them survive early stage troubles.

You’ve worked with media, with technology and web-based businesses before starting up The Morpheus. How did you arrive at this venture? 

Nandini Hirianniah: Once an entrepreneur, always an entrepreneur – this I think is true for many who taste the sweet pain of running their own venture. Guess the same was true for me too. After Madhouse got acquired by Seventymm, I worked with them for a year, but soon realized that continuing as an employee was not my calling.

It was then that Sameer and I started discussing ‘what next’. Since we’d done our first venture together and jelled well as a team, it was obvious that we’d do another together. We realized that there was more than one problem we wanted to solve and were passionate about most of these ideas. But, if we started more than one venture, we’d be unable to do justice to all of them and could also face issues as we expanded and in raising funds.

Post Madhouse, we interacted with many entrepreneurs and people who wanted to start-up companies. They were interested in knowing more about our experience as entrepreneurs or wanted advice on specific problems.

This got us thinking about a model where we could be involved in more than one company, but influence the venture in the best way possible.

This got us thinking about a model where we could be involved in more than one company, but influence the venture in the best way possible. That’s when we started doing research on various incubation models, till we chanced upon Y Combinator. We liked the Y Combinator model and what they’ve been doing to the start-up ecosystem in the US.

We felt the need to create a strong start-up community in India. There is a lot of start-up work happening, but all scattered. There are not many forums that “unconditionally” help knowledge-sharing and bring advantage to start-ups. Having struggled to learn via mistakes and felt the  need for a community that we could have reached out to (and also having not-so-good experiences with our Advisors at Madhouse), we thought it’d be good if we could do something about it.

Soon, we had version 1 of Morpheus in place, which was “mentoring only” and no funding. But our main offering was that Morpheus would work with start-up companies as limited co-founders with a specific commitment to time.

You work with start-up companies primarily in the first 12-18 months of operation, a period that you refer to as the ‘Valley of Death’. What is so dangerous about this phase? 

Nandini Hirianniah: A start-up founder is identifying and mitigating problems/risks. The first 12-18 months of a start-ups’ life is very critical, as he has too many problems to solve on limited resources while being expected to perform and progress on a daily basis. In such a scenario, one wrong turn, bad decision or a slower pace in execution costs him more time and money – before he can figure out the flaw and rectify it. This sometimes costs the start-up its life. As a founder you may run out of money figuring the right path, you may have pressure from peers and family or you may just lose hope. This means the death of a good business idea for the wrong reasons. Hence, Valley of Death!

While there is now great interest in entrepreneurship, at least in urban India, we also hear of many failed ventures. In the current Indian environment, what are the most common causes for start-up companies to fail? 

Nandini Hirianniah: Currently, cities in India are bustling with talk of new ventures; groups of students on campuses are discussing ideas, evaluating them and starting out. A lot has changed in the past 5 years – working for start-up companies is more tolerated now, as is starting your own!

The most important reason that cause start-up companies to fail is Founder Issues: In my experience I have seen some start-up companies die a premature death either because they have a single founder and he/she does not have the will or the energy to sustain longer OR one among the two founders stops believing in the idea and starts evaluating other options.

The influencing factors are pressure from immediate family, friends, life-partner or prospective life-partner and peer pressure (if I were working like my batch-mates I’d have made some money, got a car, etc.) Start-up companies’ founders have to be mentally and physically ready for a tough ride – no money, no time, pushing yourself for the first 8-12 months at least! Some can’t sustain that.

A start-up founder has to be mentally and physically ready for a tough ride – no money, no time, pushing yourself for the first 8-12 months at least! Some can’t sustain that.

The next reason is not focusing on the business as a whole. If there are coders on the founding team, I’ve often seen them focus solely on improving the product. Instead they need to consciously focus on other important things like getting customers and finances. Focusing on one thing that founders are comfortable with leaves the business at large unattended to and kills it.

Not listening to customers and learning quickly, taking too much time to release the product, getting stuck on “I want funding” to take the company to the next level, or just trying to raise funds at the wrong time are some other reasons for start-up companies to fail.

What are the criteria you use to shortlist the start-up companies that will form part of your portfolio? How easy or difficult is it to spot a winner? 

Nandini Hirianniah: A rockstar team, with the right set of skills, a great vision and a lot of passion.

– Are they solving a real problem and will customers pay them for their solution?

– Businesses targeting a large market opportunity which is growing at a rapid pace.

– Scalable business model.

– Comfort level between the Morpheus team and the founders.

– The amount of value Morpheus can add to the business has to be significant.

Spotting a winner at such an early stage is almost taking a chance. The above gives us indications that the team has the potential; the rest of it unfolds as time goes by. And yeah, we are learning and getting more accurate with identifying winners as go along.

Web-based start-up companies are obviously proliferating; what other sectors do you see opportunities in? 

Nandini Hirianniah: Web-based start-up companies are a trend, but Indian consumers want other basic problems solved. India based web start-up companies serving customers outside India is a viable option, though. Focusing on the Indian eco-system, there are very many brick-and-mortar problems that need innovative solutions. Sectors that can be exciting and have potential are utility based mobile technology, healthcare, transaction-based web-interfaces, innovative solutions in the area of touch, automotive, organic/eco related ventures, to name a few.

On your blog, you have an interesting post on hiring for start-up companies, where you talk about leading by example to inspire employees. Do you feel hiring for Indian start-up companies is still a major challenge? 

Nandini Hirianniah: There is still the big company craze in India, but I think the acceptance of working for start-up companies is only increasing. Most start-up companies have a problem hiring the right talent, especially in their early stages. Early stage employees must be entrepreneurial and be ready to contribute to the growth and working of the start-up outside the scope of their role. Such people are not easy to find. But, it’s not impossible to find such people, either. It is important for early employees to buy-in to the start-up’s philosophy and vision.

It is now 3 years since you’ve founded Morpheus, and in this time, there have been other entrants in the start-up mentoring space. What is your take on the competition? Is there enough start-up talent to go around? 

Nandini Hirianniah: As I answer your questions, I am in the midst of our first ever “Start-up Gurukul”, a 3 day event for all Morpheus portfolio, where we are exchanging ideas and helping one another in solving problems by sharing experiences. This is the beginning of another stage for Morpheus.

I do not look at it as competition, but I think it’s really good for the entrepreneurial eco-system and the start-up community if more such ventures come into action in India. There is a huge need. Collectively we can all work together in improving the quality of start-ups in India and make more ventures scale heights.

Yes, there is a lot of good talent around. A back of the envelope calculation indicates that there are close to 2,500 start-ups founded annually. But only about 25% survive.  If we can collectively increase their chances, nothing like it!

Your bio mentions that you like ‘traveling, trekking, theater and films’ and that you are an independent film maker as well. How does Nandini the entrepreneur make space for these other avatars? 

Nandini Hirianniah: I enjoy what I am doing and I try and make time to do things I like. But the past year and a half, I’ve had my hands more than full with a 15 month old at home (my daughter Sanaa) that leaves me with just enough time to focus on The Morpheus and some writing!

 

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