Watching Jyoti Bansal mobbed by the listeners of Outliers and listening to the questions he was being asked after the session got over was a great learning experience.
So how did you actually do it? Do you need to be based in the Silicon Valley to make it big? I have an interesting idea you might want to listen, fund. What will you do with all this wealth? What kind of people will you hire in your next startups?
Every time we spot a hugely successful entrepreneur (either multi-billion dollar exit or an IPO), there’s a rush to analyse what went behind and whether there’s a playbook that can be replicated to create more successful exits for startups. Everyone from investors to existing and wannabe entrepreneurs are looking for “deep insights” which will catapult their idea into the big league.
If you read some of the top learnings shared by Bansal and even listen to the entire podcast, I bet you will get a feeling that none of this is something you haven’t heard before. So here’s me committing a self-goal by telling you that there’s nothing rocket science about what follows below.
However, if you can learn from Bansal’s insights by contextualising everything he says against his startup journey, the AppDynamics story, and so on, there’s a lot to learn.
One of the things that stayed with me since I had this conversation with him, for instance, is what he said about the kind of people he will hire for his next startups. “I will try and avoid hiring people who have been part of big exits.”
This is because exits and startup wealth creation also brings a certain comfort, risk averse nature. So whenever Bansal builds his next, he wants people with a lot more hunger than those who have already drank the nectar.
I think we should speak to him after five years and see whether he fails or succeeds in his next startups.
Here are some edited excerpts from the Bansal conversation at an event hosted by Accel Partners, a FactorDaily investor.
Transitioning from an engineer to an entrepreneur, CEO
I often get asked, so what are the two things that made this happen? And my answer is there are two hundred small things that make this transition happen, not just two things. Becoming an entrepreneur is easy; it’s that mental state of mind about making that jump. What happens after that is really the hard part. For a product startup like us, the stage one has nothing to do with sales, it’s about doing product market fit. It’s like playing a video game from level 1 and moving to the next level. I always look at this as the next level, and what do I have to do to get to the next level. To me, the level zero was getting funded, then getting the product market fit, then figuring out the early sales machine, hiring executive level people for the first time, and so on.
My first two startups were failures and you learn a lot more from failed startups than successful ones.
How do you know what you’re building is needed?
Almost always the first part (of answering the question) is your personal conviction, how convinced are you. After this conviction, you need real world validation. I learned this from the earlier startups i worked with.
The first startup I worked with was started by four people, all PhDs from MIT and such. But there was no one willing to buy their product. It’s frustrating. So when I started AppDynamics, the rule was to have at least four customers to talk to.
Do you really need advisors?
Being a first-time entrepreneur, there were a lot of people offering to connect me with someone or other, and there were many of them giving advice. At some point, I realised that too much advice is also a bad thing especially generic advice that doesn’t translate into anything actionable. I was spending a lot of time talking to the advisors. So I said either you bring me a customer or an employee, otherwise I am not spending any time any more. I always looked for advisors for insights on specific problems. Who are the top ten people who have solved a particular problem before and how can I get them to share advice?
A “marwari salesman”
It’s actually strange because I always look at myself as an engineer and a product guy, and people think of me as a sales expert now. I have learned a lot about sales, I can write a book on programming and also one on sales. If you look at my growing up around all the marwari shops, the basics of the business aren’t too different — you need a good product, you have to find people who will come to your shop like some kind of a demand generation. You have to compete against other neighbouring shops because you will never be the only player in the market for anything. So, the fundamentals of a small shop aren’t any different from how a large business needs to work.