My parting email at Mettl

Last minute at the Denali glacier in Alaska

I spent good time reflecting about what should I write in this email. Thought it might be useful for others too – so sharing it.

Dear Mettlites,

Today is one of the toughest days in my life. It is my last day to be with you all at Mettl. You all have been incredibly important for me in helping me realise my dream of being an entrepreneur and in making me a better person. This is my last opportunity to express how grateful I am to have shared this amazing journey with you all. Words are not enough to convey the deep sense of gratitude I feel. 

Last 9 eventful years here have exposed me to numerous situations at work. These moments required me to take calls/ decisions often based on gut. Over time, I had the luxury to see the outcome of these decisions in success and failures. To be more efficient and right in my decisions, I have used this unique experience to make my own guiding principles to manoeuvre personal and professional situations. In this last email, I thought I should share some of these principles uncovering some of my life’s dark events known to very few. You may find some of these principles useful as you navigate your life.

1. Failures are opportunities (How I became an entrepreneur): 

I was on a high when I graduated from IIMB (a top Indian B-school). I landed with one of the top jobs from campus at BCG* in Brussels. I believed that I was a prized catch for any organisation. I had great friends, my marriage got fixed, my health was in good shape – I couldn’t have asked for more. Then within 4 months of joining, I was asked to leave BCG. I was told that my performance was so bad that they are fast tracking my exit from 18 months to 4 months. I came back to India looking for another job. The job market here was very tough in 2009. Even after months of trying, I couldn’t get even one interview call. My friends started avoiding me. My planned marriage got annulled. I broke my ankle that took ~12 months to recover. Whatever could go wrong did go wrong. I felt that BCG management was unfair to me, friends betrayed me, my fiancee was super selfish etc. etc. I was really depressed, as nothing worked out. I started doing a lot of self reflection. That’s when I realised that I always wanted to be an entrepreneur. I was passionate about building something of value from scratch. All this while, the razzmatazz of a trophy job, and other things that I was chasing was not what I wanted in life. They were just attractive distractions. Perhaps when you are at the lowest point in your life and nothing seems to be working, is the time to build thought clarity. My biggest failures brought about the biggest success in my life. I therefore believe that failures present great learning opportunities in front of us.

2. Ships are safe in a harbour but that’s not what ships are made for (Listen to your heart): 

Imagine yourself to be 55 years of age, a top celebrated CEO, with amazing 8 figure salary (or more). You are fiddling with your Rolex watch, and brand new Mercedes’ keys. You are waiting for a colleague to send a deck for the board meeting tomorrow. It is 8PM, you are tired, you want to call it a day but you can’t. Suddenly you gaze outside the window, see a nearby park where a bunch of people are playing badminton. They seem to be very engaged and enjoying the game. It reminds you that you were once very fond of playing badminton too. You had a chance of getting into the district team. But you chose to attend competitive exam coaching instead. Although you have done super well for yourself, you will wonder if you have made the right decision. While you are rich and famous but you still eat basic food. While you own a Merc – you couldn’t care less. Your bank balance is sizeable but you can’t pursue your interests. You are wondering if it was all worth it.

For most of my life, I have chased societal goals; set by my family, relatives, friends in what they believed successful people should do. I pursued engineering because it seemed like a safe, promising career; did an MBA; chased trophy jobs, top salaries, name, fame etc. I was afraid of being left behind; fear of failure was very high. And I was completely wrong. This quote gave me the courage of chasing my own dreams instead of living someone else’s ambitions. I questioned  what is the use of my education from IIT and IIM, and all my experience and skills. Is it to chase a value function set by my social system. Or is the best use of my capabilities is to help me realise my own dreams. Through this quote I gathered the courage to do what I wanted to do in life – embark my entrepreneurial journey. As I part, I really hope and wish you all to chase and realise your own dreams. It is a short life and before we know it will fly past. 

3. Be fair and genuine with people (manage your personal brand): 

Recently, I met one of our first investors at Mettl. We were discussing rationale of early stage investing. In the conversation he said that while he was contemplating investing in Mettl he was approached by another of our common friends for funding in his venture. He said that to him the other friend’s plan seemed better but he chose to invest in Mettl because he trusted me more than the other guy. 

I think personal brand matters a lot as we progress in our life. People who we are studying/ working with today could be our future investors, colleagues, recruiters, bosses, guides and coaches – you never know. As time passes by the perceived brand becomes even more important. I get referral check calls for several people who I have worked with even 10+ years back and I am sure you get these calls as well. If we are cutting corners at work, doing a shoddy job, not maintaining relationships properly – remember people are watching you.

4. There are no right/ wrong decisions, what you do after taking a decision makes it right or wrong (being decisive in life): 

Life keeps bringing us to critical decision making forks. Often there is not enough data available to understand what decision will lead to what outcome. But the situation still requires us to make a decision and move on into uncertainty.

I have had several such decision forks in my life – Mettl’s business plan, starting new product ideas, shelving others that are not working, hiring for important roles, decision to sell Mettl etc. Early this year, I was again at an important crossroad of my life. Whether to continue at Mettl or to move on. I have reared Mettl like my own child. I have seen it grow from scratch to a 350+ colleagues and growing. I have given it whatever I could and gained so much back – super smart colleagues, close friends, productive work etc. Personally it is the best environment for me to be a part of. But I want to start another startup journey someday. The high seas are calling me again and this time I would like to be more prepared, rested and rejuvenated when I start that journey. It is a tough decision but I believe what I do from now on will determine whether it was the right one or not.

I will miss you all terribly. Thank you.

Sincerely,

Tonmoy

PS: Sorry, I am not listing names of people who have done a lot for me. It is a long list and words don’t do justice

* Disclaimer: The purpose of this post is not to try to prove who is right/ wrong and settle score. It is not to settle scores with BCG etc. I think BCG is an iconic company. Some of the brightest and smartest people work there and build stellar careers. I have extreme high regards for BCG.This post is only to share my learnings and the backdrop of all I experienced was important to make the point.

Creating the B-Plan

Traversing the easy part (from my recent road trip in Alaska)

A B-Plan depicts the founding/management team’s vision about the business. A well written B-plan goes a long way to excite investors/ funds about the space and the company. It could result in better response rates to emails written to investors/ funds and better outcomes to investor presentations. This post assumes that you have thought through your own business (the complex part). This post focuses on structuring your thoughts together to make a B-Plan (the easy part). This post maybe especially useful for the first time and non-MBA founders.

Investors are pretty busy people – attending a 4 hour long board meeting one moment, building their next investment thesis, meeting potential investors for their next fund, sharing their thoughts on how to manage/ run startups in conferences, giving media interviews and many more. Sometimes multiple of them at the same time. Their calendars are choker blocked for weeks if not months. And on top they get thousands of B-Plans from entrepreneurs like you and me. They may have little attention span and at best only few minutes to make sense of your B-Plan. In such a scenario, the possible outcomes of sending a B-Plan to an investor are

  1. <.0001% probability: Investors understand everything about your business and are ready to just wire you the money/ send term sheet
  2. 20% probability: Investors really like your business but there are some unanswered questions/ concerns. They would like to meet you to know more and get their concerns alleviated
  3. 60% probability: They are confused and unclear about your business. Since they don’t want any credible opportunity to slip away, they have put one of their junior resources to meet you to know more. They may also get unresponsive because of heavy inflow of business plans where they already get enough that are understandably and interesting (falling in the first two categories)
  4. 20% probability: They understand your business but for whatever reasons (don’t like the space, don’t have money, have invested in competition etc.) don’t want to invest in your business. Nicer ones will tell you so upfront, others may become unresponsive

Odds of outcome 1 are lesser than buying a lottery ticket and winning it. Outcome 2 is the only reasonable play for a sensible founder. Fund raising is a super time consuming process, therefore between outcome 3 and 4, I believe 4 is a better state to be in than 3. It will save you a lot of time and emotional trauma of misplaced expectations in the chaos. The primary driver of option 2 is generating interest among investors so that they want to meet you and so that they keep you in an active evaluation set. Given the time investors would have, the B-Plan has to be simple, clear and succinct. These attributes cannot be compromised for completeness, disclaimers and other unwanted details at this stage. The following are important points to ponder upon

  • A B-Plan should cover broad business aspects about your startup. It should make investors understand the business of your company and the broad environment around it. It may not answer all their questions but only the important ones
  • A B-Plan is not an encyclopedia/ technical manual that will answer questions about each and every aspect about the business but should get them interested in it. Getting them interested in it is of paramount important
  • Even before you may get to meet an investor, the B-Plan deck may get emailed and shared. People would skim through it quickly and already start making their opinions. They may start discussing their opinions with their colleagues. And even before you would have a chance to present and defend your business, they may already start making their judgements
  • Keep it simple and as less verbose as possible. Try to restrict one message in one slide. The material on each slide should only augment/ bolster the intended message. Use figures to aid your messages (don’t overdo it). Aesthetics help but don’t try to make a Mona-Lisa. If a B-Plan is easy to understand – doesn’t mean it is not an investable business (in-fact quite the contrary)
  • Keep the deck short; not more than 10-15 slides. Anything more, non critical can move to appendix only if you feel strongly about it

A possible structure of a B-Plan can be

  1. What problem are you planning to solve: I have found this framework useful to structure your slide on the problem statement – What is the problem, what are the symptoms that testify that the problem exists, who is the impacted party and what is the impact. At Mettl, for example our problem statement was – Hiring evaluation criteria for most job roles is haphazard causing a lot of inefficiencies in companies. Even when evaluation criteria is well defined, it is time consuming to measure it manually and that too led to a lot of biases. This led to suboptimal company performance and undesired extra work for HRs and hiring/ line managers. At Milkbasket’s, it could be – A bulk of household grocery needs are items like dairy, breads, vegetables and fruits etc. that needs to be delivered daily and by early AM. Traditional e-commerce companies are not specialised to do that. Traditional mom and pop stores don’t have the scale and logistics to do that. This causes households to fend for themselves – causing unnecessary/extra work. We can do better in the above by making the message more pictorial (and less verbose)
  2. What is your solution: This slide can start like – XYZ is building a system/product/ software/app etc. to do ABC that will solve the problem defined in the previous slide. Drawing parallels can also work here. It helps to convey the message faster and clearer. For example at Mettl, we used to pitch to investors – Mettl is SurveyMonkey(SaaS) for candidate skill assessments. We help companies hire the right talent by providing scientific evaluation criteria across job roles and automated assessments to measure the candidates. Through visual depiction on the above and inserting the right keywords (like psychometrics, data science, technology etc.) helped us depict to our audience the kind of solution we were talking about.
  3. What is the competitive landscape & what is the positioning of the proposed solution: Here you may like use your view of the market meaningfully to dissect it. For example use one or more attributes like premium Vs economical, enterprise Vs SMB, US Vs Other geos, millenials Vs Gen X etc. At Mettl we said that while our competition addressed top 5% of the market by catering to senior level and above job roles, we want to make the power of psychometrics available for junior to mid-senior level job roles at an affordable price by automating the assessments.
  4. What is your market size: In this slide it is important to give a sense of the market size using right business drivers. If we use wrong or naive business drivers we can get market size to be all over the place. For example at Mettl we said that our primary customers were mid and large sized companies in India. There are 10K companies in India with a topline of 100MUS$ +. Mettl should be able to bill them 50K US$ on an average to use unlimited assessments across any job role. That made the market size to be 10,000 x 50,000 = 500MUS$ in India. If we start by with Indian population in working age etc. then the market size would come in tens of billions.
  5. What is the current state of the company:
    1. Team
      1. Profiles of founders & key employees
      2. # Full Time Employees/ Temp staff/ interns
      3. Key advisors/ investors
    1. Product/ solution: State of the product/ solution. Demo/ video at an appropriate stage of discussion is very handy
    2. # Customers/ engagement/ revenue: Now depending on the space of the company, you may like to show the business traction appropriately. For example in B2B SaaS companies it could be # customers, ARR, MoM growth etc. In consumer companies it could be DAU/ MAU, growth etc.
  6. Why do you need funding: You can keep this high level (without disclosing the numbers) saying that you are looking for funds to help the company achieve – X business goal in Y time. You can also indicate the numbers. You need not indicate the valuation because that is always up for negotiations with Seed/ VC funds. The goal is to get them to give a term sheet. Valuation is to be negotiated later.
    1. Who all have already committed to invest? What % of the round is already closed?
  7. Appendix
    1. Future avenues
    2. Assumptions and citations
    3. Any other important information that you deem important

Depending on the funding round (seed to series A) the deck structure would be the same but detailing in each slide could be different. The more advanced the round, the material on each slide is more real and experiential instead of projective.

Please take the above suggested approach with a pinch of salt. This is just my own assimilation of how a B-Plan should be like. There could be many other successful ways used by others. Best luck with building your deck :-).

The Art & Science of fund raising: (Seed to Series A)

L to R: Ketan & I with Karthik and Sanjay of Blume Ventures – Thanks for believing in Mettl

Capital is startup’s fuel. It helps them scale, build markets, build products and beat competition. Fundraising is a bit of art and a bit of science (90% art and 10% science). Some founding teams are able to do it more successfully than most others. It is said that fundraising is one of the two most important jobs of the founders (the other being hiring rockstars and gainfully absorbing them). The most successful startups that we see around are the ones where the founders have become fund-raising machines. Access to deeper capital have become a competitive advantage for companies. Therefore one needs to learn this important skill.

In Mettl’s context, we raised the following rounds of funding (in Nov 2018 INR to US$ terms)

  • Angel Round – 2010: ~70K US$ from angel investors (friends, family and beyond)
  • Seed Round – 2011: ~250K US$ from Blume Ventures and Dr Singh
  • Series A Round – 2012: ~3.2M US$ from Kalaari Capital
  • Bridge Round 2015: ~.5M US$ from M&S Partners (an inbound interest)

finally leading to an acquisition by Mercer in 2018.

We had our own share of hits and misses (more misses than hits). In 2014-15 we were running out of money fast. We really needed capital for our survival but no fund would touch us. We sensitised our team about the shit ahead. In our minds we were expecting many resignations but very few did. As what happens when a portend army faces tough challenges ahead – you are left with the toughest, bravest and most able ones. Which is why I maintain that Mettl had an incredible team and startup culture. But this topic for some other day. From 2015 our entire focus was on how to make our customers win. We turned profitable the subsequent year and from thereon. We started getting inbound funding offers (when we didn’t need any). We finally found our new home at Mercer.

Frankly, I am not the best person to write about how to fund raise. We couldn’t raise money when we needed it the most. Had we not learnt how to build and run a business through our own means we wouldn’t have survived. This article is just an attempt to document what I have learnt about fundraising in my journey which ended at series A level in 2012. Much has changed in terms of the fundraising environment but I believe the fundamentals are time invariant. It may be useful for new and budding entrepreneurs who may experience fundraising frequently in their voyage.

I have structured the process into the following articles that I will publish over time. Please do point out for any suggestions/ new viewpoints/ related topic that I should cover/ errors/ typos/ negative feedbacks (and positive ones too). With a word of caution, these are just my thoughts and there could be other better alternate approaches to fundraising.

  1. Thinking through your own business
  2. Creating the B-Plan
  3. Examples of some great B-Plans leading to successful fund raises
  4. Contacting VCs/ potential investors
  5. Making presentations to VCs/potential investors
  6. When successful: Negotiating terms in a term sheet
  7. Tough Luck: Building a bootstrapped business