Q&A with Mr. Alok Agrawal, Founding Partner, The Growth Labs, about startups, strategies & talent in India

Q. Tell us about The Growth Labs? What is it all about?
A. The Growth Labs is a consortium of ex-CXOs and industry experts. It specialises in Corporate Innovation Programs wherein we help corporates accelerate their innovation through the transformation of internal employees and partnerships with startups. As we like to say, at The Growth Labs, we provide “business acumen to innovators and innovative thinking to business owners” – with an unparalleled access to the startup ecosystem and a panel of astute industry leaders.

Q. What is your take on the current climate surrounding startups/early stage investments in India?
A. Well, the startup and early stage investment culture in India is still in its infancy. Despite some big ticket success stories in the startup space, both investors and startups still remain circumspect. Large scale early-stage investment in some big unicorns have also dampened the market, as a lot of people rushed in with relatively bad ideas which got funded, but delivered poor results. However, I do see a certain maturity coming in now. Startup founders are becoming more business oriented and are bringing in better solutions. Investors have also learnt that they have to be in it for the long haul, rather than push for quick exits. There is no free lunch, and as long as people realise that, there is money to be made all round. I am hopeful that over the next 3 to 5 years, we will see a number of mini and mid-sized success stories.

Q. What is your view on the current state of the VC/PE industry in India, especially in the context of their second round of investments after exiting from the first round?
A. The Indian VC/PE industry has matured over the last 10 years. They have burnt their fingers many times but also had some hits. I see them making more careful bets and spreading their risks now. They are looking for genuinely new solutions and technologies. A copy paste of a successful American or Chinese business model will no longer cut ice with them.

Q. In today’s age of disruptions, there is always a temptation to go wider by trying new businesses/products rather than going deeper in a few things. What is your view?
A. I am all for experimentation and disruption. However, it cannot come at the cost of what works. You can try many things but you need to do a few things really well. If you try to do too many things, then you will fail. On the other hand, if you do not try new things, you will become extinct very soon in today’s business environment. So spend 15 – 20% resources on the new stuff, but the rest 80% on the core revenue generating opportunities of today.

Q. Entrepreneurs seem to focus on different things to build their competitive edge. What do you think entrepreneurs should really focus on?
A. I wish there was a single silver bullet. But a successful business is really a conglomeration of multiple skills and inputs, including the right talent, right business idea, right processes, a great product and a clever approach to the marketplace. But I do find that most startups focus a lot more on product development and not as much on demand generation. I have a firm belief in “don’t build it if you can’t sell it.” People will always cite examples of great products, but will forget it was an astute business mind that lay behind that success.

Q. What is your advice to budding entrepreneurs?
A. I see many more experienced and well-educated founders building great quality solutions using technologies but also business knowledge. They may not turn out to be mega unicorns, but they will build many successful new businesses and the investors are recognising that. My advice to entrepreneurs is to build genuine solutions, not just an app for this or that. Build use-cases relevant to the market and do not try to blow everybody else out with money – rather do it with the power of your idea!

Q. Should a startup business primarily chase revenue or profits or user base? What is your opinion?
A. Well, there is no profit without revenue. Unless there is business, everything else is useless. So the primary focus really has to be the topline along with a careful watch on expenses. Profits will follow as will customers.

Q. The global economy has become increasingly ambiguous. How is all this is affecting the demand for future leadership talent in Indian companies?
A. The global environment reminds me of this amazing quote by John Seely Brown – “In the old age managers made sense of products. In the new age managers make sense of things.” I find it so apt. As the world goes through rapid transformation and volatility, managers have to be agile and open-minded. And adapt really quickly like chameleons. A number of business leaders have grown with the ‘best practices’ syndrome – trying to be good at a few things crafted over the years. But now there is no time for a perfect business. It has to be run like a series of experiments with innovation and with all the disruption. I think the most crucial leadership skills going forward will be adaptability, resilience, the ability to learn quickly at all times, open mindedness and being bold.

Q. In today’s world, an employee’s job is no longer reactive; rather it is becoming more proactive. Just doing your JD will not suffice. But this is easier said than done, especially as our traditional rote-based learning method incentivizes those who mug and cram, rather than who do critical/innovative thinking. And in order to contribute with ideas, critical thinking is a must. How do we navigate this?
A. Well, this is really a long and contentious topic. I believe our education system and corporate culture that has evolved over the last two decades has made our young managers ineffective. I find young employees start to take their positions and perks for granted very quickly, and stop learning. I find that Indian workers, at any level, go ‘above and beyond’ very rarely. And the corporate culture does not support it frankly. We need to bring in a sense of insecurity among corporate employees in India. A fire under the chair, so to say! Most of the skills we learn these days are going to be redundant in less than a decade. That means in an average career spanning over four decades, an employee needs to re-learn or re-skill at least four times over, and that learning maybe vastly different from his/her previous skills. No employee should take their experience, knowledge or position for granted, as it will all be obsolete soon. We need to build education systems for reskilling, and I see educational institutions playing a large role in this over the next decade or so.

Q. India is at a critical juncture. A stable government is in place. At the same time, elections are coming up. What do you feel are the core areas policy-makers should focus on right now?
A. India still has a long way to go. The biggest challenge is industrial development, which would build more jobs. All our policies really need to focus on this one aspect. We have over 10 million youth joining the workforce every year and only 1 million or so jobs are being created. The demographic dividend can become a curse if this divergence goes on. But I am hopeful that we will find our way, as more and more focus of our policies now is being put on job creation.

– Mr. Alok Agrawal is the Founding Partner of The Growth Labs & Founder, Knexnet.com

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