Tech

This ex-Googler just got another $30 million to help companies with the ‘art and science’ of hiring exactly who they want

lever ceo sarah nahm

By 2012, Sarah Nahm, a former Googler who had worked as a speechwriter for Marissa Mayer and a designer on the Chrome team, knew she was ready for something different.

There was no “lightning strike” moment of inspiration, Nahm tells Business Insider. She and two colleagues knew they wanted to start a company together. They all had an interest in recruitment and human resources. They just didn’t know exactly what they would do.

Over the course of nine months, the Nahm and her partners worked their networks and embedded within tech companies including Twitter, trying to figure out what problem they could solve.

To Nahm’s surprise, it turned out that she was in the right place at the right time. At all of these companies, they found the same frustrations. The headaches weren’t over anything technical. Instead, the thing these high-growth Silicon Valley companies had a tough time solving was hiring. They wanted the best programmers and the best talent, but the market was just too competitive.

“You’d expect it to be ‘big data’ this or ‘machine learning’ that, but it’s human,” Nahm says.

And so she and her two partners formed Lever. The software startup, under Nahm’s command as CEO, is designed to help with the hiring headaches she saw bubbling up back in 2012.

It seems to be working. Lever counts over 1,000 customers, including Netflix and Cirque Du Soleil, according to Nahm. Lever itself now has over 100 employees.

And investors like what they’re seeing from the company. On Thursday, Lever plans to officially announce that it’s raised $30 million in a Series C venture round. That brings the total amount its raised from venture investors to $62 million.

Nahm says the big question for Lever now is: “How can we connect human potential to meaningful work?

Tools for a changing time

Lever’s launch and growth have come as the very idea of employment is changing, for better or for worse.

Millennials, especially, have earned a reputation for “job-hopping,” jumping from position to position and company to company every year or two as they pursue their own non-linear paths to success.

In Silicon Valley and beyond, there’s a veritable talent war for top-tier engineers. And as software continues to eat the world, even blue-collar jobs like farm work are requiring a growing array of computer skills .

“The future of work is changing, and it’s a pretty dramatic shift,” says Nahm. “People are out here looking for a deeper meaning.”

lever hire

Lever’s goal is to give its customers tools to manage that shift. Its service is designed to help HR departments proactively identify the best people for open positions and figure out the best ways to convince those candidates to join their companies. It also is designed to help companies retain their workers by offering recommendations for how they can keep the employees happy.

Through its tools, Lever is advancing the “art and science” of recruiting top talent, Nahm says.

A big enough lever

What really sets Lever apart, says Nahm, is that it makes hiring collaborative. When people in a company identify a potential job candidate, they can use Lever’s service to flag that person for their colleagues. Lever’s tools will also help figure out who within the company would be best placed to reach out to the candidate.

The system is designed to try to find the person with whom the candidate might best identify and who might stand the best chance of convincing the person to join the company. For example, instead of talking to a recruiter, a hotshot programmer might want to hear from another hotshot programmer about what drew her to the company.

Lever’s analytical tools provide tips to hiring managers about how often they should contact candidates and who on their team might be the most effective at getting through to them. Lever’s service can even give insight on the average time it will take to fill a position.

lever screen

The service is a far cry from what Nahm calls the “dark ages,” when companies would post a job listing and just hope that the right person responded – a process Nahm dubs “post and pray.” Lever is built around the notion that with data and better candidate tracking tools, companies can fill jobs much more intelligently.

‘That’s what I live for’

One of the benefits of Lever’s service is that it can be used by anyone in the company, not just the recruiting team. Opening up recruiting to all workers can help expand the pool of would-be candidates for jobs. And it can help yield a more diverse pool of candidates.

That’s a huge potential benefit, particularly in an era when the tech industry’s lack of diversity has become such a hot topic. Lever itself says that its employees are 50% women and 40% non-white.

Lever plans to use the cash it just raised to make its service even smarter, boosting its analytics and helping companies identify the talent they need, Nahm says. To Nahm, connecting companies to the right people at the right time is a design problem, similar to ones she’s faced in the past.

“That’s what I live for,” says Nahm.

Source: Business Insider

Infotainment

What will happen to Earth if Humans disappear ?

1) Several hours after humanity disappears lights all around the world will start to shut down. Since most power station work on fossil fuel but without people there won’t be anybody to charge them so they will stop.

2) 48 hours after registering a sudden drop in energy consumption nuclear power plants will switch to safety modes.

3) When mills will keep working until the lubricant runs out a solar panel will also eventually become useless.

4) Nearly every region except for the one supplied by hydro-electric power stations will have their power cut off.

5) On the west of the united states the generators of hoover dam are activated by the water flow from Lake Mead, thus it can be left unattended for several months or even years.

6) Two or three days after Humans vanish from the planet most metros in the world are going to be flooded because the pumps that protect them from the underground waters won’t work without people.

7) After 10 days, pets locked at home will start dying of starvation and dehydration. Billions of chickens and millions of cows, as well as other farm animals, will be dead.

8) In the brutal world of real wildlife, there won’t be a niche for decorative cats and dog breed they will be the first to die out.

9) About a month after Humans disappear all cooling water on nuclear power stations will be evaporated. This will lead to a series of explosions much stronger than the Fukushima and Chernobyl disasters.

10) Millions of animals will die of cancer but overall the planet will recover from the radioactive contamination rather fast and easily.

11) One year after people disappear, strange stars will start to fall from the sky. During our space history, we took dozens of thousands of objects to the Earth’s orbit the highest satellites will fall after many years.

12) After 25 years, three-quarters or all squares and sidewalks will be covered with vegetation.

13) Where there are plants there are herbivorous animals and where there is pray there was always a predator.

14) The surviving dogs will cross with the wolves that come to the former cities.

15) Without us, the air will become much cleaner. In some cities, the visibility range will become several times longer.

16) Cities like Dubai and Las Vegas will be buried in sand the desert will take what belongs to it.

17) After 300 years metal constructions such as the Eiffel Tower or steel bridges will start to break since for all these years there won’t be anybody around to paint and protect from corrosion.

18) Steel rods in armed concrete will bloat up to three times of their initial thickness and the last tall buildings will go down.

19) Vas swamps which formerly occupied America will reappear and hundreds of bird and animal species will return to their unfairly taken home.

20) Large marine animals will also be very glad not to see us. In the absence of humans, Whales will thrive and reproduce to the maximum of the ocean’s capacity to feed them. This is how modern cities will look after 500 years without people.

21) After 10,000 years the only reminiscence that people were here someday will be the remains of a few stone constructions among which the pyramids in Egypt and the Great Wall of China, mount Rushmore national memorial will be there, almost intact for several hundreds of thousands of years

22) In 50 million years plastic bottles and pieces of broken glass will be the last traces of our civilization. and In another 50 million years they will be gone as well as you can see our planet is quite sturdy and can get rid of all of our trash.

23) If after 300 million years or later there will be a new rational species, they might not even notice there was a civilization before.

Business

Jim Rogers regrets giving up hope on Modi; says should have been more patient before exiting India

Instilling faith in PM Narendra Modi and his policies, Commodities Guru Jim Rogers on Monday said that he should have been more patient and waited for Modi’s plan to play out before selling his positions in 2015. In a conversation with ET Now he said, “I believed that Modi did nothing but talk, hence I sold out of India. The currency and Indian markets have gone up quite a bit after I sold out”. In 2015 Rogers exited his India investments after giving up on Narendra Modi, saying that the Prime Minister has failed to meet the investors’ expectations. “Mr. Modi ran a successful state. He campaigned for two years, saying he knew what to do. He has been there 15 months, yet little has happened,” he had said in 2015, upon deciding to sell his India assets. Earlier this year, he said that he wanted to invest in India but demonetisation event happened.

Recently he also expressed his desire to enter India again. “If Modi continues doing stuff like GST, then not just me, everybody has to pay a lot more attention to India,” he said in an interview to LiveMint. He also lauded Modi for passing the crucial GST. “On GST, I am amazed, shocked and stunned,” he told the publication.  The biggest tax reform since Independence, GST has been in the works for more than a decade. It will transform the $2 trillion economy and market of 1.3 billion people into a single economic zone with a single national sales tax.

GST will subsume central taxes like excise duty which is levied on manufacturing and service tax as well as state taxes like VAT that is chargeable on sale. Sources said Adhia informed the meeting of the four-slab rate structure of 5, 12, 18 and 28 per cent finalized by the GST Council. He explained how the fitment of different goods and services in these slabs is being done to keep their impact on consumers as well as exchequer neutral.

President Pranab Mukherjee approved four supporting legislations related to GST. Finance Minister Arun Jaitley along with his ministry officials presented a blueprint to the Council of Ministers for launch of the path-breaking GST from July 1 to transform the Indian economy. Revenue Secretary Hasmukh Adhia made a detailed presentation to the Council — the supreme executive organ headed by Prime Minister Narendra Modi — on how the Goods and Services Tax (GST) will be implemented and the challenges before it is rolled out.

Source: The Financial Express

Earlier in 2015 Jim Rogers said, he was disappointed by Modi so he backed out his investment. Read full article here

World Facts & News

10 areas where INDIA exceeds some of World’s Most Powerful and Developed Countries

indian-army

India is still a developing country and needs a lot to achieve to stand with the first world countries, but there are some specific areas where India stand far away from the developed countries. Below are the 10 reasons that will feel you proud.

1. High Altitude Mountain Warfare

India shares a borders with nuclear-armed archrivals like China and Pakistan known for flawless mountain warfare training. Hence, our Indian army went ahead and became the best in the world. The High Altitude Warfare School in Gulmarg, Kashmir, is so renowned that mighty armies like the U.S., British and German armies periodically come to train with us. Also, the Indian army’s triumph over the Siachin glacier is nothing short of stupendous gallantry.

2. Undisputed Remote Sensing Capabilities

A few decades ago, India was heavily dependent on satellite data from America. As a result of this slow process, 20,000 people died during the 1999 Odisha cyclone. Fast forward to 2015, India’s remote sensing capabilities are far ahead of that of the U.S. Today, we have satellites backing a variety of applications including groundwater prospect mapping, crop acreage and production estimation, potential fishing zone forecasting based on chlorophyll and sea surface temperature, biodiversity characterization, detailed impact assessment of watershed development projects, generation of natural resources data/information, etc.

3. Most Intelligent Nuclear Program Using ‘Thorium’

While countries around the world struggled to find the replacement for Uranium as a nuclear fuel, India’s nuclear program was already thriving on Thorium. Since India was naturally rich in Thorium deposits, our brilliant scientists made use of it instead of Uranium (Uranium 238) as fuel and surprised the whole world.

4. First Asian Nation And Fourth Country In The World To Reach Mars’ Orbit

The entire world knows about India’s Mars Mission; it needs no introduction. Not only did India become the 1st Asian nation and the 4th country in the world to reach Mars’ orbit but we did it most cost effectively too. At 450 crores, it’s the least expensive Mars orbital mission ever commissioned.

5. The Third Largest Army To Walk On Earth

The more you praise the Indian army, the less it seems. With 1,129,900 active troops and 960,000 reserve troops, the Indian army is the 3rd largest army to walk our planet. Also, it’s an all-volunteer force and comprises more than 80% of the country’s active defence personnel.

6. Second Largest Number Of Internet Users In The World

Our future rests in the hands of ‘The Internet’ and nobody drives the force of the web other than its users. After China, India has the most number of internet users on the planet. At only 29% penetration, India has 354,000,000 people using the net. This puts us way ahead of countries like US, Japan and Russia where the penetration rate is much higher.

7. Nuclear Assets

In a short span of 66 years, India’s nuclear capabilities have tremendously grown. We rank number one in the development of thorium-based fast breeder reactors; we also have 21 nuclear reactors in operation in 7 nuclear power plants, having an installed capacity of 5780 MW. Six more reactors are under construction. According to Federation of American Scientists, India has an estimated backlog of 75-110 nuclear weapons.

8. Fourth Most Feared Air Force In The World

With approximately 1,820 aircrafts in service, 905 Combat Planes, 595 Fighters and 310 Attackers, the IAF is the fourth largest air force in the world. This puts us ahead of Germany, Britain and every other developed European country.

9.Second Largest IT Industry In The World

The ultimate rise of Indian IT industry is tremendous.Currently, Indian IT sector is the 2nd largest in the world. Accordingly, in the next coming five yearswe will take over China to be the number one.

10. Contribution Of Yoga And Ayurveda

Debate this as much as you want but yoga has become a rage across the globe. And who else is to thank but India. Yogananda talked about the physical and eternal benefits of yoga that are now being actively confirmed by modern medical science.

Business

WARREN BUFFETT: The hedge fund industry’s biggest profits are going to managers, not their clients

Warren Buffett Fortune

Warren Buffett is not a fan of hedge funds and the high fees they charge clients for the promise of outperformance.

“When trillions of dollars are managed by Wall Streeters charging high fees, it will usually be the managers who reap outsized profits, not the clients,” Buffett said in his annual shareholder letter published on February 25.

He added that by his rough calculation, investors have wasted about $100 billion over the past decade in the search for superior performance.

His contention is two fold: active hedge fund managers’ fees crimp returns for their clients, and the promise of outperformance falls short when stacked against the S&P 500.

In fact, the Berkshire Hathaway chairman is on track to win a $1 million bet he made in 2008 with Protege Partners that the S&P 500 index would outperform a portfolio of funds of hedge funds. In the nine years since, the best-performing fund of funds has gained 62.8%, less than the 85.4% return that the S&P 500 index fund has earned.

Buffett’s position on this is somewhat paradoxical, since Berkshire’s success is largely a result of Buffett and his team’s ability to pick stocks.

In the letter, Buffett said his favorite recommendation for investing is a low-cost S&P 500 index fund. He also said Jack Bogle , the Vanguard Group founder considered to be the father of indexing, has done the most for American investors.

“I estimate that over the nine-year period roughly 60% – gulp! – of all gains achieved by the five funds-of-funds were diverted to the two levels of managers,” Buffett said. “That was their misbegotten reward for accomplishing something far short of what their many hundreds of limited partners could have effortlessly – and with virtually no cost – achieved on their own.”

Buffett added that if passive investors in the index are destined to achieve average results, before accounting for costs, so too would active, more expensive managers. However, it’s the group with the lower costs that will win in the end, and the side with higher costs would see a more substantial shortfall.

He said,

“There are no doubt many hundreds of people – perhaps thousands – whom I have never met and whose abilities would equal those of the people I’ve identified. The job, after all, is not impossible. The problem simply is that the great majority of managers who attempt to over-perform will fail. The probability is also very high that the person soliciting your funds will not be the exception who does well.”

Source: Business Insider

Tech

India Tech Founders – Does Alma Mater Matter?

This post is a continuation of our data story series on tech startup founders in India. Our first article covered founders and work experience as it related to funding, choice of business models, networks and exits. If you missed it, you can read it here.

In this post, we dwell on the much debated topic of founder academic background and gender. Does gender impact the ability to raise capital and also success in subsequent rounds?

How much does founder schooling impact the ability to raise initial capital? Do certain schools have better networks than others? Do some schools produce founders who fare better with specific business models? Which schools have produced more founders with exits to their credit?

You may recall that our study covers a ten-year period starting in 2005, and includes tech start ups that have raised a minimum of $2M in funding. This set encompasses 448 companies and 987 founders. We included both undergraduate and graduate academic credentials of founding teams.

Top schools provide an edge in funding

Of the 448 companies, a total of 158 companies (35%) have one or more founders from an IIT. If IIMs, BITS, and ISB are added to the mix, this percentage increases to 46%. Adding top global schools such as Harvard and Stanford hikes this to 51%. So, one of every two tech start-ups to have raised more than $2M over the past decade has a founder from one of these institutions. The other way to look at it is to say that 50% of all funding is going to founders without an elite school background. It is also illustrative to look at the other 50% that received funding. This group spans a broad range of institutions, including NITs, colleges such as DCE, NSIT, St Stephens, Sri Ram College of Commerce, Loyola College Chennai, College of Engineering, Guindy etc.

There are likely a few different factors at work here. It is possible that tech founders from top schools have a greater appetite for risk and try their hand at entrepreneurship due to better fallback options. All other things being equal (market, idea, approach), investors appear to view academic smarts as a proxy for the ability to solve tough problems. Globally, we see similar stats (Pitchbook global universities), with the top ten undergraduate programs alone spawning 3000 start-ups and attracting $34B in funding since 2010.

Founders from top schools do start with some key advantages. They have strong alumni networks that help with mentorship, seed funding and access to investors. This also helps when it comes to recruiting and building teams. The funding advantage seems to extend beyond initial rounds. Of the companies that raised more than $100M+, nearly 68% have a founding team member from a top school. We also looked at whether the fundraising ability of this group translated into exits. Of the top 15 exits (greater than $50M) in India over the past decade, 60% of them involved start-ups with founders from elite schools.

Correlation should not be confused with causality. One could argue that these outcomes are good but not great given the amount of funding that has gone into start-ups run by such founders. It remains an open question whether founders from elite institutions have a definitive edge in terms of tech ideas, innovation or value creation. Logic would dictate that this is unlikely to be the case.

Entrepreneurial ventures often start as a reaction to a specific problem faced by the founder, a strong passion, or a desire to change the status quo. As the India venture ecosystem enters its second decade, there is some risk that tech founders with similar backgrounds and experiences are susceptible to group think.  Similarly, it’s not too far fetched to argue that investors are also more persuaded by a certain profile of tech entrepreneurs – strong academic credentials, good presentation skills, and pursuit of spaces and business models that have traction globally. This is continually changing as the ecosystem matures to recognise and reward India centric entrepreneurs and solutions as well as greater diversity in founder backgrounds.

Bragging rights for those who care

We classified schools by number of companies founded by alumni, total funding raised, and exits. In terms of number of companies founded, IIT Bombay leads the pack followed by IIT Delhi, IIT Kanpur and BITS Pilani. When it comes to fundraising, IIT Delhi replaces IIT Bombay, primarily due to massive rounds raised by Flipkart and Snapdeal.

We further segregated rankings by undergraduate programs, MBA programs and other post graduate programs such as MS, PHD etc. While Indian Schools – IITs, BITS, IIMs and ISB dominate the undergraduate and MBA rankings, global schools figure more prominently in post-graduate founder qualification rankings.

Founder alma mater and choice of business model

It was interesting to explore if schools and alumni networks influence choice of business model – B2C, B2B, and B2B2C. IITs and IIMs occupied the top spots for B2C rankings with companies such as Flipkart and Ola. BITS Pilani and IIT Madras alumni appear more adept at starting and growing B2B/B2B2C companies. IIM alumni don’t have the same level of involvement in the B2B space as compared to B2C. IIM Ahmedabad did not even make it to the top 15 B2B list despite occupying the fourth spot in the B2C list. All of this is relevant as networks available to founders from various schools do influence the pace at which they are able to assemble a team, attract co-founders, hire access investors and learn from those who have tread the path before.

Academic institutions and exits

Out of 448 venture funded companies that have raised $2M+ in our data set, there have been only 38 exits. If we apply a filter of $50M (to make these exits meaningful) we end up with 15 companies as seen in the table. We also included three exits – Directi, Makemytrip, and Jabong – outside of our dataset in this list to make it comprehensive.

It is interesting to note that IIT Delhi and IIT Bombay do not make this cut despite topping the funding lists in terms of number of companies and dollars raised. We would also like to call out that exit numbers balloon if you were to include companies that raised less than $2M in venture funding. Inc42 estimates[1] that there were 140 exits in 2016 alone. That list can be viewed here. However, from our perspective, the vast majority of these exits were not consequential in terms of value and many were acqui-hires.

MBA and tech entrepreneurship in India

One in every two startups in India has one or more founder with an MBA degree while one in every five has a founding team made up entirely of MBA degree holders. Also, 40% of all 448 startups have founding teams with MBA founders in a majority (51% of the founding team). These data points remain almost consistent across funding brackets. The question to debate then is whether an MBA degree contributes to soft skills such as leadership, networking, general business management and team building.

The top three sectors with the highest share of companies led by MBA founders are e-commerce, EdTech, and Travel & Transport at 68%, 63% and 60%, respectively. Enterprise Software and Tools rank second last at 29% on this list.

Women entrepreneurs: High batting average despite fewer opportunities

Only six percent (63 out of 987) of the founders who raised $2M+ in funding since 2005 are women. The number of female founders is growing but nowhere near the volumes everyone would like to see. The lower numbers of 2014, 2015 and 2016 do not paint a complete picture as there are many companies founded in these years that are yet to cross the $2M+ funding qualifier of our dataset.

In terms of companies, female founders are present in 13% of the 448 companies that have raised $2M+.

We checked if female founders were effective in fundraising across brackets. Of 58 companies that had female founders, 59% (34) have raised $5M+, 41% (24) have raised $10M+, 28% (16) have raised $20M+, 16% (9) have raised $50M+, and 10% (6) have raised $100M+. The respective numbers for 390 companies with founding teams without a female founder (orange bar in chart below) is only slightly better. Data seems to validate that female founders are as capable as male founders in raising multiple rounds of capital to fund business growth.

As we noted when we began this series, the objective of this study was to get a data driven view on India’s tech founders and their background – work experience, schooling, gender, networks and choice of business models. The next ten years will likely be very different. Lessons – good and bad, from the first decade will shape a new generation of founders, investors, and companies pursing the massive opportunity for tech led innovation in India.

Source: Bala Srinivasa on LinkedIn

Tech

Tech Startup Founders: The Data Story

Who is the Indian tech entrepreneur? Are there traits that characterise the brave ones that take the leap of entrepreneurship in a tough market like India? Do founders with work experience fare better and does this vary by sector? Do founders from specific schools have an edge when it comes to fund raising? Do graduates from certain schools show better entrepreneurship capabilities than others? Are certain founder types better equipped to build a B2B versus a B2C business? Is there a difference in the fund raising ability of female and male founders? Does ability to fund raise extend to exit outcomes?

What was surprising to us was the total lack of data to support or refute many of these questions. Lots of anecdotal viewpoints and small sample sizes based on what one saw at individual VC firms, but hardly any data intensive analysis over a reasonable time period that could paint a more accurate picture.

With this in mind we collated granular data on every tech startup in India that ever raised more than $2M in funding since 2005. This covers 448 companies and 987 founders. The $2M cut off is arbitrary and used as filter for a meaningful sample size of founders who have managed to raise a round of capital generally needed to build a scalable business. We agree that fund raising is not the only criteria for start-up success but given the early stages of the Indian venture ecosystem evolution, it seemed like a reasonable filter.

The answers are not a short cut to finding the next great entrepreneur or the next innovative business model. What it does provide is a window into history and how tech-entrepreneurship is evolving in India. It also raises interesting points of debate – if VCs are funding cookie-cutter entrepreneurs, whether entrepreneurs are just chasing me-too models, and the relationship between funding, ability to attain profitable scale, and exits.

We broke up the analysis along a few major dimensions -– work experience, academic background, sectors, business model choices, fund raising, and exits. Complexity comes from the inter-relationships so we are presenting our analysis by anchoring on each dimension and highlighting relevant cross-dimensional data points.

This first post focuses on founder work experience. In follow on posts we’ll pivot to founder academic background and funding. At the end of this write we have shared our data approach and methodology for those interested in the approach.

The myth of the inexperienced start-up founder

A common image of the Indian tech entrepreneur is a twenty something with an IIT/IIM degree straight out of school or with just a couple of years of work experience. This is far from reality. The average work experience of the Indian founder who has raised $2M or more since 2005 is around 10 years. This encompasses 432 companies and 955 founders, whose work experience data was available in public domain.

We further broke this by founding year cohorts. The average work experience of an Indian founder moves around a bit but not dramatically from the 9-11 years range. The average work experience of founders in 2015 and 2016 seems higher because of our $2M+ funding raised qualifier. There are many companies that did not make the cut off of November 2016 as they were in the process of raising a follow on round. This contributed to increased averages for 2015 and 2016. However it may also be a hint that founders with more experience may raise funding faster. We have plotted the entire distribution in the chart below.

Prior work experience does not seem to influence magnitude of capital raised

The graph below represents the relation between avg. founder experience in a company and the funding raised by company. On the X axis, we have the founding year to see if there had been any trend in this data over a period. The bubble sizes represent capital raised and are evenly spread across the length of Y axis across years, suggesting that there is not a strong correlation between funding raised and work experience of founders. The largest 3 bubbles (Flipkart, Snapdeal and Ola) are very close to the X-axis where avg. work experience in the founding team is approximately 2 years. There is something to be said about technology based disruption and youth. Many of the biggest tech startups successes globally Google, Facebook, Snapchat, and AirBnB were started by founders with limited work experience – which probably allows innovative technology solutions unhindered by traditional thinking and past failures.

Founder work experience by sector

There is broad dispersion in terms of founder work experience by sector. Certain sectors such as Legaltech, Healthcare, Fintech, Enterprise Software, and Logistics etc. have founders with work experience well above the average. These tend to be complex industries where there is significant value in having deep understanding of the domain. New age areas like online travel and food tech are at the opposite end of the spectrum. Foodtech companies such as TinyOwl, and Zomato have founders with lower average prior experience at 5.6 years. This data is simply a snap shot of what has transpired to date and the averages across sectors. There are several examples globally and in India of tech innovation and successful companies having been founded by entrepreneurs with no prior domain expertise.

We took the top 3 sectors with the most founders – Ecommerce, Enterprise Software & Tools, and Fintech to see how founder backgrounds differ. We have only considered the last company where the founders worked before starting on their own. Consulting firms such as Mckinsey, BCG etc. are bucketed under Consulting – Global; companies such as Cisco, Microsoft, and Trilogy are bucketed under Tech – Global. Second time founders are in Ex-Founder category; and founders who were employees at a prior start up fall under the Startup – India or Startup – Global categories.

It is interesting to note that in Ecommerce, a majority of founders were associated with the startup ecosystem in some capacity before founding their own companies.

In Enterprise Software & Tools which includes all SaaS companies such as Freshdesk, and Networking companies such as Aryaka, many founders (43%) cut their teeth at global tech companies (Microsoft, Amazon) or Indian majors (Infosys, Wipro).

Fintech is a complex sector where in addition to solving for volumes or reimagining a better consumer experience, entrepreneurs need to navigate the maze of complex regulatory oversight in the sector. One in every three founders in fintech who has successfully raised over $2M previously worked at a financial services company – Global (Citi, Barclays) or Indian (ICICI Bank, HDFC) etc.

Founder work experience and choice of business model

It is generally believed that B2C companies dominate the Indian startup landscape. This is not supported by data. Since 2005, 239 B2C companies and 209 B2B and B2B2C companies were founded which raised more than $2M+. It was not surprising to see B2B and B2B2C have higher average founder work experience than B2C. Selling to businesses, especially in India, is tough. In the B2B space, founders with some prior work experience seem to have have greater success in getting things off the ground – hiring for enterprise selling roles, alliances, and networks to open doors for initial pilots.

Large company mafia

We wondered if there are large enterprises in India that nurture entrepreneurs of the future. Do these companies enable networks that later benefit their alumni when they start their entrepreneurial venture. Our data based on those that have staying power to raise over $2M in funding shows that Microsoft is the most successful platform. There have been 14 start-ups founded by ex-Microsoft employees that have gone on to attract seed and series A funding. This is followed by Amazon, Yahoo, and Mckinsey. This list of the top 10 platforms shows that tech companies and consulting companies (Mckinsey and BCG) are major contributors to the Indian start-up-ecosystem. What does not yet make a splash on the list are the alumni of large Indian startups – Flipkart, Ola, and Snapdeal. We see a lot of entrepreneurs that have cut their teeth at these firms and it’s a matter of time before they make the top ten list.

Founders experience and exits

We took a look at the top exits among India tech start ups and founder experience at the time of starting. The vast majority of the exits seem to reflect companies with experienced founders. However its interesting to note that Directi which was one of the larger tech exits did not raise any funding and had founders with limited prior work experience. Again a strong argument that the truly disruptive solutions often emerge from first principles thinking and when not coloured by past experiences in the industry.

In our next post we’ll discuss founder academic backgrounds and data derived relationships to funding, business models, and exits.

Data and methodology:

We created a comprehensive data set covering parameters such as undergrad alma mater of the founders, last company before they started their entrepreneurial journey, sectors, exits and work experience. This data set was primarily created using the data available via CB Insights, Tracxn, Linkedin, Venture Intelligence, and Crunchbase.

We analysed 448 companies which were founded in the year 2005 or later and which had raised $2M or more until November of 2016. These companies had a total of 987 founders which we used to create founder specific data sets. The companies in our data have raised a total of $18.2B across 1153 deals over the last 10+ years.

Correction: We heard back from the Directi founder Divyank Turakhia and he was kind enough to correct an error on our part. Bhavin and Divyank sold Directi in 2014 for $160M to Endurance International. We had incorrectly stated that Directi was sold for 900M. It was Divyank and Bhavin’s next venture, Media.net that was sold to a Chinese consortium for $900M (but this was not an India based business). We have corrected the table above to reflect this.

Source: Bala Srinivasa on LinkedIn