(L to R, standing): GV Ravishankar, MD, Sequoia Capital India Advisors; Ananth Narayanan, CEO, Myntra-Jabong; Dev Khare, MD, Lightspeed India; Ashish Gumashta, CEO, Julius Baer Wealth Advisors (India). (L to R, sitting): Ganapathy Venugopal, CEO, Axilor Ventures; Meena Ganesh, MD & CEO, Portea Medical; Ashish Goel, co-founder & CEO, Urban Ladder
Image: Guru Prasad for Forbes India
Whether it’s India’s top-tier software services companies like TCS, Infosys and Wipro or unicorns such as Flipkart and Paytm, large organisations are now targeting startups to provide new energy and momentum to their businesses. The rationale: Startups provide a strong foothold into newer markets and expertise in latest technologies. However, it’s easier said than done as there are a lot of complexities involved for the two forces to join hands and work together seamlessly.
It was in light of such exciting developments that the Bengaluru edition of Forbes India CEO Dialogues, held in association with Julius Bär, chose to deliberate on the subject ‘The Startups-Big Business Symbiosis’. Weighing in with their expert views were Meena Ganesh, MD & CEO, Portea Medical; Ashish Goel, co-founder & CEO, Urban Ladder; Ganapathy Venugopal, CEO, Axilor Ventures; Ananth Narayanan, CEO, Myntra-Jabong; Dev Khare, MD, Lightspeed India; GV Ravishankar, MD, Sequoia Capital India Advisors and Ashish Gumashta, CEO, Julius Baer Wealth Advisors (India) Private Limited. The panel discussion was moderated by Brian Carvalho, editor of Forbes India. Edited excerpts:
Brian Carvalho: Somebody recently used the analogy of a tank and a speedboat for big corporations and startups, respectively. Tanks are slow, steady and sturdy, and they rarely stop. Speedboats are swift, unpredictable and capable of disrupting everybody else in the ocean. Perhaps it is because of these contrasting strengths that the tank and speedboat see merit in coming together. It may also explain why some of America’s biggest corporations like Microsoft, IMAX and PepsiCo have created accelerators for startups and made investments in them. Clearly, the big boys are hoping to find new ideas early. So, let us begin with a fundamental question: Why should startups ally with the Goliaths of business and how can this be mutually beneficial?
Meena Ganesh: When we started Portea Medical [a health care startup] which was positioned outside of hospital care, we were trying to disrupt a disorganised mom-and-pop market. But that required credibility. So allying with a large hospital chain upfront did help us in getting some degree of understanding of the business as well as providing us with credibility. I think it was a good symbiotic relationship.
Ashish Goel: I have a slightly different take on this. Large companies have asset bases, customer access and momentum that comes only with scale whereas startups have innovation on their side. The challenge is how do you make this [the partnership] happen? In the US, there are many examples that one comes across. Whereas in India, somebody [a large corporate] sees an interesting idea that somebody else [a startup] is doing and the natural instinct of the former is that ‘we have got more resources, we can get this done’. So, for that partnership to happen, there has to be a shift in mindset—you can’t do everything yourself. There are many large [Indian] companies which have incubators or accelerators, but I don’t think any real outcome has come from them.
GV Ravishankar: A lot of startups have this question, of whether or not to collaborate [with big companies]. For big companies, partnering with startups and observing the world through their eyes is, in a way, seeing what’s coming in terms of disruption. If you work with them, you will have better chances of understanding what’s changing the market. Bajaj Finserv is a good example. They have a new business which has some 70 people meeting every fintech startup in the country. They know more companies than we do.
Ashish Gumashta: I see a big change in the last three years. A lot of companies, and not just in the financial services space, are innovating and incubating ideas.
Ganesh: I want to add something important from the startups’ perspective. If you are a B2B [business to business] startup, then, of course, you only work with large companies, but if you are in the B2C [business to consumer] space, where your valuation and growth path are dependent on how big you are and how close you are to the consumer, it is super important not to over-rely on these partnerships. They are important, but you have to craft your own way to create that connect with the consumer to build your brand.
Ravishankar: It’s important to find the right alignment while partnering with a company, to have a symbiotic relationship—and not one that has one person (more likely the bigger company), squeezing the other, six months or a year down the line. It’s critical to have a well-managed balance of power. Otherwise, you are really creating an unsustainable relationship.
Ganapathy Venugopal: The value that they [big companies] can add to a startup, especially in the early stages, is immense. But that requires the management or whoever is working with the startups [from the big companies] to not treat the engagement as a vanity metric. I ran a survey among our [Axilor Ventures’] startups on the ease of doing business with large companies. On a scale of five, the ranking was 2.4.