I dive deep into what makes a business successful, an entrepreneur worth millions of dollars and an investor write a cheque. Perched on my small post in Mumbai, I write mainly on entrepreneurs, start-ups, innovation, venture capital and private equity investors and unlisted firms. While following the world of business for Forbes India as Editor, Enterprise, I intend to use this space to share observations from the other side of the entrepreneurial world, where disruption, gumption and courage can take one a long way.
On Thursday, Twitter went abuzz with several people, including quite a few senior journalists, sharing links of a Bloomberg article. In India today, there are few things that create more excitement than investors and entrepreneurs, at least for the media.
To be sure, this article was being lapped up because it was about Nikesh Arora, a person with the ability to write large cheques, and who we were celebrating eagerly last year for his huge bets on India's new economy firms. According to the Bloomberg article, a letter has been sent by a group of investors in SoftBank to the board calling for an internal probe against Arora, the company's president and second in command, questioning his qualifications and track record. The investors also sought his potential dismissal from the Tokyo- based company.
Arora, who joined SoftBank in 2014, heads its investment arm and has written big cheques for Indian companies like Snapdeal, Ola and Housing.com. He has also invested in OYO Rooms and Grofers. When SoftBank invested $210 million in Ola and $627 million in Snapdeal, the Indian media went into a tizzy and Arora became this highly- sought- after investor with a magic wand - his only magic wand really was the ability to facilitate investments from SoftBank, a very deep pocketed investment company. Nevertheless, we celebrated the large investments without caring to understand that funding is one part of the business and fruition of these investments, in terms of growth and returns on investments, is where the real test for an investor lies. Today, when questions are being asked about the performance of Arora's investment call, we are again forgetting that he is not even two years old into his investments. The typical gestation period for investments is five to seven years. Give him time and then decide on his performance.
Do we tend to celebrate and berate our investors and entrepreneurs a little too early, and a little too fast? Going by the track record we have, yes. Just about two years ago, Rahul Yadav, the former CEO of housing.com, an investee firm of SoftBank, was lapped up as a young star who came up with a unique proposition of bringing the real estate industry online. All was well till a bitter spat between him and a VC investor became public. What followed was then downhill for Yadav and from a poster boy of Indian startups, he became an example of how a promoter should not behave. He was forced to step down. In this case too, no time was given to Yadav to prove himself before we got done celebrating and later un-celebrating him. Now, Yadav is starting a new company of his own, but we (the Indian media) would not talk about it much - until a Big Bang investment happens.
The Indian media's way of looking at investors and entrepreneurs is very constrictive -it's all about big cheques – the ability to write them and the ability to get them written. In the process we forget the true and only real meaningful news lies in where these companies and investments go in the future. A majority of the new- age firms that have raised large checks over the last five years -- Flipkart, Snapdeal, Ola, Paytm, BigBasket -- are still scaling up and are yet to offer concrete returns to their backers.
In India, some of the most successful investors include Pulak Chandan Prasad, the founder of Nalanda Capital, Niten Malhan and Vishal Mahadevia of Warburg Pincus, Sumir Chaddha and KP Balaraj of WestBridge and Ashish Dhawan of ChrysCap. These investors lie low, help their portfolio companies and let the returns do the talking. Of course, they tend to go off our radar at times, particularly when compared to their more easy-to-approach, media- savvy contemporaries.
Should we wait to hear more on Arora? For sure. His investments are hardly two years old. Let his investment bets tell us about him.