I consider myself an accidental investor. I have been involved in the startup ecosystem for more than a decade. Leadership roles across the some of the most successful consumer tech startups in India (Uber, Ola and Zomato) gave me the opportunity to see multiple 0 to 1 and 1 to 10 journeys.

So when Tomorrow Capital came calling I saw this as an opportunity to multiply the impact I could create and use the skills and experience I had picked up in my journey to help some really smart founder solve complex problems and create the next generation of brands coming out of India.

Q2. Describe your workday and leisure day, how does it look like

VCs is one of those industries where is takes a long time to know if you are good at it. Good investments can take years to mature and the lifecycle of a fund is usually a decade or more. As a side effect, a lot of value you create can boil down to quality of a few decisions. A normal workday would see me reading a lot, especially about the industries that we are looking at, talking to a lot of startups and once in a while talking to our portfolio companies either as updates or talking though some particularly complex problems they could be facing.

The weekends is usually reserved for family or some more engrossing discussions over meals. One thing I do daily though is starting my day with a workout – I believe the 90 mins I spend working out every morning is one of the biggest force multipliers in my life. 

 Q3. What is your view on the future of India as a market

We are still very much at the start of the cycle when it comes to VC investment in India. In a way venture capital enables more equitable access to capital and that has the opportunity to change the way the Indian economy will develop. A lot of businesses built in India have had an unequitable access to capital – the founders either came from a family or a community with access to capital. VC has the power to change that so that capital flows to what you do rather than who you are. 

We’ve just been through the first cycle of public listings of venture backed companies in India over the last 12 months. In the US, 42% of public companies are venture backed, representing 63% of total market capitalization. We are still very far away from that kind of impact. 

I truly believe that this is the Indian century. With the problems in China, instability in LatAm and Russia, there are few more attractive destinations for capital than India globally. We have a large captive market and are getting to a stage where the quality of our products and services are globally accepted. In the near future we will emerge as the third largest economy in the world and the largest English speaking population. I believe the venture capital in India will grow strongly to reflect these realities. 

Q4. Help describe your investment thesis and ideas you would like to back

When we look to invest we basically look at three main criterions that get us interested in the opportunity:

1. Is the problem large enough? Is there going to be a large outcome if we solve this problem?
2. How good is the solution? Is it really better than the alternatives that are present in the market and how much friction would have to overcome for the consumer to use it (as compared to the friction that the consumers currently face)?
3. Is the best team to solve this problem in this market?

Q5. What are your 5 key learnings from your experience as a venture investor

1. Much like hiring nowadays, no deal is done until it is done. And that only happens once the money hits the bank.
2. Don’t run after what is “hot” – for any deal due your own diligence and build your own thesis. And never compromise on corporate governance. We have seen a few investors forget this when dealing with what they think is a successful investments – it never ends well.
3. The founders are a critical part of the business – no matter how much you like a deal or the product walk away if you don’t trust the founder to deliver.
4. As an investor you are not the driver. At best you are the navigator and can give inputs. The founder needs to drive the business. 
5. Don’t hire too fast (note this is different from building a leadership team). Hiring a large sales and marketing team before you are PMF puts a lot of strain on the business and takes away your ability to experiment and change tracks.

Q6. Mention top 5 consumer/industry/technology trends in India and globally

1. We have seen the end of one of the longest bull markets in history. With decreased liquidity, higher cost of capital and turbulent markets, one thing we all are seeing is an increasing scrutiny of business model and a shorter runway for loss making businesses. People want to look at models that are sustainable now rather than some rosy excel future.
2. We are also seeing the proliferation of “online substitution” businesses dying down, whether it is in healthcare or edtech or elsewhere. People have moved back to physical models much faster than many assumed with the result that many business models that made sense in the pandemic just don’t work anymore.
3. However, in some areas, user behaviours have been changed permanently. Online shopping and grocery, D2C brands and many forms of omnichannel service deliveries are here to stay with many consumers seeing the value of decreased cost/timelines and increased convenience.
4. Another thing that has changed is the consumer attitude to health and fitness globally, with many industries likely to see an impact. We are likely to see higher insurance coverage across geographies (both health and life). There has already been a 25% increase in launches of food and drink with high-protein claims. These trends are likely to move across several industries.
5. One counter intuitive trend (given the economic tightening and COVID impact) is the trend of millennials spending on aspirations goods and services. For the first time a luxury brand (LV) is in the top 10 brands in the world usually reserved for tech or oil companies. Travel spends have already increased significantly with the hospitality industry seeing one of their best quarters ever, even before the holiday season kicked in. Multiple D2C brands are selling aspirational lifestyles. These are all going to create a new generation of experiential brands, often driven by social media personalities who are now brands in their own rights. This will also lead to several cross branding opportunities (Adidas Yeezy is a great example). 

Q6. Top 5 advice you would give to startup founder

1. In the early days of the business, focus on growth. Growth solves a lot of problems and should be the driver for most of your decisions in the early days – what you focus on, how you allocate resources and how much capital you want to raise. 
2. Build a strong team early

   , especially if resources permit. The success of the company is dependent on the founder being able to take the right decisions at the right team. That can be really hard unless founders have the time to reflect on the problems they are facing and keep missing the forest for the trees. A strong team also helps drive growth. Getting this right early is critical to the success of the company.

3. Set the culture

   . I see a lot of companies slowing down because the CEO is the bottleneck for all decision making. Ideally, the job of the CEO is the set the culture and the strategy and then let the team take the decisions that move goals forward. 

4. Be close to your customers

   . One of the things I advise all early founders is to spend a lot of time with your customer – attend customer calls, make some sales yourself (or at least participate in the selling process), talk to them any opportunity you get. Being close to the customers helps ensure you are solving the right problem – it almost impossible to get a PMF unless you understand your customers well. 

5. Have clarity on your numbers

   – there should be some metrics that a startup founder should always keep track of. Growth rate, cash position, CAC, cash burn and margins are critical to your success. Enable systems that allow you to view this data at as short a periodicity as possible.

Q7. How do you support your portfolio companies

Every company has a different journey and structure and needs different kind of support. Typically there are three areas where we have generally seen ourselves being of value:

1. In our experience, founders usually have a very strong understanding of their product and industry. In such cases we can help them scale fast by helping them build marketing and sales structures. An great example is our portfolio company Bonito Designs, an interior design and execution company. The company always had a strong design DNA and when we invested had an annual revenue of ~7 crs. Over three years we have helped them scale that to ~50 crs a month by driving a strong sales engine.
2. We also help founders scale by helping them hire a leadership team that has seen scale and can help the company reach the next level. 
3. One area which requires a lot of time and focus but may not necessarily be value-additive to the business is accounting and compliance. However as the company grows the demand of compliance and financial reporting are time consuming and given out ecosystem strengths we can help our portfolio companies set this up

However, one last thing to emphasize when supporting companies is that the final call is always the founders. You can help set up systems and make suggestions, but they have to always be the port of final call.

Q8. Which of your portfolio company you are very excited about and why

I would actually talk about 2. We invested in Bonito Designs despite it being the fourth player in a category because we believed in the design first DNA of the team and the depth in the space which meant we were still very early in the journey. This has been validated with the company’s revenue growing 80x+ in the three years we have been invested. 

At Leverage Edu we again had a contrarian thesis with not many investors sold on the size of the opportunity. But we always believed that Indians had an appetite to pay for education and that education itself was going to be increasingly global. In 12 months we got external validation in the form of a 8x increase in valuation in the next round.

Q9. When you started your career what were your ambitions

Given the rapid nature of change across industries, it’s hard to think too many steps ahead in your career nowadays. My last four organizations have been a venture capital fund, a food delivery platform and 2 shared mobility companies. When I passed out of IIMA, none of these industries even existed in India (unless you counted the shared autos as shared mobility!). What I did learn at IIMA though was that two skills were critical to success in life – work harder than the next guy and build skills that are useful. You can reach 90^th percentile in any industry by working hard or by working smart. But to reach 99^th percentile you have to manage both. 

Q10. What inspires you in life and what keeps you awake at night?

What inspires me is the opportunity I have to work at the leading edge of teach and advancement across so many different fields and to meet and work with some of the smartest people working in some of the most persistent problems of tomorrow. 

What keeps me awake is the fact that VC is a very atypical industry. Despite doing all our diligence and homework and effort, not all of our bets will pay off and sometimes it may take years to know which of them do. That can sometimes be deflating. 

Q11. Books or Blogs you would recommend entrepreneurs?

I love long form reading, so a few books that I would suggest for founders are:

1. Zero to One – Peter Thiel
2. The Hard Thing About Hard Things – Ben Horowitz
3. Shoe Dog – Phil Knight
4. That Will Never Work – Mark Randolph
5. High Output Management – Andy Grove

Me and my team have been a part of the demo day for every 100x cohort since the first one and in that time we have heard nothing but great things from founders about the support they receive. The quality of founders coming out of 100x – the confidence the possess, the clarity they have on their business – stands out in stark contrast with many other early stage founders we have interacted with. 100x is changing the way pre-seed investment is getting done in India and I am sure there will be many success stories coming out from your stables soon. 

About Piyush : 

Piyush Surana is a Principal at Tomorrow Capital, a $100 mn Venture Capital fund based out of Mumbai. He sits on the boards of Bonito Designs and Leverage Edu. He has leadership experience across multiple unicorn startups (Uber, Ola, Zomato) and industries (Telecom, Healthcare and Consumer Tech).

When not taking on business challenges, he loves to spend time in the gym or reading a book a week. Currently, he is using his wealth of experience from working in consumer tech startups to help passionate early stage ventures achieve their potential. He can be reached at [email protected]